Offshore Software Development - Top Countries for Hiring A Team (2024)

Are you looking to offshore software development resources of your company? We've been in the business as a Project and Product Manager for 15+ years so we can share the top locations you can get the best ROI with excellent value and most importantly, great quality!

COVID-19 and its after effects (supply chain issues, inflation, etc.) has brought the entire world to a halt, leaving businesses to fend for themselves. The pandemic has had a significant impact on the business and economic landscape, necessitating a significant change in people's working habits.

This massive shift in the new work-from-home culture, also known as "remote work," is due to necessity. However, it has been a long time since the growing complexity of business solutions necessitated a highly skilled workforce – regardless of talent location – in the digital transformation era.

Against this backdrop, putting together the right development team of developers, DevOps engineers, and QA engineers is one of the most difficult challenges that all technology-driven businesses face.

Because the hiring process has become extremely slow and costly, an offshore development team is an excellent alternative to hiring an in-house team.

This blog delves into the world of outsourcing and identifies the best countries for software development.

Outsourcing is the new normal 

Because of the massive shift to the new business model of remote work, companies have been forced to abandon their old hiring practices and rely on outsourced development teams.

With offices closed and businesses impacted, outsourcing has grown in popularity. Working with a remote team has become much easier as more data security solutions and distance work software have become available.

IT and BPO outsourcing have a brighter future ahead of them.

Benefits of outsourcing

There are several compelling reasons to outsource software development, including immediate and long-term benefits:

Global Talent 

Hiring the best developers is expensive in Western Europe and the United States. As a result, many companies nowadays prefer to outsource software development, which entails hiring a development team based in another country.

When the chosen country is two, three, or even ten time zones away from the client, we're talking about an offshore development team. It occurs when companies in California hire Ukrainian developers or companies in the United Kingdom hire Indian developers. Distances and borders mean even less in the face of the COVID-19 pandemic, which opens up new horizons for the technological sector and ubiquitous digital transformation.

Many companies are realizing that remote workers can be more efficient, and they are more easily able to hire offshore development teams.

Cost Savings

Cost savings is one of the major advantages of outsourcing. In Western Europe and the United States, the cost of employing an outsourced software development team to create custom software is quite high.

Any project, from telecom custom software development to eCommerce website application development, costs an average of $132 per hour. On the other hand, outsourced developers from a low-cost location can meet all of your core business requirements at a reasonable cost. Check out the profiles of available Javascript developers, React developers, and Node developers, to name a few.

Keep in mind that, in contrast to nearshore or offshore outsourcing, you will be responsible for paying for office space, employee benefits, and bonuses if you hire in-house.

Time Savings

Starting with in-house developers is always more difficult and time-consuming than hiring an offshore development team. All you have to do now is find a dependable outsourcing partner and select the most qualified technical talent for your requirements. The offshore software development team is usually well-equipped and ready to work on your project as soon as the contract is signed.

Signing contracts and onboarding remote developers is usually a simple process. Furthermore, when you hire an entire outsourced team from one company, the developers may already know each other or have worked together previously. It also helps in the prevention of any communication issues from the start.

If you still want to hire in-house for the long term but need to get started on product development right away, go with a temporary solution and staff augmentation to avoid wasting time during the recruitment process.

Cutting-Edge Technology

Access to cost-effective world-class technologies that ensure your company's digital transformation is one of the major competitive advantages of outsourcing. Offshoring to a product development team equipped with the most up-to-date technologies, agile methodologies, high-quality software, and a project management system ensures a smooth development process and the delivery of a superior end-user experience.

Reduce Risks

Developing new products with no guarantee of success carries a certain amount of risk. To reduce risk, Startups, and SMEs should outsource software development to a company rather than hiring full-time developers.

Difference between nearshore and offshore outsourcing

The beauty of IT outsourcing is that you can get high-quality work while saving money by choosing between nearshore and offshore outsourcing countries.

