We know this — hiring engineering talent in San Francisco and New York is expensive and too competitive. And hiring remote domestic workers increases opportunity (e.g. having HQ in NYC, but having someone in Madison, Wisconsin working for you remotely) and lowers costs for overall overhead. But it doesn’t eliminate complications for tax and legal liabilities (e.g. you’d still have to open an entity in Madison for your remote employee to work).
And even national hiring pools are ultimately limiting. There are 25+ million software engineers in the world, but only 4+ million in the U.S. If the goal is to build the best product, you need the best talent — wherever they’re located.
This (and a global pandemic) opens the door to international hiring, either remotely or through satellite offices. But what are the pros and cons for each available option?
We answer these questions and more in a recent webinar we hosted with Dave Marks, the VP of Customer Solutions Engineering at Fastly, and David Blair, CTO at Andela. Both have decades of experiences building and growing distributed engineering teams via satellite offices or remote entities.
Get their insights below:
1. Should you open a satellite office?
Opening a satellite office provides a middle ground where managers can work with international employees while retaining a workplace environment.
However, this involves more investment in infrastructure than hiring remote domestic workers or a fully distributed global workforce, and the pros may not outweigh the cons.
Here are 2 examples of opening a satellite office:
Domestic Example: Opening a Satellite Office in Austin, TX
When Dave Marks (VPE at Fastly) was building an engineering team at Bleacher Report, he considered a satellite office in the Southeastern U.S.. The office would be close to the parent company headquarters, and the Southeast was an untapped talent pipeline compared with the oversaturated Northeastern or Southwestern regions. The prospect of covering another time zone was appealing, as was building a company presence in a new region.
Ultimately, however, the downsides prevailed and the project was shelved. Satellite offices, even domestically, constitute a significant investment in time and money, and face many of the same roadblocks as primary locations, including exhausting the local talent pipeline.
International Example: Opening a Satellite Office in Cairo, Egypt
Opening a secondary international location also involves navigating significant logistical hurdles. What licencing does the business require? How are taxes calculated and paid? Where is the best location to open an office? What job boards do you use to post vacancies?
Getting a foot on the ground in another country does have its advantages — keeping teams connected, providing a local presence for international clients — but it can also be a slow and laborious process. David recounts how, when setting up an office in Egypt for Andela, just getting a corporate bank account took three months of background checks and compliance reviews to navigate.
2. Should you build remote entities?
Another option to consider is building a remote engineering hub (a la Stripe), which is hiring remote employees across the world but still aligning them to your physical offices.
While this is similar to a “hiring anywhere” model, if you don’t have an office presence already in the area you’re trying to hire in, you will face legal and logistical issues within a specific country, city, or even neighborhood.
Regardless, this tactic will not just expand your talent pool, but also provide you with more diverse perspectives, closer to a 24-hour development cycle, local engineers in specific buying markets, and more.
This model is easier when you hire domestic remote employees, since you only need to comply to state laws. But you still run into the problem of costs and competition — even if you’re not looking in a big tech hub.
3. Should you just hire from anywhere?
The simplest way of avoiding the challenges that go with opening a second location are to do away with the location entirely. Once you decide to build a distributed workforce, you open up the possibility of hiring the very best people for every role on your team, usually at a significant cost reduction.
“My budget goes further,” David Blair explains, when talking about the reasons he hires globally. Employees still command competitive salaries, but avoiding pockets of concentrated high demand means hiring is based on talent, not availability.
Dave Marks agrees that hiring from a small talent pool can artificially inflate a developer’s value. It was a big driver in his decision to hire remotely, first from domestic applicants, and eventually worldwide.
While the benefits of global hiring are clear, managing a team that never meets requires a change in ops and hiring practices. Additionally, you’re on the hook for the entire end-to-end process of hiring — from sourcing to assessing to providing technology to legal and tax compliance.
Managers, too, need to change their practices. It’s important to check in frequently with your team and ensure that communications are being disseminated correctly. Different cultural approaches, language barriers, and more can all result in crossed wires and miscommunication.
Dave and David both recommend talent partners (such as Andela!) because this removes the need to understand local hiring markets, legal and compliance requirements, payments, or even people management. But if you don’t decide to go forward with a partner, here is a nifty chart of what you need to think about when hiring global talent:
The world is getting flatter
Global hiring within tech is almost an inevitability that all companies will eventually have to face. Now we know that teams can work remotely without reducing productivity, more and more people are looking to escape the office and gain the freedom to work, live, and travel on their own terms. Companies must rethink their working environments and employee incentives in order to remain competitive, and creating a team atmosphere among remote workers will always be a challenge.
This is where Dave and David agree managers must step up. There are many ways to promote inclusivity and camaraderie if you think outside the office (mailing hot sauce to your team members for a Zoom challenge is just one of them!).
As employees increasingly value the culture of the companies they choose to work for, the diversity that comes with global hires becomes a real asset. Not only is it instrumental in creating better products, but in attracting the highest caliber candidates for every position, making borderless hiring the business model driving continued success.