The 21st century is the time of great technological advances. And it is also the time of the greatest tech talent shortage that companies around the world have seen. Even though the pandemic freed up some of workforce, it’s still not enough to fill in the needs of the market. So many companies choose offshore destinations to tap into a bigger pool of experts, extend their development capabilities, and access the expertise they need. In this guide, we are going to take a look at three most popular offshore regions: Eastern Europe, Asia, and South America (incl. Mexico). We will explore:
- Reasons to choose offshore software developers;
- Where to find the best offshore developers in the world?;
- Tech and industry specialisation of every region;
- Rates comparison;
- Education, skills, rankings, and English proficiency;
- And some tips on how to hire the best offshore developers.
Why choose offshore software developers
What is the real business value of offshore developers for your company?
- Highly-qualified specialists. Companies in offshore locations like Eastern Europe are known for their extensive outsourcing expertise. They focus on the professional growth of their employees, making it one of their priorities. Thus, you get access to top tech talent at an affordable price.
- Lower competition for the tech talent. In developed countries like the US or Germany companies are going far and beyond to get the experts they need. With a variety of tech giants like Amazon, Google, or Microsoft, and myriads of companies that need software development services, it might be hard for a mid-size or even large company to find and staff a development team quickly. In offshore locations, due to the lower number of companies, it’s easier to find the experts you need.
- Access to rare expertise. The majority of tech experts in IT outsourcing have experience working within a particular tech stack and domain. If you are looking for a qualified expert with a specific skill set (or even a whole team), offshore developers are what you need.
- Shorter time-to-market. Due to the faster staffing and onboarding processes, it takes less time to get your product ready for launch or software in service for your company.
- Ability to scale quickly. Another benefit of working with offshore software developers (and a vendor in particular) is that you can easily change the size of your team based on the current needs of the project.
You might also like: Offshore software development: How to make it work in 2020
Where to find the best offshore developers in the world?
According to Evans Data Corporation, there were 26.4M software developers in the world in 2019 and this number is expected to reach 28.7M by 2024. And while the US, Western Europe, and the UK have their own significant tech talent pools, the competition for this talent is tough. That is why, companies refer to offshore markets instead.
Hire offshore software developers: Eastern Europe
Eastern European countries have a combined tech talent pool of over 1M professional developers with over 50K ICT graduates entering the market every year. Ukraine, Poland, and Romania have the most significant number of software developers (between 110K and 292K). Other countries with a high number of professional developers are Hungary (84,500), Czech Republic (104,000), Bulgaria (56,000), and Belarus (55,700).
Moreover, many Eastern European countries are recognized as reliable offshore destinations. Seven countries were included in the top 30 list of the 2019 A.T. Kearney Global Services Location Index of the best outsourcing locations.
Hire offshore software developers: Asia
The Asian tech talent pool reached almost 4M in 2018. The top countries with the largest number of professional developers are India (2.75M), China (590K), and the Philippines (190K).
Asian specialists have been a sweet deal for companies that were looking for offshore developers for a long time. The A.T. Kearney Global Services Location Index recognised India, China, and Malaysia as top three locations for availability of tech talent and financial attractiveness.The Philippines has lost 3 positions, compared to the previous year, but still remains an excellent destination for BPO outsourcing. However, the region was highly affected by the COVID-19 pandemic. Many countries, including India, have struggled during the lockdown, as they could not deliver the same results within the work-from-home scenarios.
Hire offshore developers: South America and Mexico
Among the Latin American countries, the best outsourcing countries by the number of professional developers are Brazil, Argentina, and Mexico with a combined talent pool of over 700,000 developers.
These five countries have also been included in the 2019 A.T. Kearney, ranging from 9th to 30th positions, with a slight decrease in ranking compared to previous years.
However, availability of tech talent is not significant on its own. Let’s take a look at what every region can offer in terms of tech and industry specialization.
Industry and tech expertise by region
SourceSeek report reveals that among the three discussed regions, Eastern Europe has the most versatile expertise. Vendors there work with companies in security, automotive, and travel & tourism industries. Asian countries have great expertise in real estate and entertainment.
Mexico and countries in South America have expertise in entertainment, financial, and education industries.
