Today, there are hundreds of IT outsourcing companies, one can easily find several cost-efficient options. For example, the hourly rate for developers in the United States is $70-130, while in Eastern European countries, such as Poland or Ukraine, it is $30-50.
With this in mind, you can significantly reduce the cost of software development while maintaining the desired quality of the final product. To do this, it is essential to understand what are offshore software development rates in different countries and which of them offer the best talents.
The total revenue of the IT outsourcing market in 2022 is expected to be $396.3 billion. This is 9.8% more than last year. So why is this market growing?
The first reason is obvious – for many companies, such services are lucrative. Offshore developer rates vary widely in different parts of the world. Therefore, if you choose the right contractor, you can significantly reduce the development budget.
In this article, we will look at offshore software development rates by country and the average cost of development services. We will compare the pace and quality of software development in different countries, which will help you choose the right offshore service provider at the best price.
IT Outsourcing Market in Eastern Europe
Eastern Europe is a golden mean among all regions. You can hire highly qualified developers here at lower rates without risking the quality of the product. The density of software developers here is very high – 1.3 developers per 100 working people, which gives about 1 million software developers. An impressive figure for the IT industry of such a small region.
This makes Eastern Europe a promising area for software development outsourcing. On average, offshore rates for software development in the region range from $25 per hour to $60 per hour for a senior software engineer. However, more accurate offshore developer rates in Eastern Europe vary from country to country, so let’s take a closer look.
Polish Developer Hourly Rate
- Rates: $35-55
- Popular tech stack: Java, SQL, Python, C++
- The largest IT-hubs: Warsaw, Krakow, Wroclaw, Lodz
Poland is geographically and culturally related to Ukraine. But in Poland, offshore programmers have slightly higher rates than their neighbors. But it still corresponds to the average level of Eastern Europe – about $35-55. The higher cost per hour can be explained by the higher standard of living in the country and good technical education. Poland has a well-developed IT industry, so the outsourcing market is rich in both freelancers and companies providing such services.
The vast majority of IT professionals working in the country live in Poland’s four largest IT hubs. However, these are not the only cities with a developed infrastructure to support and improve the skills of IT professionals. In addition to outsourcing, hundreds of software companies are also registered in Poland.
Romanian Developer Hourly Rate
- Rates: $25-45
- IT hubs: Bucharest, Cluj-Napoca, Iasi
Rates correspond to the average in Eastern Europe and are comparable to Ukraine and Poland. In particular, a software development hour costs $25 to $50. However, Romanian developers offer decent end products, as they are good with complex languages and databases.
Romania has one of the most-developed IT industries in the CEE region. According to Clutch.co, there are also about 300 software development companies in the country. At the same time, more than 8,000 IT professionals graduate from Romanian universities each year.
One of the reasons for the number of IT professionals in the country is that Romania, since the 1990s, has created favorable conditions for attracting investment from global technology giants such as Microsoft, Amazon, Google, and others. At the same time, IT specialists in Romania are often not so highly qualified, compared to Ukraine or Poland. Often, there is a shortage of expert-level programmers.
Ukrainian Developer Hourly Rate
- Rates: $25-50
- Popular tech stack: Python, Java, Ruby
- The largest IT hubs: Kyiv, Lviv, Odesa, Dnipro, Kharkiv
Ukrainian companies offer high-quality software development at a reasonable price. In particular, 11 Ukraine-based companies were included in the 100 best IT outsourcing companies in the world. Due to this, Ukraine is among the best countries for IT outsourcing not only in Eastern Europe but also in the world.
The competence of the Ukrainian IT environment is evidenced by the portfolio of projects developed by specialists from this country: WhatsApp, Grammarly, Viewdle, Reface, Preply, and others were fully or partially created by engineers from Ukraine.
Dynamics and potential of development also showcases the quality of the IT outsourcing market in Ukraine. For example, in 2020, the Ukrainian IT industry set a new investment record by raising an impressive $571 million.
And the future is very encouraging because about 16,000 IT engineers graduate from Ukrainian universities every year. Due to high competence and affordable ratings, Ukrainian developers are in great demand around the world.
IT Outsourcing Market in Western Europe
Western Europe has some of the highest hourly rates globally, on a par with the United States. What causes it? High economic development, political stability, a developed tax system, and, as a result, high standards of living in these countries. For example, in Germany, France, and the United Kingdom, offshore developer rates are $50-100, and in Switzerland or the Scandinavian countries, the same services can cost as much as $100 to $200.
