Outsourcing

Where to Outsource Software Development

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When digital projects need to be moved fast, business owners are on the lookout for new ways to find a skilled workforce. Out of all available talent sourcing models, outsourcing seems to be the most convenient and durable software development approach.

Hiring a dedicated team allows team leaders to kill multiple birds with one stone — fight talent shortage, cut development costs, and speed up product development.

In this post, we will take a look at outsourcing trends and tendencies and offer a guide with a review of the most popular outsourcing markets to help you choose the right region for sourcing dedicated development teams.

Table of Contents:

  1. Why Businesses Outsource
  2. Where Businesses Outsource
    1. Western Europe
    2. Eastern Europe
    3. Asia
    4. Latin America
    5. Africa
  3. Conclusion

Why Businesses Outsource Software Development

Outsourcing is a flexible and scalable strategy that is currently implemented both by SME owners and corporations with billions in annual revenue. Most companies that choose to outsource software development are North American and Western European — and they find themselves looking for dedicated teams in Eastern Europe, Africa, Latin America, and Asia.

Why are businesses willing to share in-house knowledge and practices with dedicated teams? According to Deloitte’s Global Outsourcing Survey, business owners outsource for the following reasons, including to:

  • Cut or optimize development costs
  • Help the in-house team focus on the company’s core tasks
  • Improve the company’s capacity and project delivery speed
  • Increase the quality of tech operations
  • Access new practices and knowledge
  • Solve talent shortage issues
  • Benefit from disruptive software development practices

Where Businesses Outsource Software Development

As the value of the global outsourcing market increases — it is currently worth over $90 billion — new offshore markets and outsourcing software development countries emerge. The number of countries that outsource software development as a way to supply people with jobs and improve citizens’ well-being increases, as a result.

Today, there are dozens of locations that business owners can choose from when it comes to IT outsourcing. Depending on the region you choose, developers’ hourly rates may vary from $5 to $90. Pricing, however, is not the only factor to consider. The skillsets of the local workforce, collaboration efficiency, and cultural compatibility are important variables that come into play.

To choose the right outsourcing market, take a look at this in-depth review of the top IT destinations to outsource software development today. 

Western Europe

Top destinations: UK, Norway, France, Belgium

Average hourly rate: $60

Top tech skills: Web and software development, mobile app design, game development

Average English proficiency score*: 57 out of 100

Readiness as a market for outsourced software development: High

Big companies that outsource to this region: Google, Facebook, Amazon

* — according to the EF Index. All numbers are rounded.

Western European firms are a safe bet for business owners. Most outsourcing destinations in the region have a robust tech education infrastructure, including those in emerging fields like AI and Data Science.

CountryHourly rateEnglish proficiencyTime zoneTech talent educationTechnological advancements
UK$50-99100/100GMTHighHigh
Norway$50-6568/100GMT+1HighHigh
France$70-8057/100GMT+1HighHigh
Belgium$60-8063/100GMT+1HighHigh

Eastern Europe

Top destinations: Estonia, Romania, Ukraine, Poland

Average hourly rate: $40

Top tech skills: Web and software development, mobile app design, testing, support

Average English proficiency score: 57 out of 100

Readiness as a market for outsourced software development: High

Big companies that outsource to this region: Microsoft, Samsung, Oracle

Eastern Europe is one of the leading outsourcing regions in terms of development cost and software development skills. The people here have a cultural affinity to Western values — which is why the collaboration process is smooth and effortless,  with more affordable development price tags.

There are several Eastern European regions that business owners should consider for outsourcing. They look for workforce in baltic software development countries — Estonia, Lithuania, Latvia. Balkan countries. Romania, Slovenia, Bosnia, Serbia are other popular destinations.

Strong outsourcing communities emerge in the far eastern countries — Moldova, Ukraine, Russia, Belarus, Armenia, as well as central Eastern Europe — Poland, Czech Republic, Hungary, or Slovakia.

