Post the economic liberalization in the 1990s, the Indian IT-Sector has grown at an accelerated pace. India today is considered amongst the best countries to hire developers & high-quality offshore IT services and software developers. 50% of Global Capability Centres are located in India and employ more than 1mn professionals. In FY 2020 Indian IT industry contributed to 54% of the 150 billion U.S. dollars export revenue and contributed to more than 18% of the global IT spending.
High-skilled developers and cost-effective development are some of the top reasons major firms in Europe and North America rely on India for their IT service needs. As per Evans Data Corporation’s latest report, the world accounts for 26.9 million software developers in 2021. The IT and BPM industry in India currently employs more than 4.5 million people. India, by far, has a greater number of software developers when compared with any Latin American or Eastern European countries, which are major offshore development destinations. Thanks to its STEM-focused education system, India produces roughly 2.6 million STEM graduates annually. It is expected to have the biggest concentration of software developers, reaching 5.2 million resources by the end of 2023.
While outsourcing IT services, resource cost plays a crucial role in hiring an offshore developer. Whether you are a first-timer or have experience working with Indian developers or companies, you may have already experienced variation in the quotation shared by these businesses, unlike its counterparts in the US and Europe. In this article, we aim to explain the key reasons for variations in developer cost in India, so we can make informed decisions while offshoring your software development project in India.
Top ten factors that define the costs associated with hiring an Indian developer:
Tech stack
The first and foremost factor that defines the cost of hiring developers is the technology stack or tech stack. As the name suggests, a tech stack refers to the combination of programming languages, frameworks, and tools that the developers use to build the software solution, website, or application.
Here are some of the examples of the technologies used in the tech stack.
The functionality of the solution determines the selection of technology in the stack. Different technologies come at different prices basis their features, capabilities, and resilience. So, the licensing cost of technologies directly affects resource costs.
Besides the licensing, developers with specialized skills such as DevSecOps, Blockchain, Splunk, Cloud Foundry charge a higher fee. They continuously invest time, effort, and finances in acquiring and upgrading these technical skills through regular training, certifications, and re-certifications. Since some of the courses are only available after completing a certain educational qualification, these tech stack becomes more exclusive and premium to hire.
Read here what are the Top Sought after Tech Skills in the Year 2020.
Experience Level
“The only source of knowledge is experience” – Albert Einstein
Like any other industry, experience in software development plays a crucial role in defining the rates of hiring a resource. Unlike the US and Europe, where the Y-O-Y inflation rate is as low as 1-2%, India witnesses a high inflation rate, ranging between 7 to 10%. An Indian developer, on average, sees a hike of 10-30% on their salaries. Hence developers with more years of work experience come at a premium fee.
But the number of years is not the only cost-defining factor. Developers’ experience in a variety of projects is important too. A developer with five years of experience but in a similar project may not charge as much as a developer with three years of experience but in various projects.
A higher experienced developer in terms of both years in the industry and projects delivered guarantees a higher level of skills and quality of work and charges a premium fee compared to a relatively new developer in the field.
Time Duration
When hiring a developer, a longer duration of engagement is always more economical than a short duration arrangement. When a developer is hired for a longer duration, they get work security and a consistent flow of income, making price negotiation easier. A shorter stint does not guarantee the developers’ work security and regular income, thus making price negotiation harder.
Team Structure and Size
Hiring a team is more budget-friendly than hiring individual resources. While offshoring your software development project, hiring a team helps cluster the hiring margin of each resource. This increases the scope of negotiation, enabling your IT partners to provide you with a better quotation for the project. But when you hire individual resources, the hiring margin on each resource is charged separately, increasing the cost per resource.
Worktime Zone
A resource working in the Indian time zone enjoys a better lifestyle, social life, and work-life balance. In contrast, a developer working in an international time zone has to sacrifice their sleep cycle, social life, and work-life balance. Hence developers charge a higher remuneration for working in a global worktime zone versus developers working in Indian time.
Location
Hiring developers for Tier-1 cities comes at a premium price. Though Tier 1 cities like Mumbai, Bengaluru, Chennai, Delhi, and NCR have good infrastructure and a bigger talent pool, the cost of living in these cities is far greater than in tier 2 cities, which results in higher hiring cost of resources.
When compared, the cost of living in tier 1 city Delhi (India) is 25% more expensive than in tier 2 city Chandigarh (India)
Processes & Support System
When hiring, you are often are asked to choose between freelance developers or IT partners. Though hiring an offshore development partner may come at a higher price, they outperform freelance services by a large margin in the long run. With IT partners such as Your Team India, you get the proper infrastructure and support remote functioning.
Demand and Supply
Like any other industry, demand and supply play a crucial role in deciding the hiring cost of the developers. If the demand for technology in the market is high but the supply of talented resources is low, the hiring cost of developers automatically goes up. This phenomenon is usually seen when a new technology is launched in the market. The demand for resources with the latest skillsets is high as compared to the available developers. The hiring price starts to balance when more developers with the new skillsets enter the market.
A reverse phenomenon can be seen when technology is outdated. As consumers move towards new and better tech stack options, the demand for the older tech drops tremendously, lowering the fees for developers.
Communication Skills
Language proficiency and communication are crucial while working with international clients and sought-after skills in developers. Though English is taught as a second language across India’s education curriculum, there is a visible gap in language proficiency amongst resources. Hence the developers with better communication skills charge a premium. Developers who are well versed in the language and technical terms easily understand the nuances of a project. They can comprehend the client’s requirements better, delivering quality work at a shorter turnaround time.
Originally published at Your Team In India. Read the complete article factors affecting cost of hiring developers.
In our newest article, we are reviewing how to hire Shopify developer quickly and easily.
We will share our tips on finding a great Shopify expert.
Today, more than a million merchants use Shopify to run their businesses online.
What’s more, merchants running on Shopify are of all sizes, from tiny retailers to giant wholesale corporations.
The main reason why they all chose Shopify is Shopify having many solutions that work right after installation.
So if you are looking to hire a Shopify developer check this article to get our tips
