Comparing offshore Developers Hourly Rates for Outsourcing in 2021

April 18, 2021

Offshore development is also known as offshore programming, is the procedure of outsourcing the expansion requirements, for example, web or personalized software development for countries such as the Philippines, and India. The term offshore is specifically used for businesses, corporations, as well as alien banks which solely means to an area exterior to national bounds. Different locations have varying Offshore development rates. For example, it ranges from $30-$50 in Latin America and is comparatively lower for Asian countries that range in $18-$40. However, the hourly software development rate of India lies in the category of African countries such as Nigeria, China, the Philippines, and South Africa i.e. $20-$40. The hourly software development rate in Australia is $58.97 whereas that of the UK and Toronto is $18-$24 (interns) and $50 respectively. Software developer rates depend largely on the practice and skills of the consultant which ultimately determines the pricing of software development.

IT outsourcing price list functions for contracting to an offshore firm around the world and the developer contractor rates has 7 major classes. In these classes, the freelance developer rates are $25-$300

The term offshore solely means an area situated distantly from the shore and offshore software developer companies are those that have a core business intent by producing software developers of all proportions. The term varies with onshore that relates to rendering software services by a company situated in the same country you reside. However, they may vary in time or the skills of workers required to produce software. Furthermore, offshore development allows the dealers to contract and engage their crews with diversified parts of the world. These offshore development sources help users to obtain offshore consultation teams at lower rates. Furthermore, offshore programmers are programming experts hired for the services of offshore programming at average offshore programming services rate/hr.

The definition of offshore consultancy in the context of Information Technology is that the consultancy team is located in any other country but is still retained by your company. It is antagonistic to onshore development that involves outsourcing within the same country. The method provides facile communication capacities. On the other hand, nearshore software development is employed by countries that are three times zones away at the most because of which it also provides better communication facilities. Also, the time zones do not differ much that could pose problems during offshore development. Different offshore software development companies contrive, produce, elucidate, and maintain software elements for business personnel or customers. Also, different companies have different software development strategies and client association techniques. 

Offshore development rates of notable countries:

During offshore development, offshore programmers utilize engineering exercises for the production of new software. It has been noted that offshore development rates largely depend on the number of known programming languages as well as the experience of the professionals. People render software development services to revamp the web at lower costs without discrediting the software characteristics or quality. Additionally, Web developers are skilled professionals who design the web. An Average web developer hourly rate as a skilled freelancer is $75 per hour and that of experienced personnel ranges from $30-$80 per hour and the cost becomes $100-$180 per hour. Offshore software development rates by a country are the average software development rates defined and authorized by the country. Following are the average hourly wages of some noteworthy countries:

The hourly software development rate of areas located in South America including Colombia, Mexico, Brazil, Panama, Chile, and Argentina is $20-$55, whereas, locations of North America including Canada, and the United States of America are much higher i.e. $150. Eastern European regions including Poland, Estonia, Hungary, Moldova, Ukraine, Bulgaria, Romania, and Slovakia are $20-$50. Software development rates of regions of Western Europe are comparatively much higher than Eastern Europe, for example, countries such as France, Netherlands, Norway, and the United Kingdom charge $110-$300. Countries of Africa such as Egypt, South Africa, Nigeria, Kenya, Morocco, and the Philippines have an hourly rate of $25-$50. Also, the countries of East and South Asia such as Malaysia, Indonesia, and China charge higher than the countries of Central Asia i.e. $30-$100. Countries located in central Asia such as India and the Philippines charge $15-$25 per hour. Australian companies also charge a high amount for software development i.e. $100-$180

america rates
Western vs. Eastern Europe Rates

Comparison between offshore hourly software development rates of notable countries:

India has gained renowned popularity in the sector of software development because the country is crowded with talented professionals that work at a very affordable price. Therefore, clients are often inclined towards India when it comes to both quality and cost-effectiveness. Countries of Western Europe such as France, Belgium, and Norway all do not have principal service stations, however, serve for software development as coalesced teams. A huge contradiction exists between the software development rates of Eastern and Western European countries. Eastern countries such as Ukraine have produced superior IT professionals who have made massive contributions and inferences in the market but their salary structure remains low. Central Asian countries such as India and the Philippines have shown eminent contributions in the field of offshore outsourcing. However, the charge rates decreased during the reign of Mr. Donald Trump due to which potential clients were reduced and the prices of local software development also abated. As a result, low-quality services were also granted with a lack of drive of the workers. 

Central vs. East Asia Rates

Chinese Software development rates vary from normal East and South Asian countries. It has been revealed that an offshore developer earns $200/hour. Similarly, Canadian regions such as Toronto are flooded with software development companies whose rates are comparatively higher than East and South Asian states. If we debate about the South American states, its IT industry is rapidly flourishing and the countries of proximity such as the USA and Canada have made huge assets and investments which produced a bank of software developers that charge at much lower rates. African offshore development companies also provide services at attractive rates but some firms lack experienced professionals. When it comes to Australia, differences in time zones and communication obstacles are the major cons for the state. The results of 2017-18 state that the country lacks skilled web developers, software engineers, and programmers.

