Outsourcing is a process that companies can undergo in order to transfer some of their software development projects and workload to third-party contractors or offshore software development centers. Doing this can help companies save money, focus on certain project objectives, optimize the cost of projects, and reap the financial benefits.
Considered by many to be a proven way to optimize the cost of projects, outsourcing is no longer just a trend; instead, it has become common-place and popular all over the world.
Many companies are looking into differences between Mexico vs China for new manufacturing facilities and outsourcing software projects to destinations with unique software development talent pools.
When a company creates a team for your project, the employees are carefully chosen, and each brings a unique talent to the table.
The best part about these talents is that, thanks to IT outsourcing, they can come from outsourcing hubs in countries all around the world, since the process is often done online.
So, you might be wondering what countries provide the best employees for nearshore development and offshore tasks, and if you are, you’re in luck. In this article, we’re going to cover a few of the best countries for outsourcing.
What Makes A Country Ideal for Software Outsourcing?
When it comes to the best countries for outsourcing, the key points you want to focus on are the country’s IT market, their software development rates, and the ability of the country’s employees to communicate challenges and work with you in your preferred language.
One of the most important criteria that companies use to choose an outsourcing partner for your tasks is the investment that has gone into corporate education.
In other words, companies choose employees for you with a high emphasis on a good education, choosing those who have gone through both high school and higher education. According to a range of analytics, both Eastern Europe and Asia, known as top IT outsourcing markets, are two areas that focus on education.
On the other hand, in offshore software development and offshore outsourcing companies, prices tend to be a lot lower. In general, India, a prominent IT outsourcing destination, is the most affordable outsourcing country, with Argentina being one of the most expensive. You can check developer rates in different countries with YouRate calculator. It is a universal card which lets you filter software developers by country, technology, and even experience, showcasing the outsourcing software projects flexibility.
Most countries that offer software outsourcing, especially popular outsourcing hubs, have a good handle on the English language. The employees will likely speak English at an Intermediate level if not higher. For critical project roles such as managers, your employee will need to demonstrate a deep understanding and communication ability in the language, a primary consideration in choosing the right outsourcing partner.
The Top Reasons for Using Overseas Outsourcing
A few of the top reasons why you might want to consider outsourcing your program development from other countries include:
- Ability to tap into global IT markets and their services
- Risk management enhancements through diversified talent pools
- Control over service quality and cash flow advantages from outsourcing
- Projects completed by professionals in top IT outsourcing markets
The Best Countries for Outsourcing Software Development
Serbia
Clients who trust their software development outsourcing to companies in Serbia benefit from low prices, making it a competitive nearshore development option.
Despite these low prices, the quality of work is comparable to that of the USA and Western Europe, showcasing that cost-effective software development doesn’t compromise on quality.
The time zone in Serbia, as it is located in Europe, is Central EST, which means that workers have no issues working in real-time with managers in Western Europe or North America, eliminating potential time zone differences challenges.
Serbia offers free higher education and modern electrotechnical engineering facilities, so it’s easy to see why the country has such a large software development talent pool and some of the best software developers in Europe.
In addition, English is an obligatory second language and is taught in all elementary and high schools in the country. Serbia ranks number 15 of 100 countries/regions on the EF English Proficiency Index. Since Serbs learn English at a young age, many can speak it without an accent and have excellent communication skills, aligning with cultural compatibility in outsourcing.
If you’d like to outsource your web development in Serbia, a reliable company to work with is TMS. Check us out and see how we can help you with your outsourcing software projects.
Now let’s move on with the best countries for outsourcing software development.
Ukraine
In Ukraine, a recognized IT outsourcing market, English isn’t a very popular language among the general population. However, roughly 80% of the IT employees within the country speak the language, which means that language barriers are unlikely when outsourcing software projects here.
Another benefit is that Ukraine has a time zone that overlaps with both UK and US time zones, promoting real-time communication in outsourcing. Moreover, there’s a similarly structured working culture in Ukraine, fostering a nearshore development environment complete with healthy competition.
Ukraine stands out as an outsourcing hub for those who prioritize working with companies that exhibit a high software development talent pool and a good quality-to-price ratio. The dedicated development team in Ukraine is renowned for its strong grasp of the English language and a similarly structured working culture, making it a prime choice for global IT outsourcing collaborations.
Belarus
Belarus, a significant player in the outsourcing software projects domain, houses over 30,000 IT specialists and 1,000 proficient software development companies. Many developers in Belarus have achieved global recognition, and, in general, outsourcing here offers clients an attractive cost to quality ratio, emphasizing the importance of cost-effective software development.
IT services and computer tech hold the 3<sup>rd</sup> largest sector spot within the country and receive substantial government support. Many developers from Belarus specialize in intricate areas like IoT, fintech, cloud computing, AR/VR, machine learning, big data, and high-load systems, showcasing their versatility in the software development talent pool.
A concern when outsourcing to Belarus is the attrition rate, which is higher than in many other countries. It stands at roughly 24% according to Ernst & Young, indicating potential risks regarding consistency in the work provided by dedicated software teams.
