December 1, 2019
Сarring on a tradition, we release a list of top IT outsourcing countries across the globe. Fortunately for those considering programming outsourcing, the list is constantly growing and full of worthy contenders. All you have to do is to check this blog post and make the best choice out of your particular requirements and business goals.
List of the Content
- Why do companies outsource?
- Top regions for the programming outsourcing
- Best countries to outsource software development in Eastern Europe
- Best countries to outsource software development in Asia
- Best countries to outsource software development in Latin America
- Successful outsourcing examples
- How to choose among the top IT outsourcing countries?
WHY DO COMPANIES OUTSOURCE?
To give a clear picture of the situation, we will start with the current state of the IT jobs market. The software outsourcing development industry is growing for a number of reasons. Companies need highly competent IT specialists that are proficient in innovative technologies and ready to apply them. Finding them appears not that easy for a lot of businesses. The demand for fresh blood connected with more complicated technology is considerably increased in the USA, Canada, and Western Europe.
The US Bureau of labour statistics data shows that software development is among the most demanded professions and is at the top of the median earnings. Source: Bls.gov
These countries are facing a lack of workforce, while the available specialists increased the service prices. That is where software outsourcing development companies step in. Looking over the situation over recent years, it is not just an additional workforce or saving your budget. It is about developing your business through new high-quality approaches.
Which countries pay the highest salaries for software engineers?
The software development sphere influences the growth of job volume and specialist wages at the same time. The Bureau of Labor Statistics anticipates an employment growth of 26% by 2028 in the USA. About 409,500 IT jobs are expected to be opened up during this period. Thus we observe the increase in wages in the IT sphere. Listed jobs make the average annual wages: Computer Programmers – $95,640; Computer Systems Analysts – $99,020; Software Developers – $114,270; Computer Network Architects – $119,230; IT Managers – $161,730. This is the growth of approximately 3% while the general U.S. wage growth is 1,8%. We should not forget about such factors as specialty, education, employers, and regions. It is no surprise that metropolitan cities position themselves as the best-paid regions. Cities like San Jose, California ($157,480), San Francisco, California ($144,740), and Seattle, Washington ($140,930) are among the most expensive places to hire a software developer in the entire world.
Increased IT budgets
Software providers should also be aware of constant IT spending growth. They take into account all expenses on up-to-date technologies, better customer experiences, security, and management of the businesses. When you compare the growth of worldwide IT spending in billion U.S. dollars, you will get the following results: 2021 – $4401,9 billion with a growth increase of 10.2%, 2022 – $4534,6 billion with a growth increase of 3%, and 2023 – $4809,6 billion with a projected growth increase of 6.1% according to Gartner. Since spendings constantly grow every year, the market needs thousands of skilled developers of various technologies.
This demand outgrows the supply of qualified specialists for certain technologies while some languages and frameworks lag behind. The market requires new developer types and even applies re-training schemes. The software engineering labour market has shifted. We can observe that because now companies are eager to find more ReactJS, Docker, and System Administration specialists. On the other hand, people with AJAX, WordPress, and jQuery expertise will likely experience difficulties with finding their next job. IT companies prefer to improve all the time and apply only the best and most effective technologies. Some of them sharply decrease in usage, and other ones can be completely overturned.
Which developers get paid the most?
According to the 2022 Stack Overflow Report on top paying technologies, there is a great increase of about 23% across median salaries between 2021 and 2022. We can observe how the largest salaries continue increasing year over year, and software developers of various expertise are highly demanded in the market.
Top paying web frameworks. Source: Stack Overflow
Companies are looking for highly-competent and talented developers. What’s more, starting any software development project requires setting up a cross-functional team. It means the need to start the engagement with several developers of different expertise. For example, web application development is usually implemented with the assistance of the project manager, the business analyst, UI/UX designers, back-end and front-end developers, and QA experts.
Another demand is up-to-date technologies that are fastly advancing. The development of new technology constantly increases employment demand. The market goes through tremendous changes; thus, developers with newer technology expertise are greatly required for a lot of positions.
Where is software outsourcing development most popular?
