Why Outsource Software Development
…if you can get your own top-10% software development team, C-suite, office, and everything necessary—in your up-and-running Software R&D Center
- 30+ outsourced developers in 3 months, 100+ in a year
- Up to 40% cost savings
- No-entity 100% compliant employment
- Fully managed back-office: payroll, benefits and more
- No buy-out costs or hidden fees
- Your direct management and corporate culture
Mexico
Colombia
Argentina
Chile
Poland
Romania
Ukraine
BulgariaYour Own Up and Running Outsourced Software Development Team
More Than Just Software Development Outsourcing
2.5 years
average tenure of developers
Cultural alignment
with your company values
Pricing transparency
no hidden or buy-out fees
Legal & compliance
and other needed operational support
Exceptional dedication
it’s literally your own team
Long-term partnership
shared responsibility & commitmentTech stack on demend
Key Things About Outsourcing Software Development with Alcor
Why big tech outsource software development
The appeal behind software development outsourcing lies in two main drivers that propel tech companies forward: vast tech talent pools and significantly reduced costs. Thus, technology giants tap into vast pools of coders with diverse tech stacks.
That, in turn, helps them build products faster and scale more efficiently while reducing costs due to the stark contrast between software engineers’ salaries in the US and those in other countries. For instance, outsourcing software development helps you save between 30% and 70% by simply choosing to work with outsourced software engineers outside the US.
Top software outsourcing destinations
- Mexico: The largest talent pool with 800,000+ tech gems, ranking #3 in Latin America for developer expertise in modern technologies like JavaScript, Java, Python, C++, and SQL. Each year, 124,000 STEM professionals enter the workforce and power innovation in Mexico’s three major tech hubs—Mexico City, Guadalajara, and Monterrey.
- Colombia: The #2 location in LATAM for tech skills, now home to 165,000+ tech specialists. Demonstrating exceptional expertise in JavaScript, Python, Ruby, and SQL, outsourced software developers are driving the growth of the country’s three thriving tech powerhouses—Bogotá, Cali, and Medellín. Each year, over 13,000 tech graduates enter the workforce, further fueling Colombia’s dynamic tech landscape.
- Argentina: Home to over 150,000 tech professionals, Argentina ranks #1 in LATAM for English proficiency and is a hotspot for top-tier skills in Python, TensorFlow, SQL, NLP, R, and Cloud APIs. Specializing in database and mobile development, Argentina’s tech hubs, Buenos Aires and Córdoba, are driving innovation and talent growth.
- Chile: Boasting over 100,000 tech professionals, the country is quickly establishing itself as a top-tier tech hotspot in LATAM, with cities like Santiago, Valparaíso, and Concepción at the forefront. Chilean developers excel in data science, data analytics, and statistical programming, with top skills in Java, Python, Node.js, Perl, PHP, and ASP.NET.
- Poland: An offshoring magnet in Eastern Europe. Its talent pool comprises 650,000 software developers and a yearly influx of over 40,000 ICT graduates. Most prized skills center around JavaScript, Java, Python, Ruby, Shell, TypeScript, PHP, and C#. The tech industry and infrastructure are also thriving. There are more than 60,000 technology businesses and five major hubs in Warsaw, Krakow, Wroclaw, Poznan, Lodz, and the Tri-City (Gdansk, Gdynia, Sopot).
- Ukraine: Its tech scene boasts 302,000+ software engineers, while 27,000 ICT graduates complement this talent pool each year, providing US tech companies with the opportunity to hire outsourced software developers with ease. The strongest skills of Ukrainian devs include JavaScript, Java, C#, Python, and PHP. As for the tech market in general, it bustles with 5,600 tech businesses and five hubs in Kyiv, Lviv, Odesa, Dnipro, and Kharkiv.
- Romania: The country draws the attention of tech businesses, with 250,000 tech talent and 10,000 ICT graduates entering the market each year. Unparalleled tech skills? It’s JavaScript, Java, PHP, C#, Python, React, Angular, HTML, and CSS. The Romanian software development and software outsourcing market boasts over 48,400 ICT businesses and three buzzing tech hubs in Bucharest, Cluj-Napoca, and Iași, making it an ideal location for hiring overseas developers.
- Bulgaria: The country boasts a tech talent pool of 110,000 and a consistent influx of 6,100 ICT graduates annually. Bulgarian software developers specialize in C#, JavaScript, Java, Python, SQL, PHP, and .NET. With over 10,000 tech businesses and three active tech hubs in Sofia, Burgas, and Plovdiv, Bulgaria further contributes to its appeal as a go-to destination for software development outsourcing.
