How Much Does an Offshore Developer Cost?

Hiring offshore developers is an increasingly popular tactic used by companies seeking access to the top technical talent at affordable costs. By what about the cost of offshore software development? Accurate cost estimates are crucial for accurately sizing budgets when planning an offshore resourcing strategy. This comprehensive guide provides a detailed breakdown of the typical range of rates, salaries, and total expenditures involved with hiring offshore developers.

Collaborating with offshore software development company often results in substantial cost savings, ranging from 40% to 70%. This comes at an opportune moment, as North America faces a record talent gap for software engineers, leading to a notable 23% increase in onshore development rates in 2022. Amidst challenges like rising interest rates, inflation, supply chain disruptions, and the Ukrainian conflict, outsourcing stands out as the most cost-effective solution to alleviate budget pressures and maintain the momentum of digital strategies.

The cost advantage of offshore developers is driven by several factors, including cost based on geolocations, operational efficiency, access to the global talent pool, operations in different time zones, and the tap into specialized skills globally. Competitive bidding in the global outsourcing market further enables businesses to negotiate favorable rates. While cost savings are a significant benefit, businesses must balance this advantage with considerations of communication, quality assurance, and data security to ensure a successful and sustainable partnership with offshore developers.

Hiring offshore developers comes with a host of benefits, promising not only cost saving but also access to diverse skillsets, scalability, and accelerated project timeline. But this also comes with several considerations such as communication challenges, quality assurance and data security that you should remember.

Now let’s look at the cost for offshore developers from various regions around the world.

How Much Does an Offshore Developer Cost?

Offshore Development costs vary significantly based on the geographical location while considering your requirements and choosing between Nearshore vs Offshore options for the developers. Countries in Western Europe or North America has higher hourly rates when compared to the East Asian countries where hourly rates are much lower, when compared.

The following stats are from the 2023 Accelerance Global Software Outsourcing Trends.

Now that you have an idea about the cost for hiring offshore developers from a trusted offshore development centre around the world, let’s dive deeper in this and see the cost for offshore development services based on the level of skill and more.

Offshore Developers Rates According to Skillset

When estimating cost for Managing offshore teams, it is important to keep in mind that offshore developers span in the range of specialization and seniority levels. Their rates generally correlate to experience level. Let’s dig in!

Entry-level Offshore Developers

Entry-level or junior offshore developers typically have 1-3 years of professional experience. Let’s look at the hourly rate of junior offshore developers.

Mid-Level Offshore Developers

Mid-level offshore developers have 3-6 years of experience. Let’s look at the hourly rate of mid-level offshore developers.

Senior Offshore Developers

Senior offshore developers have 6+ years of experience and advanced skillset. Let’s look at the hourly rate of senior offshore developers.

Senior offshore developers

Lead Developers

Offshore Developers with Specialized Roles & Skills

Offshore developers with specialized technical skills tend to command higher hourly rates compared to the general software engineers. Some of the key specialized roles include:

• Web Developers
• Mobile Developers
• Software Developers
• Cloud Integrators
• Cognitive Tech
• Designer UI/UX

Web Developers

Offshore web developers can earn average $30-75 per hour owing to strong global demand for web programming skills. Key capabilities sought after include front-end JavaScript frameworks (React, Angular, Vue), backend languages (Node.js, Python, PHP, ROR), CSS preprocessing, responsive mobile web design, web performance optimization, and full stack development.

Front End Developers

Frontend developers craft user-facing interfaces, combining technical skills with creativity to enhance user experiences. They specialize in HTML, CSS and JavaScript translating designs into functional websites and applications that are captive and can engage users seamlessly. Let’s look at the hourly rate of front-end developers provided by Upwork.

Back End Developers

Backend developers are proficient in server-side logic, databases, and application integrations. These developers are responsible for managing behind-the-scene functionalities, and ensuring that data is processed efficiently and securely. Backend developers are known as the backbone for developing robust and scalable web applications. Let’s look at the hourly rate of back-end developers provided by Upwork.

Now, let’s move forward to mobile developers.

Mobile Developers

Mobile developers are responsible for developing smartphone & tablet applications using languages such as Swift for iOS and Kotlin/Java for Android. They are responsible for merging the technical expertise with the creative feel, to develop the robust & scalable applications. Mobile developers can develop applications with optimal functions and seamless user experience. Let’s see how much does a mobile developer cost on hourly basis?

iOS Developers

iOS developers are skilled professional who specializes in developing application for apple ecosystem. They are proficient in Objective-C & swift, seamlessly integrating the iOS ecosystem. iOS developers navigate through Apple’s strict guidelines, ensuring user-friendly and visually appealing apps that deliver a superior experience on iOS ecosystem.

