Offshore Staff Augmentation: Top Outsourcing Countries

Some decades ago, outsourcing development was something new and unusual as most companies used to have their software development department. Today the situation completely differs from what we have even at the beginning of this century. The outsourcing market has become relatively mature, and various forms of collaboration with software partners have come into the game: offshore staff augmentation, dedicated and managed teams.

But what are the best countries to outsource software development? Where should you look for when you want to hire the most talented experts for our project? This article will enumerate the top outsourcing countries globally and explain why they are ranked high on this list.

IT Outsourcing Market Size

Today, we can observe active growth in the demand for IT services worldwide. In 2023, global spending on such services was estimated to hit the mark of over $1.4 trillion, while in 2024, this figure could reach the level of around $1.585 trillion. In terms of year-over-year growth of different IT industry segments, IT services are in the second position, following only enterprise software on this ranking.

As for precise figures that could demonstrate the IT outsourcing market size, there can be some confusion. The reason for this is quite explicable: different market analysts have different approaches to the definition of “outsourcing”, as well as services, segments, and industries that  should be taken into account.

For example, according to Statista's Technology Market Insights, the IT outsourcing industry covers application outsourcing, administration outsourcing, web hosting, and other IT outsourcing services. In 2023, these segments brought a total revenue of $460 billion.

Why Is Offshore Outsourcing Gaining Momentum?

First, just a quick reminder for you of the benefits that outsourcing in any of its forms has in comparison to in-house software development. Working with external developers, you can:

• cut off the development costs;
• avoid hiring routine and numerous issues related to administrative processes;
• get access to a significantly wider talent pool;
• hire experts with the rarest skills and niche knowledge;
• ensure flexibility of your business;
• streamline your workflows;
• have more time and resources to focus on your core activities.

Given these new possibilities, nothing is surprising in the popularity of outsourcing. But why namely, the offshore type, not onshore or nearshore, preferable for many businesses of all sizes and types, including small ones, across the US and Europe?

The explanation is hidden behind numerous factors. However, excellent development skills in combination with reasonable rates are probably the key ones. As a result, companies can significantly reduce their expenses on salaries without losing the quality of the work done (or maybe even increasing it).

Furthermore, though the cultural differences can be obvious, good developers, who have experience in cooperation with clients from overseas, are usually very flexible and are ready to adapt to some issues related to this aspect. Moreover, the excellent command of English that many software experts have today helps to overcome any language barriers making the communication pleasant and straightforward.

As for the time differences, it can be somewhat tangible if, for example, you are based in the US. Your developers work from Poland, Portugal, Lithuania, Ukraine, and Georgia, or from one of the other best IT outsourcing countries located on another continent. Nevertheless, in such a situation, you can organize the working hours of the team in such a way that you will still be able to communicate with offshore developers in real-time during some hours per day.

Moreover, there will be the possibility to ensure 24-hour productivity thanks to introducing day and night shifts and working with offshore and nearshore outsourcing countries.

Let’s try to summarize what we’ve just explained above.

Why do US and European companies often opt for offshore developers?

• Reasonable rates;
• Strong technical expertise;
• Availability of specialists with rate skills, as well as professionals with knowledge in a wide field;
• High level of IT education;
• High quality of software solutions;
• Ability to work in cross-cultural teams;
• Soft skills;
• Good command of English.

The Future of IT Outsourcing

Among the main boosters for IT outsourcing, we should name general digital transformation, automation trends, and a row of new opportunities and advantages that companies can leverage thanks to this model of cooperation with developers.

The continuously changing demands, geopolitical, economic, and technological forces stimulate significant shifts in the global labor market. The ability of governments to stay flexible in response to the constantly changing external environment is one of the keys to increasing the attractiveness of specific regions as offshore service delivery locations.

When you are trying to find out which countries provide outsourcing services and could be the best choice in your case, you can analyze various factors that are important for your business:

• Human capital of the region, including such parameters as education level, skills, and experience of specialists;
• English language proficiency;
• Geography and time zone;
• Region-specific characteristics: cultural, technological, and geopolitical peculiarities;
• Rates of skilled personnel.

And you can also look at the global competitiveness of the countries under consideration. To do it, you can check IMD World Digital Competitiveness Ranking 2023 (the ranking is updated every year). The higher the country's position is, the better conditions it can create for the education of its tech experts, their professional growth, and development. This ranking can be taken as an additional parameter for estimating the region's attractiveness for outsourcing and its potential to keep this position.