Let's look at what Nearshore and Offshore outsourcing is and the benefits they provide.

Nearshore Outsourcing connects the onshore and offshore worlds. Nearshoring's outsourcing development company is located in a neighboring country or in close proximity.

The advantages of working with a nearshore development team include:

• Time zone differences are reduced.
• Labor costs are low.
• Minor cultural differences and language barriers exist, but they are insignificant.
• Visits that are more feasible for a transparent working relationship

Despite the benefits, even the best nearshore software development locations face some difficulties. So make sure you pick the right one.

Offshore Outsourcing, on the other hand, refers to a country that is far away from yours, possibly on the other side of the globe. Businesses that prioritize quality over location choose offshore locations because superior quality can be delivered at a lower cost.

The following are some of the significant benefits that an offshore software development team can provide:

• A global pool of talent.

• Experts with high levels of expertise are available at a lower cost.
• A dedicated IT team to oversee a wide range of services.
• High-quality service delivered on time.

How to hire the best offshore development team

Check out some top offshore talent

Consider the following factors when selecting a country to outsource a software development team:

• Instead of cost, consider value. Low prices should be avoided because they can indicate low quality from overseas developers. To gain a better understanding of average offshore software development rates, read our research. Keep in mind that the market is overheated, and finding the same developer rates as a year ago can be difficult, especially if you need to hire a senior engineer. As a result, if you find a perfect candidate, hire them right away, because they may not be available tomorrow.
• Reliability. Look for an offshore development company that has a track record of producing high-quality, innovative work. You can look at their reviews on Clutch or other review sites. To learn more about project delivery, contact the vendor's previous clients.
• Portfolio. Check to see if the vendor or developer has worked on projects similar to yours, as this will speed up the onboarding process. The number and scope of projects completed by the software service provider can provide insight into the company's expertise.
• Timezone. Ensure that the offshore developers' office hours coincide with those of the main office.
• Culture. Consider the cultural differences between your home country and the offshore location. If you're willing to accept those differences and are confident that they won't hinder your collaboration, go for it.
• Proficiency in English. When there is no language barrier, working with your outsourced development team will undoubtedly be much more productive.

A list of offshore and nearshore software outsourcing destinations

The following are the most convenient locations for outsourcing software development:

Europe's East

Many Eastern European countries, such as Ukraine, Belarus, Poland, and others, are well-known as top destinations for offshore custom software development.

Eastern European offshore developers are well-versed in a variety of programming languages and have extensive commercial experience. Ukraine's software engineers, for example, are known for their expertise in Java, JavaScript, and Python. PHP, Java, and.Net are the most commonly used programming languages in Poland.

In Eastern Europe, there are nearly one million software developers.

Offshore developers' hourly rates in Eastern Europe range from $25 to $40 per hour, depending on the developer's skills and experience as well as the project's complexity.

These rates may appear higher than in other regions, such as Asia, but they are still significantly less than in North America and Western Europe, where software development services can cost upwards of $100 per hour.

Because of the cultural similarities between Eastern Europe and Western Europe and the United States, outsourcing software development to this region appears appealing.

The following are the top ten countries where you can hire an offshore development team:

•         Ukraine
•         Belarus
•         Russia
•         Poland
•         Czech Republic
•         Romania
•         Hungary
•         Estonia
•         Slovakia
•         Bulgaria
•         Serbia

Learn which trends in the European outsourcing market offer opportunities.

Asia

For businesses seeking a web development team in Asia, India appears to be a "paradise." It is also well-known in the IT industry as one of the most popular outsourcing locations.

India, which has over 5 million software developers, offers custom offshore software development at relatively low rates of $25-$30 per hour. The main advantage of hiring tech talent in India is that it is inexpensive.

However, there is one major disadvantage: project quality is reduced.

Aside from that, time zone differences and cultural differences can have an impact on how people work. China is similar to India, but Chinese offshore developers charge higher rates, with product development costs ranging from $35 to $40 per hour.