Taking into account all these factors, the IT job market is open for skilled employees. In the past years, developed countries faced a lack of a qualified workforce. They try to adopt various strategies to find new professionals. The USA, Canada, and Western Europe are encouraging employees with great wages and various training and apprenticeships. The IT market has been one of the most competitive in the last decades. The unemployment rate is listed in the lowest positions. For example, the U.S. software engineers’ unemployment rate of 4% in 2011 declined to 1.7% in 2022. Thus the developed countries started the search for a new pool of skilled employees. Now they are cooperating with the best countries to outsource software development on regular bases. They found the supply of workers, new available approaches for managing their projects and saving their budgets. Programming outsourcing is a golden opportunity to improve the business, and a lot of companies are already benefiting from it.
TOP REGIONS FOR PROGRAMMING OUTSOURCING
If you are looking for outsourcing developers, you definitely have a great choice. IT outsourcing companies have provided services for a few decades. Outsourcing destinations are usually divided by the geographical location of the companies. However, they are characterized by other criteria. Qualification and language requirements, cultural similarity, time difference, and service costs are usually considered while applying for programming outsourcing. Let’s have a quick look at top outsourcing destinations.
This destination has entered the market with a great number of offers. Eastern European companies provide highly-competent outsourcing developers who can deal with innovations. Their experts are known for high-quality education and a good level of English. Services can be provided full-time due to the convenient geographical location. And you can also decrease expenses on business trips. The time difference is not that big, as it is only a few hours from Western Europe. The culture is closely matched to the Western one. Governments support IT sphere development. It might seem a relatively expensive destination for service prices. Hourly rates of outsourcing developers in Eastern Europe range between $20 and $60. But on the other hand, you will cooperate with the professionals who provide the best possible quality of services. Eastern Europe is producing the top IT specialists in the world. The destination became popular not only in Western Europe but also Canada and the USA.
Asia and the Middle East
This destination is one of the first providers of programming outsourcing. The geographical location is not that convenient, and the time difference is quite bigger. Certain companies are interested in receiving services at the cheapest price rates but still taking risks. Indian developers offer service prices of $10-25/hour, when Chinese ones can amount to $30-40/hour. The unstable economic and political situations of these regions can also influence your business. You can deal with established IT players or new entrants. The number of outsourcing developers is one of the biggest compared with other destinations. Still-improving English can be an important criterion. Some companies have failed the communication establishment. The Eastern mindset is totally different from the European one.
Latin America is a relatively new entrant in programming outsourcing. This destination became the most attractive for US customers. It is really convenient for Northern American companies due to the fact of geographical proximity and time difference. It allows collaborative approaches for the benefit of both sides. Sometimes prices for services might be lower than European ones. Latin American hourly rates can vary from $20 to $50. The IT sphere goes through a state of development. This brings all the disadvantages that are related to immature business processes and lack of technical skills. At first look, this is not that important, but almost half of the IT project didn’t make it to the launch either because of the budget overburn or being non-viable from the technical side. All this is because of poor management and insufficient technical knowledge. So if you don’t accept anything less than perfection from the standpoint of execution and timeframe – it may be worth it to look at other destinations like Malaysia or Ukraine.
Nevertheless, Latin American countries are recommending themselves as a new destination for the top IT outsourcing countries. However, a relatively low English level and the cultural difference might cause some inconveniences.
Table of overlapping working hours
There are a lot of various factors when comparing the best outsourcing countries, like political situation, English language skills level, average price, etc. Some of them are very subjective and vary from country to country, even within the same region. But there is one factor that is very easy to determine and very important at the same time. In the market study above, we have determined that the US and Western Europe are the main consumers of IT outsourcing services. Thus, this list of top IT outsourcing countries can’t be all-encompassing without the table with the comparison of how many overlapping working hours each of the outsourcing regions has with North America and Western Europe.
|Region||Eastern Standard Time (EST)||Central European Time (CET)|
|Eastern Europe (Eastern European Time, EET)||4 hours||9 hours|
|Asia (India Standart Time, IST)||2 hours||3 hours|
|Latin America (Mexico, CST)||8 hours||3 hours|
TOP IT OUTSOURCING COUNTRIES IN EASTERN EUROPE
Ukraine has already attained the position of the country with the fastest developing IT sector. It is known for the well-educated IT experts and numerous technologies they deal with. The advancing growth of the IT industry opens new opportunities and a good choice for customers. The amount of developers increases each year. It almost reaches the number of 250,000. Ukrainian outsourcing companies are constantly improving cooperation approaches and services quality.