More accurate figures depend on the experience of a particular developer and the required technology stack, and, of course, the location. It is vital to understand that these rates include only the amount you pay the developer. Add taxes and additional costs.
Offshore Software Development Rates in Germany
- Rates: $100-150
- Popular tech stack: Java, Python, SQL
- Largest IT hubs: Berlin, Stuttgart, Munich, Frankfurt
High living standards and high salaries encourage many developers to move to Germany. Thanks to a well-thought-out labor migration policy, high-quality education, and stable economic growth, Germany has more than 900,000 software developers, the highest number among European countries.
But the downside of such prosperity is the stakes for offshore software developers in Germany. Mid-level developers with more than two years’ experience earn about $64,000 a year, while senior developers at large companies earn between $90,000. Income expectations contribute to high rates.
In particular, offshore companies charge an average of $100-150 per hour for offshore software development. The exact price depends on the city where the company is.
Offshore Software Development Rates in France
- Rates: $50-99
- Popular tech stack: Java, C++, Python, Ruby
- The largest IT hubs: Paris
According to trade.gov, technology companies employ 3.5% of France’s population. At the same time, small and medium-sized outsourcing companies for business software development occupy the largest share of the IT sector – 61%.
However, the development of the French IT sector is far from other Western European countries. Novice programmers earn $35,000 a year, while senior developers earn twice as much – $67,000. This pay gap indicates a lack of development in the IT sector, which is generally to the advantage of entrepreneurs who want to get high quality at a fairer price of $50-99 per hour for offshore software development.
Offshore Software Development Rates in the United Kingdom
- Rates: $200
- Popular tech stack: Python, Java, Ruby
- The largest IT hubs: London, Manchester, Birmingham
The United Kingdom has the second largest number of IT specialists in Western Europe after Germany. In the island kingdom, every thirteenth citizen is a software developer. At the same time, their average annual salary in the UK is slightly lower than in Germany and reaches about $55,000/year. But hourly rates for offshore software development are higher. In particular, companies that do not have significant experience and customer feedback in their portfolio charge $100 per hour, and well-known and recognized companies can charge as much as $200 per hour.
IT Outsourcing Market in Latin America
The Latin American IT outsourcing market is another popular talent search region. Companies in Latin America offer relatively competitive hourly rates for the services of highly qualified professionals. This region is very convenient for customers from North America in terms of time zones.
According to IDC, the Latin American IT industry will continue its post-pandemic growth in 2022. In particular, it is expected to grow by 9.4% after 8.5% in 2021. These figures cover the entire IT market in the region and show the growth of companies that specialize in providing offshore software development services.
Latin America has recently appeared on the map of global software development outsourcing thanks to the efforts of local authorities. Countries such as Argentina, Peru, and Brazil have introduced new ways of taxing and securing their resources, which has led to significant results in the IT segment.
Hourly offshore software development rates in the region average $40 for a junior specialist and about $55 for a senior developer. But let’s take a closer look at the major IT countries in the region.
Brazil IT Outsourcing Rates
- Rates: $30-50
- Popular tech stack: Java, Python, SQL
- Largest IT hubs: Rio de Janeiro, Porto Alegre, Curitiba, Blumenau and Londrina
According to a study by Agile Engine, Brazil has the largest number of software engineers in the region – more than 400,000. This Latin American country is also among the top 50 digital countries according to the Tholons service globalization index 2019. This makes Brazil the leading country in the region for outsourcing software developers.
All this was made possible by constant investment in technical education in the country. About 15,000 IT engineers graduate from Brazil’s technical colleges each year.
At the same time, the average hourly rate of offshore developers in Brazil is quite attractive to customers and in 2022 costs $44 or $30 to $50, depending on the specialist. The country is one of the leading centers of IT outsourcing globally.
Argentina IT-Outsourcing Rates
- Rates: $35-55
- Popular tech stack: Java, Python, SQL
- Largest IT hubs: Buenos Aires
Back in 2018, Argentina ranked 14th among the best countries for outsourcing software developers and ranked 2nd in its region. And according to the Tholons Services Globalization Index 2019, Argentina ranks 10th among digital countries in the world.