For businesses looking to hire a team for outsourcing, Asia appears to be a haven. Chinese developers, on the other hand, have higher rates than the average.

Philippines, Vietnam, and Bangladesh are three other popular countries where you can hire a dedicated offshore development team. The total number of developers in Asia is estimated to be around 7 million. The following are the most important locations for hiring offshore developers:

•         India
•         China
•         Philippines
•         Vietnam
•         Bangladesh
•         Indonesia
•         Malaysia
•         Nepal
•         Pakistan
•         Sri Lanka

Latin America

With the best offshore software development countries such as Argentina, Mexico, Brazil, Chile, and Costa Rica, Latin America is now experiencing growth in the software development industry.

Latin American countries have a reputation for being one of the most popular offshoring destinations for US projects. Depending on the developer's qualifications, hourly rates for offshore developers in these countries can range from $30 to $55 per hour.

Because Latin American countries are close to North American clients and have a small time zone difference, many US companies prefer to outsource software development projects to the region. Here are the top countries in the region for offshore development:

•         Argentina
•         Brazil
•         Chile
•         Colombia
•         Costa Rica
•         Mexico
•         Panama
•         Peru

With top locations like Argentina, Mexico, and Brazil, Latin American countries are now experiencing rapid growth in the software development industry.

Several offshore software development companies based in Latin America specialize in working on North American projects and are well-versed in their needs and requirements.

Africa

Africa appears to be a relatively inexpensive location for hiring offshore developers. Offshore developers' hourly rates are less than $20 in Egypt, Morocco, and Kenya.

Nigeria and South Africa, on the other hand, are more expensive — around $40–50 per hour — and it can be difficult to outsource development teams with a good price-quality ratio. In total, 20,000 software developers work in the African countries listed below:

•         Egypt
•         Kenya
•         Morocco
•         Nigeria
•         South Africa

The cost of hiring software developers

The cost of hiring development teams is determined by a number of factors:

Salary rates are affected by factors such as living costs, business taxes, other legal regulations, market demand, and currency value.

Senior developers will always receive high marks, especially if they have completed a large number of projects and have demonstrated leadership abilities. Keep an eye on the development market, as even juniors have fairly high rates these days.

Developers with a strong command of the English language may be paid twice as much.

Tech stack: Finding a perfect fit for a rare tech stack or combination of skills becomes more difficult, especially if the company requires someone with 5+ years of experience.

As a result of the increased demand, the compensation will also be higher.

Depending on the services provided, different price ranges will apply to different types of employment: in-house, freelance, staff augmentation, and outsourcing dedicated teams.

As information platforms show, the initial rates for in-house hiring will always be lower, as they are based on a salary that does not include taxes, benefits, vacations, office costs, and so on.

Software developer salary rates  based on geography

As previously stated, the economy of a country has a significant influence on wage rates. Hourly rates in the United States, Latin America, Eastern Europe, and Asia will be compared.

For instance, we'll compare senior developer rates from our platform's partner vendors with rates from Indeed and Glassdoor for US developers.

Most startups prefer to work with high-quality engineers because they don't require extensive management and can work on their own. As a result, this overview can help you gain a better understanding of market prices, which you can then tailor to your specific needs.

How to start offshore development

When you're looking for an offshore development team and have decided on a location to hire programmers from abroad, the next question you should consider is how to find the best offshore software development firms.

Unfortunately, the high profits of offshore software development services appeal to a wide range of businesses. That is why you must conduct due diligence on your potential offshore software development company.

Client reviews, years of experience in the niche, the number of software developers, their specialization, the company's reputation, and many other factors should all be taken into account.

Finding and analysing this data isn't always simple. In this case, a platform for hiring offshore development teams, such as Toptal, may be the best option. Only vetted offshore software development firms are allowed to use the platform and submit programmers.

It means that all of the engineers on our platform are hired through a reputable software outsourcing partner who meets all of the requirements for a reputable offshore development firm.

