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Benefits of Outsourcing Software Development to Canada: Let's Figure It Out

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Karina Ovcharenko, Head of Recruitment Department
Benefits of Outsourcing Software Development to Canada: Let's Figure It Out

According to statistics, 66% of U.S.-based companies with 50+ employees outsource their tasks to experienced remote professionals. 29% of companies that have fewer employees follow their lead. What does outsourcing IT services to other countries bring businesses? They can reduce expenses, access a wider pool of tech talents, and get a competitive edge over their competitors.

It makes IT outsourcing services invaluable for startups and mid-range companies that want to scale up their operations. Owners who want to develop their businesses are wondering about the benefits of outsourcing software development to Canada, which has recently established itself as a major tech hub.

Known as the Silicon Valley of the North, Canada made the headlines in 2022 due to the Big Hiring — Meta, Google, and Amazon opening their offices there. However, Canada might become an even more attractive market for smaller companies looking for tech talents. Read on to find out the key advantages of outsourcing software development to Canada. In this article, we will outline the pros and cons of this decision, mention the legislation issues you may face, and provide you with our expert advice.


Advantages of Outsourcing Software Development to Canada

With its highly skilled workforce, tech hubs, and favorable legislation, Canada remains one of the top destinations for nearshore outsourcing. This country quickly became a preferable solution for those looking for ways to cut their expenses.

Because of the immigration constraints introduced by the U.S. in 2020, Canadian cities quickly became one of the fastest-growing tech hubs in North America. According to CBRE, Toronto gained the most talent in 2021. The country has 900K skilled tech workers, contributing to its global market success.

Read on if you still ask yourself, “Why outsource software development to Canada?” Below, we will briefly outline the key advantages that drive top companies to flock to the Canadian market.

  • Lower Expenses

One of the main reasons to outsource software development to Canada is that it allows companies to reduce their expenses by 40-50%. That’s why American companies outsource software development services to Canada to minimize development costs without affecting quality.

  • Extensive Pool of Tech Workers

Besides graduates of well-established universities offering computer science programs, the Canadian workforce includes many top talents from other countries. Famous for its immigration programs, Canada has been attracting professionals for years. Its top-3 tech hubs include over 411K tech workers.

  • Staffing Flexibility

You don’t need to worry about recruitment, administrative handling, or payroll issues. An outsourcing company will solve all these problems quickly and efficiently. How so? IT outsourcing relies on flexible staffing solutions as they allow finding talents quickly without hiring full-time in-staff workers.

  • Optimization of Business Processes

Startups and mid-size IT businesses with limited resources leverage the benefits of hiring a Canadian outsourcing team to streamline their business processes and focus on development. By delegating complex tasks to experienced professionals, they can stand out among their competitors without wasting much money.


Disadvantages of Outsourcing Software Development to Canada

While there are many advantages of outsourcing developers in Canada, you should also be aware of some issues you might face. Unless you address them, they might hinder the development of your business.

  • Insufficient Control

When working with a Canadian team, you won’t need to worry about language issues or different cultural backgrounds. However, a lack of regular face-to-face meetings may result in poor team productivity. Make sure your project manager is qualified to oversee the development process properly. In this case, one or two calls per week will be enough to keep track of the progress.

  • Difficulties With Finding a Reliable Service Provider

When you don’t know a new market well, finding an outsourcing company to help you scale up your business requires a lot of effort. While small companies might not have enough resources to complete the task, enterprises often have a less personalized approach. Select a provider with many reviews on trusted platforms, such as Clutch, TopDevelopers, or DesignRush, to avoid this issue.

  • Legal Issues

You might face legal issues if you want to outsource some tasks or hire a dedicated software development team. To avoid huge fees, consult with your lawyers before drafting a contract. Outline the responsibilities of an outsourcing company, as well as describe the working conditions and guarantees.

  • Mis-Hiring Issues

Due to their inability to find tech talents with specific skills in the U.S., many company owners wonder, “Should I outsource to Canada?” If you entrust the hiring process to a foreign-based company, third-party HR professionals may fail to hire the right professionals for the project.

The best solution to overcome the above limitations is outsourcing software development to well-known Canadian companies. In particular, it’s worth paying attention to the Canadian vendors with significant experience in outsourcing and attracting specialists from other tech hubs like Poland or Ukraine.


Laws You Need to Know for Outsourcing Developers in Canada

Canada gives foreign companies preferential treatment and encourages them to invest. Still, there are rules to follow for accessing the market quickly. One of the main pros of it outsourcing to Canada is its legal system setting a clear and straightforward framework. Below, we have outlined the essential laws to consider.

  • Investment Canada Act (ICA)

    This act is vital for every foreign company purchasing a business based in Canada. Within 30 days after closing the deal, a non-Canadian company should submit the notification form. U.S. companies are required to submit this form only if the value of a purchased business is more than 250 million CAD.

  • Security Legislation

    A company based in the U.S. that signs an outsourcing contract with a Canadian business has to include a list of specific provisions in the agreement. For instance, it’s crucial to add disclosure and reporting clauses. This law allows U.S. businesses to fulfill their obligations while adhering to the Sarbanes-Oxley Act.

  • OSFI Guideline B-10

    This official guideline released by OSFI states that Federally Regulated Financial Institutions are accountable for outsourcing activities. This legal aspect of outsourcing to Canada is essential for financial institutions, insurance businesses, and trust companies that outsource services to Canadian teams.

  • Personal Data Protection Laws

    If your company collects and uses personal information, it should follow the PIPEDA guidelines when using this business model. However, if you outsource some services to companies based in British Columbia, Alberta, and Quebec, you have to follow local legislation.


