October 17, 2017

How much should you pay for an outsourced developer?

Colombia, Latin America, Software Development

How much should you pay for an outsourced developer?

Outsourcing software development companies: An important question to ask yourself is, “What is a good rate when paying for an outsourced developer?” Upfront, this may seem like a simple question, but rates may vary according to the outsourcing software development partners and their location.

Many companies will choose outsourcing as a way of saving money. However, it’s important to highlight that saving money is not the only reason for outsourcing.

If you can get good value for less money – why not follow that road?!

In this blog post, we’re bringing you an overview of the average rates for developers around the world.

Rates in Asia – inexpensive offshore programmers

Asian countries are among the locations with the lowest rates in the world.

India is probably the best-known offshore programming country. The average rates for outsourcing IT services in India range between $18–25.

The country is a wide pool of talents that can give your project a successful take-off for a low cost. But also be aware that cooperation can be impacted by difficulties in time zone differences, cultural differences, as well as by poor working conditions.

Similar to India, China rose in the IT market as a source of IT software outsourcing available for lower rates. However, hourly rates for high-quality projects in China are rising up to $40, which is more similar to the situation of outsourcing software development companies in Eastern Europe and Latin America.

Other Asian countries worth mentioning when talking about outsourcing IT services are Indonesia, Malaysia, and Vietnam. Their average rates vary between $30 and $40 for top-quality developers.

Africa – a new destination for outsourcing software development companies at low rates.

During the last few years, Africa has been present in the IT outsourcing market as a rather cheap and growing destination.

But be aware that Africa is not a synonym for a cheap workforce for outsourcing software development companies. 

Countries such as Egypt, Morocco, and Kenya do have quite low hourly rates for offshore programming jobs – around $20 or less. But Nigeria and South Africa, for example, are not that cheap. Average rates for hiring software developers there are $40–50.

Eastern Europe – somewhere in the middle.

Average hourly rates for hiring IT freelancers in Eastern Europe are between $25 and $40.

If you’re insisting on a lower cost, then search for your software developers in Ukraine, Belarus, and Armenia, while in Poland, Hungary, Bulgaria, Romania, and the Balkans you will pay a higher rate.

However, the rates are not defined only by a developer’s country of origin. According to market surveys, the rates can vary significantly given the engagement grade. They can be between $50 and $80 per hour for a mid-market grade, and go up to $80-110 per hour for an enterprise-grade.

The important fact to take into account with outsourced software developers in Eastern Europe is that they can offer you high education, advanced programming knowledge, good English skills, and cultural affinity.

Latin America – at par with Eastern Europe

The rates for outsourcing IT freelancers in Latin America are similar to those in Eastern Europe.

The average hourly rates in Latin America are between $30 and $50 for an experienced software developer. But again, they can vary according to the grade of engagement. The surveys show practically the same results as for Eastern Europe – $30-50 per hour for a start-up grade, $50-80 for a mid-market grade, and $80-110 for an enterprise-grade.

The top countries for outsourcing development & IT staff augmentation services in Latin America are Argentina, Mexico, Brazil, and Colombia.

If you are ready to pay a bit higher rates in exchange for the benefits of workday overlap, fluent English language skills, cultural affinity, and travel proximity, search for your freelance programmers in Latin America.

The most expensive outsourcing software development companies are in: 

The fact that the US, Australia, and Western Europe are sources of the most expensive freelance developers is not surprising information at all.

Their hourly rates go from $70 to $250.

Their value is backed up by the fact that they come from some of the biggest tech-hubs in the world. They have access to top universities and resources that can provide them with knowledge about the latest trends and technology innovations.

Average rates according to job titles and experience levels

In the table below you can see the average outsourcing rates in 2017, according to job titles and experience levels (source: 2017 Guide to Global Software Outsourcing Rates, Accelerance, Inc.).

Average Global Outsourcing Rates for 2017 Chart outsourcing software development companies
Average global outsourcing rates for 2017 show a wide variety of hourly pay based on where you are looking for talent.

The future of the outsourcing market

The competition is tough, but the future for freelance developers is still bright.

Growth in contingent workforce outsourcing software development companies

25 years ago, the outsourcing market made up 17% of the total US workforce. Today, this percentage is 36%, and according to Intuit´s forecast, the percentage will continue to grow up to 43% by 2020 

What do you think – who would you rather go with? Leave a comment below.

Ready to take the next step? Book a meeting now with our team and learn more about Why Staff Augmentation is Booming.

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