50+ offshore software development statistics for 2025

You may ask, why is offshore software development still a viable option in 2025? The answer lies in its ease and speed of hiring through staff augmentation models that are driving this market’s rapid growth, with an impressive 11% annual expansion projected through 2025.

• But what else is driving this surge?
• Which industries are leading the way in offshore hiring?
• What tech skills are most in demand?
• How do companies ensure they get quality work at the right price?

Top IT outsourcing statistics: Adoption and market growth

Explore the latest trends shaping IT staff augmentation in 2025 through key 50 outsourcing statistics that reflect on and how businesses are capitalizing on its potential worldwide.

1. The offshore software development market will reach a value of $151.9 billion in 2025. Demand for these services shows no downward trend up to 2033.

   

2. Offshore outsourcing is projected to represent 45.24% of the global outsourcing market by 2028.

3. The offshore software development market is expected to grow from $122 Billion in 2024 to $283 Billion by 2031, at a 10.13% annual growth rate.

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4. The BFSI sector (banking, financial services, and insurance) drives 30.29% of global IT outsourcing.

5. The healthcare sector accounts for 23.43% of IT outsourcing services.

6. The manufacturing sector holds 12% of the IT outsourcing market.

7. The telecom sector has a 15% market share due to IT investments.

8. Retail and e-commerce to expand fastest in IT outsourcing with а 9.7% compound annual growth rate.

9. The reasons behind companies choosing to outsource over in-house hiring are the benefits are lower hiring and staff retention costs, access to a huge talent pool, easy scalability, faster time to market, price-to-quality ratio.

10. So, it's no surprise that large enterprises heavily rely on their offshore software development company vendors, which generate nearly 60% of their revenue.

11. North America holds the highest market share, coming in at 38.5%, and generates the most revenue in the offshore development market, coming in a $46.2 billion contribution.

12. 68% of US companies outsource to low-cost countries and 54% of them choose India, where the average wage for IT specialists is $15-35.

Staff augmentation & IT offshore industry insights for 2025

Discover the niche insights for upcoming 2025 you should know about the offshore staff augmentation. Whether you opt for in-house hiring or looking into global talent pools, with IT staffing insights you can stay ahead of the hiring curve.

1. 74% of global employers find attracting a skilled workforce as difficult. Out of this number, 76% are in the IT industry.

2. The most common challenges for IT companies during in-house hiring are a lack of candidates with specialized skills, driven-up salaries, and intense competition among tech companies.

   

   So, more companies are shifting towards IT staff augmentation services to avoid these challenges.

3. Over 40% of companies not currently outsourcing plan to consider it in the next year.

4. Companies are considering outsourcing top tech roles, with 34% likely to outsource CTO, 30% CISO, and 30% CIO positions within the next year.

5. 93% of companies that outsourced reported being satisfied with the outcome.

6. 92% of Great-2000 companies outsource their IT services.

7. About 34% of companies are likely to outsource their CTO within the next 12 months, and around 30% said the same for CISO and CIO positions.

8. Around 60% of all outsourced projects fail because of poor cultural compatibility. The key to avoiding such issues is to hire an experienced staff augmentation vendor, who already has a lot of experience working with clients from different countries.

9. The price-to-quality ratio in software outsourcing can save you up to 85% of all your monthly savings.

10. Outsourcing can cut labor costs by up to 90%. The biggest cost cut is noticed when labor is outsourced to countries with a lower cost of living.

11. Average hourly offshore development rates depending on role and region combined from sources such as PayScale, SalaryExpert, Indeed, Upwork, TopTal. Western Europe has the highest demand for offshore software development, so rates are evidently higher compared to Asia or Eastern Europe. Also, remember that average rates may differ a lot from the actual price for actual software development services depending on technology knowledge, seniority level, and even communication skills.

    

12. 70% of business leaders named cost-saving as the primary reason for outsourcing.

13. 49.6% of companies plan to increase their outsourcing, with 40% maintaining current levels, and only 10.4% aiming to reduce.

14. Outsourcing software development companies can help their clients cut the time-to-market for new products by 25%.

15. 76% of companies outsource IT functions, compared to 52% that outsource business operations. This shows the continued trend for preference to outsource complex IT tasks over general business activities.

16. 86% of business leaders name service quality as a main factor in choosing an outsourcing partner.

17. IT services make up 72% of all global outsourcing contract values.

Offshore software development trends in 2025

Learn offshore development services trends for 2025 to improve your innovation journey and acquire top-tier tech talent. Pay attention as certain trends may be more impactful than others, depending on your business's needs.

1. More than 75% of executives plan to outsource IT services with the most common areas such as IT infrastructure services, app and software development, and cybersecurity.

   

2. 80% of offshore companies will adopt low-code/no-code platforms in the next decade to match 52% of companies that are already using outsourcing for AI and machine learning consulting services.

3. The demand for software developers, testers, and QA experts in the US is expected to grow by 22% in 2030.

4. By 2026, 90% of businesses will be significantly affected by the skills shortage and might lose nearly $6 trillion due to its impacts.

5. The most high-demand jobs on the wanted list include AI engineers, data scientists, solution architects, cybersecurity engineers, cloud engineers.

Most popular countries for offshore development in 2025

Among all the factors that all companies put into consideration when choosing a country to find a staff augmentation vendor are two crucial - offshore software development rates by country and the variety of talent pool.

1. Offshore software development services in Eastern European countries are gaining more recognition due to decent quality and cost of offshore software development.

2. The most popular destinations are Ukraine with an IT export market expected to reach $5.49 billion by 2028, Poland with 20,000 ICT graduates yearly, and Romania which placed 17th out of 111 in the Global English proficiency ranking.

   

3. Another vast amount of talent pool is in Asia. Specifically India, the Philippines, and Vietnam.

4. With over 5,400,000 IT specialists, India holds 68th place out of 102 nations, with emerging technology (46%) and data science (26%) skills.

5. The Filipino IT services market proves to be startup-oriented with the most advanced industries being FinTech and eCommerce.

6. Offshore software development in Vietnam is a profitable opportunity for businesses with this country’s tech sector expanding at %8.9 annually up to 2026.

Top 3 predictions for the software outsourcing industry in 2025

As we enter the year 2025, it is safe to say that software developing companies are adjusting to the new process of software development, delivery, and sustainability. Rapid technology innovation is blurring geographical borders and is expected to change the entire concept of IT development and consumption.

Here are top-3 predictions for the software outsourcing industry in this landscape.

1. Focus on specialized skills

Companies will seek out outsourcing partners that can provide niche expertise for specific project needs. The demand for blockchain, AI, and cybersecurity specialists will continue to rise.

2. The rise of hybrid models

The global shift toward coming back to offices leads to the inevitable blending of remote and on-site work and reshaping outsourcing models.

Companies will seek both cost savings from traditional outsourcing and direct control over remote developers.

3. Enhanced collaboration tools

As a follow-up to the need for control, companies are expected to adopt platforms that offer more real-time interaction to enable real-time code sharing, version control, and project tracking.

Choose an offshore software development company that understands your needs

With 64% of IT leaders globally choosing to outsource, it’s clear that the software development outsourcing trend is going strong in 2025.

Devico specializes in acquiring top talent who can help you build your product with specialized IT expertise while keeping your costs in check.