By 2029, the global IT outsourcing market is projected to reach $812.70 billion, driven by trends like team augmentation. It’s become a potent global outsourcing technique.
In recent years, South Asian countries have become popular destinations for global IT companies looking to outsource their team with skilled experts. This allows companies to add more qualified offshore IT talent to their workforce, whether you are a software company or startup trying to reach tech professionals around the world or a company trying to increase the productivity of your IT team in a short amount of time and costs.
This workforce hiring technique, known as "team augmentation," allows businesses to cover staffing shortages by bringing in outside, highly qualified teams. It can be a good way to expand the team or work together to develop a tech product in different places.
Outsourcing employees for projects that fit the organization's current staffing needs and goals is called team augmentation. By working with committed remote teams, team augmentation can help your internal team increase productivity and cut expenses.
For instance, your business needs seven developers to create a gaming app. Two senior and two junior software developers work for the company, though. More than three developers are required for the project. The business can employ a team augmentation strategy to hire top industry talent to develop a high-caliber gaming app and close this skill gap without incurring traditional hiring costs. The hiring team shared various experiences and skills with the in-house team, which can benefit your software development team. You can accomplish your objectives with team augmentation without dealing with the headache of hiring and training full-time staff.
Some South Asian countries are becoming popular destinations for global companies looking to augment their team with skilled experts. Here are the top five South Asian countries considered good destinations for team augmentation.
Why South Asia is a Hotspot for IT Team Augmentation?
South Asia has emerged as a global hotspot for Software team augmentation, thanks to its significant cost advantages, skilled talent pool, and cultural compatibility. The region's significant cost advantages enable companies to access top-tier IT expertise at a fraction of the expense compared to Western markets.
South Asia boasts a vast talent pool, with countries like India, China, and Sri Lanka producing a steady stream of highly skilled IT professionals proficient in cutting-edge technologies.
Additionally, cultural compatibility and strong English proficiency in many South Asian nations facilitate seamless collaboration with global teams. By 2024, the global IT outsourcing market is projected to generate $541.10 billion in revenue, with offshore outsourcing contributing a substantial 43.46%. With a forecasted annual growth rate of 8.48% (CAGR 2024–2029), South Asia continues to strengthen its position as an indispensable partner for businesses worldwide seeking scalable and efficient IT solutions.
Factors Should Consider When Choosing South Asia for Hiring a Software Development Team?
- Cost of hiring
- Quality of education and IT skills
- English proficiency
- Time zone alignment
- Management and control
- Government support and policies for IT outsourcing
- Established IT infrastructure
Access the top industry talent, customized solutions to fit clients’ needs, expanding team quality, prototyping new ideas, complete end-to-end development, ensuring product or service scalability, speeding up development, and cost-effective software development solutions, etc; these are all attractive factors that make a country ideal for team augmentation.
Which 5 South Asian Countries are Ideal for Team Augmentation?
If you want to outsource your software development to a remote team in South Asia, here are our top five team augmentation countries to consider. We highlight the region's strengths, unique selling points, and potential challenges to assist you in deciding on staff augmentation from South Asia.
Bangladesh
Bangladesh has emerged as a major player in the global IT outsourcing market, with its IT sector expanding at a rapid pace. The country has a large number of skilled professionals in IT who excel at meeting global business demands.
The reason behind the growth of the IT outsourcing market in Bangladesh is the cost-effective and high-quality IT services. Many companies from developed countries are outsourcing their IT services to Bangladesh due to the availability of skilled IT professionals at a lower cost. Additionally, the country's strategic location and time zone advantage make it an attractive destination for outsourcing services.
The rising demand for low-cost, high-quality IT services drives Bangladesh's IT outsourcing market forward. Many companies in developed countries are outsourcing their IT services to Bangladesh because skilled IT professionals are available at a lower cost. Furthermore, the country's strategic location and time zone advantage make it an appealing location for outsourcing services.
The IT outsourcing market in Bangladesh is witnessing a shift towards more complex and value-added services. The country is moving up the value chain, providing services including software development, cloud computing, and big data analytics. The government is also promoting the IT industry by providing various incentives and tax benefits to IT companies.
