Where to Outsource Software Development: Top Pick by Country and Company 2023

Discover how to find the best custom software development company for outsourcing. We've listed the best countries with leading software development firms.

Read on!

This article has compiled the ultimate guide to outsourcing software development. You’ll discover the elements that make a good IT partner, the best countries for outsourcing, and their idiosyncrasies.

The world is constantly advancing into digital space. New technological solutions are being developed each day, creating trends and updating industry standards. The global software development market is expected to reach $1.3 trillion by the end of 2022, showing the area’s growing popularity as a whole.

As hiring an in-house team is becoming more expensive, companies and startups are shifting their attention to outsourcing. This enables them to get skilled professionals while optimizing their budgets. However, finding the perfect cost-quality ratio is extremely challenging.

Our research shows that collaborating with a team from Eastern Europe helps companies save around 81.8% of their budgets when compared to teams from the United States. Experts from these areas get paid between $10-50 per hour. Simultaneously, they provide superior quality that brings multiple benefits to your business.

What is outsourcing software development?

Outsourcing software development means delegating the development process to a third-party vendor while maintaining complete control over the product. This approach helps companies gain the required technical expertise and reduce development costs.

1. Cost-effectiveness

According to Deloitte’s 2020 global survey, 70% of companies opted to outsource to reduce or optimize project costs. Partnering with leading software development firms allows businesses to save money on equipment, workspace, and salary differentials.

For example, the average software developer’s salary in the United States is $95,475 per year. The same position in Ukraine gets paid around $17,391 per year, saving 81.8% of your budget while maintaining identical quality. Now imagine that you have to hire a whole team, and calculate the costs.

2. Talent pool

By collaborating with an outsourcing software development company, you gain access to the global talent pool as your location no longer restricts you. You can hire teams from any country worldwide, finding the perfect cultural fit and reducing expenses.

This also means that it becomes easier to find the right technical expertise. If you’re working on a challenging project, finding a senior-level professional will be much easier when sourcing the global market. It might even be cheaper than in your location.

3. Faster time-to-market

Most IT companies stick to a time-tested workflow. This allows them to launch your product without wasting time, following proven methodologies, and having access to all the required resources. All team members are immediately involved in the process.

Collaborating with a team of outsourcing professionals also helps you manage the workload. While the vendor’s side works on your application, you get to focus on your core business and marketing. This leads to faster and better results as everyone remains concentrated on their areas.

4. Top-class quality

Offshore software development firms, especially those from Eastern Europe, are well-known for providing high-quality services in all industries. There are multiple reasons for this, such as a strong educational base and a high degree of digitization.

For example, Ukraine is the first country in the world to legalize digital passports. The country demonstrated a decent level of IT capabilities with its Diia app. With this service, people have all key documents available online and can legally open businesses with just a few clicks.

With this level of digitization, it is no wonder that the people from this area are capable of solving the most difficult technological challenges while maintaining top-tier quality.

What makes a country good for outsourcing?

Now that we’ve covered the benefits of outsourcing, let’s check out
the elements that make a country a good choice for collaboration.
This list consists of five key components.

1. Costs

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The software developer’s hourly rate is probably the most important aspect when planning your project. Among the factors that usually create costs, we can pinpoint the following:

  • Skill level (junior, middle, senior);
  • Specialization (programming language);
  • Location.

In the United States, the average hourly salary of a software engineer with 1 year of experience is $39.60. The same expert with more than 10 years of experience gets paid $49.82. However, the situation varies from city to city. The most expensive location is San Francisco with an average rate of $49.57 per hour. Montana appears to be the cheapest area in the US with an hourly pay of $37.17.

There also is a notable division in the costs depending on the programming languages used. StackOverflow’s Developer Survey 2021 provides us with some interesting numbers:

  • Clojure – $95,000;
  • Ruby – $80,000;
  • Python – $59,454;
  • JavaScript – $54,049;
  • PHP – $38,916.

Knowing these numbers will allow you to calculate the required budget and understand what would be a reasonable price for your project. Note that the provided numbers are only the averages.

2. Education

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Collaborating with an educated team is always beneficial. You get people who can deal with complex technological challenges, find creative solutions and think outside the box. If your developers have a STEM degree, they are more likely to create a top-tier product.

According to the Eurostat report, these are the countries with the highest number of people aged 25-34 with higher education:

  • Luxembourg;
  • Ireland;
  • Cyprus;
  • Lithuania;
  • Netherlands.

However, similar reports usually share very general data that isn’t always reliable. Each rating agency will provide a different list of the most educated countries, creating considerable confusion. To mitigate this problem, it is recommended that you look into each case individually.