Also, before beginning a project, it would be beneficial if you:

• Estimate time and budget. Even during the early stages of negotiations with an outsourcing partner, it would be beneficial to have a clear understanding of the scope of work and when you can expect to see the results.

• Clearly define your objectives. It's critical to write down your goals and expectations, create a full project strategy, and discuss it with your offshore development partner right away to avoid any miscommunication and to get the results you want.

Hiring an offshore software development team: FAQ

What is the best way to find a top-notch offshore development team?

When considering outsourcing product development to an offshore location, keep the following factors in mind: service quality, reliability, client reviews, cultural and time zone differences, and, finally, English proficiency. Also, keep an eye out for prices that are too low, as this could indicate that the service is of poor quality.

Over a million different types of offshore software development companies exist around the world, and picking one is no easy task. You can use websites that provide information about available outsourcing companies and independent contractors or freelancers to simplify the process of finding the right outsourcing partner.

There are specialised websites that evaluate, research, and review top companies in various industries, such as Clutch or Toptal, which provide software development outsourcing services. While Clutch allows us to delve deeper into some useful information such as a list of companies organised by country, ranking, hourly rate, case studies, core competencies, reviews, and more, sites like Toptal maintain a unique database of software development agencies from Eastern Europe and Latin America, and know which engineers are (1) excellent (every engineer is vetted) and (2) available to start a new project soon.

Toptal allows you to hire developers directly from outsourcing companies by speaking with them. You avoid all of the sales talk and run a lot less risk than if you worked with freelancers. Assume you're looking for freelancers. In that case, websites like TopTal, Fiverr, or UpWork can provide you with an enormous database of independent contractors willing to bid on your project for the lowest possible price while still providing high-quality work.

What criteria should be used to assess offshore software developers?

It's critical to assess both their technical and soft skills before hiring offshore developers. There are numerous interview guides available for evaluating developers' technical abilities. When working with an outsourced development team, it's important to remember that the specialists will have no trouble working remotely and collaborating.

You should inquire about the following to see if the offshore developer is a good fit for your project:

• Background and prior experience
• The developer prefers to use the following technologies on projects.
• When working remotely, how does the developer resolve conflicts?
• How does the candidate collaborate with other team members while working remotely?
• Are there any special methods for staying focused when working from home?

What is the best way to collaborate with offshore developers?

Implementing the appropriate offshore project management methodology, which will coordinate all work processes, is critical to the effectiveness of an offshore development team's work. Agile methodology is not new, and it is already widely used as a practical and convenient framework for software development teams around the world. Agile offshore software development companies are as productive as, if not more productive than, co-located teams. 

What can you do to keep your offshore development team interested?

Keeping remote employees engaged is a never-ending process for any company. Focusing on communication is one of the most effective ways to increase productivity and engagement. As a business, you can establish communication standards for your outsourced development team, conduct regular check-ins, and use a variety of collaboration tools. If you have a team of remote software developers and engineers and would like more advice, check out our article on how to engage remote workers.

The Bottom Line

Do you require the services of an offshore development company? We understand how difficult it is to locate the best offshore software developers. But it is possible, and the effort is well worth it.

Use our expertise in selecting an offshore software development team if you are afraid of making a mistake that will cost you time and money. Toptal makes finding a perfectly matching team of offshore developers from Eastern Europe and Latin America for any project simple and secure.

Hire a vetted development team in a matter of days!

About the Author

Author: David AttardWebsite: https://www.linkedin.com/in/dattard/Email: david@collectiveray.com

David has been working in or around the online and digital industry for the last 21 years. He has vast experience in the software and web design industries using WordPress, Joomla and niches surrounding them. He has worked with software development agencies, international software companies, local marketing agencies and now is Head of Marketing Operations at Aphex Media - an SEO agency. As a digital consultant, his focus is on helping businesses get a competitive advantage using a combination of their website and digital platforms available today. His blend of technology expertise combined with a strong business acumen brings a competitive edge to his writings.