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Offshore software development rates

The global tech market is experiencing a significant lack of qualified IT personnel. In the US alone there are over 230,000 unfilled jobs for software developers and other IT specialists. This, in return, causes the dramatic increase in the compensation rates and competition for the tech talent. Companies sometimes have to pay huge checks to hire an experienced US-based development team. 

One of the ways out of this endless cycle of spending more and more money is hiring abroad. Companies from North America and Western Europe have been outsourcing their software development for decades. The difference in remuneration is so significant that it allows companies to save 20 to 65% of their budget on salaries alone.   

In this article, we are going to compare an average software developer salary in North America and Europe to the one in most popular outsourcing destinations in Eastern Europe, Asia, and South America. 

Comparison of annual software developer salaries worldwide

Let us begin with an important statement: the numbers that we are going to discuss in this article are the median for the local market and may not reflect the complete picture. Every case is different, and some US developers can earn as much as $30,000 a year, while others can get up to $240,000 every year (e.g. a solution architect with unique technological and industry expertise somewhere in Silicon Valley). 

Let’s take a look at the breakdown of the engineers’ salaries based on their experience (junior, mid-career, and experienced developers) in some of the top staffing locations. 

Software developers’ salaries in North America

Both American and Canadian engineers receive rather high compensations with the average annual paycheck of $76,500. So gathering a tech-savvy team will cost you an arm and a leg. Moreover, you will have to fight for the tech talent and wait for an average 10 to 18 weeks before they start working for you. If you add the onboarding costs, the overall numbers are quite depressing. 

Overall, the rates vary significantly from state to state, and can differ depending on the technical expertise you are looking for. 

State

Junior 

Middle 

Senior 

New York, USA

$67K

$109.3K

$169.30K

California, USA

$77.9K

$130.5K

$197.5K

Washington, USA

$48.1K

$115.1K

$178.5K

Massachusetts, USA

$68.5K

$107.5K

$164.5K

Florida, USA

$57K

$96K

$149K

Texas, USA

$66.5K

$107K

$157.4K

Ontario, Canada

$63.6K

$99.7K

$157.7K

Source: ZipRecruiter

The US developer’s salary by technology

You can also see that the average annual compensation differs based on the primary programming language and technical expertise a particular engineer has. 

Here’s the comparison of the US software developer salaries by their technology specialisation.

Technology

Junior 

Middle 

Senior 

PHP

$54K

$82K

$100K

Java

$57K

$69.7K

$117K

C++

$58K

$76.5K

$107K

.NET

$44K

$69K

$111K

JavaScript

$57K

$79K

$117K

Source: Glassdoor

Other factors that will raise the numbers are experience with architecture, cloud expertise, ability to lead the team, etc.

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Engineering salaries in Western Europe

There are several large tech hubs in Europe — Berlin, London, Paris, Barcelona, and Amsterdam. European engineers get lower salaries, compared to their US colleagues. However, they still receive heavy paychecks. Moreover, the large number of prominent startups and HQs of tech giants like Google, Facebook, or Microsoft means you will have to fight hard to hire top talent

Country

Junior 

Middle 

Senior 

Germany

$43.5K

$57.6K

$76.5K

United Kingdom

$35K

$755K

$95K

France

$36.5K

$48K

$68.2K

Netherlands

$35.3K

$53K

$76.5K

Sweden

$30K

$53K

$66K

Switzerland

$80K

$108.3K

$132.5K

Source: Glassdoor, IT jobs watch UK

The UK and Switzerland have the highest compensation rates in the region. These two destinations are often HQs for global companies and financial institutions, which triggers the demand for highly qualified software engineers. 

Let’s also explore the average annual salaries of software engineers based on their specialization. We compared the salaries of developers in the same European countries in five pamor groups: 

Country

PHP

Java

C++

.NET

JavaScript

Germany

$53,875

$56,790

$59,129

$57,944

$59,062

United Kingdom

$64,676

$95,312

$95,312

$71,484

$81,696

France

$44,483

$44,007

$51,101

$42,786

$50,186

Netherlands

$45,718

$53,186

$64,638

$50,161

$55,307

Sweden

$47,363

$56,083

$49,928

$53,693

$61,390

Switzerland

$92,967

$96,782

$107,608

$89,917

$98,435

Source: Payscale, IT jobs watch

One of the biggest issues of software development in Western Europe is the competition for tech talent. Small and medium enterprises are struggling to hire experts with the needed qualifications. They cannot compete with the market leaders both in terms of money (salary and bonuses) and additional benefits. That is why many of them choose to outsource their IT operations or software development to one of the three established locations: Eastern Europe, Asia, or South America.