As for the technology expertise, Asian countries are known for the prevailing number of PHP developers, as many companies outsource web development there. Eastern Europe has a versatile tech portfolio and is known for delivering enterprise-level solutions.
Offshore developers by technology
If you are looking for offshore developers who work with specific tech stack or possess a particular expertise, it is also a good idea to check for availability of such experts in the region. We have created a PDF file that offers an estimation of the number of offshore software developers by major technologies.
Offshore developers’ rates
Let’s talk about developers’ salaries. According to Payscale, the average salary of a software developer in the US (with 2-5 years of experience) is $70,000 a year. An offshore software developer with similar qualification and experience earns between $7,000 and $35,000, depending on the location. If you take billing rates, you can save as much as $10-35K a year per developer. The difference in rates of onsite and offshore developers can be even more impressive when we are talking about rare expertise or more years of experience. Please remember, that lower cost of services does not mean you get lower quality. Most outsourcing locations have a lower cost of living; thus, they can offer lower price of their services.
Another aspect that often drains the budget is the long staffing process and ineffective onboarding. Did you know that nearly 60% of US employers reported having troubles filling specific job openings within 12 weeks or more, which resulted in over $800K in additional annual expenses? Whereas, the typical staffing time for offshore software developers varies between 3 and 7 weeks.
Read more: How to save your software development budget when outsourcing
Education, English proficiency, skills, and rankings of offshore developers
Another important aspect is education and skills of offshore developers. In offshore destinations like Eastern Europe or Asia, software developer is a prestigious job with high expectations and demands. So in this section we are going to explore education, English proficiency, and skills of offshore software developers.
The 2020 ranking shows that among the three discussed destinations, Eastern Europe has the greatest number of top-notch universities. Thus, the access to education (and tech education in particular) is better in EE countries.
Eastern Europe has an average 99.65% literacy rate, whereas in South America and Mexico this score reaches 95.7%, and in Asian countries - 90.6% (primarily because of India).
English proficiency and cultural compatibility of offshore software developers
According to the 2020 EP EFI ranking, Eastern Europe has the highest score in terms of English proficiency, thus making the communication between you and your offshore developers much easier.
It is important to find offshore software developers whose culture matches your expectations. For example, Eastern European vendors are known to be a great cultural fit for companies from the US and Europe. In one of our articles we have discussed cross-cultural cooperation, based on the Hofstede Insights study. Find out more in a PDF file below.
Cross-cultural compatibility of offshore software developers
International rankings and skills evaluations
An international SkillValue ranking by Pentalog offers an interesting perspective on the best IT skill sets per country in the world. As you can see, Eastern Europe ranks the highest in the overall skill ranking, as well as in rankings by technology. For example, five out of the top 10 places are held by Eastern European countries and four more countries are in the top 30 list.
As you can see on the chart above, out of South American countries, only Brazil has made it to the list, ranking at the 20 place. Mexico was ranked 2nd in the general list and 18 in the Elite classification by test. As for Asian countries, India was ranked 35th and the Philippines - 38th, while Chinese developers took 43 place.
Another source, Hackerrank, offers a slightly different perspective. They’ve ranked China as number one, but the rest of the region received more than moderate scores. Eastern European countries have performed well, ranking between 3rd and 20th positions.
Once we have estimated the tech talent pool in every location and country, explored their technical and industry expertise, and evaluated their skills, it is high time to learn how to hire top offshore software developers.
How to hire the best offshore developers?
1. Understand your business needs
This step is important to evaluate the amount of work that needs to be done, the cooperation model that will best fit your needs, and the number of offshore developers that are going to be involved in the project. Example of questions to ask yourself:
- Is it a short-term or a lengthy project?
- Do you need developers to expand your in-house team or do you need a project built from scratch?
- How many people do you need?
- Do you need them full-time?
2. Choose the right location
Understanding what needs to be done will bring you to the next step - finding the right location. In one of our recent articles, we’ve discussed three main IT outsourcing destinations: Eastern Europe, Asia, and South America. Keep in mind all the crucial aspects while choosing the final destination:
- What technical and industry expertise do they have?
- Will they be a great cultural fit for your company?