Argentina is another well-developed IT outsourcing market in Latin America. The country has many talented professionals in various segments, including software development. Due to economic and cultural growth, Argentina is very close to European countries. At the same time, the rates of offshore developers range from $30 to $50, depending on the level of the specialist.
The country’s leadership believes and invests a lot in good education. As a result, the University of Buenos Aires took first place in computer science education. And in the Coursera Global Index Report 2020, Argentina ranks 22nd in the global survey.
Peru IT-Outsourcing Rates
- Rates: $35-55
- Popular tech stack: Node.js
- Largest IT hubs: Lima
At the Peru Service Summit 2019, it was announced that the country managed to receive $85 million in revenue from other countries. This was made possible by the development of the IT outsourcing market. This economic recovery, combined with the development of the IT segment, allows Peru to attract investment into its economy to further develop and improve living standards.
The average offshore software development rates in this Latin American country is $35-55. In general, Peruvian developers have an excellent technical education, are fluent in English, and are well acquainted with how business works in the United States.
IT Outsourcing Market in Asia
Asia remains one of the leading regions for outsourcing in the IT industry. There are many companies that are exclusively engaged in providing obedience to offshore software development, as the densely populated region has hundreds of thousands of IT-specialists. Such a high supply creates relatively low rates for offshore software developers, which is the most significant advantage of this region. They range from $20 to $45.
A significant disadvantage at the same time is the large difference in time zone, although many developers in Asia are willing to work at night. Significant cultural differences can be another problem, making communication very difficult. Nearshore companies in Europe have an advantage in this regard.
Let’s examine the salaries in Asia’s largest IT outsourcing centers: India, Vietnam, and the Philippines.
Developer Hourly Rates in India
- Rates: $25-$50
- Popular tech stack: Java, C++, Python
- Largest IT hubs: Bangalore, Chennai, Mumbai, Kolkata
For several years, India has been a leader in Asian software development outsourcing and is one of the world’s leading digital countries. This is evidenced by statistics for 2016, where India ranked second among the countries with the largest number of graduates in STEM – 2.6 million. Every year, the country’s technical universities graduate about 120,000 IT professionals.
Even though India is the top digital nation worldwide, the quality of the final product is not always satisfactory, because the country has no general framework of quality standards control. Therefore, it is critical to find responsible and reliable developers.
Offshore software development rates in India are $20-40. It is convenient to work with specialists because they all study English in technical universities and speak it well, which is a great advantage.
Developer Hourly Rates in Vietnam
- Rates: $20-40
- Popular tech stack: Java, PHP, and .NET
- Largest IT hubs: Hanoi, Ho Chi Minh City
Vietnam is regularly ranked among the best countries in the world to outsource IT talent. Numerous Vietnam technicians have a good knowledge of English and an excellent command of English. Back in 2006, California-based consulting firm NeoIT named Ho Chi Minh City one of Asia’s best non-Indian cities for its high potential in the IT industry’s outsourcing segment due to its advanced IT infrastructure and a large workforce.
As a result, in 2017, Vietnam ranked 5th among the world’s most attractive countries for Global Outsourcing Services. A number of engineers is one of the reasons. Another one is relatively low rates of offshore software developers: $20-40 per hour.
Developer Hourly Rates in The Philippines
- Rates: $25-50
- Popular tech stack: PHP, ASP.NET, Ruby on Rails, ASP.NET Core
- Largest IT hubs: Manila
Manila is one of the ten best cities for outsourcing, according to Tholons. Thanks to this and other significant IT hubs, the Philippines has an enviable place among the countries with the best pool of offshore software developers in the Asian region.
The country’s IT specialists are distinguished by a fairly high level of English language proficiency, as well as a good technical base. The Philippines has a stable political and economic system and a well-developed IT infrastructure, contributing to its popularity among IT outsourcing customers.
Average Hourly Software Development Rates by Technology
The above prices for outsourcing in different countries are average among professionals of different levels. But numbers do not take into account many factors. We have decided to compile a list of offshore software development rates per hour based on the technologies used. It is based on open information from nearly 300 outsourcing vendors worldwide.
.NET is a popular set of technologies used by software developers to create and run products on the most common platforms Linux, macOS, Windows, iOS, and Android. The average hourly rate for .NET developers is $36.