Offshore software development cost in Eastern Europe

One of the most prominent outsourcing destinations is Eastern Europe. Software development services are definitely more affordable here, compared to their Western countries. Eastern European software developers typically have great technical education, as well as versatile tech and industry expertise as the majority of the companies in the region specialise in IT outsourcing. 

 

Let’s take a look at the best offshore software development countries in the region in terms of availability of tech talent and their salaries. 

Country

Junior 

Middle 

Senior 

Poland

$22.5K

$37.9K

$47K

Ukraine

$11.4K

$26K

$43.3K

Russia

$15.5K

$21,000

$36K

Moldova

$11.5K

$12.2K

$18K

Source: Payscale, Indeed, Glassdoor, Dou.UA, TAdviser

Apart from the more affordable prices, this region has many other benefits. Software engineers in the region are also recognized by many international rankings, like HackerRank, TopCoder, SkillValue, etc. The region has over 2,700 vendors listed on Clutch. They offer a wide range of services and their portfolios have some large names like Audi, Bosch, Microsoft, Wargaming, and many others. These firms often have wide domain expertise.

Offshore rates for software development in Asia

Asia has become a popular outsourcing destination due to the large number of experts and relatively low salaries. In 2019 A.T. Kearney GSLI, the top five most favourable destinations for outsourcing were occupied by Asian countries: India, China, Malaysia, Indonesia, and Vietnam. They were named the best offshore software development countries for the financial attractiveness and availability of human resources. 

 

Country

Junior 

Middle 

Senior 

China

$29.7K

$42K

$52.7K

Japan

$67.5K

$96.8K

$120K

Vietnam

$14.7K

$20.7K

$26K

India

$8.5K

$12K

$15.2K

South Korea

$32.4K

$46K

$57.5K

Source: SalaryExpert

The financial aspect and availability of resources make these countries attractive for IT outsourcing. Some of the countries have decent STEM education and rather high qualification of their experts.

Offshore software development cost: Mexico and South America

Countries in Latin America are next on our list of excellent outsourcing destinations. Some of the world’s most popular corporations choose to outsource to one or several countries in South America. The difference in salaries between North and South America is enormous. In the table below we compare the rates for some of the best offshore software development countries in this region.

Country

Junior 

Middle 

Senior 

Mexico

$13.5K

$24K

$33K

Brazil

$14.5K

$21K

$33K

Costa Rica

$17K

$26.500

$34.7K

Chile

$17K

$24.700

$39.5K

Argentina

$8.8K

$16.700

$26K

Source: Glassdoor

Countries in this region are often known for their nearshoring expertise. However, the unstable political situation and poorly developed infrastructure might be a problem for successful IT outsourcing.

Why opt for offshore software development in Ukraine?

Choosing the right location for software outsourcing is a strategic decision that should not be made solemnly on the money factor. There are many other things to take into account: large numbers of skilled engineers, variety of IT outsourcing vendors, favourable business climate, convenient time zone, etc. Here are five benefits of outsourcing your software development to Ukraine: 

Why choosing Ukraine is a good idea:

  • Extensive tech talent pool. The country has over 200K of IT specialists, and the majority of them work for IT outsourcing and outstaffing companies. 
  • Large number of vendors. The country has over 1,600 tech companies that provide outsourcing services of any type.
  • Excellent business climate. The country has one of the lowest taxes (5% of revenue) and ranks 64th in the Ease of Doing Business by the World Bank.
  • Affordable yet highly skilled workforce. You pay less for the same services you would get on your local market without compromising the quality of your product.
  • Experience with outsourcing. Global tech moguls like Amazon and Google outsource their IT processes to Ukrainian companies. Moreover, Ukrainian engineers created some of the world-known unicorns, e.g. Grammarly, WhatsApp. 

Wrap-up

With the high demand for talent and the growing needs of the market, the war for software engineers isn’t going anywhere soon. You may try to fight for the top talent on your local scene, or just tap into the global tech talent pool and enjoy many benefits it brings. 

If you need to hire experienced engineers today, just contact us right away!

If you are ready to outsource your project, send us a message right away and we will plan your way to success!

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