- How much time will they have for meeting in terms of time-zone difference?
3. Find the right vendor
Unless you are looking for a single developer to work on a small task, you most likely will need to find a company to work with. There are thousands of offshore software development vendors across the globe. Some companies have glorifying customer reviews, some are proud about their experience in every industry, and others have strong portfolios. You will also find vendors who offer insanely low rates, while others seem to exaggerate the cost of services.
We have created a step-by-step guide on how to choose the best offshore outsourcing company.
Once you have found the vendor, it’s time to negotiate a win-win contract and start working. By the way, you might also need to check our article on how to avoid contract loopholes.
4. Bonus item: Share the bigger picture
If you want your company to succeed, it is important that your tech partner (and your developers) understands your business needs and vision. It will be for them to satisfy you, if they know your expectations. Don’t forget to share:
- product description and its position on the market (or within the company);
- your business needs;
- expected deadline;
- KPIs and milestones;
- your vision of the process.
As you can see, offshore markets can offer a wide selection of experts within various tech stacks and industries. Asian offshore developers can be a great choice in terms of financial attractiveness, but might be a little bit of a challenge as there will be very small or now window for communication. Mexican and South American developers are known for nearshore development services for countries from the US. However, these countries have less developed infrastructure, compared to other destinations. Eastern European offshore software developers typically have both strong technical background and versatile expertise. Besides infrastructure development and significant improvement of tech education, this region has also adopted new technologies and created a thriving market of software development and IT outsourcing services.
Why choose Ukraine to hire top offshore developers?
- The overall tech talent pool in Ukraine is over 192,100 IT experts. Ukraine also has the largest number of developers working for outsourcing and outstaffing companies - nearly 131,000 experts.
- Ukraine has over 1,600 tech companies that offer nearshore and offshore outsourcing services to companies around the globe. You can easily find a reliable tech partner here.
- Strong educational system. Every year more than 16,000 ICT students graduate from universities all over the country. Keep reading: Tech education of developers in Ukraine: 5 significant insights
- Ukraine is a well-known outsourcing destination. In 2019 A.T. Kearney ranking, Ukraine was included in the list of 20 most appealing outsourcing locations .
- Offshore developers here have been known as an excellent match for virtually any country or continent. Ukrainian developers in cross-cultural communication
- Choose the best offshore outsourcing company (2020 edition)
- Legal aspects of outsourced software development in Ukraine
Why choose N-iX to hire the best offshore developers?
- The company has an internal talent pool of 1,000+ professionals, as well as offices in Ukraine, Poland, Bulgaria, and other countries that will give you access to almost 600,000 professionals;
- The company is compliant with international security standards, including ISO 27001:2013, PCI DSS, ISO 9001:2015, GDPR, and HIPAA;
- The company boasts many awards, such as Global outsourcing 100 by IAOP, GSA UK 2019, and more.
Featured success stories
As a company with almost 20 years on the market, N-iX has been working with companies around the globe for a long time, establishing long-term partnerships across all many industries.
- Gogo, a US-based company that provides in-flight connectivity and wireless entertainment services for commercial and business aviation around the world. We’ve helped Gogo move the on-premise data solutions to the cloud and built a cloud-based unified data platform that collects and aggregates data from 20+ sources.
- Travelport Locomote is Australian corporate travel platform which simplifies and streamlines travelling life cycles (tickets. Hotels. etc.). Three N-iX teams have been working on software development, testing, and enhancing of the existing travel platform. Watch client’s testimonial
- Another client is TuneIn, an American audio streaming service, that needed to expand their in-house development capabilities.
- N-iX teams has also worked with HotSchedules, a US-based company that provides an employee scheduling and labor management solution in the restaurant industry since 2015.
- Our dedicated team is also working on a Bluetooth communication system for motorcycle riders for a US client - Cardo Systems. Expertise delivered in this project: embedded development, software development and testing. Watch client’s testimonial
- N-iX also partnered with OpenText, Canada's largest software company, to work on a platform that allows the company to design and deliver integrated mobile solutions for clients that use more than one product swiftly and without developers’ involvement.
If you have any more questions about offshore developers, our expertise, or services we offer, contact our experts!