Software Developers’ shortage on the US market
Tech demand in the US remains high, with 171,000 IT positions currently unfilled. As of February 2025, there were approximately 250,000 active tech job postings, and this number is expected to continue growing, reaching 7.1 million by 2034.
Overall, the U.S. labor market remains tight. The struggle is ongoing: to find suitable candidates for open positions. Plus, the implications of recent layoffs and hiring freeze are still taking their toll.
That’s why, when seeking rare tech talents, companies turn to software development outsourcing. In Eastern Europe, tech businesses hire software developers from an abundant pool of 1.75 million, while Latin America offers an even larger talent base of over 2 million outsourced software developers. Let’s take a closer look at trending sectors: AI, Blockchain, Cloud, and Machine Learning.
Overseas tech talent pool
AI
The demand for AI is growing, and countries in Eastern Europe & Latin America provide a burgeoning source of talent:
- Poland leads with 64,000 AI developers.
- Ukraine follows closely with 23,000 AI developers, while Romania has 22,000 AI engineers.
- Mexico and Colombia together account for over 60,000 AI developers.
Blockchain
Eastern European & LATAM Blockchain software engineers are also present:
- Poland and Ukraine lead the way with 1,200 and 1,00 skilled Blockchain coders respectively.
- Romania showcases a presence of 620 adept Blockchain developers.
- Mexico and Colombia follow with over 1,000 top-tier professionals in the Blockchain domain.
Cloud
The numbers of Cloud professionals give a considerable supply for the US tech demand both in EE and LATAM:
- Poland leads the way with 8,400 Cloud software engineers on the labor market.
- Romania follows suit with its 4,400 Cloud developers.
- Mexico boasts more than 2,000 high-tech cloud specialists
Machine Learning
As for Machine Learning, there’s an oasis of rare skilled specialists for the businesses parched in the US tech desert:
- Poland leads with 3,000 tech experts.
- Ukraine and Romania come second with 1,200 machine-learning coders each.
- Colombia and Mexico together have a pool of 1,500+ ML specialists.
When it comes to application development, both regions are thriving, making it easy to go for software development outsourcing in Mexico, Poland, or anywhere across Latin America (LATAM) and Eastern Europe.
Outsourced developers’ salaries worldwide
What about the salary rates? Here is what Senior engineers with 5+ years of experience earn in different domains:
AI
- Artificial intelligence programmers in Poland earn the highest wages in the region, averaging $80,400 per year. Romania follows closely, with an average annual salary of $78,000.
- Ukraine offers an annual salary rate of $75,600 for its AI engineers.
- In Mexico, AI engineers are available for $62,400 a year, while in Colombia, you can recruit outsourced developers for just $60,000.
Blockchain
- In Romania, blockchain developers are paid the highest at $81,600 a year.
- Poland ranks second with an annual income of $78,000.
- Colombia offers one of the most competitive salaries—$62,400 per year for a developer, compared to $68,400 in Mexico.
Cloud
- Romania offers the most generous wages for cloud developers at $84,000 a year.
- Polish developers charge around $72,000 per year for their services.
- Ukraine has the lowest wages among these countries, with an annual salary rate of $52,400.
- Speaking of Mexico and Colombia, tech specialists in these countries earn $68,400 and $60,000 per year, respectively.
Machine Learning
- Senior ML engineers from Poland and Romania earn approximately $80,400 and $78,000 a year, respectively.
- The Ukrainian tech market offers its ML talents an annual salary rate of $75,600.
- In Mexico and Colombia, you can expect to pay as little as $60,000 per year for an ML engineer.
Challenges of software development outsourcing
There are several challenges to consider when entering the realm of software development outsourcing:
- Legal aspects. Before you opt for software outsouring aborad, you should dive into the labor laws of the chosen location to learn about ways to legally hire local programmers.
– Option 1: do all of it by yourself from scratch and spend months and tens of thousands of dollars to get things up and running. You might end up making quite a few mistakes along the way if you’re not familiar with the local market.
– Option 2: choose a reliable local vendor that offers a better solution for hiring overseas developers without setting up your legal entity.
- Operational functions. After hiring developers, the journey is far from over. Tech companies then face a multitude of operational tasks: onboarding and offboarding employees, managing payroll, handling taxes, submitting reports to tax authorities, arranging benefits, and more. Just like with legal processes, mistakes with payroll and tax management can be costly. Therefore, companies often delegate these back-office operations to a local provider who knows all the ins and outs and can handle the paperwork efficiently.
- Provider choice. Software development outsourcing can go sour if your provider makes a mistake like offering unsuitable candidates that waste your time, delaying the discussed deadlines, or failing to provide essential services, thereby making you hire a million other vendors. To avoid such pitfalls, your choice of software development outsourcing partner in Latin America or Eastern Europe must be rock-solid. They need to be not only reliable and trustworthy but also armed with top-notch technical and legal expertise.