According to various factors, in 2023, the following countries were named as the top 5 locations for IT outsourcing (and it will be sensible to presuppose that in the nearest years, they will preserve this status):

1. India;
2. China;
3. Malaysia;
4. Brazil;
5. UK.

What Are the Top IT Outsourcing Countries Today?

To help you find the most appropriate country for hiring IT developers, we have prepared the following list of factors that you should consider to make the right decision.

• Number of developers and business expertise.

How large is the tech talent pool, and how many businesses operate in each outsourcing destination? When choosing the right project team, these are essential issues, as this helps determine the most favorable conditions to outsource software development. 

The more mature the market in the country is, the fewer risks of disservice may occur. The same applies to the size of the talent pool in each country, especially when you need to hire many experts or access specialized skills for the project.

The number of software developers worldwide in 2023 was around 26.9 million; in 2024, this figure will increase to 28.7 billion. Most of these specialists are based in China (in 2023, there were nearly 7 million developers in this country), and it is predicted that China will keep the leading positions in 2024 as well.

The European region is also known for a large number of software developers. In 2023, their number was 6.1 million. With its 900,000+ developers, Germany has the biggest population of software developers in Europe. It is followed by the UK with 850,000 developers and France with 534,000. Poland has around 400,000 programmers, while Ukraine houses nearly 200,000 specialists.

The number of software development companies is also continuously increasing all over the world, especially in the most popular outsourcing regions. For example, as of 2024, Eastern Europe houses more than 3500 software development vendors registered on Clutch alone. It is worth mentioning that practically all of them have delivery centers there, thus hiring local talent and using their expertise and skills.

As for the trans caucasian ICT market, it is expected that by 2025, the number of developers in Armenia will reach 30,000, while a STEM-related graduate output is over 3,000 annually in Georgia.

Since 2019, Armenia has rolled out an active support program for the ICT sector, which increased the number of development centers, mainly operated by US-based companies. Still, the country faces a couple of issues related to transparency in tax and customs procedures, according to the official website of the International Trade Administration.  As for Georgia, its government started to support foreign IT companies by providing low taxes and labor costs, which attracted many players, mainly from neighboring countries.

The Asian labor market engaged in the ICT sector is one of the largest in the world. We have already stated that China has the most significant number of software developers. But it’s also important not to forget about India, with its 5 million software engineers, as well as the Philippines and Malaysia, with around 150,000- 200,000 tech specialists each.

It is no secret that Asia is home to the most funded industry unicorns, which constantly fuels the development of digital technologies. However, it is worth noting that the internal demand for IT-related graduates is very high. They are primarily engaged in government-led projects or in-state companies.

The combined tech talent pool in LATAM countries exceeds one million developers, with the majority living and working in Brazil. Argentina, Mexico, and Chile occupy the consecutive positions on the list: 

According to Clutch, there are 2365 companies in LATAM, but the majority of them don't have local delivery centers there.

• English language skills.

If you are outsourcing your critical tasks, good command of English is a pure necessity. Working with remote projects requires a lot of active communication between architects, software engineers, designers, project managers, and other team members. Most regions and countries that offer software outsourcing services don’t have a language barrier, even though their developers may not sound like native speakers. Most software outsourcing developers have a comprehensible accent that doesn’t affect written and verbal communication. 

One good way to evaluate the English skills of each outsourcing country is to analyze the data presented on the English Proficiency Index website. Here’s what we found:

• The majority of European countries have a conventionally high and moderate level of English proficiency.
• We can also observe that Argentina, the Philippines, and China are on this part of the list as well.
• It is worth noting that the Philippines have a better command of English than other Asia-based countries. India, for instance, is in 50th place, while China occupies 38th position.
• Brazil occupies the 10th position in Latin America. It makes it a bit harder for employers to find the right talent with good English proficiency.

Top countries for outsourcing by English proficiency level:

Europe: Poland, Portugal, Lithuania;

Asia: Singapore, the Philippines;

Latin America: Argentina.

• Cost.

Many North America and Western Europe companies need to address a similar challenge of choosing the right outsourcing destination that will fit the budget limitations. On the other hand, most outsourcing companies from reputed locations have lower rates than in the US or UK due to lower compensations, overheads, and costs of living.

It is important to get an optimal quality-price ratio when considering the best outsourcing country or region. Sometimes companies opt for regions with low rates but end up paying above-average to fix issues in low-quality software. This is just one of the criteria for evaluating a particular country in terms of its attractiveness as an outsourcing destination. 