3. English level

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If you plan to work with a custom software development company, it is most likely that your language of communication will be English. Therefore, your partner must have at least an upper-intermediate language level. This will let you discuss most topics without restrictions.

According to the EF English Proficiency Index, here are some of the top countries:

  • Netherlands – very high proficiency;
  • Poland – very high proficiency;
  • Czech Republic – high proficiency;
  • Romania – high proficiency;
  • Ukraine – moderate proficiency.

By working with these countries, you are most likely to find software development firms that will easily understand you. That’s one of the keys to success.

4. Mentality

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While you may speak the same language, you might not always be a great match in terms of mentality. Although it is believed that some countries have a certain mindset, an individual expert may be completely different from others. Make sure you have a chat with the team to see whether they’re a good cultural fit for your business. This will prevent any possible issues during the work process.

5. Popular technologies

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It is essential to know that the country has software development companies with the expertise you need. The most popular programming languages worldwide are Javascript, Python, TypeScript, and Java. You are likely to find an excess of talent working with these technologies.

If we talk about specific markets, then here are the most used programming languages in Ukraine:

  • JavaScript – 18.4%;
  • Java – 15.4%;
  • C# – 13.7%;
  • Python – 13.2%;
  • PHP – 10.8%.

This means that you’ll easily find software engineers for any of these languages. However, if you need something more specific like Apex or Erlang, then it might be a challenge.

Top 5 countries to outsource software development

Based on the aforementioned criteria, we have gathered a list of the best countries with leading software development companies. These include Ukraine, Poland, Romania, the Czech Republic, and India. Let’s have a closer look at each option.

1. Ukraine

Awarded as the Delivery Destination of the Year, Ukraine is one of the most popular outsourcing locations in the software development industry. The most dedicated teams work from here. Even with the ongoing war and constant humanitarian challenges, the experts from Ukraine meet all deadlines and provide high-quality services. 

The average hourly rates of a software engineer in Ukraine vary from $10 to $40 per hour depending on the technologies and skill levels. Also, the country is ranked 35 out of 111 for its English proficiency, demonstrating a moderate level.

StartupSoft is your reliable partner when it comes to hiring dedicated professionals for your project. We help startups and tech companies of all sizes build teams based in Europe, covering all the processes from sourcing to equipment. Try it out now!

2. Poland

According to the Kearney Global Services Location Index research, Poland is ranked twelfth among the most attractive outsourcing destinations. It is Ukraine’s direct competitor with many skilled and educated software engineers in various domains.

The average hourly rates of a software developer in Poland vary from $30 to $50 per hour depending on factors like location, technologies, and industries. Poland is also ranked 13 out of 111 for its English proficiency, having nearly the highest language level among all countries.

3. Romania

Ranked #18 in the Kearney Global Services Location Index research, Romania is showing to be an emerging market. Its information technology industry contributed 7% of the country’s GDP in 2021. Reports also stated that there were 212,000 professionals in the IT area.

Romanian developers get paid from $18 to $50 per hour. The country is ranked 17 out of 111 in the EF English Proficiency Index, meaning that people there are quite proficient in the language. It is worth noting that many companies like Microsoft, IBM, Oracle, HP, and Intel have their offices in this location.

4. Czech Republic

The Czech Republic is an attractive outsourcing destination with 105,000+ developers and offices for global corporations like IBM, Honeywell, and Google. It’s the country where the well-known Avast antivirus system was created. 

Developers in the Czech Republic get paid from $30 to $50 per hour. It’s ranked 23 out of 111 for its English proficiency, still falling in the “high proficiency” category. The country is also ranked 16 on Kearney’s Index, rising 10 positions over the previous year’s results.

5. India

India is the #1 country in Kearney’s index, occupying over 50% of the global market and bringing in 8% of its GDP for 2020. The country is one of the oldest destinations for outsourcing software development. Research shows that its software industry is growing by 60% each year.

Indian developers are paid $11,168 per year on average, about $5 per hour. The country is very attractive for companies with low budgets due to these costs. Also, India has English as an official language and is ranked 52 out of 111 for its proficiency. 

How to choose the
best outsourcing company?

Choosing the top software development company may be intimidating, especially
if you’re looking to create a top-notch product. We know the challenge.
That is why we’ve prepared the following criteria to help you make the best choice.

1. Relevant experience

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Partnering with an outsourcing team that has experience in your industry is a necessity. This is required to ensure the vendor knows the market, doesn’t create extra risks and understands the best practices. Look for experience not only in your particular speciality, but in similar areas as well. 