The IT outsourcing market in Bangladesh is unique due to the country's large pool of young and talented IT professionals. The country has a huge IT graduates, and the government is taking initiatives to provide them with the necessary training and skills to compete in the global market.
The growth of the IT outsourcing market in Bangladesh is supported by various factors such as the country's stable economic growth, increasing foreign investment, and favorable government policies. Additionally, the country's large population and growing middle class provide a significant market for IT services.
The government is also investing heavily in infrastructure development, including the development of the IT sector, which is expected to further boost the growth of the IT outsourcing market in Bangladesh.
India
India has been a leading place in the IT Outsourcing market for many years. The country has a large pool of skilled IT professionals with strong English proficiency and a business-friendly environment that has attracted clients globally.
The Indian IT outsourcing industry is renowned for its vast talent pool, cost-effectiveness, and high-quality services. Most companies in the country provide a wide range of services, including software development. They also prioritize working with companies that have experience working in the industry and provide customization solutions to their specific needs.
The IT outsourcing market in India is projected to grow significantly. According to Statista, the market is expected to expand at a compound annual growth rate (CAGR) of 13.52% from 2024 to 2029, reaching a market volume of $20.81 billion by 2029. This growth indicates the increasing reliance of global companies on Indian firms for IT services, including software development which preferred the country as one of the ideal destinations for team augmentation.
The industry's growth has been fueled by a robust educational system that produces millions of skilled IT professionals annually with the skills required for the global IT market, with India's favorable time zone for global collaboration.
This has helped to attract clients from around the world. Its shift towards digital transformation with advanced technology and a business-friendly environment has attracted many multinational companies to set up operations in the country. This has led to the development of a strong IT ecosystem, with many companies offering a wide range of services to clients in different industries.
India's government has also supported the IT industry, with policies and incentives designed to encourage investment and growth in the sector. A huge range of growing middle-class populate driving the demand for its outsourcing service areas including software development.
Indian IT companies are known for their expertise in emerging technologies like AI, cloud computing, and cybersecurity, making them strategic partners for businesses worldwide.
The industry's adaptability and focus on continuous innovation have solidified India's position as a key player in the global IT landscape.
Overall, the IT Outsourcing market in India is expected to continue to grow in the coming years. Clients are looking for companies that can provide quality services at a reasonable price, focusing on digital transformation and different DevOps methodologies. As the market evolves, companies that can stay ahead of these trends will be well-positioned for success.
Sri Lanka
In South Asia, Sri Lanka has become a well-liked location for software development teams seeking to add qualified personnel to their workforces. Because of its competitive advantages, this nation has grown in popularity as a destination for IT outsourcing in recent years.
Sri Lanka is expanding significantly thanks to its supportive government, good business conditions, and high literacy rates. By 2024, the Sri Lankan IT outsourcing market is expected to generate US$292.80 million in revenue. Due to government initiatives to position the nation as a center for business process and IT outsourcing, experts predict that the market will grow at an annual rate of 1.38% from 2024 to 2029, reaching a volume of US$313.60 million. It has a burgeoning software development sector that places a premium on quality and provides affordable prices.
This country's IT industry offers a compelling value proposition with its highly skilled professionals, competitive pricing, and convenient time zone. The average spending per employee in the IT outsourcing market in Sri Lanka is expected to reach US$33.31 by 2024. In addition, the average hourly rate for a software developer in Sri Lanka ranges between $28 and $140, depending on the expertise required.
One major reason global companies choose Sri Lanka for team augmentation is the cost-effective outsourcing services. The workforce cost rate is lower than the average cost worldwide because lifestyle expenses are more affordable here. With a high focus on education and training, the nation boasts a literacy rate of over 90%. People in this area are highly regarded for their fluency in English, which facilitates communication in the global marketplace.
The government has also implemented policies to encourage the growth of the IT industry, such as tax breaks, investment incentives, and the establishment of technology parks. Furthermore, Sri Lanka's strategic location and favorable time zone make it an appealing destination for businesses from Europe, the Middle East, and Asia.
