Software Development Outsourcing in Bangladesh
Over the past decade, Bangladesh has been growing in popularity as an outsourcing and offshoring destination. In this article, we discuss the main reasons for the growth of IT offshoring to Bangladesh, the current IT sector state, the pros and cons of outsourcing IT services to Bangladesh, and what are the outsourcing alternatives to Bangladesh to consider.
Why Companies Tend to Outsource Software Development to Bangladesh
Bangladesh has long attracted business interest as a large and affordable resource for remote workers. Although unlike India, Bangladesh primarily provides sales and marketing professionals, thanks to continuous government support, it already supplies more than 16% of total online workers in the BPO sector, according to the Online Labour Index of Oxford Internet Institute. More and more companies that used to hire dedicated developers India are now weighing the possibility to expand or move their BPO and software development outsourcing to Bangladesh.
Although most of the local workers specialize in marketing, back-office, and customer support services, over the past years, the volume of software development outsourcing to Bangladesh has been rapidly growing as well as software outsourcing companies in Thailand.
There’s still room for growth for the IT labor force pool and expertise. Yet, currently, the software development Bangladesh sector counts more than 40,000 specialists working in the BPO sector and 500,000 freelance IT specialists seeking one-time and long-term projects, as reported by the IndependentBD. As mentioned by the same source, the biggest IT services operators in Bangladesh include Genex Infosys LTD, Dutytaker, Fifotech, assisting world-famous corporations, such as Coca-Cola and Samsung.
The government is actively supporting the software outsourcing Bangladesh sector as the main potential for the development of the country’s economy and is trying to adjust all the relevant laws to attract foreign investors. Thanks to the continuous government efforts and support of the IT sector, a growing number of companies now considers IT outsourcing in Bangladesh as a lucrative option. The country offers incentives to stimulate the IT outsourcing sector, such as:
- Tax reduction for the work of foreign employees up to 50% in the first three years;
- Exemption from VAT when renting offices for software development outsourcing in Bangladesh;
- Restrictions on foreign capital ownership in Bangladesh have been removed.
Besides, Bangladesh is one of the cheapest labor providers, offering an hourly minimum wage of ৳210.00 ($2.47), according to PayScale, which is almost half the wages in the Philippines or India.
Since Bangladesh is a large country with over 163 million inhabitants, 65% of whom are young people, there’s a constant influx of young talent. Potentially, according to IndependentBD, by 2024 Bangladesh can become one of the central providers of low-cost labor resources in Asia and globally.
Let’s take a look at the main characteristics of the IT market in Bangladesh.
IT Market in Bangladesh: Overview
The software development Bangladesh market is burgeoning, witnessing a substantial growth rate of 13.35%. The sector is diversified, housing approximately 19,000 Bangladesh software development companies and a robust workforce of around 750,000 IT professionals. The nation’s tech export value stands at 93 million USD, indicating a significant contribution to the global IT landscape.
Given the fluid and rapidly changing landscape of the IT sector, the data we have currently only provides a snapshot of the continual advancements and evolution happening in the industry. Staying informed about the latest trends and shifts in the sector is essential for anyone looking to have a well-rounded understanding of the market dynamics.
Navigating the Tech Scene in Bangladesh
Bangladesh is emerging as a dynamic hub in the tech world, marked by rapid growth and innovation. With a multitude of software development company in Bangladesh sprouting across cities like Dhaka, Chittagong, and Khulna, the country is becoming a nexus of technological development.
In Dhaka, the bustling capital city of Bangladesh, a significant concentration of software developers can be found, given its status as the country’s economic and technological hub. The average salary in a software development company in Dhaka is $850, with the city hosting 1300 developers, contributing to various domains of the IT sector.
Chittagong, the principal seaport of harbors, has a substantial number of top software developer in Bangladesh, which is vital to the city’s diverse industrial base. The developers here earn an average salary of $450 and the city is home to many software developers, reflecting the city’s economic vitality.
Khulna, renowned for its myriad of industries, has software developers integral in melding technology with the city’s diverse sectors. The average salary for a software developer in Khulna is $450, and the city accommodates 1000 developers, indicative of the growing IT sector in the region.
Rajshahi, a city steeped in cultural and historical richness, sees a burgeoning demand for the best developer in Bangladesh to fuel its modernization efforts. The average salary in Rajshahi for software developers is $550, with 950 developers working on a range of IT projects contributing to the local economic framework.
Comilla, blending its ancient heritage with modern advancements, relies on software development firm in Bangladesh to enhance its technological footprint. The average salary of a software developer in Comilla is $450, with the city being home to 480 developers, reflecting the synthesis of tradition and modernity in the region.
