Outsourcing software development to an international team of programmers may save money. Offshoring also allows access to global talent pools. Yet, the average cost of offshore software development varies significantly by country. Costs vary by technology stack, developer seniority, recruitment approach, and platform utilized to hire offshore employees.
The Current State of the IT Staffing Market in 2023
American startups want senior software engineers. You are unlikely to find a junior or even a mid-level position. For example, startups need to perform fast to survive in a changing environment. They need strong leaders in each position, have limited resources to hire and manage a big development staff or get financing rounds that offer new possibilities. Western Europe (especially Germany and the Netherlands) has a similar situation, with a disproportionate number of European businesses.
In these sectors, salaries have risen due to high demand and a limited supply of senior engineers. To compete for talent in low-cost countries, big corporations must pay the highest prices. Then came the boom in offshore software development in Eastern Europe, Latin America, Asia, and Africa.
Offshore Software Development Hourly Rates
The rates of software development in North America and Western Europe
As of 2023, a software engineer’s average basic hourly salary is $47 per hour. This number may vary by skill, technology, and geographical location.
Eastern Europe Offshore Software Development
Eastern European nations such as Ukraine, Belarus, Poland, and Romania have become one of the world’s top five software development hubs. IT exports from these nations totaled about $13 billion.
Additionally, the Czech Republic, Hungary, Bulgaria, Croatia, Serbia, and even Moldova are notable participants.
Here are some more statistics on the status of the IT sector in Eastern Europe:
- $5 billion: the earnings of about 500 information technology firms
- 700,000: the region’s population of IT experts
- 60,000: the yearly graduation rate of technology students.
- Annual revenue increase of 20% to 25% in the area.
The Technology area includes software engineering, database management, security engineering, operating systems, computer networking, and human-computer interface.
The cost of offshore software development is essential when seeking long-term relationships. Concurrently, the ability to build trust with your offshore developers is a crucial aspect to consider when choosing an outsourcing destination. An east European developer’s hourly wage is about $37.
Latin American Software Development Offshore
While the region’s economy remains weak, the IT industry will rise in coming years. Latin America’s and South America’s leading software outsourcing countries. Brazil has the most significant number of software engineers (400,000). Brazil is also rated second among the top 50 digital economies.
Even though Brazil is the biggest country in South America, companies often refer engineers to other Latin American nations. For starters, Brazil is the only country having a Portuguese-speaking population. The rest of the continent speaks Spanish. Therefore, companies may hire engineers from various countries with confidence.
The average hourly pay for software engineers in Latin America is higher than in Eastern Europe. A Latin American developer makes $50 an hour.
Asia Offshore Software Development
Asia, the pioneer of software outsourcing, has the most offshore software engineers. In 2018, the figure reached almost 3 million people in India alone.
Offshore development is also appealing in China. The Chinese government encourages the IT sector economically. For example, the country now boasts over 50 science and technology industrial parks. Moreover, 200 offshore companies and 95,000 unfilled IT positions exist in the Philippines.
India is Asia’s most significant software outsourcing country and a digital powerhouse. Indian software development companies are renowned for their low-cost web development outsourcing services. About 120K IT workers graduate annually from the country’s IT schools. Moreover, In India, the offshore software development hourly rate is between $15 to $20 which is very affordable as compared to other countries.
Africa Offshore Software Development
Africa’s IT outsourcing sector is relatively young, but it is rapidly growing and attracting foreign clients. Younger populations are anticipated to boost demand for high-quality service sector jobs, and the country will soon be among those most popular for software development outsourcing.
North Africa, particularly Egypt, Morocco, and Tunisia, has quickly become a significant outsourcing destination because of its proximity to Europe and New York. Morocco and Tunisia also attract French tourists owing to their everyday language. North African programmers know Python, Ruby, and SQL.
South Africa is also a viable choice because of its low time zone differences and strong English, German, and Dutch proficiency. South African developers know C++, PHP, and SQL. Africa outsources less than any other area. In South Africa, the average hourly rates for offshore software development services are range from $40 to $50.
As you can see, offshore countries have significantly lower average software development costs than the US or Western Europe. A senior software engineer in an overseas country may be paid less per hour than a junior or medium developer in the US. Because living expenses in offshore countries are lower than in the US or Western Europe, outsourcing is the most cost-effective alternative.
Choosing a country to outsource software development services from requires care. Sadly, not all offshore countries provide a good value for money.
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