Outsource developer rates in 2024: how to choose a software outsourcing country

Let's harken back to that age-old saying, "You get what you pay for." This saying fits like a glove when it comes to the realm of IT outsourcing.

By hiring outsourcing developers, a company can reduce the cost of developing a web or mobile application by up to 60%, without losing the level of quality. For example, the average software developer contract rate for a senior developer in the USA is about $ 75-$135 per hour, while the same quality developer in Ukraine, for instance, will require $35-$50 per hour.

Market analysis and price comparison are the first things any sensible businessman does before choosing an IT outsourcing partner. In this article, we have collected the latest actual global IT outsourcing market figures. 

As a bonus, we will discuss how to select an IT outsourcing destination and how much does it cost to outsource software development.

In this article:

Why outsource IT services

Let’s consider the main reasons for using software development services.

Cost savings

One of the primary reasons for opting for outsourcing services is to cut down on business expenses. By leveraging offshore outsourcing services, companies can substantially decrease labor, tax, and insurance costs. This, in turn, enables them to channel resources towards enhancing and expanding their core business. Furthermore, organizations can trim down capital expenditures by avoiding the purchase of hardware and software needed to complete tasks.

Business scaling

Another crucial reason to outsource software development is a company's capacity to swiftly scale its operations without the need to hire additional personnel. This facilitates a rapid response to market changes and an increase in overall profits. For instance, outsourcing the development of a Minimum Viable Product is commonly employed for such purposes.

Increased productivity

Outsourcing empowers companies to promptly adapt to market shifts. When an IT outsourcing company provides services or manufactures goods, it might need to transform itself due to evolving consumer preferences or technological advancements. Outsourcing services allow a company to adeptly respond to such changes, a particularly vital aspect in a fast-paced environment.

Wider range of competencies

A reputable outsourcing provider typically possesses the capability to provide a comprehensive solution for your business. Take Geniusee, for example, which not only offers Minimum Viable Product development services but also excels in AI-powered app development, technical support, and separate business analysts or DevOps services. This versatility proves especially beneficial for software development companies in the early stages of market growth.

High-quality services

Outsource software development company often boasts experience working with diverse clients and comprises a team of professionals equipped with the necessary knowledge and, crucially, experience in your niche to fulfill tasks according to client requirements. Additionally, outsourcing software development companies frequently hold quality certificates and establish partnerships with leading technology providers.

Reliable level of support and service

Outsourcing software development teams commonly implement processes and procedures for project management, quality assurance, and timely customer support. Moreover, they exhibit a higher level of responsibility in fulfilling their commitments to clients.

Transparent terms of cooperation and project control

Outsourcing companies can furnish a detailed work plan, regular reports on completed work, and documentation that proves valuable for future maintenance, ensuring a transparent and controlled collaboration.

Factors affecting outsourcing rates

The immediate factors influencing outsourcing software development prices to the greatest extent are the volume and complexity of the work. These indicators determine the required level of qualifications of IT specialists involved in solving the problem, as well as their number. Additional outsourcing software development costs may also apply. This includes purchasing or leasing the necessary equipment and software. The ratio of expenses for these items depends on many reasons, in particular, on the type of activities carried out.

To a large extent, custom software development outsourcing prices depend on the creativity of the project and the level of the task, considered as a function of the planned scope of work. When choosing solutions, options for maximum differentiation of IT tasks are preferable. In this case, it is possible to use standard and already proven methods. Serious IT outsourcing companies prefer this algorithm as the most rational and economical. Today this approach is the most common, but this does not mean the exclusion of creativity — heuristic solution methods in reasonable proportions are also necessary.

The price of IT outsourcing services is greatly influenced by the competence of the customer themselves, and their ability to correctly formulate and set a task. Ultimately, it is this step that determines the success of all subsequent activities.

The implementation of an optimal information system adapted to the conditions of a specific business requires detailed knowledge of its business processes. Therefore, the terms and price of IT outsourcing can be significantly reduced by creating a mixed team of developers from among the in house development team and remote team.

Outsourced software development hourly rates comparison by regions

IT outsourcing market rates

Software development outsourcing rates in Eastern Europe

The revenue of the IT outsourcing industry in Central and Eastern Europe is growing 4-5 times faster than the global average: by 20-25% per year versus 5% per year.

Prices for IT outsourcing in Eastern Europe depend on the country. For example, rates for hiring developers in Ukraine will be lower than rates for developers in Poland or the Czech Republic. The average rate of offshore developers is around $30 for a junior software developer and $50+ for a senior software engineer. Below, you can find a table with offshore software development rates by country in Eastern Europe, including outsourcing rates in Ukraine.

The best countries for software development outsourcing

• Ukraine
• Romania
• Poland
• Bulgaria
• Hungary
• Czech Republic
• Belarus
• Croatia

Eastern Europe has all the characteristics of one of the fastest-growing areas in custom software development — from the growth rate of the IT industry to the huge IT talents pool.

Large numbers of technical universities and advantageous business conditions stimulate the industry’s prosperity. Kyiv, Ukraine, is among the fastest-developing cities in the region. By the end of 2023, the Kyiv tech market is expected to have 100K+ software development specialists.

Software development rates by country

Pros and cons of cooperation with software engineers from Eastern Europe

Average software development rates in Asia

Asian countries include some of the top world’s outsourcing destinations, and their developers are famous for their cheap but not high-quality products. If you’re thinking about finding a software development partner in Asia, software development rates will reach about $20 for a junior software engineer and $40 for a senior developer in the biggest Asian tech cities.