Based on the data collected by Payscale and Glassdoor, average software developer’s rates in the world’s renowned outsourcing hubs look in the following way:

Top countries for outsourcing by cost-efficiency:

Europe: Ukraine, Poland, Portugal, Lithuania;

Transcaucasia: Georgia, Armenia;

Asia: India, China, the Philippines;

Latin America: Argentina, Brazil.

• Availability of relevant qualifications and skills.

For businesses looking to outsource their projects, a high-quality educational infrastructure is a must. The best countries to outsource software development are the ones that focus on providing quality specialists with a STEM degree, IT-related studies, and knowledge of business processes. It is also important to assess the availability of free and paid courses that help to advance basic technical skills. 

Taking this into account, we can mention that European countries have diverse math and science programs and provide skilled IT graduates every year.

As for Asia, QS World University Rankings lists 186 computer science and Information technology universities. The most reputed ones are located in China and India.

Transcaucasia’s Georgia and Armenia have several good university programs to study computer science and IT. However, the demand for qualified professionals grows faster than its supply according to recent estimates. 

Graduates with ICT-related university degrees in Latin America have fewer options with their learning paths than in Asia or Europe. The above-mentioned QS World University Rankings include 30 HEI in the region. Here’s a glance at their location:

Top countries for outsourcing by the availability of relevant qualifications:

Europe: Ukraine, Poland, Lithuania;

Transcaucasia: Georgia, Armenia;

Asia: India, China;

Latin America: Brazil.

• Time zone differences.

In theory, working with a remote outsourcing company brings the trouble of finding suitable working hours that will satisfy each party. It is necessary to ensure that business hours overlap and don’t hurdle communication. However, having a reliable team by your side ensures that lack of time zone proximity doesn’t affect operations. For example, they usually strive to compensate for that gap by providing support and maintenance services before and after business hours.

Indeed, a good understanding of how much working hours will overlap with your remote team can help choose the right outsourcing country. A popular outsourcing destination like Beijing (China) is one of the most distant hubs in terms of geography, being 12 hours ahead of New York. Here’s how the same comparison applies to other outsourcing countries, by region:

Due to a favorable geographic position and negligible time difference, Canada and the countries from Latin America look attractive as a nearshoring destination. However, it is worth assessing them on other criteria listed above to ensure they are the best fit for the particular project requirements.

Summing up: The Best IT Outsourcing Countries

Poland

The IT specialist market in Poland is represented by Polish specialists and migrants from Eastern Europe who demonstrate excellent skills. English skills are also quite high. The analysis of LinkedIn accounts of software developers in Poland has shown that nearly 63% of specialists have a B1 level or higher.

Today, more than 50 universities offer various IT programs covering all aspects of software development, including web and mobile development, game development, and others.

The country attracts impressive foreign investments and is actively developing its IT sector, which gives it great chances to become one of the major IT outsourcing hubs.

Ukraine

During the strict coronavirus lockdown implemented by the local authorities in 2020, over 90% of software development companies switched to remote work, which means that today Ukrainian IT specialists are accustomed to this work model. Despite the lack of strong governmental support of the IT sector and ongoing geopolitical instability, it is actively developing thanks to the talents and skills of its experts.

According to forecasts, the IT outsourcing market in Ukraine will demonstrate positive tendencies. It is expected that the revenue will be growing at a CAGR of 14.5% during the period from 2024 to 2028). By 2028,  its market volume will reach $2.32 billion.

Lithuania

Lithuania has become a popular destination for IT outsourcing thanks to its highly skilled specialists, competitive rates, and geographical proximity to Western Europe. The country boasts a strong IT education system, which ensures the continuous expansion of a pool of talented IT specialists.

Lithuania has a dynamic startup ecosystem that has contributed to the growth of the IT outsourcing market. The Lithuanian government actively promotes the country as a destination for IT outsourcing, offering various incentives and support programs to attract foreign investment, like VAT exemption for many IT services, special visa programs for foreign skilled workers, Vilnius Tech Park for startups and innovative companies, etc.

Portugal

Portugal has only a few universities that offer programs for future software developers, and many students are "reserved" by companies even before they graduate.

However, the IT specialist market in Portugal is largely represented by immigrants from other countries. The region's attractiveness for digital nomads is driven by a number of government measures, such as residence permits for highly skilled professionals and special tax statuses. Today, the number of talented developers who reside in Portugal is continuously growing.

Armenia

Armenia may seem to be not a very obvious name for some people in the best countries in software development. But it is so. Good tech education combined with attention to detail and a sincere desire to constantly expand their knowledge - that’s how we can characterize Armenian developers. Based on our own experience, we can say that the English proficiency that guys in Armenia have is quite impressive regardless of official rankings that we can all find on the Internet.