Compared to other South Asian outsourcing destinations such as India or the Philippines, Sri Lanka provides competitive pricing while maintaining high-quality standards. These cost advantages entice global companies to outsource without sacrificing work quality.
Sri Lanka provides strategic advantages for multinational corporations due to its location at the intersection of important shipping lanes and near important markets in Asia, Africa, and the Middle East. Additionally, Sri Lanka's location and increasing regional connectivity have aided in the expansion of the IT outsourcing sector, with the country acting as a gateway to the South Asian market.
Vietnam
As Vietnam transitions to a service-oriented economy, the country's information technology (IT) market has grown steadily, competing with other leading South Asian countries such as China and India.
Vietnam is a top South Asian destination for cost-effective software outsourcing. The country's annual outsourcing growth rate is around 13.31%, making it a significant player in the global IT outsourcing industry. With a strong emphasis on outsourcing software development, digital content, and business processes, Vietnam is expected to grow from $534.90 million in 2023 to $881.90 million in 2027.
Vietnam has significant financial benefits from IT outsourcing, which attracts outsourcing hiring companies. According to Kearny's Global Service Location Index, the country has highly skilled young professionals, lower living costs than most South Asian countries, and favorable government business policies and availability, making it one of the top six best locations for IT outsourcing.
The transition to higher value-added software development services is one of the Vietnam IT outsourcing market's strengths. The growing number of skilled experts in Vietnam drives up demand for creative and customized solutions for international clients.
Furthermore, there is a trend toward greater collaboration between outsourcing providers and clients, with an emphasis on developing long-term partnerships and co-creating solutions.
Another trend in Vietnam's IT outsourcing market is the increased use of emerging advanced technologies. Most of Vietnam's tech-savvy young professionals have studied or worked abroad, so they are familiar with various business practices and cultures. These factors make it easier for outsourcing companies to work with clients in other regions.
In recent years, stable political conditions and rapid economic growth have drawn the global outsourcing software development industry. Furthermore, Vietnam's membership in the ASEAN Economic Community and other regional trade agreements has helped to expand the country's IT outsourcing industry into new markets.
Philippines
The Philippines has become a major player in the IT outsourcing market, attracting many companies to outsource their IT services to the country.
Customer preferences: One of the main reasons for this is the Philippines’ highly skilled workforce, particularly in the IT sector. The country has a large pool of young, educated, and English-speaking workers who are able to provide high-quality IT services at a relatively low cost. Additionally, the country’s cultural affinity with Western countries, combined with its timezone, makes it an attractive location for companies looking to outsource their IT services.
Trends in the market: The IT outsourcing market in the Philippines has been growing steadily over the past few years, with many companies choosing to outsource their IT services to the country. One of the trends in the market is the increasing demand for cloud-based services, which has led to the growth of cloud-based outsourcing in the country. Another trend is the increasing demand for artificial intelligence (AI) and machine learning (ML) services, which has led to the growth of AI and ML outsourcing in the country.
Local special circumstances: The Philippines has several special circumstances that make it an attractive location for IT outsourcing. One of these is the country’s strong government support for the IT industry, which has led to the development of several IT parks and special economic zones. Additionally, the country has a large pool of young, educated, and English-speaking workers who are able to provide high-quality IT services at a relatively low cost.
The Philippines’ strong economic growth and stable political environment have also contributed to the growth of the IT outsourcing market in the country. The country’s GDP has been growing at a steady rate over the past years, and the government has been implementing policies aimed at attracting foreign investment, including in the IT sector. Additionally, the country’s stable political environment has helped to create a favorable business climate for IT outsourcing.
Conclusion
Finally, team augmentation is the best approach for strengthening your team's capabilities and increasing efficiency. It has emerged as an important strategy for businesses looking to improve their capabilities, scale efficiently, and meet project demands without the difficulties that come with traditional hiring. South Asia stands out as a top destination for IT team augmentation, offering unparalleled cost savings, a highly skilled talent pool, and a collaborative advantage due to cultural and linguistic compatibility. With its strong growth and evolving expertise, the region continues to assist businesses around the world in achieving innovation and success in the fast-paced global software development environment.
