Understanding the Cost of Offshore Development: A Quick 101

Before going offshore, it’s really important to understand the cost of offshore development. And, how teaming up with an excellent offshore vendor or offshore team builder can make things a much more simple and seamless process for working with a team abroad in sync with the one you have at home.

What Factors Affect the Cost of Offshore Development?
Well, first things first, having a clear idea of your project makes it easier for an offshore company to understand what should be delivered. This includes things like: the size of the project, the technical considerations to take into account, the time to market for your products and/or services, the skills and expertise needed of the extended team, as well as any additional costs to take into account.

The kinds of costs mentioned below are just estimates that differ when you hire full-time, world-class developers. The actual rate can be influenced by the need of specific or niche technologies, seniority and past experience of developers, past projects, and other factors. Ultimately, it depends on your goals — the bigger the talent pool, the more engineers and skill sets you have to choose from.

Which Locations Can Affect the Cost of Offshore Development?
Different locations provide your business with different benefits. For example, many companies offshore business processes like customer service to locations like the Philippines. But, since we’re discussing software — it’s prudent to look at the cost of offshore development in Asia, Latin America, and Africa.

And, how that differs from hiring locally only — something that many tech leaders are realising is a restrictive option in times of talent shortages in major markets. In the Eastern Europe region, it will cost you around €22-€40 per hour, depending on the skill of a particular offshore developer. The rates in Asia range from €17.8 to €40, and the costs in Latin America are roughly around €26.7-€49. In Africa, you’re looking at somewhere around €18 to €43.5.

Hiring locally is something that not only has an impact on salary, but also premises prices, which can spiral in major metropolitan areas like London, New York, Paris, Toronto, and Sydney — to name a few. In Western Europe for example, the cost of offshore development can be over €200 per hour for very high-level engineers.

How the Right Offshore Partner Can Help to Balance Quality With Price
This is the main thing to consider. Finding the right partner probably is the best place to start. They’ll have expertise on the ground, which will prove crucial when it comes to acquiring and retaining the best engineers for your business for the long term — and save on additional costs of local legalities, office procurement, equipment, and more.

Additionally, if they have a proven model that combines all of those added extras with world-class recruitment, managed operations and administration, as well as cultural alignment between the offshore team and your team at home, then it’s simply the smarter way to do it.