Is Nearshoring Software Development The Solution For UK Startups After Brexit?

As with many industries across the UK, Brexit is set to majorly shake up the software development sector. Making access to talent harder than ever and creating uncertainty for foreign workers both living in the country, and those considering moving from abroad, the war for high quality talent is only set to escalate and become that much more fierce. 

With so many unknowns in play, it’s extremely difficult for businesses to take action to mitigate future struggles, and this is forcing companies to rethink how they acquire talent. In the last 6-12 months alone, there has already been a sharp decrease in the number of job applicants targeting the UK. Many no longer feel welcome and so are moving elsewhere; 

“Technology isn’t stopping: people will just up sticks, pack their bags and go wherever they’re most welcome. And the optics of Brexit are not about welcoming. They’re about closing doors.”  (The Guardian)

As these difficulties grow, organisations are increasingly on the look out for alternative options in order to find the skills and people they require. Many have turned to freelancers or nearshoring software development as a means of finding these resources. 

With a potential brain drain in progress throughout the UK, these companies may have to get used to the idea of using talent located abroad to achieve their development ambitions. 

One of the greatest issues surrounding Brexit is the foreign policy around immigration. As a result of severe tensions, the United Kingdom is now a somewhat questionable place for foreign workers to settle down, particularly those looking for long term stability. With an immigration system that could change at any second and a lack of clarity on future relations with Europe, it’s difficult for top talent to justify risking the unknown political circumstances of the near future. 

The Brexit situation has fundamentally made the UK an unattractive place for foreign workers. With constant political and socio economic tension, it’s unsurprising that high quality development talent is choosing to move elsewhere. Understandably, with so many options available to them, it makes little sense to go to a country that doesn’t welcome them with open arms. 

How nearshoring and remote engineering teams are helping fill the gap 

To counteract the negative impact Brexit has had on the local development talent pool, many businesses have broadened their scope and embraced nearshoring software development opportunities. This has given them access to high-quality resources in a short space of time and enabled organizations to scale accordingly, prioritising the niche skills they critically need. 

Some companies have taken this one step further and built entire remote teams outside the UK, in fact, there are a rapidly growing number of companies who can boast of their success with this approach: 

Archdesk

To manage the risks of Brexit, this flexible construction management software startup moved the majority of its operations to Poland, to “invest our resources in a more stable environment.” (Forbes)  

It’s clear the unpredictability of the UK commercial ecosystem forced Archdesk to transition their development resources to a more reliable and attractive location. 

Revolut

In response to Brexit, the digital bank Revolut took steps to refocus their development resources and expand their team in Lithuania, as the country is considered a much cheaper and low-risk proposition to operate from. Lithuania has made efforts to reduce unnecessary red tape and regulations as a way of attracting UK-based firms exploring alternative locations. (Wired)  

The move from the UK to Eastern Europe/Baltics is becoming all the more common, and many European countries are now doing everything they can to welcome these businesses with open arms. 

Duco

The London-based data engineering company aimed at financial institutions, Duco, chose to expand their team in Wroclaw, a small city in Poland as a result of Brexit. This was also due to the unexpectedly high education levels and language abilities of the local talent, and was reinforced by positive references from previous tech companies who’d operated in the area. The location was also chosen for the significant cost advantages available and the lack of competition for high skilled workers, enabling the company to hire faster.

Duco’s experience is not unique and is representative of many London-based organisations. It’s likely interest in Eastern European teams and opportunities is only set to grow. 

Hiring software development talent outside of UK is a Taboo but everyone does it

Due to unfair public perception, many organisations using development resources outside the UK keep it under wraps in order to avoid accusations that the company lacks the internal know-how to get the job done themselves. This can undermine an organisation’s reputation and create perception challenges in the market.

Organisations like Transferwise, Monese and Ocado have all build engineering hubs outside of the UK, but few communicate this to the public. 

As nearshoring software development becomes more mainstream, it’s likely this stigma will shrink and perceptions will change, encouraging further uptake and exploration of the opportunities it presents. 

Software development hubs outside the UK will become the norm 

With such difficult circumstances working against them, many companies have decided to build entire hubs in other countries in order to fulfil their development needs. Skype, TransferWise, Prezi and Avast all started in Eastern Europe, and while these runaway successes were the exceptions, that is quickly changing.

Companies are no longer obsessed with finding teams and resources in the major European hubs, and they’re much more open minded to what Eastern Europe can offer. 

Nearshoring is already a common tactic for many organisations, and it’s only likely to grow moving into the future as companies need to scale and diversify their teams fast. As technology has developed, more companies than ever have adopted the remote-first model, including the likes of Buffer, Basecamp, Zapier, Trello and Invision. 

Already popular with unicorns, the remote first model is growing fast as companies seek the flexibility needed and niche talent to enable their business to leverage the best development skills on the market. 

In reality, Brexit is a small part of a bigger picture, it has made the recruitment of high quality local talent much more difficult and as a result, forced companies to look abroad for the skills they need. While Brexit has undoubtedly sped up the adoption of nearshoring, it is not the main  catalyst for its growth. Lower costs, easier access to high quality skills, excellent English capabilities and generous incentives from Eastern Europe are all driving the adoption and success of nearshoring software development.