There are three ways you can check the company’s experience:

  • check out their case studies on their website, GoodFirms, or Clutch.co page
  • read their customer reviews to see what people say
  • ask them directly about their previous projects

Knowing that the developers know what they’re doing will bring peace of your mind. You’ll be able to fully trust them to do their work with minimal supervision.

2. Aligned values

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The collaboration between two companies can be compared to a marriage. Both sides need to be on the same wavelength for it to work. This cannot be achieved without sharing the same values.

Imagine two companies from Western and Southern Europe working together. Western Europeans tend to see deadlines as something crucial and always do their best to meet them. Southern Europeans are likely to be more relaxed in these terms, often taking their time.

How do you combine these two worlds? You establish communication standards from the very beginning. Once both parties are clear on their values and expectations, it will become a win-win situation.

3. Time-zone-friendly

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Outsourcing usually assumes collaboration with a software development firm from another continent. This might appear to be somewhat challenging considering the time difference. Here’s a little comparison: while it is 3 pm in New York, it is 10 pm in Kyiv.

The smaller the time difference, the easier it is for your teams to cooperate. However, practice shows that people manage to collaborate even with the greatest differences. You must establish direct work hours and ensure you have a mutual overlap for daily meetings.

Successful teamwork through different time zones is always based on respect, empathy, and inclusion. Having flexible schedules and understanding each other’s free time is invaluable.

4. Communication skills

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Clear communication is as important as deep technical expertise. You must set an appropriate communication strategy and expectations to avoid any potential misunderstandings.

Here are some points to discuss with your custom software development firm:

  • How will you communicate during and after the project;
  • How often will you be updated on progress;
  • What methods of communication you will use;
  • During which hours can you expect to receive responses;
  • What is the maximum response time for your requests.

Usually, companies define their expectations and develop communication frameworks within the first days of collaboration. A high level of communication skills is demonstrated by fast responses, progress transparency, and mutual understanding.

5. Client reviews

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By reading client reviews, you can shed light on the software development company’s internal processes. This is the easiest way to determine the vendor’s reliability and responsibility.

Customers frequently share valuable information about their partners such as:

  • Technical expertise and industry knowledge
  • Implementation of best practices and guidelines
  • Communication standards and responsiveness
  • Unusual cases that demonstrate whether the team is reliable

The most popular sources for testimonials in the IT industry are Clutch and GoodFirms. These resources are trusted and well-known for publishing exclusively verified reviews. Independent experts contact clients and interview them, getting only the truth and avoiding fake comments.

6. Reliable partner

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A reliable partner is interested in your project’s success. If your project sets unrealistic expectations, a professional developer will warn you about it and propose an alternative. The same goes for choosing technologies and implementing new features.

You must understand the degree to which your software vendor will go to develop a top-notch product. This is usually evident by the way the team communicates and participates in discussions. However, you may also ask them directly or ask a few questions to see how they react.

Your project doesn’t need freelancers who will do only as they’re told. It needs talented professionals who will invest their skills to help you build the best solution. That’s what partnership is about.

Partner with StartupSoft

StartupSoft can find the best global talent for your project. You don’t have to hire freelancers when we can help you build a dedicated team of professionals who take pride in their work and share your values. The best products in the world were built by such people.

We cover all the tedious processes:
  • Sourcing, interviewing, and recruiting;
  • Office scouting, rental, and administration;
  • Cybersecurity and infrastructure;
  • Legal, taxes, and operations;
  • Equipment, tools, and software;
  • HR and team retention.

Leave all of this to us. Our custom-tailored service will help you get people who value long-term commitment, and spend less money while maintaining top-tier quality.

Shall we try?

If you’re looking for a reliable partner that would hand-pick top tech talent for you, we’d recommend checking out StartupSoft. We know we might
be biased, but we’re quite confident we’ll be able to make that perfect tech match for you.

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FAQ

We have answers to some common questions:

How to find a great software development company?

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You must first determine your budget and tech needs. The best cost-effectiveness ratio is usually provided by Eastern European countries like Ukraine or Poland. Check your company’s case studies, client reviews, and other data to make the right decision.

How to hire a software development company?

2

After finding a software development vendor, you will usually schedule a call to discuss your project with the company’s representatives. The vendor then searches for the perfect candidates to join your team. You can interview and test them however you like. Once approved, you sign an NDA and start working.

Is outsourcing software development reliable?

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Yes, it is. Many global corporations like Microsoft or Google frequently outsource software development because it provides top-tier quality at a reasonable cost. All you need to do is find a trustworthy contractor. This may be done by checking the vendor’s case studies and user reviews on websites like Clutch.co.