Which countries have the cheapest software engineers that you can hire
It must be somewhere in Africa (hopefully without sounding too prejudicial). I guess in countries like Kenya and Uganda you might be able to find very low rates.
Next to that would be Pakistan.
And then India.
How much does the cheapest software engineer cost?
It does not actually matter where you hire nowadays from (when it comes to offshore outsourcing). In most cases, you should allocate a budget of around 2000 US Dollar to 3000 US Dollar per month for a developer in Africa, Pakistan or India.
If you are ready to commit to long term agreements, then even cheaper rates than that might be possible.
But you will find nowadays companies for example in India, which charge 3000 to 6000 US Dollar per month for a developer.
I would advise not to go below these rates. There comes a point where your requirements will not be fulfilled anymore.
I found also the answer from Joe Francis on Outsourcing to Cheaper Countries interesting. Although I am of a different opinion. In most cases, there is a tendency to go for short term and low hourly rates in India, which most definitely will not work out.
There are companies in India which specialize in catering to that type of client request. They know from the start that it will not work out and will deliver below standard work.
You will succeed in offshore, nearshore, onshore only if it is a win-win for the service provider and for you!
There is no way, only one party can win. If the hourly rate is low and the contract period is short, then almost no company in the world will be interested. Apart from the scam artists, mentioned in the previous paragraph.
Even a small company with low overhead costs cannot deliver good quality on a low hourly rate or small prices.
The only exception might be a college student in Pakistan (insert any other offshore location) who works part-time next to his/ her education. But here low quality and long waiting times need to be considered.
Comparison to Eastern Europe
Eastern European countries like Poland, Romania, Ukraine, Bulgaria are an interesting option.
But you also have to see: The number of people in these countries and also the number of developers is rather low. Furthermore, a developer from Poland, Romania or Bulgaria might easily as well migrate to other European nations, as they are part of the European Union (EU). Therefore hourly rates will be rather high.
I also worked with people from Eastern Europe. The only place where the excel more is when it comes to high-end Screen Design. They are able to create designs which cater to European tastes. Otherwise, when it comes to backend development, you might as well get a software developer from Asia.
I am working now since 2012 with companies mainly from Germany, for which I provide software developers in our premises in Kochi, India.
The only times offshore outsourcing worked, was when it was a long time engagement, where the developer becomes part of the onshore team.
Through that, the developer will also learn about the culture, the expectations and the timelines of the clients. Which is a learning process which might take some time/ months.
Cheap, Cheap, Cheap, Quick, Quick, Quick, does not work. There are humans involved, so it needs to be a humane approach.
Who can benefit from outsourcing to cheaper countries?
Mainly companies who have ongoing work in software development can benefit from nearshore and offshore outsourcing. These include:
- IT Services Companies: Which implement ERP or other software solutions for their clients
- Software companies: Which create and maintain software solutions, which are sold as licenses
- Web agencies: Which build web solutions for their clients
- IT departments: Which are constantly building new software solutions for their other departments (like Marketing, Sales, HR, etc.) or are creating modules for their ERP systems and maintaining those systems
- Startups: Startups can be successful in outsourcing to cheaper countries. But only if they are funded by internal or external sources. Bootstrapping with some small funds will not work. If bootstrapping is the plan, then the Co-Founders need to code or give away shares to other developers, who might be located in the same city or region.
Successfactor Number One: Commitment
If the client and the service provider are ready for a long term commitment, then only the nearshore or offshore collaboration can work.
In that case, the service provider will be ready to hire senior developers who can work on the project or put existing senior resources on the project.
Also, the IT company in the country with the cheaper resources can also add additional team members like designers, etc., in case they are needed.
In that case, the IT company will also be ready to give a say in the hiring process. And the client can ask to check for specific pieces of knowledge, like specific frameworks or similar.
In collaborations where there is no commitment, the salespeople/ managers might be tended to agree to specific technical knowledge, whereby in reality the developers will be learning those things on the go, and might not have any experience in those technologies.
Outsourcing to cheaper countries might be a good idea. Especially because the overall cost will be lower. Countries like India, Pakistan, China, Bulgaria, Romania, Ukraine, and similar nations might be interesting.
But it is important to make sure to consider the points in this article. A long term commitment, a win-win situation, and a close collaboration with the service provider in the offshore location will make sure that you get the results you need.
The author: Sascha Thattil works at Software-Developer-India.com which is a part of the YUHIRO Group. YUHIRO is a German-Indian enterprise which provides programmers to IT companies, agencies and IT departments.