Offshore software development has gained an exponential boom over a couple of years.
This is the reason, many offshore companies have flourished across the globe and most promise the best service at a genuine price.
By hiring developers from overseas, tech companies are preferring to build offshore development centers.
Well, why not when offshoring has become such a successful model today.
Collaborating with a development team from another geographical location helps in conceptualizing the product, refining the business model, and assisting in defining strategic goals in the best possible way.
When you start working with the top software development company, you get plenty of benefits. This is because they know how to develop a product in its entirety, starting from ideation to post-release maintenance.
Reasons to Outsource
Organizations prefer to hire offshore developers as they are specialists in their respective fields. In addition to this here are the below-mentioned benefits that play an important role.
Firstly, it is important to know about cost-effectiveness.
The hourly developer rate of an overseas engineer depends on the nation’s market and currency. Developers from different countries with lower GDP and unstable currencies, charge comparatively less, than others.
b) Rich Skills
Secondly, an outsourcing firm allows business owners to work with middle and senior developers. They are rich when it comes to skillset.
An additional perspective: Organizations get an impartial and talented partner that knows how to identify potential issues, develop a creative business model, create a strategy, and implement it successfully.
c) 24-hour Development Cycle
Additionally, the time difference in companies allow you to be present always. When the in-house team is done with its development tasks, the software outsourcing firm steps in. The company keeps working continuously and this is good for the project.
d) Focusing on Strategic Goals
Fourthly, companies know how to redirect the efforts of the in-house employees and make sure they focus on the core and priority tasks.
Now, let’s compare the developer’s rate as per continent
Software Development Hourly Rates Globally
Let’s explore the top outsourcing destination and compare the price of developers,time differences, and skills. We will be reviewing Asia, Europe, Latin America, and Africa.
Overview of Hourly Rates
|Destination||Outsourcing Rates||Countries Included|
|Eastern Europe||$25-$50||Ukraine, Poland, Romania, Hungary, Bulgaria|
|Latin America||$30-$50||Brazil, Mexico, Argentina, Chile, Columbia, Peru|
|Africa||$20-$40||Morocco, Kenya, Nigeria, Egypt, South Africa|
|Asia||$18-$40||India, China, Philippines|
A pioneering software outsourcing destination, Asia boasts the biggest number of software developers i.e. 10 million.
The hourly rates of the continent are shaped by various aspects and differ a lot from country to country.
Hiring an offshore developer from Asian countries is the most budget-friendly option. The rates start from $18 for a junior engineer and increase up to $40.
India, the Philippines, and China are the three major countries offering custom software engineering services.
Other countries include Vietnam, Malaysia, and Indonesia that are gaining ground while offering software development services.
Asian countries and rate of offshore developers
The entrepreneurs who wish to execute their ideas by developing quality products or services, consider Indian developers.
India is a country that leads to other countries when it comes to outsourcing destinations in Asia.
It is also considered as the top digital nation in the Tholons Services Globalization Index 2019. In 2016, India was nominated as the second country across the globe with the highest numbers of STEM graduates (2.6 million).
Here are the reasons why the country is one of the most preferred outsourcing choices:
- As per A.T Kearney Global Service Location Index 2019, India tops the list of the most attractive outsourcing destinations.
- The country has 100 million English-speaking people in the world. And by the end of this year, there will be more than 2 billion English speakers in the country.
- Approximately 1.5 million engineering graduates pass out of colleges every year.
- More than 200,000 IT graduates are annually added to the IT industries in India. The country has the youngest employable population globally.
- In the upcoming years, 40% of professions will train themselves according to the latest technology to meet the advanced industry requirements. Offshore Developers Hourly Rate by Country in Asia in 2020.
The blend of technological infrastructure, talented professionals, less hourly rates, and emerging engineers make Indian offshore developers worth considering.
China is also another preferred country where mobile app developers or web developers are hired. Chinese developers are the first across all HackerRank challenges.
This is because the Chinese government supports the tech sector by giving them economic incentives.
Today, there are more than 50 science and technology industry parks across the country.
The Philippines is another country that has the fastest growing IT industry with more than 200 offshore companies and 95000 technical positions.
Despite this, Philippines ranks 5th among the top 50 digital nations in the Tholons Services Globalization Index 2019 with Manila being the second super city.
The 2020 offshore developer hire rates in other Asian countries are:
- Bangladesh: $25
- Malaysia: $30
- Nepal: $25
- Philippines: $25
- Sri Lanka: $25
The hourly rate of the developers in Europe varies from country to country. For example, Ukraine developers charge less than Poland engineers. But on average, junior developers cost $25 per hour and $50 for seniors.
The best countries of Europe to hire software developers are:
- Czech Republic
Ukraine is located in the center of Europe and has been constantly attracting foreign investors since the late 1990s and early 2000s.
That was the time when the first software outsourcing companies started appearing in the country.
Ukraine is one of the best offshore development providers as its education system churning out plenty of IT professionals yearly. The country is a hub for a technological start-up
Here are a few facts regarding the IT industry in the country:
- As per the State Statistics Service of Ukraine in 2019., the IT service exports in the country rose by 15%. Today, it makes up 16% of the export of various services which in the total brought the country $15.23 billion.
