To save money, you can outsource software development to a team of programmers in another country using modern technology. But you will need to better understand offshore developers rates for budgeting requirements. Offshoring also gives you access to a larger pool of talent from across the world. On the other hand, the typical cost of software development services varies substantially from country to country. When it comes to product development, several variables influence pricing. These include factors like the technology stack developers use, their experience, and the hiring method.
An analysis of offshore software development rates by country and level of experience will be presented in this post. Also, we give some advice on how to recruit offshore developers properly. We’ll be utilizing credible sources: SalaryExpert, Indeed, PayScale, Upwork, Toptal, and ourselves—YouTeam, a marketplace for on-demand engineering staff augmentation.
The Benefits of Hiring Offshore Developers in 2021
In addition to lower offshore developers rates, if you employ offshore developers, you will benefit from the following benefits:
- Access to a large pool of IT talent. According to the Wall Street Journal, employers in the US had over 918,000 vacant IT positions in 2019. If your company is one of these, outsourcing may be a viable option.
- There are no hidden fees. You just pay for the services since offshore software development is done remotely. Insurance, office space rent, incentives, and other fees become the responsibility of offshore developers or an intermediary agency.
- You’ll have more time to devote to your project. Employees who work from home save time commuting and may devote that time to the project.
Offshore developers rates according to country/region overview
It would be best if you always kept in mind that typical offshore developer rates might fluctuate greatly from the accurate pricing of software development services, which is why:
- When calculating the average rate, it considers the costs of various technologies. And some of which are more common and less costly than others.
- Because developers with decent English, communication skills, and a proactive attitude are constantly in demand, they are paid more than the average.
- The average cost is a combination of the rates of junior and senior developers, with the first group accounting for the lion’s share of the market. Employing a junior developer is less expensive than hiring a senior developer, which is a good thing for saving money. However, because the vast majority of the developers are junior developers, the average cost will be skewed somewhat in favor of the cost of a junior developer unless the data is appropriately weighted.
And we tried to be as accurate as possible in this post about how much an experienced developer willing to work on international projects would cost at an hourly rate. We hope you find it beneficial.
Let’s now examine the market processes that have contributed to the present situation of the global software development industry.
Offshore developers rates and the current situation in the IT hiring market
Senior software engineers are in high demand among startups in the United States of America. A job opportunity for a junior or even medium post is quite unlikely. Many factors may be at play, including the requirement for excellent leaders in each function and the demand for startups to perform quickly to thrive in a changing market. Due to a lack of resources, it is hard to employ and manage a large development team or even get financing rounds that open up new possibilities. A similar trend exists in Western Europe (particularly Germany and the Netherlands), where many European startups are located.
There is a high demand for senior engineers in these regions and a limited supply, resulting in higher compensation and fierce competition for available resources. Most startups will have to hunt for workers in countries with lower living expenses if large corporations can afford to pay the highest rates. As a result, Eastern Europe, Latin America, Asia, and Africa have gained a reputation as offshore software development hotspots.
Last year, however, the whole world entered a new, pandemic-related digital age marked by rapid technological innovation. The ever-increasing tech trend has resulted in a massive demand for software development services in recent years. There was a talent shortage even in offshore outsourcing locations. It’s becoming more difficult to find an engineer with the right tech stack and 5–8 years of expertise. As a result, offshore development rates have risen to unprecedented heights. Let’s take a closer look at it.
How Did Offshore Software Development Rates Change Over Time?
This post was initially published on our blog in early 2020. However, since market circumstances are continuously changing, we periodically update this blog post. And in this latest version of the post, we compare the rates we previously mentioned to the current market pricing for software development.
Market circumstances change regularly. Offshore developer rates have risen by more than 7% for virtually all technologies since 2020, which is not surprising. In the case of senior developers, the percentage is much higher at 10%.
The technologies with the most dramatic rise were React Native, ReactJS, Python, Ruby on Rails, NodeJS, Java, and PHP. In comparison to the previous year, these developers received a payout rise of up to 15%.