Comparing Canada With Other Countries for IT Outsourcing

According to Statista, the global IT outsourcing market will increase to $587.3 bn by 2027. While Canada is popular among the U.S. companies looking for nearshore IT outsourcing opportunities, Poland, Ukraine, Romania, and the Philippines have established themselves as top offshore IT outsourcing destinations. Read on if you are wondering: “What are the advantages of outsourcing to Canada compared to other countries?”

  • Canada

    Language:

    You won’t face language issues when working with a Canadian company, as locals are native English speakers.

    Core competencies:

    The most commonly used programming languages in Canada are Java, Python, SQL, R, C++, HTML5, and CSS3.

  • Poland

    Language:

    According to the EF English Proficiency Index, Poland ranks 13th among 111 researched countries and regions. It corresponds to a very high English proficiency.

    Core competencies:

    According to statistics, the most demanded languages are JavaScript, Java, and Python, which is why many local developers specialize in them. Learn more about how to hire software developers in Poland.

  • Ukraine

    Language:

    About 80% of Ukrainian IT professionals have an above-intermediate level of English.

    Core competencies:

    Ukrainian developers prioritize JavaScript, C# and Java.

  • Romania

    Language:

    Romanians have a high English proficiency level, following the latest EF EPI report.

    Core competencies:

    Local professionals have extensive knowledge of Python, Java, JavaScript, C/C++/C#, and Ruby, among many other programming languages and frameworks.


Expert Advice

Nearshore IT outsourcing is a cost-effective solution for companies of many sizes that want to cut down on their software development expenses and complete the project on time. Due to the numerous benefits of IT outsourcing to Canada, we recommend it to businesses interested in scaling up and getting a cutting edge over their competitors. To make the right decision about whether you need to outsource your project, consider the following:

  • Think about the size of your company. If it’s around 50 employers, you will appreciate the benefits of hiring a Canadian outsourcing team.
  • Estimate the core competencies of your team. If you don’t have on-staff professionals with the required skills in your company, it might be wise to outsource complex tasks to professionals.
  • Analyze your deadlines. If you have a tight deadline, entrust your project to a reliable outsourcing company known for delivering results within the set time frame.

Consider Integrio Your Trusted Partner

Integrio Systems is a well-known company providing end-to-end custom software development services. By outsourcing a variety of tasks to its team of seasoned developers, you can scale up your business and save money and valuable resources. The company works with businesses of many sizes and has teams based in Canada, Poland, and Ukraine.

Cam Tran

After being contacted by Cam Tran, a Canadian company known for working with oil-filled distribution transformers, Integrio Systems was tasked with creating a custom app with work management tools. Our developers created Jive from scratch to make it easier for clients to create, view, store and organize work instructions. This solution is especially suitable for those who want to streamline their business processes.

Then, we kept working on the project to create a full-fledged ERP system that facilitates inventory management and allows keeping track of the manufacturing process. This solution makes it easier to perform internal audits, control quality, as well as optimize schedule management and document storage.

Homebuzz

Integrio Systems also worked on a project for Homebuzz. It aimed at streamlining the process of real estate and property management. This startup's main goal is to automate various property management and promotion tasks. To turn it into a trusted SaaS solution provided for U.S. and Canadian clients, we developed handy tools for posting and updating ads posted on U.S. and Canadian real estate platforms and social networks.

In addition, we created handy features that facilitate facility maintenance and troubleshooting, booking, appointment scheduling, etc. Thanks to POS integration, clients can select the most suitable payment methods.

After looking at the efficient solutions the Integrio Systems team created, you will see why companies might outsource to Canada. If you want a turnkey solution with advanced functionality and an extensive toolset, contact Integrio Systems now!


Final Thoughts

By outsourcing software development, SaaS product creation, code modernization, and other tasks, you can scale your business while staying within your budget. Using this method, it will be easy for you to match your teams' schedules due to a non-existent timezone difference. You will also save money and benefit from a favorable currency exchange rate.

The Silicon Valley of the North offers unlimited opportunities for those who want to develop their businesses by using cost-effective solutions. The Toronto-Waterloo Corridor is a fast-developing tech hub allowing you access to a massive pool of tech talents. Due to this, you can quickly source the market to find the specialists you need. In addition, the country is known for its political stability and transparent legal system, which makes it attractive for foreign businesses.

Now that you know about the pros and cons of outsourcing to Canada, it’s time to contact a trusted company that provides such services for businesses from different industries!

Benefits of outsourcing software development to Canada

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Benefits of Outsourcing Software Development to Canada: Let's Figure It Out Advantages of Outsourcing Software Development to Canada Disadvantages of Outsourcing Software Development to Canada Laws You Need to Know for Outsourcing Developers in Canada Comparing Canada With Other Countries for IT Outsourcing Expert Advice Consider Integrio Your Trusted Partner Final Thoughts FAQ

FAQ

Reducing operating expenses is the main reason for outsourcing product development and other tasks to companies based abroad. The annual median salary of a software developer in Canada is $78,000, and the yearly salary of a software developer in the U.S. is $93,846. By minimizing expenses, a company can allocate more funds to development.

It’s essential to analyze the available information about the other side and check whether the team has a relevant skill set. That might answer your question: “Should I outsource software development to Canada?”The provider of outsourcing services should be ready to adjust the plans to suit your needs best. In addition, you need to indicate all your expectations in the contract.

Make sure to ask for guarantees and set the payment schedule. It’s also worth checking whether a company has worked on the market for years. Depending on your needs, you can add any other requirement to ensure that the outsourcing contract fully describes your expectations.

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