Advantages and Disadvantages to IT Outsourcing in Bangladesh
When it comes to outsourcing IT services to any foreign country, there are some pros and cons to consider. Let’s explore the benefits of outsourcing Bangladesh and why the country comes as an attractive outsourcing destination:
- Cheap rates are the main advantage for businesses looking for an outsourcing location;
- A large, young, rapidly growing talent pool;
- Strong government support of the IT sector and IT outsourcing in Bangladesh, in particular;
- Clear conditions for business development and outsourcing;
- Convenient location and time zone difference for businesses located in Singapore, Japan, Australia, New Zealand, etc.
To sum up, software development outsourcing to Bangladesh offers a huge number of young and educated workers who are ready to provide quality work for little money.
However, despite the promising and welcoming conditions for outsourcing to Bangladesh, the country has several problems that should be considered before hiring IT experts or dedicated teams located in the country.
Among the disadvantages of outsourcing Bangladesh programmers, it’s worth to take into account the following:
- It’s hard to find senior-level IT experts, as the talent pool consists mostly of young specialists;
- Poor Internet connection across the country;
- Low English proficiency, compared to other popular outsourcing destinations;
- Many local IT companies don’t have yet have international working experience;
- Inconvenient time zone difference for companies located in the US and Europe;
Unfortunately, the pandemic has negatively impacted offshore software development in Bangladesh, shrinking the workforce due to quarantines. Most companies outsourcing and offshoring to Bangladesh have difficulty transferring employees to remote working due to poor Internet bandwidth when operating from non-central offices.
Developer Salaries in Bangladesh: A Comprehensive Overview
The Information Technology (IT) sector in Bangladesh is witnessing a period of dynamic growth and transformation. The influx of varied IT roles in the market has created a diverse spectrum of salary structures for Junior, Middle, and Senior developers in Bangladesh outsourcing company:
Alternatives to Software Development Outsourcing to Bangladesh
The outsourcing and offshoring to Bangladesh growth rapidly, turning the country into the second-largest Asian workforce provider after India. However, if you are looking for more stability and shorter distances, it may be beneficial considering other outsourcing destinations.
Taking into consideration all the advantages of software outsourcing in Bangladesh, it’s still not a ‘one-fits-all’ solution, and it’s absolutely okay to seek more suitable alternatives for your business.
Although Asia was one of the earliest IT outsourcing hubs, nowadays, Eastern Europe (and Ukraine, especially) is gaining momentum, and that’s for a reason. Here are the undoubtful benefits of outsourcing software development services to Ukraine, a bright representative of IT-skilled Eastern European countries:
- Huge IT labor force pool (200,000 IT specialists);
- Highly qualified, versatile IT experts;
- High education level (14 million people in Ukraine obtain higher education, as per the KPMG 2019 report);
- Good reputation of Ukrainian programmers, according to Mobilunity clients’ feedback;
- Affordable hiring costs;
- Convenient location for companies with European headquarters;
- Minimal time zone differences;
- Similar business culture;
- Ukraine shares European values;
- No risks of natural disasters;
- Full compliance with GDPR and other data protection regulations.
Why Is Ukraine a Perspective Alternative to It Outsourcing in Bangladesh?
Nowadays, Ukraine is a rapidly growing outsourcing haven, and more and more companies are interested in outsourcing IT services to Ukraine or even open R&D/SSC centers in the country.
Ukraine moved up to the 20th position in the Global Services Location Index, thanks to the rapid infrastructure development and improved business environment, becoming a more and more approachable and lucrative destination for outsourcing.
The latest KPMG report also mentions Ukraine as a convenient and labor-saving destination that shows the significant growth potential of the IT talent pool. Besides, the Deloitte 2020 survey indicates that numerous global companies, such as Samsung Electronics, Apple, IBM, have opened their R&D centers in Ukraine, which denotes the growing demand and interest in the country’s experts.
Summarizing Specifics of IT Outsourcing in Bangladesh vs Ukraine
To provide a full picture of the possibilities and perspectives of outsourcing in Bangladesh vs. Ukraine, we have composed the most relevant information on both locations in the table below:
|Size of a tech talent pool
|Low (#63 in EF EPI 2020)
|Moderate (#44 in EF EPI 2020)
|Average monthly rate (middle-level IT expert)
|23,900 BDT ($282), according to PayScale
|$2000, based on Mobilunity’s Recruitment Team research on the local job markets
|High for Junior experts, low for Senior programmers
|Risks related to natural hazards
|Data safety and insurance
|Moderate (#65 in global NCSI)
|High level (#25 in global NCSI)
|Quality to price correspondence
|Moderate (cheaper cost for moderate quality)
|High (high quality for affordable cost)
|Ease of doing business
|Hard (#168 in the 2020 World Bank’s Ease of Doing Business rating)
|Relatively easy (#64 in the 2020 World Bank’s Ease of Doing Business rating
As can be seen from the summary table, each country can boast of a number of advantages but delivers some possible pitfalls as well. Depending on your company’s needs, requirements, budget, and deadlines, you can choose the right outsourcing destination for your project.