Offshore Development Hourly Rates by Region in 2021
This section will give you an overview of the regions and offshore development rates by country so that you can make an informed choice when hiring from abroad. Eastern Europe, Latin America, Asia, and Africa will be discussed. To properly compare offshore software development rates with domestic software development rates, let’s first look at rates in Western Europe and the US, the two regions where the greatest demand for offshore software development services exists.
Software Development Rates in Western Europe and North America in 2021
According to Indeed.com, as of 2021, the average basic hourly wage for a software engineer in the United States is $46.32 per hour. This number may change based on various factors, including expertise, technology, and geographic location. Here are some state-by-state examples of rates:
Similarly, rates vary per country in Western Europe, for example:
Let’s look at the rates in offshore countries now.
Offshore Development in Eastern Europe in 2021
Eastern European nations such as Ukraine, Belarus, Poland, and Romania are now among the top worldwide software development hubs, according to a study conducted in January 2019 by AVentures Capital, Aventis Capital, and Capital Times. IT exports from these countries totaled about $13 billion.
The Czech Republic, Hungary, Bulgaria, Croatia, Serbia, and Moldova are important contenders in this area.
Here are some other statistics on the situation of the IT sector in Eastern Europe:
- The profit of the 477 IT businesses that took part in the study was $5 billion.
- The yearly number of graduates from technical institutions is 60,000.
- In the region, revenue growth is expected to be between 20 and 25 percent every year.
According to Coursera’s Global Skills Index 2020, Belarus, Ukraine, the Czech Republic, Poland, and Hungary ranked first in the technology category, including security engineering, operating systems, software engineering, databases, and computer networking and human-computer interactions. There are also several Eastern European countries, like Belarus, Hungary, and the Czech Republic, that have risen to global prominence in data science, including skills like Python and SQL.
Offshore Software Development in Ukraine in 2021
Ukraine has been attracting international investors since the late 1990s and early 2000s, when the first software outsourcing businesses began to develop due to its convenient location in the heart of Europe. Given the current situation of the IT sector in the country, the following statistics and information are available:
- According to Ukraine’s State Statistics Service, IT service exports from Ukraine increased by 15% in 2019. It now accounts for 16 percent of total service exports, worth $15.23 billion to the country. Ukraine’s IT exports were expected to top $5 billion in 2020.
- According to HackerRank test results, Ukrainian developers are ranked 11th in the world in terms of programming capabilities. More than 85% of IT workers have at least a basic command of the English language.
- In Ukraine, there were over 160,000 IT experts engaged at almost 4,000 IT enterprises as of 2019. By 2021, the number of IT experts will have risen well above 200,000.
- The IT sector in the country is increasing at a rate of roughly 26% per year.
According to the rankings of offshore development rates by country, Ukraine has a lot to offer when outsourcing software development.
Poland as an Offshore Development Destination
Poland is one of the most costly nations to outsource software development in the Eastern European region. It is also one of the region’s most secure and stable economies. The Polish government is a staunch supporter of the IT sector. As a result, numerous major firms, including Google, Intel, and Siemens, established R & D operations in Poland.
This country’s membership in the European Union is one of its most valuable assets. As a result, it is particularly appealing to Western European businesses that share legal and geographical space.
In addition to its own IT graduates, Poland is continually expanding its talent pool by headhunting the brightest engineers from Ukraine. Many software outsourcing firms operate in the Polish and Ukrainian markets, allowing engineers to quickly transfer to nations with lower living and software development rates.
Eastern European Software Engineer Hourly Rates in 2021
When a company is looking for a long-term partner, the cost of development is critical. An important consideration when considering an outsourced location is the ability to establish trusting working relationships with your developers. For your convenience, we merged the average hourly pay for software developer talent in various Eastern European nations with the World Bank’s assessment of political stability and ease of doing business.
Software Engineers’ Average Hourly Rates in Eastern Europe in 2021
As previously said, when a company is hunting for a long-term collaboration, the cost of development is quite crucial to consider. At the same time, the capacity to establish trusting connections with your offshore developers is an even more important factor to consider when selecting an outsourcing region. For your convenience, we integrated the average hourly pay for software development talent in other Eastern European nations with a World Bank score of political stability and ease of doing business.
