Offshore Software Development Rates by Country: A Comprehensive Guide

Outsourcing software development to Eastern Europe

Disclaimer: Comparison data is based on aggregated data from Indeed.com, Glassdoor.com, and Payscale.com in 2024. Figures can vary depending on specific technology, experience, industry, or niche.

The revenue of the IT outsourcing market in Eastern Europe is expected to grow at an average annual rate of 7.78%, showcasing the increasing interest in Eastern European tech providers.

The main regional hubs are considered to be Ukraine, Poland, and Romania, with average software development rates of around $25 to $45 per hour. But what else makes this region attractive to Western businesses? Let's explore.

Pros of outsourcing to Eastern Europe

High-quality professionals for a decent price

The talent pool of highly skilled IT professionals in Eastern Europe is quite large, and the rates are lower than in most Western European countries or North America. For example, Ukraine and Poland provide advanced development services for rates as low as $30-50 per hour.

Cultural compatibility

Most Eastern European countries share values similar to those of the Western world, which reduces misunderstandings and cultural incompatibility and enhances collaboration.

Easy communication

English proficiency is required for IT professionals when hiring in Eastern Europe to ensure easy communication with international clients.

Convenient time zones

For clients from Western Europe, North America, or Australia, the time difference ranges from two to eight hours, allowing for real-time communication.

Government support

Many Eastern European countries support the IT sector and encourage technology development through policies and incentives.

Cons of outsourcing to Eastern Europe

Confusing tax laws

Tax regulations vary from country to country in Eastern Europe, which may confuse Western businesses. However, this confusion is decreasing as many software development companies now adopt gross salaries and rates. This approach simplifies the process for companies outsourcing to Eastern Europe by providing clear and predictable cost structures.

Competitive hiring market

Even though the talent pool is large, the demand for IT professionals in Eastern Europe is high, which can lead to challenges in finding developers with specific skill sets for a project.

Software development outsourcing rates by country

Outsourcing software development to Asia

China and India hold the top two spots in the list of countries with the highest number of software developers, with 7 million and 5 million professionals, respectively.

With its large talent pool, Asia is one of the most attractive destinations for offshore software development. This section will help you better understand the region and determine if it could be the right choice for your needs.

Pros of outsourcing to Asia

Lower rates

Outsourcing to Asia is generally quite cost-effective. Countries like India, the Philippines, and Vietnam offer lower rates for software development than most of Europe, making this region economically attractive for many Western businesses.

A large number of IT specialists

Asian countries host a vast and diverse number of IT specialists, from software developers to data scientists, giving businesses a large pool to choose from.

Cons of outsourcing to Asia

Communication difficulties

Countries like Singapore, Malaysia, and the Philippines generally have higher English proficiency due to historical and educational factors.

However, English proficiency varies significantly in other countries. In addition, differences in accents, communication styles, and culture can lead to misunderstandings.

Time zone differences

The time difference between Asia and North America is 10-15 hours, creating communication challenges.

Low working conditions

In some Asian countries, labor rights, workplace safety, and employee welfare might not meet Western standards.

Low code quality

In some Asian countries, the focus on rigorous code quality control might not be as strong as in Europe or North America. This can lead to product defects and performance issues.

Lack of security

Some Asian countries may not have established data protection laws, posing potential risks to client data.

Hidden costs

Due to the challenges mentioned above, such as lack of security, low working conditions, and low code quality, there is a significant risk of hidden costs associated with rebuilding your software or addressing the consequences of data breaches.

Software development outsourcing rates by country

Outsourcing software development to Latin America

Lately, Latin America has been gaining momentum in outsourcing software development, and the market volume is expected to reach $27.57 billion by 2029, according to Statista.

We've gathered all the necessary information to understand why and what opportunities businesses have for outsourcing to Latin America.

Pros of outsourcing to Latin America

Suitable time zones

The time zones of Latin American countries generally overlap with North America and have manageable differences with Western Europe (5-7 hours).

Cultural compatibility

Latin American countries often share work ethics and communication styles with Western cultures, leading to smoother collaboration.