How to choose a software development outsourcing partner
When looking for a perfect partner to recruit outsourced developers, consider their tech and market experience, track record, and guarantees. Find more details below:
- Experience in hiring software developers is a must. It allows you to save time and ensure you’ll get candidates with the right tech stack. Additionally, consider the proposed hiring model: does it meet your needs as a tech business?
- Track record speaks volumes about the provider’s performance, communication, and client approach. To gain a broader perspective, read reviews on Clutch and other reputable platforms.
- Guarantees should be as clear as day: how fast can your potential partner provide outsourced developers, how much that costs, any buy-out fees to take into account, and what they promise if they fail to meet the deadline.
What is a software development center?
A software development center is your dedicated remote office with a team of software engineers. Usually, tech product companies establish such centers in a foreign location with an abundance of talent and lower labor costs. Imagine it as an extended piece of your in-house puzzle: a reliable provider helps you with office space, procures tech equipment, and provides benefits for your team. All this is possible without setting up your legal entity abroad, just as we did for Ledger, Grammarly, ThredUp, and others.
In comparison with software development outsourcing, where you outsource a project via a third party with no direct control over the team, your own software R&D center allows you to use the best practices to fill the expertise gap, scale fast in a chosen location, and have the whole software team work on your behalf from the start without any buy-out fees.
Expand with Your Own Software Development Outsourcing
Alcor is your tech expansion accelerator for global growth
- From 0 to 100+ engineers in one key talent pool
- Employer of record—no entity compliant employment
- Comprehensive in-country support
- No buy-out or other hidden fees
- Your team from day one. Your management. Your culture.
Software R&D Center vs Outsourcing Software Development
Software R&D Center
- Silicon Valley-caliber talent We recruit 30+ elite senior developers in 3 months. All decisions regarding the team are up to you.
- Transparent pricing Detailed invoices help you be in control of your finances. Plus, your tech R&D team is x2 more affordable than an external one.
- Your team & branding You get a tech team with shared values for innovation and growth—90% retention rate & an average tenure of 2.5 years.
- No setup & buy-out fees No setup fee is needed to start building your software R&D team. Plus, there is no buy-out process—your team now, free insourcing after.
- Intellectual property under control With direct agreements, you fully own your product and its source code, keeping unique expertise in-house.
Software outsourcing
- Junior/middle-level talent You can’t control the quality of talent. Plus, with planned moves to new customers after 1 year, your A-players will be snatched away.
- High markups Some providers charge up to 50% of talent compensation to earn more without the client knowing about it.
- Not your brand & practices Developers work under your provider’s brand. Thus, there’s no room for your corporate culture, policies, and direct oversight.
- High setup & buy-out fees Most vendors require contractual & financial obligations first. Then, you pay 20% of a developer’s annual compensation in buy-out fees.
- Intellectual property risks IP rights over your product initially belong to developers of your provider. You get minimum security and a tedious transfer process.
Companies Scaling with Alcor
Alcor is a reliable partner that meets our hiring needs. We finally hired experienced software engineers in Eastern Europe with strong tech skills and business acumen. Account Managers are awesome!
With Alcor’s all-in-one solution, we got a software R&D office with 15 senior PHP devs and a compliant operational coverage. I really appreciated their transparent pricing structure and deep expertise.
We interviewed a lot of EoR platforms and companies, but Alcor was the only one that provides a combo package of EoR and Recruting offerings. Alcor helped us build a full stack team in 1.5 month.
We wanted to switch from our outsourcing provider, and Alcor has become really game-changing for us. Within a mere 6 months, we got a fully-fledged team of 30 engineers in our own R&D office.
Alcor’s R&D solution eclipses full-cycle recruitment, EOR service, and operational support for our offshore team. Their ‘all-in-one place’ approach is far more cost-effective than I could’ve imagined.
I value their commitment to going the extra mile. We evolved from an outstaff project into an independent company, and Alcor’s support was crucial. They hired and ondoarded 15+ professionals for us.
Thanks to Alcor, we hired four engineers and a designer that strengthened our team. Beside stellar recruitment, Alcor flawlessly handled our payroll. Their approach was seamless and swift.
Alcor closed our 4 QA positions in a month and more than doubled the team in a year! We chose Alcor because of their communication style, cost, scope of services, and ideas to help us be successful.
Expanding our engineering team outside the US with Alcor was a game-changer! They found 15 talented developers and provided seamless EOR & operational support. Great responsiveness to our needs!
