Let's remember the old adage, "You get what you pay for." This adage applies perfectly to the issue 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 rates for a senior developer in the USA is about $ 75-$125 per hour, while the same quality developer in Ukraine will require $ 35-40 per hour.
Market analysis and price comparison is the first thing any sensible businessman does before choosing an IT outsourcing partner. In this article we have collected the latest actual figures of the global IT outsourcing market and as a bonus we have developed a Guide "How to choose an IT outsourcing country? How much does it cost to outsource software development?".
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 a developer in Poland or the Czech Republic. The average rates of offshore developers is around $25 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.
Eastern Europe has all the characteristics of one of the fastest growing areas in 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 2020, Kyiv tech market is expected to have 75K+ software development specialists.
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 hourly rates will reach about $18 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 destination 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 is achieved at the expense of lower quality 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.
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 and Mexico would cost you around $30 and senior software developers cost $50 per hour. You can also find lower prices like $7-$15 per hour in this region, but keep in mind that the result may not always be of high quality.
Junior development specialist outsourcing rates in Africa in 2020 is nearly $20 per hour. A small talent range of software engineers in African countries cause the high junior software developer rates comparatively to other world regions. An hourly offshore developer rate of a senior software developer in such countries as South Africa, Morocco and Kenya is around $40 on average.
In order 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 in outsourcing software development is actually cost reduction. 59% of entrepreneurs are guided by this when choosing 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 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 average 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.
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 software development 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 than any other location.
However, the 1-2 hour difference is handy when maintaining live communication with a remote dedicated development team. 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 other business owners and entrepreneurs who applied for outsourcing services and had experience of 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 work process and the final result of your work.
We are a 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 whole 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. And 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.
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The best country for outsourcing in 2021 is Ukraine due to advanced skills at favorable prices, convenient time zones, large talent pool, location and culture, laws and regulations and a decent level of English.
The average hourly rate for software outsourcing development in Ukraine ranges from $25 for junior specialists and up to $55 for senior engineers.
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.
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 countries like Ukraine and Poland. The difference in the cost varies to up to 60%.
Yes. You save on wages, taxes and fees, expenses for employees' workplaces, expenses for software necessary for productive work, expenses for improving the qualifications of employees.
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