Latin America’s Offshore Development in 2021
According to IDC, despite political instability and poor economic growth, the Latin American IT market will rise in 2021. The IT market was expected to grow by 4.8 percent in 2020, according to Ricardo Villate, vice president of the regional consultancy. According to IDC, business expenditure on 3D printing, cloud, AR/VR, AI, IoT, security, and robots has increased.
According to Coursera, Argentina and Chile are among the top 30 countries in the world for data science (Machine Learning, Data Management, Data Visualization, and Statistical Programming).
Offshore Software Development in Brazil in 2021
In Latin America and South America, Brazil is one of the top software outsourcing countries. According to a previous survey by Agile Engine, Brazil has the most software developers in the region, with over 400,000. The Tholons Services Globalization Index 2019 ranks Brazil second among the world’s top 50 digital countries. In 2021, the average hourly wage for a software engineer in Brazil was $44.
Latin America’s Top-Performing Outsourcing Destinations
Engineers are often sought from outside Brazil, even though Brazil is South America’s largest country. And, as a result, has the region’s largest pool of available workers. The basic explanation for this is that Brazil is the only country in the world where the majority of the population speaks Portuguese. While the rest of the continent speaks Spanish, it’s simpler for enterprises to extend their recruiting to several nations because their foreign engineers will be able to communicate with one another in their native language.
Mexico, close to the United States, is one of the most preferred nations for nearshore software development. Why? Because its engineers are accustomed to dealing with US customers and have a thorough understanding of their corporate culture.
Argentina and Panama are the second and third offshore development nations in the area that we wish to highlight.
- As per the same analysis by Agile Engine, Argentina is rated 14th among the top software outsourcing nations and second in the region. According to the Tholons Services Globalization Index 2019, it is also the tenth most digitally advanced country.
- According to the World Bank Group, Panama has been one of the fastest-growing global economies in recent years, with great technological advancement in the IT business.
Average Developer Hourly Rate by Country in Latin America in 2021
According to the most recent statistics, the average annual wage for software developers in Latin American nations is greater than in Eastern Europe; however, stability ratings are lower.
Offshore Software Development in Asia in 2021
Offshore development rates are very reasonable in Asia compared to other regions. As a pioneer in software outsourcing, Asia has the largest number of offshore software developers of any region. This figure was around 3 million in India alone in 2018.
China is also an appealing offshore development destination. Across all HackerRank challenges, Chinese developers come out on top. The Chinese government provides economic incentives to the IT industry. More than 50 scientific and technological industry parks have since been established around the country.
Cebu City in the Philippines has the fastest-growing IT sector, with over 200 offshore enterprises and 95,000 tech jobs available. In the Tholons Services Globalization Index 2019, the Philippines is ranked 5th among the top 50 digital countries, with Manila as the world’s second-largest metropolis.
Offshore Software Development in India in 2021
According to the Tholons Services Globalization Index 2019, India is one of Asia’s leading software outsourcing countries and a top digital nation. One of the most cost-effective ways to outsource web development is through Indian software development companies. More than 100,000 IT professionals graduate from the country’s technical institutions each year. As of 2016, India was ranked second in the world for the number of STEM graduates, with 2.6 million. In India, the developer’s average hourly wage is $30.
On the other hand, there have been cases in India where junior developers eager to get started in their careers leveraged themselves with the lowest pay rates possible. Under such low pay rates, under-skilled developers working on complex projects have made those projects fail.
Offshore Developers Hourly Rates by Country in Asia in 2021
Other Asian nations’ offshore development rates for 2021 are as follows:
Offshore Software Development in Africa in 2021
Although Africa’s IT outsourcing sector is still in its early stages, it has already shown fast development and is drawing international customers. The growing number of young people in the region would increase the demand for high-quality service sector employment. The country will soon be among the finest places to outsource software development.
- It has swiftly become a prominent outsourcing destination because of its time zone consistency with Europe and a short time difference with New York, as well as North Africa, notably Egypt, Morocco, and Tunisia. Furthermore, because of their similar language, Morocco and Tunisia draw consumers from France. Python, Ruby, and SQL are just a few of the technologies that North African programmers are familiar with.
