Outsourcing software development is no longer an undiscovered way to structure business processes but a well-accepted and beneficial model. Yet, you’ll be impressed by how greatly offshore software development rates by country may differ in some parts of the world. Average offshore software development rates in Ukraine are around $30-50 per hour, while in the USA, you’ll pay as much as $100-150 for the same service.
So, where to look for the best outsource development team? Let’s find out.
Offshore software development rates by country: a detailed overview
In 2021, the IT outsourcing market generated almost 527 billion dollars. Today, there are hundreds of IT outsourcing hubs all over the world. They all differ by their rates, development quality, culture, expertise, time differences, and much more. So, to hire a development team, you should consider the entire scope of these characteristics, analyze them, and choose one of the best offshore software development countries.
Talking about rates, we can identify two big pools of outsourcing destinations:
Countries/regions with high-quality life standards and a stable economy – the US, Australia, Western Europe, Israel, UAE, etc. IT outsourcing rates are higher and generally vary from $50 to $300.
Regions with less developed local markets, such as Latin America, Africa, Asia, and Eastern Europe. They are often characterized by lower offshore development rates and a high number of specialists.
Lately, regions with less developed economies have become real players in global IT outsourcing. They have become reliable and productive IT hubs that produce a significant part of mobile and web solutions. So, let’s start our overview of them.
The cost of offshore development in Eastern Europe
Think about the option to hire remote developers from Eastern Europe. In the past years, this region has become one of the biggest offshore outsourcing centers hosting more than 1 million well-qualified professionals and offering affordable web development. Its main outsourcing hubs include Ukraine, Poland, and Romania, with average offshore software development rates by country ranging from $25 to $55.
While the development costs are quite acceptable in Eastern Europe, its quality is also well-promising. This region offers solid expertise proven by years. Another positive factor of IT outsourcing in Eastern Europe is high language proficiency — most vendors here are English-speaking.
Offshore Software Development – Ukraine
Popular tech stack: Python, Java, Ruby
IT hubs: Kyiv, Lviv, Odesa, Kharkiv, Dnipro.
Ukraine has gained a leading position among IT outsourcing destinations in Eastern Europe and worldwide. Right now, the country ranks among the best offshore software development countries. What’s more, the country’s software developers provide high-quality for a reasonable price. In Ukraine, the rates are, on average, $30-55 (while some junior developer rates can be as low as $20).
Kyiv, Odesa, Lviv, Kharkiv. These are only a few of the Ukrainian IT hubs that play an essential role in the global arena, with 18 Ukrainian companies being ranked among the best 100 IT outsourcing firms worldwide. The potential of offshore development in Ukraine is inspiring. Thus, last year the Ukrainian IT industry set a new record — it received an astounding $571 million in investments.
Its talent pool is also out of the discussion. Ukraine is a home for more than 250,000 developers. Most offshore software development teams in Ukraine are well-educated and skilled. Strong expertise and solid tech education are what make this destination so attractive. The country has around 29,000 tech graduates yearly. Being proficient in most programming languages, Ukrainian developers are in high demand far outside its borders. That’s why many international companies prefer Ukraine when choosing a destination to hire a development team in Eastern Europe.
Offshore Software Development – Poland
Popular tech stack: Java, SQL, Python, C++
IT hubs: Warsaw, Krakow, Wroclaw, Lodz.
In Poland, rates for outsourcing development are a little higher than in neighboring Ukraine. Yet, such high software development cost per hour can be explained by the excellent tech education in the country and higher living standards. Polish outsourcing is also rich in both freelance specialists and established companies.
Offshore Software Development – Romania
IT hubs: Bucharest, Cluj-Napoca.
Don’t neglect these destinations searching for affordable web development. The rates here are affordable, ranging software development cost per hour on average from $25 to $45. Yet, the expertise is promising: Romanian developers are proficient in the most complex databases, languages, and algorithms.
Offshore development rates in Latin America
Latin America should also be considered while choosing a destination to hire a remote development team. It offers competitive talent, reasonable rates, and a convenient outsourcing location.
If you decide to outsource your development to South America, be ready to pay $30 for a junior specialist, while a senior developer’s hour could cost around $55.
Latin America as an offshore software development hub has been recognized only recently. Much due to the efforts of local governments. With all the economic instability and political insecurity, such countries as Argentina, Colombia, and Brazil needed new ways of financing. Thus, national governments started investing in tech education and IT infrastructure to develop the industry. The results are pretty good – today, these countries have many highly skilled talents who cooperate mainly with US companies.
Tech stack: Java, Python, SQL
IT hubs: Buenos Aires.
Argentina is one of the most advanced offshore outsourcing IT markets in Latin America. It offers quite a vast pool of technical-savvy talents popular within Western Europe. Growing economically and culturally close to European countries, Argentina has marked a strong presence in the global IT arena. Offshore developer rates here range from $30 for junior and $55 for senior programmers.
Tech stack: Node.js
IT hubs: Lima.
