Software Outsourcing Costs: Price Comparison by Country
June 17, 2020
Choosing which country to outsource to can prove to be difficult. You literally have a world of options to choose from. Luckily we have prepared a quick guide to the average hourly rates for software development in seven major outsourcing countries.
These numbers will give you a better sense of how much does IT outsourcing cost in the United States, the United Kingdom, France, Spain, Poland, Ukraine and India.
Knowing the software outsourcing rates in each respective country will help you decide where the best location for you to outsource to is.
True cost of IT outsourcing
If you deprive yourself of outsourcing and your competitors do not, you’re putting yourself out of business. said Lee Kuan Yew, former Prime Minister of Singapore.
Outsourcing to the United States of America
The listed rates on Clutch.co show outsourcing rates to be at the high end, at an average of $150 per hour. The high rate developers in the United States charge is due in part to the high cost of living in much of the country as well as the high quality of work produced by American software developers.
There are various reasons why companies choose to develop software in the US despite the fact that the same, or greater, quality of work can be developed in other countries. Many companies are also based in the United States and appreciate being within a timezone or two of the company they outsource to as well as sharing the same culture and language.
Outsourcing to the United Kingdom
According to IBISWorld, Software development in the United Kingdom is estimated to grow 5.9% in market size in 2020. British software developers are well educated and have solid English-language skills as it is their first language.
Statista, a German data and statistics company, reported that in 2019 there were 386,900 programmers and software development professionals employed in the United Kingdom. The talent pool in the United Kingdom is large and deep. The quality of work produced by British development teams is on par with that of American’s. However, according to Clutch.co, at $105 per hour (avg.), British developers are on the pricier end of the IT outsourcing spectrum.
Outsourcing to France
French wine, French cheese, French... software development? It may not be the first place you think of when you think “software outsourcing” but the French do a fine job of it. The French software industry is huge.
The Centre for the Promotion of Imports from Developing Countries, funded by the Netherlands Ministry of Foreign Affairs, reported that the French software industry contributes around €37 billion to the economy directly which is more than double what it makes up in Italy. The French software sector accounts for 1.6% of all jobs in France.
French software developers are of a high calibre. The French invest a great deal in software research and development to the tune of around €2.6 billion per year. Of all European countries, France spends the second-highest amount on research and development. So when it comes to software outsourcing rates, companies can expect to pay average around $107 per hour (source Clutch.co), which is the standard for Northern/Western Europe.
Outsourcing to Spain
Spain is a decent option to outsource to. It boasts a large skilled workforce and has around a 14.41% unemployment rate. They are semi-competitive in terms of the quality of work produced. Spain has one of Europe’s highest ratio of technology graduates. Spain is the fifth-largest economy in Europe and has relatively high spending on software research and development.
The software development industry contributes around €12 billion to the Spanish economy each year, which is around 1.2% of Spanish GDP. Research done by Clutch.co reveals that the software outsourcing rates in Spain oscillate around $56. This is definitely on the lower end of the outsource-cost spectrum. However, be wary of the quality of work produced in Spain.
Outsourcing to Ukraine
Ukraine is one of the more competitive markets to look at for offshore software development, and is reported to start from $52 per hour (avg.). This is a very low rate, but we have had interactions with several businesses who struggled with the administrative aspects of working in Ukraine. This is largely due to difficulties with security of projects, the lack of common law, and the internal market, that cancel out the benefits of paying lower rates.
Outsourcing to India
India is a major tech hub and has over 5 million engineers ready to work. They offer a low average offshore rate of $39 per hour (source Clutch.co), but this often comes with several tradeoffs. These negatives include cultural differences, time zone disparities, and a locational disadvantage.
Why Poland is among top outsourcing destinations?
Poland boasts some of the best software developers in the world. It has become the largest business process outsourcing market within Central and Eastern Europe. It is one of the top locations globally in the outsourcing market.
Low Cost of Developers
According to Clutch.co the average hourly rate for a software developer in Poland is $60. This is far less than rates in the United States and allows American businesses to save up to 50% on offshore development to Poland.
Poland’s low average hourly rate also beats out the United Kingdom, France, and Germany. It even beats out Spain, where the cost of living is low. It’s hard to compete with Poland, where the outsourcing industry has been growing at an annual rate of 20% for the past 20 years.
Developed IT Outsourcing Infrastructure
Poland’s IT industry is known for its high-quality services. The country has become a leader in IT outsourcing and is now considered to be very dependable when it comes to security and enforcement of contracts. There are many cities in Poland with well developed IT infrastructureincluding Krakow, Warsaw, and Wroclaw. Many major global businesses establish their research and development centres in Poland.
Poland’s developers have strong English-language skills. 93% of Polish students learn at least one foreign language. The most frequently learned language is English.
Poland has a large pool of talented employees with solid educational backgrounds, strong communication skills charging the lowest prices of all countries in this article. Polish developers rank among the world’s best. According to an independent survey by Hacker Rank, Poland’s developers rank among the top three best in the world.
Summing up IT outsourcing costs
The difference in hourly rates between a developer in the United States and Eastern Europe is vast. Businesses can save a ton on salary costs by choosing nearshore or offshore development to a cheaper market.
Of all the places available globally to outsource to, Poland stands out as one of the best choices. Developers in Poland have a very low average hourly rate of all countries mentioned in this article at $60. The outsourcing industry in Poland is advanced and has been steadily growing for over a decade.
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