The decade-old offshoring market has been constantly growing. Many companies are seeing the advantages that offshoring brings. Due to the increasing demand, offshore information technology outsourcing companies are popping up like wild mushrooms, making it more difficult for clients to choose the best company for their projects. To help you make a better-informed decision, we present this overview of the developer rates around the world.
Offshore Outsourcing is Not Dead
Offshoring is a business process where a company transfers its local production process to a third-party company in a foreign country. Offshoring has become an increasingly popular trend over the years. Its cost-saving and flexible advantages in business make it highly favored venture among small to medium businesses.
Despite the horror stories surrounding offshore outsourcing, there are still quite a number of companies that see offshoring as beneficial rather than a waste of time and money. Even in 2019, global software outsourcing is predicted to rise.
Hourly Developer Rates by Region
With nearly a thousand offshoring companies around the world, finding the right offshore development center seems to be getting more difficult. That is why Accelerance revealed the global software outsourcing rates for 2018. The data was based on the average rates from 700 software development companies.
Asia offers the cheapest software development services among most regions fluctuating from $30–$42 for senior developers. India, China, Philippines, Vietnam, Bangladesh, Indonesia, Malaysia, Nepal, Pakistan, Sri Lanka, and Thailand are among the most popular countries that host offshoring software development services. India and the Philippines are two of the most popular outsourcing destinations in the world.
For the last couple of years, Europe has been offshoring clients’ go-to destination for “quality over quantity” offshoring. In a 2016 global outsourcing survey conducted by Deloitte, Europe hosted the most operations according to respondents. Countries that are competent in the offshore software development field are Ukraine, Poland, Czech Republic, Hungary, Latvia, Estonia, Slovakia, Bulgaria, Belarus, and Romania.
The Latino region of the Americas is progressing in offshore development. South American countries Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Panama, and Peru are the driving forces of offshore development in the region.
Looking at the published data and statistics from Accelerance, the United States has the highest rates when it comes to software development. A lead developer is paid roughly $176–$187 an hour which is four times higher than a lead developer in Asia. With high rates combined with the shortage of skilled developers, it’s no wonder most startup companies in the United States are choosing to offshore production.
Factors Affecting Offshoring Rates
Offshoring rates of different countries vary for many reasons, but there are four main eminent components as to why they vary. These are location, job demand, work experience, and offshoring duration.
Location is a great factor in determining offshoring rates. This is mostly the reason why countries near America or Western Europe have higher rates than the others. The more developed the country’s economy is, the higher the developer rates.
- Job demand
Skilled developers have been a scarcity in the United States, which is one of the main reasons why they choose to offshore specific processes of their production to other locations where skilled developers are abundant. According to the law of demand and supply, the low supply and high demand would mean higher cost for products or services.
- Work Experience
Skilled developers who have gained more knowledge and experience in their respective fields are paid higher. Their seniority gives them the authority to demand better pay since their years of work allowed them to gain an advantage of experience from others.
Another factor that can determine rate is the length of your offshoring contract. The longer your contract for offshoring is (say a year), the higher the chance of driving down service rates.
Important Offshoring Tip!
Service rate is a driving factor in choosing an offshore company, but this should not be the top priority. Most, if not all, less experienced companies are baited in with the cost-saving benefit of offshoring. These are the companies that are most likely to overlook the risks they may encounter. A smart entrepreneur knows how to meticulously choose a team that can work best on your product. Look for a company that can surely produce quality output but at a very affordable price.
With tough competition in the offshoring market, consultation companies claim that they have the best of the best skilled and knowledgeable team of developers that any offshore company will ever have. But how can this be proven? View their track record and work history. There is no better proof of a company’s excellence than its output.
Which company should you choose?
In choosing a competent offshore company candidate, always put quality at the top of your checklist. Pick a company that is skilled, has efficient communicators, and is reliable, flexible, and trustworthy. Choose a company like Full Scale.
At Full Scale, we give you skilled teams of developers that will solely devote their time and contribute their knowledge to create quality output. We have successfully worked with many companies—GigaBook and Stackify are among the few—and achieved great results.
Matt Watson and Matt DeCoursey, the company’s founders, are entrepreneurs themselves, which is why they completely understand how an offshore team of software developers can help in taking the big leap towards success.
Full Scale houses dedicated individuals who produce quality outputs through a wide range of development services, not just software development. Our services include web and mobile application development, search engine optimization, graphic design, consultancy, and content writing.
As the proprietor, you are in command of your ideas while our team produces the product precisely the way you want it to be made.
Don’t be too rash and hurry to choose the cheapest service rate. Be fastidious and choose wisely.