Alcor’s flexible model helped us scale from 0 to 30 devs in a year first, and then to 50! No buy-out fees, seamless hiring, and top-tier talent. A hassle-free way to grow without setting up a subsidiary!
FAQ
1) Why is it cost-effective to outsource software development?
Choosing software development outsourcing in countries with a lower cost of living and favorable tax policies enables companies to reduce expenses by up to two times.
With Alcor, companies save up to 50% while scaling their engineering teams. Here’s how: a senior software developer in the US can earn up to $180,000 annually, while equally skilled experts in Latin America and Eastern Europe typically earn $58,000 and $70,500, respectively. In addition, these regions offer more favorable tax regimes for employers.
Lastly, Alcor’s approach goes beyond finding offshore remote developers. We get you a team that’s yours from day one—cut costs by not paying buy-out fees!
2) Does Alcor have any guarantees for hiring outsourced developers?
Sure, even better: we have guarantees backed up by our performance results. We promise to hire 5 outsourced programmers within the first month and over 30 within 3 months. All that comes with the guarantee to hire from 10 to 100+ programmers in a year, along with a 3-month warranty for free candidate substitution.
3) How fast can Alcor provide an outsourced software development team?
We pride ourselves on expeditious recruitment—stellar quality within tight timeframes. Alcor’s average time to close a vacancy when hiring a developer is 2-6 weeks. In just 1 day of our cooperation, you’ll get high-quality blind CVs. Over the next 5 days, we will start sending you the CVs of pre-vetted candidates whom you would like to invite for an interview immediately.
4) Why choose Latin America and Eastern Europe as software development outsourcing destinations?
With a talent pool of 2 million highly skilled outsourced programmers, Latin America offers all the benefits of hiring local developers—saving up to 50% on your costs and enjoying minimal to zero time zone difference between your HQ and remote team.
Eastern Europe, in turn, impresses with 1.75 million top-notch tech talents, strong English proficiency, and the opportunity to save up to 45% when you work with overseas programmers. And here’s the classic competitive edge: with a 7–8 hour time zone difference, you can launch round-the-clock product development—while your business day wraps up, your Eastern European engineers are just getting started.
5) How to ensure outsourced developers’ corporate culture compatibility with our enterprise?
The best approach is to select a software development outsourcing destination where tech specialists share a similar business culture. Eastern Europe aligns with Western values in both life and work, offering an excellent blend of adaptability, teamwork, creative thinking, responsibility, resilience, problem‑solving, and outstanding time management.
Latin America has a history of decades-long collaboration with US tech companies. Developers from this region are known for their assertive and expressive communication, punctuality, and a work ethic driven by excellence, as well as strong values of teamwork, collaboration, and continuous learning.
To ensure you and your developer are a perfect match, start with a provider who thoroughly understands your cultural, professional, and communication standards.
6) Can you headhunt C-level management?
That’s an ace up our sleeve. We’ve amassed 8 years of experience in the tech market and have access to 253,000 verified candidates in our talent database! Whether you’re looking to find developers or fill positions like CTO, CIO, CMO, or CFO, it takes us about 5-8 weeks to hire a team lead and 6-9 weeks to headhunt a C-level manager.
Our clients attest to it: we hired the Head of R&D for Sift, an online fraud detection application development firm, from the second CV we received. Other successful cases include the Director of Engineering for Dotmatics and the Deployment Lead for Ledger.
7) What about payroll, accounting, and office lease in outsourcing regions?
With Alcor’s approach to software development outsourcing, there’s no need to establish your legal entity in a target location. With our comprehensive EOR support, we take care of all the nuts and bolts for your outsourced software development team. It includes the employment of developers, monthly payroll management, tax payments, accounting, compliance with all local laws, and even more.
With our turnkey solution, you can rest assured—we guarantee 100% compliance while handling all the paperwork on your behalf. And if you’d like to establish a physical office for your team, we’ll be happy to assist you in finding suitable office space and negotiating a lease agreement.
8) What else does Alcor’s software R&D solution include?
Apart from full-cycle tech recruitment of Silicon Valley-like outsourced developers and EOR support, we provide comprehensive operational support that includes office or co-working lease, tech infrastructure setup, procurement management, employer branding, stock options assistance, business visa support, and other back-office services.
9) How Alcor’s approach to software development outsourcing can benefit your business in particular?
The most important thing you gain with Alcor is the ability to scale your business. While you stay focused on building your product, we provide access to the top 10% of software developers, transparent pricing with volume discounts, and essential operational support. In addition, you benefit from rigorous pre‑screening: 80% of our CVs are approved by clients, and 98.6 % of our candidates successfully pass probation with outstanding feedback. Ready to try it yourself?