Cost-effective rates

Compared to North America and Western Europe, the labor costs are lower in Latin America, letting businesses save money while accessing skilled developers.

English proficiency

High English proficiency among IT professionals in Latin America facilitates better communication with English-speaking clients.

Cons of outsourcing to Latin America

Legal and regulatory differences

Labor laws vary from country to country in Latin America, which can complicate legal processes for foreign companies.

Political and economic instability

Some Latin American countries experience economic and political crises, which pose risks to business processes.

Security risks

In 2023, 62% of companies in Latin America suffered from data breaches, indicating low readiness for cyberattacks.

Software development outsourcing rates by country

Outsourcing software development to Africa

African countries are focused on bringing a wind of change to their tech sector. The annual revenue growth rate for IT outsourcing in Africa is predicted to be 10.99% up to 2029, which is unsurprising given rates as low as $10 per hour. But what else does this region offer?

Pros of outsourcing to Africa

Low rates

African countries have low labor costs, resulting in affordable software development rates.

Fast development

Africa rapidly grows its IT ecosystem, with new tech hubs and a young, innovative workforce contributing to fast project delivery.

Cons of outsourcing to Africa

Political and economic instability

Some African countries experience political and economic uncertainties, which can disrupt business operations and investments.

Skill gaps

While Africa's talent pool is growing, there are still gaps in the tech stack offered by developers.

Security risks

90% of African companies have no security policies or protocols, endangering the data they work with.

Software development outsourcing rates by country

Software development outsourcing rates by country

Giraffe Software can assist you today

We understand that many of you need time to evaluate all options, think them over, and decide on a region, a country, and finally, your outsourcing provider.

If you're ready to explore opportunities further or discuss your ideas with professionals, Giraffe Software is here to help.

Our Process and Expertise

Giraffe Software is your go-to tech partner, with 70+ in-house experts and a network of 30,000 pre-vetted talents. Thanks to our well-oiled reporting, HR, and retention processes, we ensure our clients save at least 35%- 45% on their IT budgets.

With over seven years in the game, we've built a solid team of skilled engineers and a vast partner network, delivering 120+ successful projects for more than 60 clients across the EU and US.

And we are very proud of the glowing reviews they left us on Clutch, Upwork, and GoodFirms. Here are just a couple of projects that prove our proficiency in staff augmentation.

looxis, a German company known for creating exclusive photo-etched gifts, came to us to shift their sales from offline to online and tap into new digital revenue streams. They wanted to launch an eCommerce store, but their previous tech vendor didn't meet their quality standards.

They needed top-notch tech experts with great English skills and strong expertise to complete the project on time. Plus, they wanted their store to have 2D and 3D image modeling features so customers could preview their personalized gifts before buying.

Within just three days of their request, we provided eight candidate CVs that fit their needs. The client selected and hired their desired experts in just two weeks. These specialists seamlessly integrated into the client's in-house team, and our collaboration lasted five years, during which we helped LOOXIS establish a new digital revenue source.

As a result, LOOXIS gained:

• A team of middle to senior developers skilled in 2D and 3D image modeling, all at half the rates of local developers
• A dedicated team working directly under their management
• An eCommerce store that met all their requirements
• Over 50% reduction in operational expenses, as our solution covered everything from salaries to taxes and hardware

This collaboration helped LOOXIS successfully transition to digital sales and expand its market reach.

Another project, REM Waste, was for a UK-based waste management company with over 100 partners serving 700+ customers. They needed a digital makeover to scale their business and aimed to replace their outdated CRM with a new, custom platform.

After their previous developers failed to deliver a working MVP, REM Waste turned to us for help. We provided an estimate for the MVP and quickly assembled a team of two developers, an architect, a PM, and a QA within two weeks. In just four months, we delivered a polished MVP, enabling REM Waste to secure further investments.

The results were first-rate:

• A talented development team that rescued the project
• A refactored solution with bugs fixed
• A high-quality MVP with missing features delivered
• Post-MVP functionality completed over the following 15 months, with the team growing from 4 to 8 members
• A 38% cost saving compared to local estimates

Now, REM Waste is planning to build a SaaS solution based on this CRM.