Android Developers

Android developers are proficient in developing applications for the android ecosystem. They are proficient in development languages such as Kotlin and Java. They design and implement software solutions that seamlessly integrate with the Android platform. Android developers ensures performance and seamless user experience across the wide range of android smartphones and tablets.

Cloud Integrators

Professionals skilled at smoothly integrating cloud services into an organization’s infrastructure are known as cloud integrators. They maximize scalability and efficiency while designing, implementing, and overseeing cloud solutions. They know how to use cloud platforms like Google Cloud, Azure, and Aws. The cloud integrators improve the business is overall performance, who facilitate a seamless move to and operation inside the cloud environment.

Cognitive Tech

Cognitive Tech professionals focuses on leveraging Artificial Intelligence, Machine Learning and Blockchain to develop intelligent systems that simulates human perception. They design algorithms, neutral networks, and models to enables machines to learn reason and solve complex problems. Cognitive technology experts contribute in the advancement of automation, NLP, and decision-making systems.

Designers

Designers are creative professionals that shape the visual experience of user. Whether you Hire UI/UX designers or web designers, these developers have the gift to blend the artistic talent with technical skills to develop visually compelling and practical designs. These developers have expertise in the tools such as Adobe creative suite, Sketch or Figma, designers bring ideas to life, enhancing brand aesthetics & user engagement.

Now that you have an idea about the what are the hourly rates of various offshore developers. Let’s move forward to the additional cost factors to consider while calculating cost for offshore development services.

Comprehensive Cost Analysis: Additional Cost Factors in Project Planning

Aside from the anticipated direct salaries, there are few sizable extra expenses to factor into the total hiring cost of offshore software development. When projecting annual and lifetime expenditures, businesses must take these extra elements into consideration:

Recruiting & Hiring Costs

Investing in human resource management and recruiting operations is necessary to find qualified offshore workers. The onboarding process, technical screening, travel to the onsite interview, background checks, and immigration support are typical costs.

Retainers & Long-Term Commitments

To reserve resources in advance, many offshore companies demand minimum project retainers ranging from $5,000 to $25,000+. For income stability, longer-term contracts, say six months to a year or more, might also be required.

Administration & Operations Overhead

Effective management guarantees the effective functioning of remote teams. Even when the development work itself is inexpensive, there are substantial costs associated with investing in components like collaboration tools, IP protection measures, productivity tracking, time zone alignment, regulatory compliance, and cultural training.

Travel & In-person Meetings

At crucial junctures, organizations could have to pay for the cost of transporting remote workers to the main office to arrange training, provide implementation assistance, or conduct orientation for new hires.

Different Cultural & Regional Holiday

When coordinating across global regions, diverging national & religious holidays translates into more non-working days. India alone has 20+ public holidays, nearly triple that of US vacation schedules.

Replacement Hiring & Severance

Backfilling development capabilities takes a further unplanned investment whenever offshore member resigns or is terminated.

Processing & Currency Conversion Fees

Over years of growing a global team, incremental banking expenses associated with managing payroll internationally through foreign currencies accumulate.

Although they are occasionally disregarded, budgets that account for these additional expenses from the beginning are significantly more accurate and realistic. To identify additional costs early on, do proper research.

Is Hiring Offshore Developers the Right Choice?

There are other aspects besides just finances that come into play when determining how much does an offshore developer cost. Even if cutting costs is a major motivator, making well-informed decisions that support strategic goals requires a thorough grasp of all the variables at play. Some of these factors include:

• The Cost Advantage
• Beyond Hourly Rates
• Communication Channels & Tools
• Quality Assurance & Testing
• Project Management Tools
• Flexibility & Scalability
• Data Security Measures
• Legal & Compliance Consideration
• Unexpected Possibilities
• Training & Onboarding

Wrapping up!

Hiring offshore developers is a calculated risk to increase long-term competitiveness, scalability, and creativity. Managing the cost of offshore development calls for a comprehensive approach that balances short- and long-term strategic goals, project-specific requirements, and financial efficiency. Employers who take this strategy can optimize offshore development’s advantages and promote success in a more competitive and worldwide business world. If you have any further queries, you can leverage our IT strategy and consultation services to get a custom roadmap for your project.