Are you planning to start cooperating with an overseas team but don’t know which software developers will be the best to cooperate with? This article is for you! You will find the top IT outsourcing destinations here and find out what you should consider making the best choice.
If you are looking for employees and wondering whether IT outsourcing will be beneficial for your company, we recommend reading our article about it.
5 Factors You Should Consider When You Choose an IT Outsourcing Direction
Before we get to our top 6, let’s consider what factors influence effective cooperation with a foreign outsourcing company.
In our opinion, these are primarily:
1. Cultural proximity
Even though you are looking for a company from another country, you should focus on finding a partner that has a similar work culture to yours. It will save you a lot of time and avoid possible misunderstandings. In culturally identical countries, laws or tax regulations are very similar, so it is easier to conclude contracts, settle accounts, pay taxes, meet quality requirements or maintain intellectual property rights.
2. English language skills
It would seem that in the IT industry, English is something obvious. However, sometimes you may be disappointed, and instead of solving your business problem or creating new IT projects, you will have to focus on avoiding communication problems, which are very inconvenient and take a lot of time.
3. Programming skills
When you are sure that you have found a provider with whom communication will work well, another aspect worth analyzing is the team’s skills, knowledge, and expertise. When choosing the direction of IT outsourcing, you can research various international rankings that check programming skills.
Entrepreneurs choose to outsource their software development services to another country because of the cost reduction associated with lower employee salaries. Therefore, when selecting an outsourcing provider, it is worth checking the average rates in those countries. However, keep in mind that if the above points are not met, your cost of completing the entire project may increase. You will lose a lot of time on solving communication problems and those related to the possible incompetence of the outsourced team.
5. Talent pool
Another reason for outsourcing is the IT shortage faced by the client. So, when deciding to work with an outsourcing company, you should check the size of their talent pool. This way, you will know if they will ensure that they have all the specialists you need, even those with niche skills.
Top 6 IT outsourcing destinations
If you are from the US or Western European countries, Poland is likely to be one of the closest cultural choices for you. Many Poles work in Western companies, and global giants such as Google and Facebook choose to locate their offices there.
Moreover, Poles have a good command of English: according to the EF English Proficiency Index, Poland ranks 16th globally.
And what about the skills? Well, according to the results of the Programming Olympics organized by HackerRank, Poles are the 3rd best developers in the world. Moreover, they took 1st place among Java developers and 2nd place among Python developers, two of the most popular backend languages that hiring managers look for in a candidate.
Are there any disadvantages of working with an outsourcing company from Poland? So, the earnings of Polish developers are higher than in most countries on this list. According to Glassdoor, the average salary of a Polish software developer is approximately $30,500 per year. However, when comparing them to the wages of Western developers, they are still even several times lower.
Analyzing all the above factors, we believe that Poland is currently the best direction for IT outsourcing. You can find 5 reasons why you should choose Poland for IT outsourcing in this article.
We also encourage you to read our report “Prepare for the IT recruitment process in 2022”. You will find there all the data on current salaries, the most popular programming languages, and tips for effective recruitment processes in Poland.
Ukraine is another popular IT outsourcing destination. The advantage of cooperation with Ukrainian companies is certainly savings because the annual software developer salary in this country is around $12,800 per year. However, compared to Poland, which is in the first place on our list, the programming skills of Ukrainians are on the lower level. They are only 11th in the HackerRank ranking. Moreover, their English proficiency is also worse, and they are only 40th in the world.
And what about the work culture? As a Western customer, you will certainly find it easier to communicate with a team from Ukraine than from countries like India or China. However, considering economic and geographical factors, Ukraine will be further away from your team than Poland.
Belarus is another popular outsourcing destination. Its IT sector has been flourishing over the last decade and its share in Belarus’s GDP is expected to grow to 7.5 % by 2025. With over 55,700 IT professionals working there, the country stands as an attractive place for hiring software developers.