Thailand
Another prominent outsourcing destination is Thailand. According to a 2016 survey, the country ranks 6th among ASEAN nations for its efficient offshore labor market. Thailand’s burgeoning higher education system and impressive infrastructure continually elevate its software development talent pool.
Thailand has intensified its efforts to bolster its English proficiency, boosting its appeal in the IT outsourcing market. Clients outsourcing to Thailand often seek services like web design, digital marketing, IT consulting, app development, testing, and software quality assurance, highlighting its versatility in IT outsourcing services.
Latin America
Many companies, aiming to optimize their IT outsourcing strategy, look to Latin America to source ideal professionals for their projects. Here, you’ll encounter specialist agencies and platforms to aid in recruiting—from the best virtual assistant websites to top-tier software development and IT agencies.
A primary advantage of outsourcing to Latin America is the vast software development talent pool available. Many of these professionals boast fluency in English. For US-based companies, the nearly identical time zones are an invaluable outsourcing benefit.
India
The competitively low prices and cost-effective software development in India make the country stand out as a top contender for the title of “best countries for tech jobs”. With its thriving IT outsourcing market, India has been advancing in tech and software development for more than two decades, turning programming outsourcing into a full-blown industry.
Although India’s literacy rate may be comparatively lower, the emphasis on mathematical research and cutting-edge technology development is evident. As part of its outsourcing strategy, India is initiating a Westernized approach to education, producing up to 2.6 million STEM specialists annually, further enhancing its software development talent pool.
Argentina
Outsourcing companies in Argentina possess a strong background in software project services, including software and mobile development, DevOps engineering, and data migration to the cloud. Supporting its outsourcing software projects, Argentina provides free tech education, with 70% of its students merging their studies with computer-related tasks, enhancing the nation’s software development talent pool.
The 90s witnessed the growth of Argentina’s IT industry. A significant advantage stemming from this is its formidable telecom network, ideal for internet startups and companies considering Nearshore outsourcing in Latin America. However, potential cultural differences might pose negotiation challenges, underscoring the importance of understanding communication in outsourcing.
China
China’s primary and secondary education predominantly centers around high tech and mathematics. Its outsourcing hub witnesses an annual growth rate of 30%, with a focus on Shell and Python software products.
Over 30,000 software professionals in China hold tier 1 and 2 positions according to the HackerRank Programming Olympics.
This emphasizes China’s dedication to IT outsourcing training . However, potential drawbacks include occasional non-compliance with intellectual property laws. To mitigate this, it’s advised to partner with top-tier outsourcing software teams and set clear boundaries.
Poland
Poland boasts a diverse IT outsourcing talent pool and a solid footing in software development. Among Eastern European nations with high-tech prowess, Poland secures a top spot, attributed to their affordable IT outsourcing services.
While PHP dominates in Poland, Java and .NET are also prevalent. According to various clients, Polish engineers exhibit proficiency and commendable work ethics, with minimal cultural differences emphasizing smooth communication in outsourcing.
Being an EU member, Poland adheres to stringent data protection laws, making it a preferable outsourcing destination for projects demanding stringent data security. Typically, Polish professionals excel in UI roles and comprehensive web development.
Poland outsourcing has become a key player in the global outsourcing software projects domain, providing unparalleled talent, budget-friendly solutions, and a flourishing tech ecosystem for businesses aiming to upscale their potential.
Taiwan
Recent data suggests that the Taiwanese government envisions transforming the nation into the Asian counterpart of California’s Silicon Valley, enhancing its IT outsourcing hub status. In 2020, the country heavily emphasized STEM education and bolstered its innovation and cutting-edge technology development. As a result, Taiwan has ascended as one of the premier technologically advanced nations globally.
Outsourcing coding and software project services to Taiwan is highly advantageous. Here, IT professionals, part of the software development talent pool, are renowned for their diligence, stellar work ethics, and superior quality of work, distinguishing them from several other Asian nations.
Czech Republic
The Czech Republic boasts a top-tier IT sector renowned for its proficient outsourcing software projects. This domain teems with professionals delivering cost-effective software development solutions, consistently available to cater to diverse project needs.
Prominently, the country ranks within the top 20 that invest heavily in the tech sector. Remarkably, such investments account for 2% of the nation’s GDP, outperforming both the UK and Canada in outsourcing strategy commitment.
Global giants like IBM, Honeywell, Google, and NetSuite maintain operational bases here.
Numerous smaller firms also set up shop, leveraging the nation’s language skills and stringent product quality policies. The Czech Republic’s IT outsourcing talent pool burgeons annually, adding 7K tech graduates, signifying its dynamic expansion.
Philippines
Over recent years, the Philippines has catalyzed a discrete transformation, refining the outsourcing hub for software development to meet evolving demands. Culturally, the Philippines aligns closely with Western nations and stands as the world’s third-largest English-speaking country, ensuring smooth communication in outsourcing.
Contractors from the Philippines, pivotal to the software development talent pool, earn accolades for their swift deliveries. The tertiary education framework is spotlighted, courtesy of its burgeoning tech graduates.
The high-caliber, cost-effective software development services offered by Filipino IT experts attract international businesses seeking value-driven solutions.
