When resources within your business or your country are insufficient to meet your software development needs, then you need to delegate technical functions to offshore, software-development, outsourcing teams. However, in different countries around the world there will be different service fees.
For example, the average hourly price for a senior developer in the US starts at $60 per hour, in Ukraine it is around $35 per hour, while in Vietnam it is just $18 to $22 per hour.
Likewise, in other regions of the world, offshore outsourcing software development prices fluctuate in different price brackets, depending mainly on the country’s economy and the cost of labor and human resources there.
However, a question that has always been carefully considered by investors both before and during the COVID-19 pandemic is: “How to get the best product in the most economical way?” In fact, besides all the other pricing factors like taxes, maintenance fees, or extension fees, it can be said that outsourcing development is a complicated ‘journey.’ So every aspect plays an important role in the end product output, from human resources to price level.
Here’s an overview of rates of offshore software development in different zones in the world.
The factors that make the offshore outsourcing price up
Obviously, every business has different revenues and expenditures to keep it running, and software development companies are no exception. They are also influenced by many factors, and therefore, the price to create the product will also vary by country, in each organization.
The basic local business tax rate is established based on the country’s income and living conditions. Let’s try to compare a small Asian country like Vietnam to the U.S. Well, it is certain that Vietnam will have a much lower cost of living compared to other countries within Asia, and then further compared to America.
Since Vietnam is not a country whose native language is English, software engineers will have to learn both technical expertise and in-depth English to be able to communicate fluently with their country partners. Understanding the importance of this issue, many technology companies in Vietnam have organized or sent their staff to take advanced English classes. And so, this is also considered as one of the factors that make up the price, because flexibility in foreign languages is a plus point that not all companies or countries have.
Maybe for client businesses, software engineers are just “mercenaries,” but for outsourcing organizations, they are “valuable assets” and of course need to be treated well.
In other words, the way software development outsourcing treats their staff – especially Developers – can easily be seen through their staff’s satisfaction about the work environment, workplace and work attitude. The higher the Developers satisfaction is, the higher their productivity would be, which becomes another factor in determining their prices to clients.
Different rates in different countries
On average, a junior software developer in Eastern Europe will cost around $25 per hour and maybe up to $50 per hour for a senior software engineer. While in Latin America, outsourcing rates range from $30 to $50 per hour. In terms of prices lower than the two regions above, it is impossible not to mention Africa, with offshore software development labor costs ranging from $20 to $40 per hour. The countries of Africa with high enough levels of computer skills to undertake software engineering projects include: Morocco, Kenya, Nigeria, Egypt and South Africa.
And finally, the regions with the lowest outsourcing prices in the world with a team of engineers no less skilled than other regions in Asia are China and India. They are the main technology centers of Asia with a large number of software engineers: nearly 5 million Developers in each country. In addition, other prominent Asian countries we must mention are Vietnam, Malaysia and Indonesia, since they are also developing and providing similar software development services.
As mentioned above, one reason Asia has the most competitive software development service rates in the world is because it has a lower cost of living. It also boasts an education system focused on training modern technological competencies for high school students. This creates the foundation for the development of the domestic, information technology industry, contributing to the human resources needed to change the world’s technology.