Want to know more about outsourcing to Ukraine?
Read the article dedicated to how to hire Ukrainian developers and what advantages you will gain working with dedicated development teams there.
Ukrainian developers are often participants in various IT conferences and training. Efficiency is vastly improved throughout the companies. The center of the industry is concentrated in the capital of Ukraine, Kyiv. As one of the top IT outsourcing countries, Ukraine combines reasonable hourly rates between $20-$45/h and superior quality of work.
Poland develops the IT industry as one of the general branches of the Polish economy. The EU economy grows fast and increases the need for the workforce, so Poland often is the first place considered by the European companies in their search for the top IT outsourcing countries and Poland eagers to fulfill that high demand. It offers the biggest number of working places in Central Europe because over 400,000 IT specialists work here. They apply various technologies and specialize in outsourced and hardware design services. Companies have the experience for a few decades. Most of them are located in Warsaw and Krakow.
Poland offers some of the best services and operates inside the EEA economic zone, which is very convenient. However, that convenience comes at a cost, and Poland is by far one of the most expensive IT outsourcing destinations on this list.
Romania is another representative of top IT outsourcing companies included in industry reports by IDC and Gartner. Actually, a considerable part of their developers is explicitly involved in outsourcing. The number of specialists reaches 119,000. Companies encourage hiring well-educated and skilled employees. IT development greatly contributes to the national economy, and companies are open to cooperation. Romanian capital, Bucharest, is the place of residence for IT development activities. This location offers competitive rates between $20 – $60/h, which makes it very attractive. This country is concentrated on developing new service strategies by uniting national IT strengths.
Bulgaria is recognized as an increasingly attractive choice for many businesses. It is a great competitor in the outsourcing market. They provide an educated and motivated workforce. More than 101,400 specialists are employed in the industry. The services are applied to multinational and local customers at average rates between $30 – $60/h The capital city, Sofia is the center of IT life. However, taking into consideration the relatively lower number of IT specialists, when compared to other contenders of the best outsourcing countries list, it takes a bit longer to launch mid-sized and large projects there.
TOP IT OUTSOURCING COUNTRIES IN ASIA
India has occupied its position among the top IT outsourcing countries over recent years. The country has been working in this direction for more than 25 years. Programming outsourcing is a mature industry in India. It owns a huge pool of IT specialists. Leading services evolve service offers and expand the traditional ones. Customers are usually offered reasonable and one of the lowest prices. In some situations, cultural compatibility, technical skills, and business process organization might still be the issue even after all those years. Yet, some of the finest Indian software companies can deliver excellent results. However, they might lose the huge gap between their and other countries’ pricing since quality naturally requires the best and the most expensive developers.
China aims to improve both business and political environments. Their companies enter the world IT market and try to advance the quality of the services and skilled developers. The wages of their outsourcing developers are increasing. Therefore service prices are higher than in the rest of Asia. They are oriented not only toward European or American customers but also Asian ones.
Malaysia is partially limited by the smaller amount of outsourcing developers. Despite this fact, it always gets a high rate among world-class service providers. It is a serious competitor for India and China. Malaysia is a great choice for mid-sized companies that are oriented for cheaper charges but less risky. It is acknowledged as an established player among top outsourcing countries. Collaboration and partnership help to build a vibrant IT industry in this country.
Indonesia is a bit newer entrant in programming outsourcing. This country is an economic powerhouse in Southeast Asia. It has the biggest GDP in this region. Indonesia is the 4th largest population in the world, which is why it is a huge source of new and talented developers. It is recognized by Gartner as among the top IT outsourcing countries. The trend of outsourcing in Indonesia is regularly increasing. Jakarta is the center of the IT industry.