Brazil
Brazil boasts a multitude of reliable software providers and developers, establishing its reputation as a prominent IT outsourcing hub. As a leading destination in the outsourcing strategy, Brazil is coveted for its cost-effective solutions and abundant talent pool. Outsourced employees from Brazil excel in adapting to clients’ specifications and honoring project timelines, epitomizing communication in outsourcing.
Moreover, Brazilian outsourcing enterprises demonstrate high proficiency in English, facilitating seamless contract drafting and project execution. A significant portion of the workforce is also conversant in French and Spanish, making most employees bilingual or even multilingual, enhancing the software development talent pool.
Vietnam
Vietnam is renowned for its superior service quality and the unmatched value proposition these services offer. Labor expenses in Vietnam are approximately 90% lower than in the US, promising substantial cost savings for clients opting for outsourcing software projects here.
What further elevates Vietnam as a prime outsourcing hub is its diverse and rich reservoir of skills within the software development realm. The Vietnamese government prioritizes education and skill development, resulting in a highly educated populace that often clinches overseas job opportunities, enhancing the country’s outsourcing strategy.
However, Vietnam’s IT sector is relatively nascent compared to other nations. Consequently, there can be challenges related to the equilibrium of supply and demand for IT specialists. Communication nuances might sometimes be a hurdle when partnering with Vietnamese entities.
Romania
Romania houses approximately 60,000 professionals in the outsourcing domain, contributing a significant 20% to the outsourcing software projects in Central and East Europe, reflecting its robust IT outsourcing talent pool.
Major global players like Dell, Oracle, Microsoft, and IBM have established significant operational footprints in Romania. The country also hosts Ubisoft offices. Romania emerges as a preferred destination for fintech software solutions. However, it might not be the first choice for those seeking diverse software project services outside this niche.
FAQs about the best countries for outsourcing
What makes a country a top choice for outsourcing?
Well, there’s no one-size-fits-all answer here. But generally, countries that offer cost-effective solutions, possess a rich IT outsourcing talent pool, and have a stable political and economic environment often take the lead. Don’t forget about time zones too! It’s super handy if the country’s working hours overlap with yours.
Why are some countries cheaper for outsourcing than others?
You see, it’s all about the local economy and the cost of living. Countries with a lower cost of living can offer quality services at a lower rate. Plus, the outsourcing strategy of a country plays a role. If a country invests in its IT sector, it can offer competitive prices without compromising on quality. Cool, right?
Is the quality of work directly related to the cost?
Nah, not always. While it’s tempting to think you get what you pay for, many IT outsourcing hubs in developing countries provide top-notch services at a fraction of the cost. It’s all about doing your homework and researching the company or professional you’re considering.
How do language and culture impact outsourcing?
Big time! Communication is everything. If there’s a language barrier or cultural misalignment, things can get messy. That’s why many businesses prefer countries with strong English skills and communication in outsourcing. Cultural alignment can also ensure smoother project execution.
How important is time zone alignment?
Honestly? More than you might think. If you’re constantly playing email tag or having meetings at odd hours, it can be draining. However, many outsourcing software projects teams adjust their schedules to align better with clients. It’s all about finding that sweet spot.
Can outsourcing affect my company’s reputation?
It can swing both ways. If you nail the outsourcing strategy and partner with a reputable firm, it can boost your brand. On the other hand, if things go south, it might tarnish your reputation a bit. It’s all about choosing the right partner and being transparent with your stakeholders.
Do political or economic instabilities of a country affect outsourcing decisions?
Totally. If a country is politically unstable, there could be disruptions. And economic instability? It might lead to unexpected cost hikes. It’s always wise to keep an eye on the broader IT outsourcing hub landscape and be ready to pivot if needed.
Why are tech hubs important in outsourcing destinations?
Tech hubs, my friend, are like fertile soil for software project services. They’re places bursting with talent, innovation, and resources. If a country has prominent tech hubs, it often means there’s a thriving ecosystem supporting IT and tech endeavors. So yeah, they’re kind of a big deal.
How do intellectual property laws differ when outsourcing?
Oh, this is a tricky one. Some countries have robust IP laws, while others, not so much. It’s crucial to ensure that whatever you’re developing remains yours. Always dive deep into IP laws when considering outsourcing software projects to a new country.
Should I visit the country I’m outsourcing to?
While not mandatory, it can be a game-changer. Visiting allows you to get a feel of the culture, meet the team face-to-face, and understand the local software development talent pool. Plus, who’d say no to a bit of travel?
Ending thoughts on the best countries for outsourcing
The first step in developing a strong outsourcing relationship is choosing the best countries for outsourcing. However, you’ll also need to outline clear communication and collaboration in order to make an outsourcing relationship work.
If you’re looking to find an employee team extension in Europe, one of your best bets is Serbia. Serbia is a popular outsourcing destination for many companies within the US and Europe.
If you enjoyed reading this article on the best countries for outsourcing, you should check out this one about nearshoring.
We also wrote about a few related subjects like outsourcing failures, Outstaffing, outsourcing to Serbia, in-house development vs outsourcing and outsourcing to India.