Regions of Latin America, such as Colombia have gained recognition recently. Political insecurity and financial instability in Colombia required new methods of sponsors. Thus, the national government of Colombia inducted in IT foundation, training, and technical education of the state for increase software development hourly rate. To calculate the software developer salary per hour from the monthly salary following formula is used:

Hours per month= Hours in year÷12

For example, an Indian software developer's salary per hour is $15-$25. Whereas, that of Pakistan is $18-$25. Nigerian software developer salary per hour is $25-$50. The average hourly rate for Russia, Bangladesh, Taiwan, Serbia, and Germany are $20-$30, $25, $25.76, $7.53, and $100-$149, respectively. Comparing the hourly wages of the above-mentioned regions, we find that the hourly software development salary is higher in the USA i.e. $150.

Outsource Developer and freelancers charge:

Software companies vary widely in their costs and are classified into 6 categories which also serve as a basis of Average Software Development Costs per hour.

The following categories include different grades of software engineers and the average software engineer hourly rate is also described below:

  1. Enterprise-class are the largest competitors in the trade and the staff usually work for governmental projects. The professionals of this class usually charge a high amount with an hourly rate of $250-$850. However, the companies of this class offer eminent quality work.
  2. Big business-class software developing companies work for larger businesses that can not confer to enterprise-class yet have higher budgets. The hourly rates for this class are $200-$300.
  3. Mid-market class companies maintain a sound balance between price and quality. The experts work for small and medium-sized enterprises at an hourly rate of $125-$175.
  4. Small class companies employ workers that work at lower rates for local businesses at an hourly rate of $75-$175.
  5. Freelance developers work on small projects that don’t require teamwork. Freelance Software developer rates are highly variable. Fresh graduates working as freelancers charge $50-$75 per hour. Whereas, experienced professionals who understand various programming languages and have been working for a long time will charge higher i.e. $100-$300. To calculate the freelance hourly rate, divide your expected income by the number of hours worked in a year. The formula becomes;

$100,000 (desired income) ÷ 2080 (hours)= $50/hour

  1. Offshore Development rates range from $25-$50, or maybe increased to $40-$75.

The consultant salary called the Hourly wage of a software engineer is categorized into various percentiles. Recent reports of 2021 reveal that the consultant salary of the 50th percentile software engineer is $74, 75th percentile software engineer is $81, and that of the 90th percentile software engineer consultant salary is $88. Different rates have also been prescribed for WordPress developers as WordPress Developers Hourly rates range from $15-$28 for Upwork professionals.

A good hourly rate is a satisfactory amount that is charged by software developers by working in an hour which involves labor costs, profit, as well as overhead costs. The cost of software development varies widely in small and larger firms. The cost of new software development at a smaller scale costs almost $25,000-$60,000, whereas, the cost for large-scale enterprises is over $125,000. If we discuss the IT outsourcing price list, the Worldwide IT forecast of 2008-20 claims that there would be an ultimate rise in the IT expenditure i.e. $1,034 billion at the end of the year 2019. Recent researches claim that IT companies commonly costs within a range of $110-$165 per user, per month. However, managed IT outsourcing services costs higher because of extremely harmonizing business applications.

The hiring of an offshore software developer is a multidisciplinary task. At first, a comprehensive job portrayal is represented. Figure out the track records of freelance developers, or outsource companies. Consult with the development team. Afterward, an efficient process management tool is selected. Most of the offshore developers get pain on an hourly basis. You can also work from home as a freelance developer for any foreign organization and the salary structure may get elevated based on the experience gained. The offshore developers may work as a team of 10-20 individuals for larger projects for enterprise-class, or big business class. On the other hand, freelancers work as a single entity for software modification or development.

Many software developers are contracted for custom software development which is a process of specifically designing web software for various clients or organizations. The rates at which custom software is designed are called Custom Software Development rates. For example, Pegasus is a trustworthy software development firm for small and intermediate scale businesses that produce custom software by scheduling a consultation. On the other hand, software developing consulting rates are the average market rates or prices the clients pay for a consultation utility. Following are some prominent examples of offshore software developing companies:

  • Skelia
  • SiliconMint
  • Itexus
  • Kodius
  • Admios

Software engineers, web developers, and programmers who are working with large-scale firms get a rise by 3-4% in their wages annually. The salary structure offered to software developers is impressive in India. This is because software engineers and web developers are in high demand and are consequently paid satisfactorily. Also, cloud engineers, IT security specialists, system engineers, development operations engineers, and data scientists are well paid in the software industries. It has been noted that the salary structures are comparatively higher in the US because of magnified finances, economy, and high GDP values. However, Asian and African countries are rich in natural resources, heritage, music, and landmarks but have lower wages because of decreased GDP values and poor economical conditions. The rates also differ due to varying labor productivity in different areas of the world. Therefore, it is suggested for governmental bodies to invest in the Information Technology infrastructure to maximize the wages of software developers.