Although it’s possible to find IT outsourcing services in Bangladesh for a cheaper price, the downsides and risks, such as low quality of work, poor internet stability, and low data security, make Bangladesh quite a risky move for global businesses. On the other hand, Ukrainian codes are known for impeccable programming skills and have a strong reputation on the global market.
Whether you decide to settle on Bangladesh, Ukraine, or any other outsourcing location, make sure to cooperate with a credible local IT services vendor to ensure smooth management and great performance of the hired IT specialists.
Hire developers in other Countries
Expand your team’s capabilities by recruiting top-tier developers from around the world. This approach allows you to leverage diverse skills and cultural perspectives, enhancing innovation and technical excellence in your projects.
Mobilunity – Elevating Your IT Journey in Bangladesh
Outsourcing IT services needs a partnership with a steadfast and knowledgeable provider to ensure you secure the optimal IT professionals tailored to your project needs and organizational objectives. Mobilunity stands as a distinguished IT entity, specializing in connecting businesses, ranging from startups to large enterprises, with proficient software developers imbued with extensive experience.
With nearly a decade of presence in the global arena, our acumen in sourcing premier programmers and constituting efficient remote teams is unparalleled. Whether you are looking to hire Node JS consultants or a dedicated MERN developer, Mobilunity is your go-to resource to elevate your software development endeavors in outsourcing company in Bangladesh. Reach out to us to discover and engage with top-tier specialists!
Feeling overwhelmed by the challenges of finding specialized talent and managing outsourcing details? Let the experienced team at Mobilunity make things easy for you! We’re here to quickly connect you with skilled software developers and make sure you have a dedicated, expert team ready to bring your visions to life without delay.
Mobilunity Service Models: Crafting Solutions to Meet Diverse Needs
Mobilunity offers a spectrum of service models, designed to cater to diverse business requirements and technological landscapes. We provide dedicated development teams, insightful consultancy services, and adaptive recruiting services, each tailored to meet the specific needs and objectives of our clients. These models deliver a balanced blend of flexibility, expertise, and support, enabling businesses to surge ahead with enhanced strategic insight and confidence. Discover how Mobilunity can amplify your organizational growth and help in navigating your industry effectively.
- Dedicated Development Teams
Mobilunity’s primary service model is offering Dedicated Development Teams, where clients assume direct management of full-time resources. In this model, clients maintain control over the project’s direction and day-to-day tasks of the dedicated team. Mobilunity facilitates this by handling all HR, accounting, and help desk inquiries, allowing clients to focus solely on the project at hand. This approach ensures seamless collaboration and alignment between the client’s vision and the dedicated team’s execution.
- Consultancy Services
Our Consultancy Services are designed to provide clients with the flexibility of managing part-time resources directly. Similar to our dedicated teams model, we relieve clients from the administrative overhead by addressing all HR, accounting, and helpdesk-related matters. This service is ideal for organizations seeking specialized knowledge and insights on a more flexible and transient basis, allowing them to leverage expert advice and skills precisely when needed.
- Recruiting Services
Mobilunity offers Recruiting Services as a recruiting-as-a-service model. We excel in local hiring in offshore software development company Bangladesh and scouting the best candidates across Eastern Europe, meeting diverse talent needs. We have successfully hired developers in various countries, including Croatia, Serbia, Kazakhstan, Azerbaijan, Albania, Peru, and Tajikistan, showcasing our global reach and local expertise in securing the right talent. This model underscores our commitment to providing our clients with the ideal candidates, whether they are located domestically or internationally.
Ready to experience unparalleled service and elevate your business to new heights? Partner with Mobilunity, a top-tier outsourcing company in Bangladesh, to unlock boundless possibilities and innovative solutions tailored just for you.
All salaries and prices mentioned within the article are approximate NET numbers based on the research done by our in-house Recruitment Team. Please use these numbers as a guide for comparison purposes only and feel free to use the contact form to inquire on the specific cost of the talent according to your vacancy requirements and chosen model of engagement.