Node.js is used to develop traditional websites and back-end API services. At the same time, the technology has real-time architects in mind. Based on our analysis, you can hire Node js developers for an average of $48 per hour.
Python is the world’s third most popular computer programming language, used to develop both websites and software, as well as to automate tasks and analyze data. In other words, Python is not a specialized language but a general-purpose one. Based on our analysis, the average Python developer is asking $51 per hour.
And now that we’ve to know the rates, let’s look at the advantages and disadvantages of offshore software development.
Benefits of Hiring Offshore Developers
Hiring offshore software developers has several benefits in addition to affordable prices. Let’s look at some of them:
- Highly qualified IT professionals. According to The Wall Street Journal, in 2019, there were more than 900,000 unfilled IT vacancies in the United States alone. Outsourcing is the best option to find the necessary talent even for such companies.
- No running costs. With offshore software development, you only pay for services you ordered. You do not have to worry about renting office space, equipment, salary, insurance, taxes, etc. All costs are on the companies that provide services or the developers themselves.
- You will be able to spend more time on the project. Given the complete lack of current administration and the work of remote developers from home, there is more time left to work on the project.
But of course, offshore software development has its challenges. Let’s look at some of the most important.
Challenges of Hiring Offshore Programmers
In the case of software development outsourcing, its shortcomings are pretty predictable and familiar in all situations. Some of them we have already talked about above, but let’s highlight all of them here:
- Differences in Time Zones. The most popular regions for IT outsourcing are Latin America, Eastern Europe, and Southeast Asia. Depending on the location of your office, these time zones can be very different from yours. For example, there is a difference of 7 hours between New York and Ukraine.
- Lack of Personal Communication. “Offshore” means that the customer and the developer are located in different countries, so it is obvious that there will be a barrier in communication between them. You must be ready that all communication will be in chats and by video. Or be prepared to fly across the hemisphere.
- Too Many Companies to Choose From. It would seem that a large number of software development service providers in the market should be an advantage, but not always. The wider the choice, the harder it is to make it there the higher the chance of error. Be prepared to spend some time on deep research.
- Cultural Differences. When working with offshore developers, you need to understand the difference in cultural contexts. The only recommendation here is to find worthy developers from cultures close to you.
If you understand these and other challenges and are willing to work with remote developers, then let’s move on to the hiring algorithm.
How to Hire Offshore Programmers in 6 Steps
Below we offer a generalized algorithm for hiring the ideal team of offshore developers. Your process may be different, but note the following before you begin:
Detailed Job Description
Before starting the search and in the process, make sure that you have accurately described all the desired functionality and requirements of the future products. It is necessary to find developers who have all the required skills to create full-fledged working software for your business.
Proven Track Record
Check the ratings of developers on Clutch and similar sites, you can also check their profile on LinkedIn to see who they have worked with and who have feedback. Ideally, you can contact their previous customers and ask for feedback and recommendations.
Access the Latest Code
Conflicts can happen in the process, and offshore programmers have close access to the code. We recommend that you have constant access to the revocation version code just in case. You must also agree on the administrator’s rights to the Github, TFS, and cloud services.
Find out in advance how developers build the workflow and whether they can add or change developers as the project progresses. After all, it may turn out that you do not like their workflow or other details. Also, be sure to keep an eye on the NDA.
Reject the Cheapest
Focus primarily on quality and reasonable cost-effectiveness. Working with the cheapest on the market, you may find yourself in a situation where you have to pay more and postpone the launch due to the low quality of the final product. Don’t forget to check the code on Stack Overflow or GitHub.
Convenient collaboration tools greatly simplify and speed up the process. Use state-of-the-art project management and tracking tools to see team progress and discussions on the go instead of outdated mailing.
Offshore programmers are the best option for small businesses and startups, as this hiring scheme saves a lot of money and time. But before you start looking for specialists, you need to be clear about the existing options and offshore developer rates in different regions. Also, keep in mind the possible problems that may arise in cooperation.
At Fireart Studio, we offer you the high-quality skill of execution combined with comfortable pairing conditions. Our team based in Ukraine has seven years of experience working with customers worldwide. Every professional on our team has an English level of at least B2 and a higher IT education.
We know that offshore development is not only a search for a workforce but also a reliable team that understands the needs of business and is ready for challenges. Contact us, and our specialists will advise you on choosing a team of true professionals.