- Due to minor time zone variations and good English, German, and Dutch competency, South Africa is another attractive option. The Tholons recognize the region as a Digital Nation and a Super City to top it all off. And South African developers are comparatively fluent in C++, PHP and SQL.
- Africa’s east Kenya has a disproportionately high number of programmers. This may be because Nairobi acts as a hub for international businesses to reach Africa.Thousands of Kenyan enterprises call Nairobi home. And the city’s infrastructure fosters technological innovation among emerging firms and startups. East Africans are reputed for their skills in working with Java, SQL and in Mobile Development.
Despite this, African nations have the lowest worldwide skill rankings.
Offshore Development Rates by Country in Africa in 2021
According to a recent study, the hourly pay of a software developer in Africa is much lower than in any other outsourcing market. However, you will pay a larger price in terms of risk since this region has the lowest stability index.
Sri Lanka as an outsourcing destination
Sri Lanka has risen to the top of the list of outsourcing destinations for knowledge-based projects. And this because of huge tax benefits, a booming GDP, and favorable trade relations. When it comes to high-quality software products, Sri Lanka has developed and established a reputation for excellence. The National Outsourcing Association has recognized and shortlisted Sri Lanka several times as the “Offshore Destination of the Year.”
The IT industry in Sri Lanka has been one of the most robust throughout the COVID-19 crisis, with exports growing at an annual rate of 8%. Over 300 Sri Lankan software businesses exist now, accounting for 90% of the country’s IT exports. Sri Lanka has long been regarded as a center for the worldwide IT and business process outsourcing (BPO) industries. The IT/BPO industry accounts for 13.2% of service exports, behind the textile and tourism sectors. Sales have surpassed the $1 billion US mark.
Moreover, because of Sri Lanka’s high literacy rate, the country’s information technology industry has emerged as the most efficient, competent, and financially appealing sector, among many others. For more than a decade, Sri Lanka ranked first among the countries in the South Asian area in terms of outsourced development. Moreover, it was the preferred destination for many US, European, and Australian corporations looking to outsource development.
The advantages of employing Sri Lankan software developers
The following are some of the factors that contribute to Sri Lanka’s popularity as an outsourcing destination:
- Global Services Magazine has named it as one of the top 10 emerging global destinations.
- The National Outsourcing Association has recognized Sri Lanka as the “Offshore Destination of the Year” for many consecutive years.
- It is one of the top six offshore service destinations in the Asia-Pacific, according to Gartner’s ranking of the world’s leading destinations for offshore services.
- In 2017, the A.T. Kearney Global Services Location Index (GSLI) ranked Sri Lanka as the 11th most desirable location for financial attractiveness, people skills and availability, and business environment.
- According to the IBM Global Location Trends Report, the country ranks 12th among the top-ranking destinations.
Quality is also a trademark of Sri Lanka’s well-versed IT business. As a result, Sri Lanka has established a reputation for greater software product quality compared to other offshore outsourcing destinations due to a consistent stream of product deliveries over time.
Furthermore, outsourcing these development projects to Sri Lanka improves efficiency and competitiveness.
Hourly Rates for Developers in 2021, based on Technology and Experience
Treinetic’s final thoughts on offshore developers rates
It might not be easy to find a team of software engineers for your project. This is very relevant for those in the United States or Western Europe looking for IT talent in their area. Finding suitable individuals at an affordable price may take a long time. If you are new to remote hiring, it is crucial to learn about the best nations to outsource software development and offshore software development rates by country.
To give you an idea, here’s what you’d pay a mid-level developer in an offshore region:
- $24-$35 in Asia
- $30-$40 per hour in Eastern Europe
- $30-$47 per hour in Latin America.
- $22–$30 in Africa.
The lower cost of living in offshore countries is responsible for this inequality in income. Although you will often obtain the same quality as local experts, you must be cautious when selecting a place to outsource software development services. If you want to speed up the development process and minimize unforeseen costs, you can employ an award-winning offshore development team.
Please get in touch with us immediately. And we’ll be pleased to provide you with additional information about managing outsourced development.