Have You Chosen The Right Country To Outsource Your IT?

February 16, 2024

Are you thinking of outsourcing your software development operation? It's undoubtedly a great way to cut costs, especially if you own a startup or run a business that executes small projects periodically. Beyond having the advantage of access to excellent talent for less money, there are other things to look out for when spreading your tentacles offshore.

For example, economic stability, basic amenities, time zone difference, language, etc., could significantly impact your vendor's ability to deliver. So it's best to balance all the factors that affect project outcome when choosing a destination for outsourcing. With that said, here are the best/worst countries for outsourcing your software development.

1. The Philippines

When outsourcing any aspect of your business operation, effective communication is a vital factor. This is one area the Filipinos thrive in. Up to 92% of the Philippine populace speaks English, making them one of the world’s largest English-speaking countries. Since their accent isn't as thick as the Indians, businesses make the Philippines the first choice for some caliber of projects.

Like India, the country developed its education system over the years via educational reforms. Asides from the advantage of English language proficiency, the Peso’s low value is another reason, if not the most significant, entrepreneurs rush to the Philippines. The local IT skills are certainly on a steady increase, which makes Filipinos strong contenders.

The Philippines is said to graduate an average of over 100,000 IT students a year, compared to roughly 20,000 in the UK.

2. India

India is one of the most popular go-to destinations when it comes to outsourcing offshore. First, as large as the population is, a considerable percentage of the population speaks English. Their accents may be a bit too thick, but if you are not assembling a customer service personnel team, they'll do just fine, especially with IT operations.

Furthermore, there is a large focus on STEM (Science, technology, engineering, and Maths) in India's system of education, which leads to a yearly toll out of over two million science and tech graduates. What's more, their software developers are highly competent in different programming languages common with modern software development.

Their cost of living is relatively low, making their exchange rate to the UK and the United States currency an upside since you can pay less and hire more. However, poor infrastructure in some areas of India can affect project delivery. So, try the major cities such as Mumbai and Delhi, where stable internet and electricity aren’t a big challenge. A developer's salary in India is around 780,000 Rupees ($11,200), according to PayScale.

3. China

China has become a hub for the fastest growing IT companies in the world. With nearly five million tech graduates produced yearly, China is a destination to get as many tech experts as you need. Apparently, a "hypothetical programming Olympics" is a thing, and according to HackerRank, China ranked first among countries likely to win.

Well, that's altogether re-emphasizing their programming competency. One of the downsides of outsourcing from China is that; of it's 1.3 billion populace, less than 1% has excellent English language proficiency. Also, intellectual property law enforcement is on the lax side. While managing this condition is totally possible if you hire a reputable offshore vendor and establish clear rules of engagement, the risk of property theft reported in China is significantly high.

Of all the countries in Asia, the cost of hiring software developers is relatively cheaper in China. With a large population and low cost of living in some areas, there's always someone willing to do a development job for less. The annual salary range of software developers ranges from 189,000 CNY ($27,695) to 357000 CNY ($52,314).

4. Ukraine

If you are looking to hire offshore C++ programmers, Ukraine is particularly famous for this class of IT skill. There is also an array of other software developers with competence in vast coding languages. Ukraine is, by far, one of the most famous destinations for IT solutions. The Ukrainian populace isn't English speaking, yet you'll quickly find software developers who can communicate well in English.

The nation heavily invests in its IT sector, as you'll find hubs and institutions focusing on the development of software engineers for the future. These hubs are foretold to be highly beneficial as the next decade ushers in an IT solutions powerhouse. The Ukraine time zone conveniently overlaps with the U.S, so organization and coordination can be in real-time mode.

5. Poland

Based on the statistics from HackerRank, Polish software engineers are the third-best in the world. Polish software engineers came out first in an assessment of Java language. They also showed excellent command of other programming languages such as Python, Ruby, PHP, NET, etc. Most of the populace doesn’t speak English officially; still, a significant number is proficient in English as a second language, including many who offer services as freelancers, lecturers, etc.

The difference between Poland's and America's time zone will require planning to get you and your vendor on the same page. However, there exists some overlap to accommodate functional association. The economy is relatively stable among Eastern European nations.

Their software development prices are on the affordable side, or at least significantly lower than the countries that have the demand. Unlike some Asian countries, they adopt standard practices, especially with usual security requirements. Even more, they have saner laws regarding the protection of intellectual property. Based on PayScale data, the annual Polish developer's salty is around $22,000 to $24,000.

6. Brazil

Brazil is a country that can boast of a good number of fluent English speakers among its work-force. The country equally has one of the youngest workforces globally, and they are working towards a science and tech-inclined educational system. Brazil is an upcoming country when it comes to software development. Judging by HackerRank's view, Brazilian programmers have a little over the average score in software development assessment.

That's not bad news; it merely means Brazil is your go-to destination for mid-level software developers or engineers. It's also an opportunity to pay less, but you might want to look elsewhere for your serious coding work.

The standard of living in Brazil is relatively low; however, this is not across the board. Therefore, you may find some vendors charging way higher than others. That's because of the varying cost of living. E.g., you may end up paying more when you want to hire developers from the heart of Rio or São Paulo.

For the most part, communicating with their coders shouldn't be a problem, and annual salary can range widely between R24,000 - $6,000 to $33,000. If you prefer the hourly rate, freelancers and outsourcing agencies peg it around a maximum of $45/hour, though this figure could be less depending on the project's requirement.

7. Egypt

Though Africa isn't the first choice for software development, Egypt's pool of IT talent is significantly increasing, and it is now under the outsourcing market radar. Channeling some of its resources into building a STEM-focused environment right from high school, Egypt shows excellent promise.

While it's a predominantly Muslim nation, you'd be surprised most schools in Egypt run course work in English, making the average high schooler and college graduate proficient. The truth is, attention is now on Egypt for its very palatable developer's salary. Even for a senior developer, the average yearly salary is around $6000.

This number is way lower than most country's software engineers and coders. You may spend some time searching for the best talent to take up your project, but you'll save a lot. Altogether, Egypt's economy is reasonably stable and has a low risk of intellectual property theft.

Now that you are aware of the top places to outsource your IT operations, you also need to know the subpar locations for hiring freelancers or outsourcing agencies. Here are the three worst locations:

  • Thailand
  • Colombia
  • Jamaica

If you are all about cutting costs, then these locations may not be such a bad idea. However, they are on the list of worst countries because of the risk they present. These areas are undoubtedly building their tech talent pool, making them places to find entry and mid-level coders; however, the downsides are worth considering, so you don't make a wrong trade-off.

Tech products are sensitive, and these areas are synonymous with high crime rates in localities, low electricity, relaxed legal-system, and epileptic/insecure network. So, not are you faced with uncertainties due to factors beyond the developer's control, but you might also be facing exposure of sensitive details over a non-secure network. One of the biggest nightmares in software development outsourcing is intellectual property theft, and you may be at high risk in these three areas.

Final thoughts

The first step to landing the best is to restrict your search to the best locations. Note that the best areas listed in this article have their downsides, but you can manage them with the right terms of engagement. However, the worst locations are faced with the possibility of delay and the theft of intellectual property and a lax legal system.

We hope you found this article useful. Here at Cloud Employee, we assist companies looking to hire dedicated offshore developers across many technologies. Talk to us, learn more how Cloud Employee works, or see our Developer Pricing Guide.