Comparing Offshore Development Rates Globally

If you're considering hiring a software development team close to home, be ready to spend a pretty penny and invest a significant amount of your time. The 2023 Accelerance Global Software Outsourcing Report indicates that US software development companies charge up to €200 per hour.

As a tech leader, you're probably in the market for a business solution that's both cost-effective and versatile. That's where offshoring steps in as an attractive option.

In this piece, we'll explore and compare offshore software development rates globally and the factors influencing these prices. 

By the end of this article, you'll be able to identify the best offshore software development country, giving you the confidence to kickstart your offshoring journey!

Comparing offshore software development rates

When hiring offshore developers, there are no right or wrong choices. It's all about weighing factors like your budget while considering cultural fit and English proficiency.

The primary factor influencing offshore development expenses is the location of the engineering team. So, let’s explore some top tech offshoring destinations, explore their attractiveness, and outline their specific rates.

Please keep in mind that the hourly rates provided below are calculated using tools like PayScale, Upwork, Indeed, and other professional salary calculators.

Latin America

• Colombia, with Medellin as its tech hub, is on the rise as a favoured destination for tech investors due to tax and financial incentives
• In Mexico, Monterrey has a talent pool of over 100,000 skilled engineers as the industrial capital
• Rates for hiring top developers in Colombia and Mexico range from €25 to €65 per hour, averaging around €37
• Other options in Latin America include Chile, Brazil, and Argentina, with average offshore software development rates of approximately €35 per hour

Eastern Europe

• Poland and Ukraine stand out for software development with strong work ethic and project dedication
• Over 3,200 custom software companies offer premium services in Eastern Europe, concentrated in Warsaw, Krakow, Kyiv, and Lviv
• Hourly rates for software development in these cities range from €13 to €60, averaging around €32 per hour in Poland and Ukraine
• Other emerging options in Eastern Europe include Czechia, Romania, and Hungary, with hourly rates from €13 to €30

Africa

• Egypt and South Africa stand out as major tech hubs on the continent
• European companies favour Egypt for its time zone and proximity, while South Africa appeals to UK, US, and Australian firms for English-fluent developers
• Rates in Egypt and South Africa range from €20-€45 per hour, averaging around €30 per hour
• Other notable countries are Nigeria and Morocco - Nigeria is the most populous nation, and Morocco produces more engineers with investments in computer science
• Costs in Nigeria and Morocco range from €15-€42 per hour

Asia

• India is a global IT leader and premier offshore destination with 1.5 million new engineers yearly, major tech firms like HCL Technologies, and the Silicon Valley of Asia in Bengaluru
• The Philippines offers competitive rates but has a talent shortage affecting engineering quality

Rates in India and the Philippines range from €10-€50 per hour, averaging around €28/hour

Other emerging Asian options are Pakistan and China - China has advancing software engineering but faces challenges like language barriers and higher rates of up to €40/hour

Factors influencing offshore software development rates

While the geographical location of your developers or offshore partners is the most significant factor influencing offshore software development rates, it's important to remember that there are other considerations.

While you're in the process of hiring top-notch developers in places like India or Colombia, it's good to keep in mind that there are other aspects to consider. Things like the specific tech stack they specialise in, the reputation of the company, and even the developer's exact location within the country can significantly impact the overall cost.

City

A global talent shortage affects industries, including software engineering. Offshoring to regions like Eastern Europe and Asia offers a solution, with a sizable talent pool and lower living costs.

However, software development rates can vary within major cities. For instance, hiring engineers in high-cost cities like Mumbai may be more expensive than in places like Bengaluru, where you can access top talent with better cost efficiency.

Tech expertise

Offshore developer rates are influenced by their technical proficiency, programming languages, and specialisation in particular frameworks.

If you're looking for offshore developers with rare, high-demand skills, expect to invest more than you would for your standard engineering team. These developers who wear multiple hats often secure higher paychecks, considering their location and top-notch skills.

For example, hiring a front-end developer for app development usually costs less than engaging an expert in machine learning and artificial intelligence.

Company reputation 

When considering an offshore software development company, don't underestimate the importance of their reputation and portfolio – these are significant factors that back up their rates.

Before choosing an offshore partner, conduct a thorough background check. Investigate the organisations they collaborate with, their talent sources, origins, and future business perspectives.

When evaluating potential offshore partners, consider their experience and rates. An established company with extensive experience working with international firms will likely have higher software development rates than a newcomer.

Why choose India for offshore software development?

India is a thriving technical brilliance and innovation hub, producing 1.5 million English-speaking engineers annually. Here's why this country is the top choice for tech leaders:

• A collaborative tech community
• Access to world-class developers
• Cost-effective services (average rate of €28/h)
• Exceptional scalability
• Vast talent pools in tech hubs like Bengaluru and Hyderabad

This blend of infrastructure, emerging talent, and English proficiency makes India the strategic leader in offshoring software development and building dedicated teams.

In summary

When it comes to offshore development, the world is your oyster. 

With diverse locations and rates, focus on finding the right cultural fit and technical expertise to suit your needs. Remember that India remains a top contender with its talent pool, infrastructure, and cost-efficiency.

If you're looking for cost-effective offshore software development, contact us. We're here to help you transform your business!