The country is located in the UTC+4 (AMT) time zone, making it possible to find time for meetings even when customers are located in Europe. The rates, as well as in three previously mentioned countries, looked quite attractive for offshore clients.

Every year around 1,800 tech specialists graduate from the Armenia Universities that offer students the possibility to gain theoretical knowledge and demonstrate their skills and achievements in practice at different national and international contests and hackathons. The local governmental authorities are investing in IT education and the general industry. They try to create the most attractive business environment to attract foreign companies and boost the national economy.

Georgia

Georgia has a fast-growing IT market that foreign investors actively support. The Georgian government is currently promoting the country as an attractive destination for IT outsourcing through various initiatives aimed at supporting the IT sector's growth.

The country is known for its excellent developers, deep knowledge, and rich practical skills. The time zone may not be the most appropriate one for customers from abroad. However, it is still possible to organize successful cooperation with the guys from this country. At Geomotiv, we started our work with developers from Georgia not so long ago, but we are pretty satisfied with this experience.

India

India is one of the most prominent destinations for outsourcing software development services in the world. The country has over 5.8 million programmers with different specializations. And every year, around 120,000 young programmers graduate from universities. The main obstacle mentioned, especially for customers from Europe, is the difference in time zone. Sometimes cultural peculiarities are named among the issues in such cooperation. However, if all participants of the projects are, first, good professionals, it is possible to overcome the difficulties caused by cultural norms.

China

The Chinese IT outsourcing market is on the rise. It is expected that 2024 its revenue will hit the mark of over $28.7 billion, while by 2028, it can reach $41.6 billion. This means that the CAGR for the forecasted period will be almost 10%.

China, which is today one of the largest outsourcing countries, emphasizes STEM education and has the highest scores in terms of the technical excellence of its specialists. It receives strong support from the government, which has introduced new policies regulating the industry. However, when it comes to bottlenecks, experts identify data security threats that tend to have a higher probability than in other Asian countries.

Malaysia

Today, Malaysia is called a rising star in the outsourcing industry, which has become possible thanks to its strong focus on technology and digital skills. Malaysia provides international businesses with access to a rich talent pool and favorable conditions for establishing their offshore development centers.

In Malaysia, there are many entry-level coders who can be hired for simple tasks, as well as highly professional developers who can contribute to the realization of severe enterprise projects.

Brazil and Argentina

These two countries are leaders of the software development industry in South America. It’s interesting to note that they are sometimes called the India of the region as they also offer access to numerous talented tech experts and reliable companies providing outsourcing development services. Over 500,000 and over 150,000 developers work in Brazil and Argentina, respectively.

The rates in Brazil are higher than in Argentina (actually, Argentina offers the lowest rates in the region). Development teams from Argentina often become a preferable option for customers in the US as there are no significant time differences and language barriers. As for Brazil, there is a critical disadvantage of working with this country as most developers do not speak English.

Canada

Many colleges and universities in Canada offer IT education programs known for their high quality. Thanks to internships at software development companies, students can gain practical experience and connections, which will help them find permanent employment much faster.

Thanks to favorable economic and social conditions, Canada is an attractive region for migrants worldwide. This tendency is also reflected in the labor market, as many of the specialists represented in the labor market are immigrants. After analyzing LinkedIn profiles of software developers, we found that 60% of candidates are from India, 14% are Canadian citizens, and 26% are representatives of other countries.

UK

The revenue in the IT outsourcing market in the United Kingdom is expected to reach $35.5 billion in 2024 and over $50 billion by 2028.

One key advantage of choosing the UK as a country for IT outsourcing is access to qualified specialists. Over 100 institutions, including world-famous ones, offer IT-related programs and courses. 

Though the rates of software developers in the UK are rather high, the quality of delivered solutions and the country's existing IT infrastructure help it remain competitive in the outsourcing market.

All these countries deserve to be on the list of top IT outsourcing countries, but as it is logical, they all have pros and cons. And it is better to decide which region to choose after analyzing all the related factors, including your location, budget, and expectations.

Top 5 Reasons Why Geomotiv Can Become Your Reliable Software Development Partner

1. 14+ years of experience and knowledge accumulated to feel the industry and foresee its demands.
2. We have access to 80.000+ seasoned specialists from the best countries for outsourcing software development. This vast talent pool allows us to find professionals even with the rarest combination of skills easily.
3. We have solid expertise in various industries and business domains, including the most quickly developing ones, such as EdTech, AdTech, OTT TV and video engineering, eCommerce, and others.
4. Thanks to our competitive rates, you can cut your development costs by 50%.
5. Our specialists can join your team within 1-2 weeks of us initiating the hiring process upon your request.