TOP LATIN AMERICAN IT OUTSOURCING COUNTRIES
Mexico offers reasonable service prices and a well-educated workforce. The number of specialists is growing, and they are constantly improving their professional and management skills. However, the industry there is relatively new, so there is a huge space for improvement on both the collaboration’s programming and business management sides. The US companies still consider that destination as a bit risky one, but when it works, it works well due to geographical proximity and slightly lower rates in comparison to Eastern Europe. The Mexican government is also interested in improving its business environment in order to provide services for international companies. Programming outsourcing can be a great share of the national economy.
Argentina is attractive for a lot of companies due to a culture mostly influenced by Europe. This country continually develops its economy and international relationships. Their education prepares skilled specialists who are eager to work. Argentina is implementing 65% of the design efforts of most Internet startups among Latin American software outsourcing countries. They are constantly trying to discover innovative solutions for a lot of issues.
Colombia is often chosen for an increasing number of young outsourcing developers. Over 13,000 IT-related specialists graduate from Colombian Universities. The government supports foreign direct investments through sophisticated economic systems. Geographical locations attract US-based customers. The new opportunities make the country arrange the scheme for cooperation. Colombia is known for the best telecommunication and electrical infrastructure in Latin America. Bogota and Medellin are the centers of software outsourcing development.
Peru is a dynamic country with a growing economy. This programming outsourcing country is considered a nice investment opportunity. The direct foreign investment rate rises as a result of positive economic development. Other Latin American countries tend to set up various operations. Their outsourcing developers mostly specialize in web and mobile applications. The software outsourcing development industry’s revenue is expected to grow yearly.
TOP IT OUTSOURCING COUNTRIES: SUCCESSFUL EXAMPLES OF PARTNERSHIP
Overall, outsourcing IT services has been a successful strategy for many companies, allowing them to access highly skilled and cost-effective talent to provide high-quality services to their clients. There are many examples of successfully outsourced work to various destinations worldwide. Here are some examples of known companies that partner with providers in top IT outsourcing countries:
- Microsoft is a global technology company that produces software, hardware, and cloud services. Microsoft has several development centers in Eastern Europe, including locations in Romania, Poland, and Ukraine. Microsoft has successfully outsourced IT services to Eastern Europe due to the region’s highly educated workforce, strong engineering skills, and competitive pricing.
- IBM is a multinational technology company that outsources its IT services to countries like India, the Philippines, and China. In India, IBM has a significant presence and employs over 140,000 people. The company has been able to leverage the skilled workforce in these countries to deliver high-quality IT services to its clients.
- General Electric has outsourced a significant amount of its manufacturing work to China. This has allowed the company to take advantage of the lower labor costs in China while maintaining high-quality standards.
- Intel is a multinational technology company that designs and manufactures computer processors and other hardware components. Intel has a significant presence in Eastern Europe, with development centers in countries like Poland, Romania, and the Czech Republic. Intel’s collaboration with Eastern European IT professionals has been successful due to the region’s highly skilled workforce and available specialists.
- Dell has outsourced its manufacturing operations to Mexico. This has allowed the company to take advantage of the lower labor costs in Mexico while maintaining high-quality standards.
Learning from the experience of other companies is always a good practice that could help to work with the best providers from top IT outsourcing countries. Outsourcing IT services to top outsourcing countries can benefit companies significantly, including cost savings, access to skilled talent, flexibility, scalability, improved quality and efficiency, and time zone advantage.
Interested in other successful examples of outsourcing?
You can check one of our articles on offshore outsourcing, which covers other outsourcing examples and how these companies benefit from it.
HOW TO CHOOSE AMONG THE TOP IT OUTSOURCING COUNTRIES?
A wide choice of IT outsourcing countries allows businesses to find their provider in numerous global destinations. As the experience shows, a professional team does not necessarily have to be located in the same country as the product owner. The main thing just remains to establish good collaboration where both sides work towards the best outcomes.