Last year, the country’s IT sector experienced +9% growth. With average software development rates of $30-50, Peruvian developers are technically educated, fluent enough in English, and well aware of the US business processes.
Tech stack: Java, Python, SQL
IT hubs: Rio de Janeiro, Porto Alegre, Curitiba, Blumenau, and Londrina.
In Brazil, the average developer rate per hour goes around $30-50. The country is one of the leading offshore outsourcing hubs in the world. In 2021, Tholons Services Globalization Index included Brazil in the top 50 IT nations. This region is also renowned for its high number of technical engineers: STEM (science, technology, engineering, and mathematics) workers represent 2.1% of formal employees in Brazil.
IT hubs: Medellin, Bogota.
Offshore software development rates here are the same as for the rest of Latin American countries. While the tech talent pool is not tiny in Colombia, a difficult criminal situation in the country and the lack of English proficiency make it less attractive among other IT outsourcing destinations.
Offshore development costs in Africa
Until recently, Africa hasn’t been among the popular offshore development destinations. After Microsoft invested $100 million in the continent’s developers in 2019, the African IT outsourcing market snowballed. Key IT hubs are Kenya, South Africa, Morocco, Egypt, and Nigeria. Rates usually vary from $20 to $45.
Tech stack: Java, Python
IT hubs: Western Cape, Gauteng, Durban.
South Africa leads the continent’s IT industry. In 2021, Tholons included the country in the top 50 digital nations. Its geographical location also contributes to the region’s growing IT market — South Africa’s time zones overlay with most European countries.
IT hubs: Mombasa, Kisumu, Eldoret.
The biggest IT outsourcing hub in the Eastern part of Africa is Kenya. Apart from the reasonable rates, there’s another plus – hire offshore developers from this country, and you won’t have to worry about their English proficiency. That’s thanks to the country’s policies which made English an official language in Kenya.
Tech stack: PHP, Python
IT hubs: Morocco, Egypt.
The Northern part of the continent also shares a time zone with most European countries. Offshore developer rates here don’t differ from the rest of the continent. Key IT outsourcing countries are Morocco and Egypt. Some of the biggest global telecommunication providers even placed their R&D centers in Egypt (Vodafone, Intel, etc.).
Tech stack: SQL, Java, Python
IT hubs: Lagos.
For West Africa, the top region for offshore development would be Nigeria. The country’s IT market is only evolving but has excellent potential and a talent pool. Understanding the benefits of an advanced local IT industry, the Nigerian government actively invests in developing the market and educating developers.
Software development rates in Asia
This region’s most significant competitive advantage is its low offshore software development rates, which sometimes range from $18 to $45. With its 10 million tech specialists, Asia has lots to offer. Yet, affordable offshore rates for software development and a vast talent pool are sometimes achieved at the expense of good product quality and great cultural and time differences. Asia’s biggest IT outsourcing hubs are China, India, Vietnam, Malaysia, Indonesia, the Philippines, and Bangladesh.
Tech stack: Java, C++, Python
IT hubs: Bangalore, Chennai, Mumbai, Kolkata.
India is recognized as one of the best offshore software development countries. Its offshore developer rates usually range from $25 to $50. English is widely spoken around the country, which is a significant advantage when choosing a destination to outsource software development. Yet, the final product quality can be an issue. There is no legal system to control quality standards in the country, so it depends on whether you’re lucky enough to find responsible and reliable developers.
Tech stack: Python, Algorithm and Functional Development
IT hubs: Beijing, Shanghai, Shenzhen.
The region boasts a rich talent pool of skilled developers. Chinese software development cost per hour is slightly higher than in other Asian countries — $50-80. More advanced local economies and specialists cause this price. The language barrier is among the main concerns for companies looking for outsourcing in China. So, having recognized poor English proficiency throughout the country, the Chinese government started to invest in numerous initiatives to educate the local population.
Tech stack: PHP, ASP.NET, Ruby on Rails, ASP.NET
Core IT hubs: Manila.
The country’s developers have a pretty good level of English. Besides, a strong tech foundation and an elaborated IT infrastructure. Moreover, the country’s stable political and economic situation increases its popularity among IT outsourcing seekers.
Tech stack: Java, PHP, and .NET
IT hubs: Hanoi, Ho Chi Minh City.
For Vietnam, average offshore software development costs are $20-40. The country has been regularly ranked among the top global outsourcing destinations. Vietnam can be characterized by deep expertise, numerous technical specialists, and high language proficiency.
Destinations with high rates: the US, Western Europe, Australia, Israel
The common thing for these countries is their relatively high outsourcing development rates. Average offshore software development rates by country here reach up to $150. These numbers result from elaborated economies, high life quality standards, and well-developed internal markets in the chosen destinations.
The United States
The US annually ranks among the top digitally competitive countries in the world. Yet, the specifics of its national market, economy, and taxation system make the region one of the most expensive IT outsourcing destinations. Average US offshore software development rates may range from $70 to $150.
The stable economy can explain this region’s rates – the advanced taxation system and European countries’ high standards enhance the region’s IT sector. In Germany, France, Netherlands, offshore developer rates vary from $50 to $100, while in Switzerland or Scandinavia, the same services may cost you up to $100-200.