Our Experience in Offshore Staff Augmentation

We are a US-based company, but our talent pool includes the most skillful developers from the best outsourcing countries in the world. We work with tech experts from Canada, Brazil, Argentina, Ukraine, Armenia, Georgia, Poland, Portugal, Lithuania, and Kazakhstan.

We never prioritize specialists based on their nationality or country of birth. We have the same criteria for all potential candidates. And this approach helps us find the best of the best. There are several points that we always focus on at the first stages of the hiring process. For us, they are tech skills and English proficiency.

At Geomotiv, we have well-established processes and a rich talent pool of over 80K specialists, which ensures almost instant hiring.

Our HR and recruiting team can successfully address your needs by filling temporary and long-term tech positions with experts from the top software outsourcing countries.

Our services go much beyond traditional talent acquisition.

First, our senior recruiters will study your requirements and provide up to five active candidates upon request. Our specialists are really good at this, as proven by a remarkable 95% offer acceptance rate. But our responsibility doesn’t end here. We will also help with onboarding and all HR processes. We provide comprehensive administrative support for new hires and care for their work satisfaction, including professional development and mental health.

Our IT staff augmentation services also extend to handling legal and financial aspects. We expertly handle finance management, tax filing, reports, payrolls, and other vital matters that ensure the transparency and compliance of business processes.

It is crucial for us to ensure that our clients and all the hired specialists feel comfortable. That's why we do our best to address and prevent all possible concerns in advance. We conduct regular team audits, continuously gather feedback, and can stay in touch even 24/7.

The attrition rate for our tech experts who work for our customers is around 2.5% per year, which is good proof that we are on the right path.

How to Find the Best Countries to Outsource Software Development in Your Case

Here’s a quick checklist for you. Top 5 points to bear in mind:

1. Focus on the value, not only on the costs. The principle “the cheaper - the better” is not the suitable one to follow. It is pretty standard in software development when meager prices should be viewed as an indicator of low quality. Nobody wants to overpay but try to find reasonable rates, not just very low.
2. Pay attention to English proficiency. The primary key to a successful project is efficient communication with your team. Developers should clearly understand the requirements and the tasks that you have for them. That’s why it is crucial to find a team that will communicate with you without dictionaries and translators.
3. Do not ignore cultural peculiarities. Despite the era of globalization that we humanity has already entered, people in different countries are still influenced by their cultures. Therefore, before establishing long-term cooperation with specialists from another country, it is recommended to ensure that the cultural differences won’t influence your work together and you quickly put up with them.
4. Do not forget about time zones. Though it is quite natural that when you work with an offshore team, it is hardly possible that your working hours will fully coincide. But they should at least overlap. You need to have time for meetings and communication that will be comfortable for both sides.
5. Try to find reliable information on the level of tech education in the country. Today on the internet, you can find a lot of reliable data. Make sure that the country under consideration has specialists with proper knowledge and education.

When the most appropriate country or region for the outsource is chosen, it’s time to seek a team to work on your project. In our blog, you can find a detailed article that provides tips on finding the best dedicated team. These recommendations work concerning searches for any remote team regardless of the chosen form of cooperation. Below you can find just a quick reminder of the aspects that you should focus on:

• Previous experience of specialists, their knowledge, education and background;
• Tech stack that developers worked with on their previous projects;
• Abilities in communication with clients/other team members remotely;
• The reputation of a company that is ready to provide its developers, its business journey;
• Genuine reviews (you should know what the company's real clients think about their cooperation).

It’s worth mentioning one more thing about the success of offshore outsourcing. It can happen so that you find the best one of the top software outsourcing countries, then hire an excellent dedicated team, but your communication will turn out to be inefficient and not very successful. But what's the reason? Quite often, such a situation can be explained by a wrongly chosen project management methodology.

Today, Agile is the most widely used method for coordinating all work processes in an offshore software development team. It helps to achieve the highest productivity of a team and to get the best results possible. So, do not forget about this point to devalue all your previous efforts to look for the best team.

If you want to hire remote specialists on your own, we’d like to recommend searching for them in one of the best countries for outsourcing. But if you prefer to rely on a software development partner that will find the best experts for you, Geomotiv is always at your service. Over the years of work, we’ve managed to gain an excellent reputation on the market, and today we work hard in order not only to keep but also to strengthen our positions.