While Belarus offers great high-quality solutions for software outsourcing, the developers aren’t known to be as skilled as developers from neighboring countries, such as Poland or Ukraine. When it comes to English skills, Belarus took 38th place in the EF EPI.
According to Glassdoor, Belarusian developers earn an average of about $31,500 a year.
A possible disadvantage that companies entering the Belarusian market face is the Belarusian law. Even though the government has created several laws to encourage foreign investments, the overall unstable political situation and complexity of the legal system make it challenging to do business there.
It’s time for the winners of the programming skills ranking presented by HackerRank: China. You will find the best specialists in data structures, mathematics, and functional programming in this country.
Another plus of working with China is saving money. Chinese developers earn around $37,500 per year.
And what about the cons? Working in China differs a lot from known European or American standards. There is a high risk of communication problems. This issue is compounded by the fact that many may have difficulty communicating in English. Currently, China is at 49 on the global ranking of countries and regions by English skills. Moreover, in the EF English Proficiency Index two years ago, their English level was described as “weak.”
Although China has a large base of qualified professionals, possible communication problems can be a big obstacle and significantly affect your comfort level and the project’s final outcome.
In 4th place of the top programmers in the world were Hungarians. Their country is also a popular outsourcing destination due to its relatively low programmer rates (according to Glassdoor, the annual average is around $25,000 per year) and cultural proximity to Western European countries. They are also ranked as the 17th best English-speaking country.
What are the downsides? The Hungarian market is relatively small, so the most significant challenge may be finding the right people to build the whole IT team. It can be especially problematic when you are looking for professionals with niche specialties.
Bulgaria is a small country with a population of only 6.927 million, so the talent pool is relatively small. As with Hungary, it can be a challenge to find valuable employees.
However, if you find a professional outsourcing company from this country, you will probably be happy with the cooperation. First of all, the money savings will be satisfying because the average annual rate of a Bulgarian developer is about $21,300.
Bulgarians are pretty good programmers (ranked 12th in the world in the Programming Olympics), and on top of that, they have good English (ranked 23rd in the world). It is a European country, so surely the quality of communication will be satisfactory.
As you can see, their scores are not as high as Poland’s, but in our opinion, they are satisfactory enough to put the country at number 6 on our list.
India is a very large country. The population is as high as 1.38 billion people. They can boast of many programmers for every need. Many companies prefer Indian specialists because of their low rates. According to the Korn Ferry report, by 2030, India will have one million high-level technology experts and will be at the forefront of technology worldwide.
In 2021, average rates in the country ranged from $20 – $40 an hour, which is a very low rate. However, before you decide to outsource your projects, you need to consider the pros and cons, such as differences in cultural and business values, communication despite time zone differences and average proficiency in English (58th place in EF EPI), the transparency and problem-solving skills of specialists and their level of knowledge.
Even though India ranked #31 in the Programming Olympics, in recent years they have become a country of high-tech startups and successful international projects, such as Housing.com. However, before engaging with any outsourcing country, we advise business owners to carefully research the company they are considering for a partnership.
Other popular IT outsourcing destinations
When considering outsourcing, you’ve undoubtedly considered many options. Therefore, to give you more insight into other IT outsourcing destinations, here’s a look at five countries that didn’t appear in our top 5 but are also popular outsourcing choices.
- Place in the Programming Olympics: #20
- Place in the ranking of countries by English skills: #15
- Average annual wages: $16,900
- Place in the Programming Olympics: #42
- Place in the ranking of countries by English skills: #85
- Average annual wages: $6,900
- Place in the Programming Olympics: #30
- Place in the ranking of countries by English skills: #70
- Average annual wages: $11,400
- Place in the Programming Olympics: #31
- Place in the ranking of countries by English skills: #48
- Average annual wages: $8,000
- Place in the Programming Olympics: #46
- Place in the ranking of countries by English skills: #18
- Average annual wages: $8,300
Are you looking for an IT outsourcing company from Poland? Contact us. Our talent pool is full of specialists perfectly matching your business needs.