Passing some parts of software development to independent contributors is a common practice for big businesses. Today IT industry continues growing fast, and modern software maker corporations really match enterprises of other industries. So outsourcing is popular in that sphere. A big software development project run by a company usually includes some non-core tasks that are passed to offshore or onshore software development groups, which do not belong to the company’s staff.
Practical reasons for outsourcing are quite simple: saving cost and saving time. Most development companies prefer not to employ new people for fulfilling a project because some extra time should be spent for their training and making them a team. A group of skilled professional software makers from aside is a much better choice for doing such a project as they have already enough experience in the field of custom software development and will solve their organizational problems by themselves. In this case the company does not have to spend on maintenance, social programs, medical insurance, project management, etc. So no wonder that the last financial crisis resulted in further growth of IT outsourcing market.
While outsourcing programming teams exist all over the globe, we can see a certain distribution of demand by geographical regions. Usually economically developed countries have the highest interest in inviting software outsourcing teams. The biggest concentration of significant IT projects is located in those countries, where post-industrial trends are most strong. So let us investigate how much long-term custom outsourcers are likely to be paid in such regions as: USA, Canada, Western Europe.
USA is the world leader in software development, being the birthplace of computer science and Web-technologies. Major American software project teams are also the greatest IT corporations on the planet, like Microsoft, Apple, IBM, Oracle, Borland and others. So the country’s need for outsourcing is strong. Average annual salary for custom software development and support in the country is about $85,000.
In Canada software companies operate with lesser funds as the basic level of prices is lower than in USA. The average annual salary for outsourced IT services in the country is about $65,000.
Among Western European countries UK is one of the most competitive by the dimensions of IT market. In 2010 the net revenues for software development outsourcing are about 8 billion pounds. The average proposed salary for software staff is above $50,200 per year.
In France the outsourcing market was growing by about 5% annually during the last years. In 2010 the growth proceeded despite the skepticism of analysts. Currently the average yearly salary for full time software developers is about $49,000.
The DACH region (Germany, Austria, Switzerland) being a high-tech leader on the continent has a developed and rapidly growing IT industry. This year the size of IT outsourcing market in the region is about 17 billion euros. The average proposed salary for software engineers is up to $56,000 per annum.
Netherlands has a developed IT industry with outsourcing being its only sector to have positive growth (about 2.2%) in 2010. Currently, average annual salary for full-time staff proposed by Dutch software producers reaches $64,800.
Salaries for software developer jobs in Australia/NZ and Finland were added to this comparative chart in order to better illustrate the current situation in the IT markets of North America and Western Europe.
In certain cases salaries in IT outsourcing may deeply vary, as they are based upon the required quality level of the project and on outsourcers’ experience. The physical location of an outsourcer is important too – software developer companies when adopting the offshore outsourcing may choose teams from India, China, Philippines, where prices are much lower. On the other hand, many project managers prefer the onshore outsourcing in order to increase the quality level and avoid language barriers. In this situation many prefer to hire outsourcing teams from Eastern Europe, mostly from the former Soviet territory, where the formidable level of engineering is preserved and prices are quite low comparatively to other European countries.
Michael T., technical analyst
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