The widening gap between technical job openings and local talent availability slows digital transformation efforts across American and Western European tech industries. As a result, 76% of companies choose to outsource their IT function.
By tapping into the global talent pool, organizations can expand access to qualified tech talent while achieving up to 40% cost savings compared to domestic sourcing. For example, average offshore developer rates in Poland are around $25 per hour, whereas hiring experienced developers in the USA will cost $58 hourly. These cost differences highlight the growing appeal of international talent sourcing across different regions.
To help companies navigate this complex landscape, we will explore the peculiarities of the major outsourcing markets – Central and Eastern Europe, Southeast Asia, and Latin America. We will also provide offshore software development rates by country and provide insights into the cost of hiring developers across different regions. Leveraging this global perspective, organizations can make informed decisions when choosing the outsourcing destination, balancing technical expertise with their budget realities.
Key takeaways:
- Central and Eastern Europe offers an optimal balance of cost and quality, making it a popular destination for IT project outsourcing.
- Asia has the largest talent pool and lower rates, but challenges like time zone differences and varying quality standards can make managing outsourcing projects more complex for businesses in other regions.
- Latin America has become particularly attractive for North American companies due to minimal time zone differences and competitive rates.
Offshore software development rates in Central and Eastern Europe
With a vast talent pool of world-class tech professionals and competitive prices, Central and Eastern Europe (CEE) provides favorable conditions for offshore software development services. The region is home to over 1 million software engineers who work in ICT, public services, e-commerce, manufacturing, fintech, and transport industries.
Local IT specialists are known for their strong technical capabilities and engineering prowess. Staying competitive requires them to be able to handle cutting-edge technologies such as machine learning (ML), large language models (LLM), IoT, and a constantly expanding array of programming languages and frameworks.
According to HackerRank, Poland, Hungary, the Czech Republic, and Romania are in the top 20 countries in the world in terms of tech skills, surpassing the traditional coding giants – India and the US. The latest Pentalog ranking also placed several CEE nations in the top 10 places with the best developers in the world.
Central European countries have a long tradition of excellence in engineering, math, and science. A strong emphasis on STEM education at all levels, from primary school through university, allows the region to produce a steady stream of tech-savvy graduates who can deliver complex projects that meet international benchmarks.
At the same time, compensation rates for engineers tend to be lower than those in Western Europe. The outsourcing costs vary from country to country, but average software development rates start at $15 per hour and reach up to $23 per hour.
Software development hourly rates in Poland
Poland is the largest IT offshore development hub in Central Europe. It boasts over 400 outsourcing centers, employing over 430K skilled professionals. The Polish tech ecosystem now has over 3K startups, which focus primarily on SaaS (39%), web (36%) and mobile (26%) applications, hardware (17%), customized digital products (15%), and tools for IT (10%).
In recent years, Poland’s IT industry has gained significant attention from global corporations. Tech giants like Facebook, Intel, IBM, Microsoft, Hewlett Packard, and Dell opened their R&D facilities across the country. This helped the tech sector attract more than $86.3 million in investments in 2024 alone.
The main reason Poland is popular among foreign companies is the abundance of skilled software developers. According to Coursera, the country demonstrates cutting-edge proficiency across business (77%), technology (86%), and data science (67%) domains, securing 22nd place in the global leaderboard. Polish software engineers are well-versed in popular programming languages like JavaScript, Java, Python, TypeScript, PHP, Kotlin, and C++/C#.
The average hourly rate among Polish offshore development companies ranges between $25 and $27. According to SalaryExpert, junior offshore developers typically earn around $19 per hour, while senior developers make $34 an hour. With 10+ years of experience in custom software development and IT outsourcing services, we at Neontri know how to help our international clients find the best match at a reasonable price.
Software development hourly rates in the Czech Republic
The Czech Republic is a promising offshore software development hub with a talent pool of 130K professionals. This robust workforce provides companies access to skilled technology experts across various domains, including SaaS, web development, and mobile software services.
The IT services industry is projected to generate $6.01 billion in revenue in 2024. IT outsourcing plays a significant role in this market. It contributes nearly 38% of the total value – roughly $2.28 billion. From an economic perspective, ICT service exports constitute 20.49% of the Czech Republic’s total service exports.
The country also offers competitive pricing, with an average hourly rate of $22. Compensation varies depending on the developer’s experience level and specialization. Junior developers tend to be on the lower end of this range, with $17/hour, while senior developers can command rates closer to $30 per hour.