The Australian IT market is getting bigger right now. Yet, some barriers hold it from becoming one of the top offshore development hubs: high rates, remote location, and significant time difference. Average rates for software development can be as high as $100-190 in Australia.
The IT industry in Israel has expanded by 400% during the last decade. Software development rates in the country are pretty high. Let’s compare: the average salary of an offshore software development team member in Ukraine is about $1,500, while in Israel, a junior will get $5,500 for the same work. Such striking rate difference results from the lack of tech expertise and a more stable economic situation in Israel.
Why outsource software development?
There should be clear reasons why more and more businesses are turning to outsourcing. Surely, there are. Offshore software development is beneficial in lots of ways. Some of the crucial ones are:
1. Lower rates
Outsourcing saves you money since it provides more affordable options for businesses. That’s probably the prime reason so many companies prefer this cooperation model. Why lower rates? As a rule, the average rates for software development in a region or a country depend on the stability of its economy, currency, and local market situation.
Apparently, some states such as the US, Singapore, Australia, and Western Europe have much more stable economic conditions and, consequently, higher rates. At the same time, most developing countries (let’s take Ukraine, Brazil, India, Algeria) with low income per person offer more affordable prices due to their less elaborated economy.
Yet, cheaper does not mean worse. Although we used to think that more affordable teams may result in worse quality, it’s not always an issue for IT outsourcing. In some countries, such as Ukraine or Poland, the quality of offshore software development is pretty high and supported by an extensive educational background.
2. Wider expertise
Outsourcing is not always about hiring developers. It’s also about obtaining proper & more profound tech expertise. As experienced as it can be, your in-house team would never provide such a broad perspective as developers who work offshore.
Their key advantage is their diversified portfolio. While working in outsourcing, developers deal with numerous databases and dozens of languages and tackle hundreds of totally different business problems. That’s what makes the offshore team so precious. Having worked on projects similar to yours, an offshore software development company can refine your idea while avoiding mistakes you could have made.
Offshore development is also time-saving. By hiring a remote development team, you free yourself from wasting time and money on resource-consuming HR and admin processes: candidate interviews, recruiting procedures, onboarding, risks of quitting, pages of internal documentation, and on and on. Your outsourcing partner is responsible for all these ‘headaches’, while you can go directly to development.
4. Additional professional perspective
Discussing and analyzing business ideas with professionals who can provide you with honest and qualitative feedback is crucial. That’s where outsourcing may come in handy, too.
Offshore software development means passing your project to a team of professionals, including business analysts, marketing specialists, UI/UX designers, and project managers. They can give you a fresh perspective on your business idea, outline ways to optimize it if necessary and find your strong and weak points.
5. Ongoing development
The time difference is generally considered a negative factor in the development process. Yet, sometimes it can play in your favor. Consider time shift as a bonus which allows you to see the results of your late evening comments early in the morning. While you are sleeping, your outsourcing partner is working to make your app slick.
How software development rates are formed
Software rates differ from region to region. But why? Obviously, you are aware of some basic price-constituting factors, but still, let’s quickly overview them.
- Technology stack: the rarer and more complex stack you need for your project, the higher developer skills you require. Consequently, the developer’s rate per hour will go up. If necessary, you can always get rough estimates for your web or mobile application development using various free online app calculators.
- Outsourcing destination: as we have mentioned before, the region’s specifics define the development costs. Countries with higher living standards set bigger rates respectively.
- Experience & reputation: the more experienced team you choose, the higher fares they charge. The same goes for reputation. Basically, you pay more for the security and reliability of your project’s results.
- Team size: you pay for every specialist engaged in your project. The bigger scope of work and roles — the higher cost.
- Cooperation model: in general, outsourcing can be split into two basic options — IT outsourcing as it is or IT outstaffing
Development Costs Distribution: Outsourcing vs Outstaffing
Outstaffing presupposes that every team member is hired specifically for your project. So, all HR and administration processes are done by the vendor, while you have to manage a development process. This allows for saving money and time.
With IT outsourcing, you hire the in-house team of another company. In this case, project management is on the side of the outsourcing partner. While such a model may cost more, it puts the responsibility for achieving your project goals on the partner and enables you to concentrate on some strategic activities. Besides, outsourcing offers various payment models: dedicated teams, time & material, and fixed prices.
Wrapping Up: Offshore Software Development
This guide provides a detailed rates comparison in the leading IT outsourcing hubs worldwide. All of them are worthy of your attention. Some offer lower rates, and others — the better quality or smooth communication. Yet, the final decision is always up to you. At Fulcrum, we believe that IT outsourcing is not about finding work labor. We are sure it’s much more. About finding a reliable technical partner. About strengthening your project with the expertise of professionals, sharing common goals, and fighting for success.
So, all you need is to focus on your business goals and find a team that will root for your project and helps to turn it into success. So, just in case you forgot, we are always there for you. Just find time to tell us more about your project.