Nordic Startup News Early Stage Startup News From The Nordics
Countries all over the globe incline to hiring developers for startups as their business model as it is a modern, proactive, and effective solution in the business world. With remote employees that work for your project from around the world, you get maximum efficiency and cut costs considerably. But can this scenario be applied to startups in the Nordic countries?
By Anastasia Stefanuk
One of the biggest reasons why startup companies are inclined to hiring remote software development teams from developing countries is the costs-cutting effect. You see, when it comes to hiring, employing, and retaining the staff members, it all boils down to spending approximately 1⁄3 of a company’s initial budget to pay salaries for recruiters, HR specialists, mentors, and other staff members within this area. Let’s take an example of salary ranges in a few Nordic countries: a junior recruiter in Norway would ask you for about $6000, HR managers would want $8-10,000 in Sweden, and recruiters with rich experience would ask for $3-5,000 in Denmark. With nearshoring, another company takes these services to be done for you, thus, the expenses for HR activities will no longer eat your budget.
The more qualified, educated and demanding the developer is the more money you need to cover their financial needs. Let’s take at the situation you will face in the Nordic IT market: junior C++ developer in Norway – $18,000, Full-stack Developer in Finland – $6000, and Software QA Engineer in Sweden – $10,000. Too much as for a company that still does not generate profits, however, you want to get a world-class quality for your projects while spending an adequate amount of money. In this way, nearshoring companies assist you in selecting the candidates not only based on your project peculiarities, but also on your financial capabilities. You get access to the global tech talent pool and can easily get a qualified developer for $4-5,000 per month with the set of necessary skills in programming to perform a project of different complexity.
Staying motivated
It is a well-known fact that people hate routine: waking up, going to the office, drinking the same coffee from the same mug every day, completing the same tasks, the road back home, the next day – repeat, all year round. So you always need to find motivation for your employees by offering them office perks, bonuses, corporate parties, summer trips – overall, create a corporate culture. If workers do not get those, they start losing the motivation, which leads to decreased quality of services, and, eventually, professional burnout. Remote development teams face the same issue, but it’s not your problem and you are not the one to solve it. However, companies that deal with nearshoring services usually do their best to prevent their staff’s burnout and keep you away from these problems.
The lean management approach
In order to save your money and time for hiring 100+ employees at once, startup founders tend to apply the approach of lean team management. The principle of this approach is to
initially define the number of developers needed for a particular project and then assess if more or fewer people needed to successfully work on the task. However, the issue of this approach if you work with in-house employees is that you will need to fire people, thus, losing resources and undermining your reputation.
In fact, Sweden is practicing 5-months notice for a job termination, which means that the company will give money for a person that is no longer needed for a company’s performance. Outstaffing, in this case, allows you to be flexible in employing the number of workers you need even if you do pivots of decreasing or increasing the overall number of developers in your team within 4-6 weeks. Outstaffing providers give you the freedom of scaling up and down, thus, your operations remain consistent.
Popular locations for IT
Digitalization has erased the borders in many ways and opened numerous opportunities to cooperate with companies all over the world. There are 3 major IT destinations that a startup may consider when looking for tech talent.
Asia – an increasingly economically developed continent with a variety of countries that can offer you nearshoring service. The IT market will provide you with a rich pool of talents and an affordable pricing strategy will be diligent and loyal in terms of performing your projects. Nonetheless, keep in mind that Vietnamese and Indian developers may have strains in completing laborious tasks. Also, cultural differences may also possess a threat in communication and overall issues clarifications.
European countries such as Belarus, Serbia, Ukraine, and others – considerably low salaries for developers, talented and devoted professionals, timely delivery and quality. For instance, Ukraine alone has more than 180 000 software engineers on the market that allows finding a perfect match for nearly any kind of startup. However, due to the fact that these countries are not European Union members, you can face security and data policy compliance issues.
EU member-countries – the exemplary quality of services, responsible attitude towards projects, on-point delivery, and human relationships. All countries within the EU are operated under the same regulations, therefore, companies often face a brain drain. Eventually, more developed countries can hire your employees by offering them more attractive deals.
Overall, dedicated development service for startups is indeed a working solution for the above-mentioned situations, but one needs to understand that it is not a universal panacea and requires a founder’s thorough analysis and time to employ.