Software development hourly rates in Romania
When Romania joined the EU in 2007, it was like opening the doors to a whole new world of opportunities. With investment flowing in the country’s IT sector, the local startup culture went into full bloom.
The success of UiPath, Romania’s first unicorn, is a testament to the country’s potential to nurture globally competitive tech companies. This success story showed everyone what’s possible, and now the country has set an ambitious goal: they want to create five more unicorns by 2025.
Bucharest is a center of Romanian technological boom. This hub generates 63% of national tech revenue. The capital is a thriving hub for companies specializing in cybersecurity, incident response, disaster recovery, and interoperable software products.
Romania is also a well-known destination for offshore outsourcing services. It offers significantly lower prices than Western Europe while maintaining excellent quality standards. The average software development hourly rate is $18. Junior developers charge $13 for their services, while more experienced developers typically get around $23 per hour.
Offshore development rates in Asia
As a pioneer in software development outsourcing, Asia has established itself as a major player in the global IT sector. The region boasts a vast talent pool – more than 15 million professional developers.
China and India are the biggest outsourcing services hubs in the Asia Pacific region. With a combined talent pool of 12 million programmers, data scientists, architects, and QA engineers, they are well-positioned to provide the capabilities needed to fuel large-scale software projects across various industries.
Other Asian countries – Vietnam, Thailand, and Indonesia – are also gaining prominence in the global IT outsourcing market. Thanks to advancing infrastructure, government support, and much lower rates than in Europe and the US, they are becoming viable alternatives to established offshore software development hubs in the region.
Software development rates in Asia begin at $10 for an entry-level specialist and reach up to $35 for a senior engineer.
Offshore developer rates in India
India has long been a prominent outsourcing destination for major enterprises and international corporations. The offshore rates for software development are attractively low-ranging from $10 per hour for junior specialists to $17 per hour for more experienced developers.
While the prices are attractive, many Indian tech companies focus on delivering the basics at low costs rather than building cutting-edge solutions. So, while working with Indian developers can save money, it often comes with trade-offs in the quality of deliverables and project complexity.
This doesn’t mean there is no great talent in India. But companies considering this outsourcing destination should do the following:
- focus on individual offshore developer portfolios
- check their past work by reading customer reviews
- conduct thorough coding assessments to test their skills
- set up quality checks throughout the project to mitigate potential gaps in technical execution.
Offshore developer rates in China
China has the largest number of software developers in the world – almost 7 million people. The local tech talent pool is characterized by a robust pipeline of engineering graduates and a strong emphasis on STEM education.
Price-wise, China’s offshore software development rates are about the same as in CEE, with an average of $25 per hour. Junior developers start at $19, and senior-level specialists charge up to $35 per hour.
Despite the competitive pricing, there’s the tricky bit. Imagine trying to coordinate work with someone who’s heading to bed when you’re just starting your morning coffee. That’s the reality of working with Chinese teams. When it’s 9 am in New York, it’s already 10 pm in Beijing. So when Western companies start their workday, Chinese developers are wrapping up theirs.
This can create gaps in project coordination and immediate problem-solving. Thus, it’s crucial for organizations considering outsourcing to China to develop robust asynchronous communication strategies and carefully plan project workflows to mitigate the time zone challenges.
Offshore rates in Latin America
Latin America (LatAm) is the most popular offshore software development hub for North American tech companies. The negligible time zone difference, rapid growth of the IT sector, favorable taxation system, and impeccable service quality make Brazil, Argentina, Columbia, Uruguay, and Mexico very convenient outsourcing destinations.
Software development companies in LatAm can also provide access to a 1.5 million pool of skilled developers. These engineers use a tech stack that is well-suited to supporting North American clients and can be trusted with sensitive data due to robust data protection laws and cybersecurity practices.
Hiring remote developers in South America can also save costs, especially for small companies and newly-emerged startups. The hourly rate of a junior engineer is around $11, while prices for senior offshore software developers are $15-$22 per hour.
Offshore development rates in Mexico
Mexico has emerged as a compelling nearshore software development destination for North American companies. The local IT industry provides highly competitive value, with average hourly rates ranging from $11 to $20.
The country has a vast talent pool of 700K software engineers. They are well-versed in the latest technologies and scored #2 in Python tests offered by Pentalog. This ranking also shows that Mexican freelancers are good at C/C++ programming.
The Mexican tech ecosystem is still maturing. It has some big selling points, though. Most developers speak good English, and they work in the same time zones as the US. But these perks don’t automatically guarantee smooth project execution. Some companies are excellent, while others are still catching up. The key is to check their track record and tech infrastructure to ensure they can handle the project long-term.