- In the HackerRank test results, Ukrainian developers are 11th in the world in terms of tech skills.
- Till 2019, there were approximately 160000 IT professionals in Ukraine employed at nearly 4000 IT companies.
- The IT industry of Ukraine grows by about 26% annually.
- The average hourly rate for software developer services in Ukraine is $26.
- Ukraine’s tech industry is one of the most rapidly growing industries with $4.5B in investments in 2018.
- Well, by the end of 2020, Ukrainian tech professionals are estimated to touch 200k.
- The hourly rates vary from $25 to $50 per hour and the time zone is the same as most western European countries.
Hourly Rates Comparison of European Countries Developers
- Poland: $40 – $56
- Ukraine: $26 – $43
- Romania: $26 – $45
- Czech Republic: $34 – $53
- Hungary: $39 – $52
- Bulgaria: $34 – $51
Europe is a good place that gives you the opportunity to hire dedicated offshore developers at cost-effective rates.
In addition, the region is popular for its qualified IT professionals and the rapid growth of the industry resulted in 1 million software developers in the continent. As a result, his makes it a lucrative software development outsourcing destination.
c) Latin America
Countries: Brazil, Argentina, Colombia, Costa Rica
Latin America IT companies have startups and medium businesses. According to Accelerance, about 90% of tech firms are located in Colombia and Mexico.
Let’s explore the hourly rates country by country:
European trends have a strong influence on Argentina’s IT market. Argentina has always economically and culturally connected to Europe. Well, it has the most expensive IT development teams in the region. Meanwhile, this because the developers have rich experience in working with western countries.
The country has over 13000 engineers every year and the majority go to the offshore companies. Nevertheless, companies are CMMI certified benefitting from American influence.
Brazil is one of the leading software developments in outsourcing countries. Rio de Janeiro is a global IT center and the city has 8/10 top technology universities producing 14 thousand alumni each year. Decidedly, many US companies prefer recruiting Brazilian talents.
Costs of outsourcing development in Latin America
- Junior Developer: $25-$34 dollars
- Mid-level Developer: $30-$52 dollars
- Senior Developer: $45-$55
Africa’s IT industry is still in its emerging phase but has started to depict rapid growth. It has now started to attract clients from across the globe. It has been predicted that the young population has a lot of potentials.
- North African countries like Egypt, Morocco, and Tunisia have quickly become recommended countries having talented offshore developers. Thanks to the small-time zone difference with New York and compatibility with Europe. Besides, Morocco and Tunisia attract clients from France as the language is the same. Companies hire software engineers from North Africa as they have expertise in Python, Ruby, and SQL.
- South Africa is the preferred choice due to its high proficiency in languages like English, German, and Dutch. Also, they have already been featured in the Tholons Digital Nations and Super Cities rankings. The top developers are skilled in C++, PHP, and SQL.
- East African Kenya has the highest number of developers. Likewise, the capital Nairobi is the place where the city’s infrastructure encourages technical innovation among startups. The development team is well-versed in Java, SQL, and mobile development.
Offshore Software Development Rates by Country in Africa in 2020
The hourly rates of African developers are: The recent data shows that the software engineer hourly rate in African countries are:
- Egypt: $20
- Kenya: $20
- Morocco: $20
- Nigeria: $40
- South Africa: $40
What Affects the Rates of Offshore Developers?
More than 45% of companies in the US and Western Europe face this challenging situation where they are unable to find and hire talented programmers. This was revealed by the 2018 Manpower group survey.
Due to this shortage of developers, when companies finally find the developers and are willing to bring them on board, developers command a high salary.
Hiring developers in Eastern Europe and Asia offers an economical option. The talent pool coupled with a lower cost of living in these areas can be hired at a budget-friendly rate.
b) Technology Stack
The modern technology stack is very complex and it is not taught in formal education.
Dedicated developers who are skilled in multiple complementary disciples will always command higher salaries, relative to the location
Furthermore, the price depends on skills, portfolio, and technology availability. The rarer the tech stack, the more expensive it is.
Certainly, let’s understand this with the help of an example. Hiring front-end developers for iOS app development will cost less than a developer who is an AI expert.
c) Engagement Model
Organizations can hire coders that work on the project remotely. Particularly, their cost depends on the different engagement models that they choose. The three models include:
- Fixed engagement model
- Time and Material engagement model
- Dedicated developer engagement model
d) Experience Level
It is natural that the ones having more years of experience tend to demand more salaries. Developers lacking expertise but have still managed to deliver a string of successful projects and demonstrated their technical ability can also expect a high salary.
e) Project Requirements
Last but not the least, you know a project can either be very simple or a bit complex. The requirements vary from project to project. The project complexity impacts the hourly rates of the development team. If you want the project sooner, it is going to cost you more.
In conclusion, after deciding the country, the next step is to look for a reliable offshore development company that fits the project scope, deadlines, tech stack, and budget. Finally, get the best software development and mobile development services from professions that know how to analyze ideas, plan, implement, and fulfill all your business requirements.