Looking at good market practices, we can find so many known companies benefited from IT outsourcing.
Whats App is a great example of programming outsourcing. It helped the team to keep development costs lower and deliver a successful product. A software developer from Eastern Europe created the early app version. Collaboration with the offshore contractor was the beginning of the impressive journey.
Slack is another successful sample of nearshore IT outsourcing. Being headquartered in San Francisco, they applied for the services of a Canadian development provider to work on their design. The main tasks included app and web design, including the Slack logo.
What is the difference between offshore, nearshore and onshore outsourcing?
Find a detailed explanation of different outsourcing models and how IT outsourcing counties’ locations influence them.
More and more businesses find their contractors at various outsourcing destinations. Moreover, they can outsource some specific tasks or even the particular development process stage. Therefore, well-outlined project requirements allow them to establish objective criteria for choosing the best IT outsourcing countries. Here are some of the main aspects to consider:
- Time difference – Considering the geographical standpoint, teams have to adjust the working hours for better collaboration. The longer working hours overlapping is quite beneficial as a few hours can’t be enough for some projects, especially when it requires closer collaboration.
- Cultural compatibility – Sharing similar values is really important. Cultural diversity often causes differences between working process approaches, including levels of loyalty and engagement. It’s really important to choose among the best IT outsourcing countries that share the same mindset as yours.
- Language proficiency – Lack of language knowledge can really pose challenges to efficient collaboration. Poor communication and misunderstanding usually lead to negative outcomes in the project delivery. Comparing Eastern European and Asian countries, we can say that developers from the first ones are more proficient in English.
- Developers’ rates – The cost cut is a big advantage of selecting top IT outsourcing countries. The development services cost less there, and companies have access to a larger work pool. But at the same time, quality has to remain a high priority. The team can’t give up quality to look for the cheapest rates, like in India.
- Reliable service provider – Regardless of chosen IT outsourcing countries, the main task is finding a good service provider. Looking for an established partner to share previous experience and offer the required expertise is important.
At first sight, it might be difficult to choose among the top IT outsourcing countries. But careful requirements analysis and learning the market situation help businesses make good decisions regarding their needs.
Software outsourcing development has become an important branch of the IT industry. The job market increases considerably and requires new talented resources. Employers are looking for skilled workers who can deal with various technologies. They need to be ready for constant improvement and new business approaches. Western Europe and North America lack a shortage of workforce while rising IT spending. In recent years a lot of companies have started to outsource software development all over the world. These services are offered at a high level and have a number of benefits. Your company will cooperate with the team of professionals handling numerous tasks while you also decrease your spending. A great option is a software outsourcing development team that regularly works for your company. In this article, we provide you with criteria that will help to choose the most suitable destination and its representatives. You can find a short description of the top outsourcing countries. Those countries are developing ones, but they have a huge willingness to work and improve. They offer up-to-date technologies and efficient cooperative schemes.
Have you decided to apply for software outsourcing development in Eastern Europe?
Welcome to contact Existek. We are an offshore software development company with vast experience in this sphere. Our team will be glad to provide advice and answer your additional questions.
Frequently asked questions
What is the top reason to outsource?
Since IT spendings increase constantly, there is an outgrowing demand for skilled developers of various technologies. Programming outsourcing turns out to be a reasonable solution for thousands of projects. With the lack of a qualified workforce, developed countries started to search for a new pool of professionals across the globe.
What are the benefits of outsourcing?
More and more companies apply for software development services across top IT outsourcing countries. They usually acknowledge such distinct benefits as
Talented and skilled professionals
The balanced approach of management
Cost cut down
The variety of engagement models
How do I choose an outsourcing partner?
When you choose an outsourcing partner, you need to implement a few simple steps.
Define your needs, including required expertise
Find the established providers
Decide on the engagement model
Get in touch with the chosen provider
Which are the best IT outsourcing countries?
Software developers from Eastern European countries like Ukraine have recommended themselves due to their great qualifications and communication skills. Reasonable service cost, geographical proximity and cultural similarity are among other factors that make Eastern European countries one of the best destinations for outsourcing.