Offshore development rates in Brazil
When talking about the cost of offshore software development, Brazilian rates are quite a bargain. Junior developers start at around $12 an hour. This makes them attractive to companies seeking cost-effective solutions for less complex development tasks. But even the seasoned pros with specialized skills and extensive tech stack top out around $21 per hour.
But lower rates might mean working with developers who are still building their skills or learning industry best practices. Thus, companies should take time to check developers’ skills and spell out what they need before jumping at the low price tag.
Key factors influencing offshore rates for software development
Digital connectivity and collaborative technologies make it easier than ever to tap into international talent pools, breaking down traditional geographical barriers. Companies now have access to thousands of software developers across continents, allowing them to balance cost-effectiveness with technological expertise.
IT project outsourcing became a strategic approach for companies aiming to access high-quality development services and reduce product development costs. Now that companies can hire developers from pretty much anywhere, the prices aren’t just about location anymore.
Project complexity, required technologies, maintenance needs, and the specific engagement model contribute to the final rate. Let’s examine these factors in detail.
Cost of living
The economic foundation of a country directly influences its labor rates. For example, a developer in San Francisco needs to charge more because their rent alone is $3K a month. Meanwhile, Polish developers can offer lower rates and still maintain a great quality of life in their local economy.
Skill and expertise
The depth and breadth of technological expertise play a critical role in determining development rates. Places like India have huge tech communities with lots of developers who know common programming languages. But when looking for an expert in niche domains such as GenAI solutions, cybersecurity methodologies, or data management sevices, the pool of talent gets smaller and the rates go up.
Economic conditions
A country’s economy has a big impact on its software development market. In developed countries, strong tech infrastructure, advanced training programs, and higher living costs often mean higher salaries for skilled professionals.
Emerging markets, however, tend to offer more competitive pricing as they work to establish themselves on the global tech scene. Offshore countries use their lower costs and hunger for international projects to attract software development opportunities.
Currency exchange rates
When companies hire developers from other countries, exchange rates play a big role in the final price. A strong national currency can make certain markets particularly attractive, letting companies build better products without increasing their budget.
Let’s say that, with $10K, a company can get one month of development. A favorable exchange rate might stretch that same amount to six weeks of work. This financial leverage allows organizations to optimize their development budgets and keep the same quality and expertise.
Market saturation
The economic principle of supply and demand affects the tech industry just like any other sector. Markets with an abundance of professionals possessing similar technological skills tend to experience more competitive pricing structures as professionals compete for limited project opportunities. Technology ecosystems featuring highly specialized skills create a different economic dynamic, where scarcity drives prices upward.
Hire offshore developers with Neontri
Neontri is a custom development services provider with 10+ years of experience creating digital transformation programs, web and mobile app development, and cloud solutions for industry leaders across the retail, banking, and fintech sectors. In addition to performance-based engineering, we also provide IT outsourcing services to organizations of any size, wherever they are located.
We help companies build distributed software development teams to accelerate their business growth. At Neontri, we understand that business needs evolve, so we offer a multifaceted service package that features seven distinctive outsourcing models:
- Try & Hire
- Staff augmentation
- Recruitment process outsourcing
- Permanent placement
- Employer of Record (EOR)
- Agile POD
- Team augmentation
Thanks to such a diverse range of services, we can offer flexible partnership approaches that can be tailored to your project requirements, budget constraints, and organizational dynamics.
Cost of offshore software development: From pricing to partnership
Selecting an outsourcing destination requires a holistic approach. Each country and region is unique, with differences in socioeconomic and financial conditions affecting software development rates.
Companies must balance cost considerations with talent quality, technical expertise, communication skills, and long-term strategic alignment. The lowest rate doesn’t always translate to the best value. Offshore software development cost is influenced by project complexity, necessary technologies, maintenance, the type of pricing model, and the cost of living in the selected market.
Are you ready to build your offshore development team? Contact us, and we will help you identify the optimal resourcing strategy for your business success.
FAQ
Why do offshore software development rates vary so much?
Rates vary based on factors like local living costs, market competition, technical expertise levels, and economic conditions in each country. The size and maturity of the local IT market also influences pricing.
How can I assess whether an offshore team offers good value for their rates?
Evaluate their technical expertise, past project portfolio, and client references rather than focusing solely on hourly rates. Consider their communication skills, process maturity, and ability to deliver quality work consistently.
What countries offer the best value for web and mobile app development?
CEE countries like Poland and Romania offer an excellent balance of technical skill and cost-effectiveness.
