September 13, 2022
A severe talent crunch and the pressures of the pandemic have resulted in software developer rates increase higher than ever in the last few years.
A return to business as usual in many parts of the world in early 2022 didn’t cause relief for businesses struggling to keep digital transformation projects on track. Inflation, a faltering global economy and the destabilizing impacts of the war in Ukraine piled on even more pressure.
US software developer rates took a hard hit with a whopping 23% average increase in 2022. As a result, US companies' interest in offshore software offshoring has surged as they seek critical developer skills at prices in line with constrained budgets.
"We will all need to be adaptable to navigate the growing challenges ahead,” says Andy Hilliard, CEO of Accelerance. “Thankfully, software outsourcing helps us achieve that. If it plays an invaluable role in offering affordable access to talent and resources in boom times, it really comes into its own in tough times."
Just in time to help navigate the uncertainty on the horizon in the year ahead, Accelerance's definitive annual guide is here: The 2023 Accelerance Global Software Outsourcing Trends and Rates Guide is your must-have reference for software outsourcing guidance in uncertain times.
It’s chock full of information to combat high developer costs, scarce technical skills and corporate cutbacks. You’ll find outsourcing best practices, benchmarks and case studies from our world’s largest certified developer network and other leading industry experts.
Get the guide to equip you for the year ahead:
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Make more informed budgeting and staffing decisions
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Beat developer talent shortages and rate inflation using affordable global talent pools
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Build a recession-proof IT sourcing strategy
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Compare engineering rates across six regions and 16 roles
This definitive guide contains insights for an informed 2023 tech sourcing strategy, including the regional differences in costs to consider in choosing an offshore destination.
Outsourcing can be a great way to lower your software development cost, but which part of the world do you choose from? The guide provides rates for 16 software developer job roles across six regions - Latin America, Central & Eastern Europe, South & Southeast Asia, and North America to help determine your best potential outsourcing destination, cost-wise.
Developer rates in Latin America spiked 24%, the most of any offshore location, due to an escalation in labor costs and an influx in clients exiting partnerships in Ukraine. In Central and Eastern Europe, rates rose only slightly as a result of the ongoing conflict in the region. South and Southeast Asia remained the least-expensive outsourcing region, with little to no change in rates from the prior year.
Resulting shifts in supply and demand among regions will continue to have impact in 2023.Crisis slammed the worldwide outsourcing industry with the outbreak of the war in Ukraine in 2022. It crippled an international powerhouse destination for software outsourcing, exacerbating the global software developer supply already at a record high shortage. Resulting shifts in supply and demand among regions will continue to have impact in 2023.
In a highly volatile and unpredictable business climate, it pays to be informed of the challenges and opportunities impacting the industry. Our top picks for market trends in 2023 are:
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Cost and scale flexibility: Companies need the ability to quickly adapt in right-sizing software projects and containing costs, and outsourcing offers that scalability and agility.
- Developer shortage paradox: There’s more work available than ever for software developers, but it is increasingly difficult to secure skilled and experienced developers at affordable rates.
- Need for hyper-specialized tech talent: The pace of technological change is requiring deeper expertise in specific technologies from cloud architecture to cybersecurity.
- Hybrid team validation: With many employees forced to suddenly work from home during the pandemic in recent years, the blended model of remote and in-office workers is proving productive.
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Cybersecurity sourcing crisis: Outsourcing is a way to help fill the critical gap in cyber talent, which IT leaders cite as a top business risk threatening technology operations.
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Multi-partner sourcing: It pays to have multiple partners in different countries, diversifying the workforce to buffer against business disruptions such as the pandemic and the Ukrainian war.
From our 20+ years of outsourcing experience and thousands of successful client engagements, we know how to use outsourcing to build a resilient IT operation. Accelerance has the network and the expertise to help you with future-forward resourcing, with our largest certified network of top 1% of global software development firms.
Interested in discussing our latest analysis while considering your 2023 software development sourcing decisions?
Book an appointment with an Accelerance trusted advisor.