Depending on which Eastern European region a developer chooses, average hourly rates and talent skills may vary, as seen in the table below.

CountryHourly rateEnglish proficiencyTime zoneTech talent educationTechnological advancements
Estonia$25-5058/100GMT+2HighHigh
Romania$35-4561/100GMT+2LowLow
Ukraine$25-4052/100GMT+2HighHigh
Poland$60-7064/100GMT+1HighHigh

Eastern Europe is a promising destination. Development hubs like Ukraine do a good job at offering affordable software developer rates and combining Eastern and Western technological know-hows to build reliable, revenue-driving solutions. 

Asia

Top destinations: India, China, Philippines, Singapore

Average hourly rate: $30

Top tech skills: Tech support, software development, testing

Average English proficiency score: 53 out of 100

Outsourced software development market readiness: High

Big companies that outsource to this region: IBM, Microsoft, Dell

Emerging Asian economies have a strong presence in the IT sector. While Japan, China, and India remain established outsourcing players, new regions – like Malaysia, Singapore and the Philippines – are also making an appearance.

CountryHourly rateEnglish proficiencyTime zoneTech talent educationTechnological advancements
India$30-4055/100GMT+5MediumMedium
China$25-4053/100GMT+8HighHigh
Philippines$25-3560/100GMT+8MediumLow
Singapore$30-4067/100GMT+8HighHigh

Latin America

Top destinations: Mexico, Chile, Costa Rica, Colombia

Average hourly rate: $35

Top tech skills: Web development, QA testing, tech support

Average English proficiency score: 50 out of 100

Outsourced software development market readiness: Medium

Big companies that outsource to this region: Amazon, Alibaba, Toptal

Latin America has been one of the leading outsourcing powers since the 1980s. The region’s relative proximity to the US facilitates the collaboration process and offers Latin American developers a steady stream of projects to work with.

Aside from the most popular outsourcing software development countries — Mexico, Chile, and Colombia – markets like Panama and Ecuador have also started to make a noticeable mark on the global IT outsourcing map.

CountryHourly rateEnglish proficiencyTime zoneTech talent educationTechnological advancements
Mexico$25-5049/100GMT-6LowLow
Chile$20-5053/100GMT-3MediumLow
Costa Rica$25-5057/100GMT-6MediumMedium
Colombia$30-5049/100GMT-5LowLow

Africa

Top destinations: South Africa, Nigeria, Bangladesh, Ethiopia

Average hourly rate: $30

Top tech skills: Web and software development, QA testing

Average English proficiency score: 50 out of 100

Outsourced software development market readiness: Low

Big companies that outsource to the region: Accenture, HP, IBM

Africa accounts for some of the world’s fastest-growing economies — such as Nigeria and Ethiopia. The region offers an affordable workforce and has started to adapt to globalization, adopting the latest tech practices and innovations.

A growing number of large-scale corporations have Africa-based vendors — Atlassian, HP, IBM, and many more. To fully understand the potential of this region, take a look at the comparative table for Africa’s leading outsourcing destinations.

CountryHourly rateEnglish proficiencyTime zoneTech talent educationTechnological advancements
South Africa$40-5065/100GMT+2MediumMedium
Nigeria$20-4058/100GMT+1LowLow
Ethiopia$25-3049/100GMT+3MediumLow

Outsource Software Development to Eastern Europe

As you choose your next outsourcing destination, there are a lot of details to account for. Business owners need to choose a region with skilled and affordable tech talent, as well as a high level of English proficiency and cultural compatibility. 

Out of all outsourcing destinations, Eastern Europe seems to be the most well-balanced in terms of affordability and skill. To hire a skilled development team for your project, consider reaching out to Elitex — an experienced outsourcer based in Ukraine. We offer software development and testing services to SMEs and large-scale corporations from all over the world.

If you have any questions regarding software development or want to know how we can be of assistance for your digital project, please contact us, and a representative will reach out to you in no time!

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