India and China are the main Asian software development destinations, with nearly 5 million engineers in each country. Indonesia, the Philippines, Vietnam, and Pakistan are also growing markets with the same type of outsourcing services as previous countries. As we mentioned above, the reduction in prices and the fast pace of development are achieved at the expense of lower-quality software development projects. As well as cultural differences, unfavorable working conditions, and differences in time zones negatively affect the quality of communication between the dedicated team and the customer.

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Pros and cons of cooperation with software developers from Asia

Software offshore development rates in Latin America

Recently, the countries of Latin America have had an increase in demand for software development from customers from the United States due to their relatively close location and the minimum difference in time zones.

Hiring a junior offshore software engineer from a Latin American country like Brazil, Argentina, or Mexico would cost you around $30 and senior software developers cost $50 per hour. You can also find lower prices like $15-$20 per hour in this region, but keep in mind that the result may not always be of high quality.

Pros and cons of cooperation with software programmers from Latin America

Average software development hourly rate in Africa

Junior development specialist outsourcing rates in Africa in 2024 are nearly $20 per hour. A small talent range of software engineers in African countries causes the high junior software developer rates comparatively to other world regions. The hourly offshore developer rate of a senior software developer in such countries as South Africa, Morocco, and Kenya is around $40 on average.

Pros and cons of cooperation with software engineers from Africa

Software developer rates in the best outsourcing countries all over the world

How to choose an IT outsourcing destination

To find the most efficient and suitable country for software development collaboration, you need to pay attention to several key factors, such as average rates for IT services, the level of technology industry development, time zone differences, and cultural relevance.

1. Analyze and compare developer rates per hour

The main factor is actually the cost of outsourcing software development reduction. 59% of entrepreneurs are guided by this when selecting the region to which they plan to transfer the development of their product. Another part of business owners is looking for talent, which is not so easy to find at home. Despite this, you must remember that the success of your software development project is determined by its quality, and as everyone knows, quality requires costs.

The first thing to start with when choosing a region for software development is to analyze and compare the medium rates for IT services.

Fortunately, we have already prepared detailed software outsourcing rates in various outsourcing regions in 2020 which you can find above.

2. Study the state of the tech industry in different regions

The main indicators for market research are the number of technical universities that developers graduate from, the number of personnel already available on the market, and the popularity of the technology stack that is needed to develop your project.

If the country you are interested in has an extensive talent pool of IT engineers and other specialists you need, a high level of technological education, and occupies a rather large niche in the IT outsourcing market around the world, this means that you are moving in the right direction.

The situation is a little more complicated if your project requires a specialist with a rather rare technology stack, for example, Scala, Groovy, Q#, Elang, etc.

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3. Don't forget the time difference

Interestingly, the opinion that the 1-2 hour difference has the best influence on development efficiency is often not entirely objective. For example, using the Let's consider “follow-the-sun” model — a type of global collaboration in which problems are resolved around the clock and transferred between offices in different time zones, increasing responsiveness and reducing delays) can shorten the time to market. Follow-the-sun is used by dedicated teams that are spread out across the world. The constant workflow increases response time and reduces time to market. This method literally follows the sun, so work is performed during normal work hours anywhere in the world. And customers in one location get the same quality of support as any other location.

However, the 1-2 hour difference is handy when maintaining live communication with remote developers. This hour difference is appropriate if the 2 teams need to plan things together and share knowledge more often.

4. Understand your level of cultural fit

It is believed that cultural compatibility is difficult to measure. But we believe that this is not the case.

This can be easily verified by collecting feedback from small businesses owners and entrepreneurs who applied for outsourcing services and had experience in cooperation with a particular country.

You can also contact other owners in the destination country and ask all your questions, for example, regarding the legal system, tax collection system, approach to task management, etc.

The issue of cultural compatibility is important as it affects the creation of a comfortable atmosphere during the development process and the final result of your work.

Geniusee can become your long-term IT outsourcing partner

We are an offshore software development company that specializes in hiring software engineers, with a variety of technology stack for our clients around the world. You have the opportunity to hire a single developer or a dedicated development team for your project. Each of our developers works directly on your project, which gives a deeper dive into the project’s essence. Since you will manage the project, you will be able to use any models and tools to track the readiness of tasks and the project as a whole.

Fill out the contact form if you have any questions.

FAQ

Which country is best for outsourcing?

The best country for outsourcing in 2024 is Ukraine due to advanced skills at favorable prices, convenient time zones, a large talent pool, location and culture, laws and regulations, and a decent level of English. 

How much does IT outsourcing cost in Ukraine?

The average hourly rate for software outsourcing development in Ukraine ranges from $25 for junior specialists and up to $55 for senior engineers. 

What is the average hourly rate for software outsourcing?

The average hourly rate for software outsourcing development ranges from $15-$45 for junior specialists and up to $50-$100 for senior engineers. The price varies greatly depending on the outsourcing region. 

How can outsourcing reduce costs?

Software development, which is done in the USA/Western Europe for a very high price, can be obtained at a much lower hourly rate in developing European countries like Ukraine and Poland. The difference in the outsourcing costs varies up to 60%. 

Is outsourcing really cheaper?

Yes. You save on wages, taxes, and fees, expenses for employees' workplaces, expenses for software necessary for productive work, and expenses for improving the qualifications of employees.