Outsourcing to Armenia, benefits and rates

The long-term economic changes amid the pandemic have changed the global infrastructure which now faces negative employment where there are vacancies and not enough specialists with the right skills. Larger markets like the US have started considering outsourcing to new directions like Eastern Europe, where there is a strong focus on science, technologies, and engineering. 

Newcomers to Eastern Europe will be surprised to find a fast-developing and already prosperous talent pool with innovation-oriented developers. The new market is already valued as the most promising outsourcing destination, offering drastically lower rates than North America, Western Europe, and Latin America. 
 

According to statistics, in 2019, there were about 26.4 million outsourced software developers in the world. The number is expected to grow to 28.7 million by 2024. The growing number of specialists still doesn’t cover the demand for in-house and offshore partnerships. 

Most offshore talent pools, such as Western Europe or North America, are overfished or overpriced; as a result, Eastern European countries are now being evaluated as more appealing destinations due to their strong emphasis on technology, engineering, and science. 

10 reasons to outsource to Eastern Europe and Armenia

Why is it worth outsourcing IT services to Armenia?

Reasonable Costs

Compared to the US, Canada, and Western Europe, Eastern Europe, including Armenia, offers a reasonable price-quality ratio. Of course, there are cheaper destinations in Southeast and South Asia, but often partners report low quality, miscommunication, and distrust against those agencies. With a solid technical background, talents from Eastern Europe can cover scalable projects at a lower price than those in North America and Latin America. Check out the regional comparison of outsourcing rates. 

Use IT outsoursing rates tool by country to discover which country offers better outsourcing rates and benefits. 
 

As far as we are evaluating Armenia’s IT sector and the price range of the region, it is worthwhile to break down IT outsourcing services’ rates per country for Central and Eastern European countries and the Balkans as well. 

Growing Talent Pool

The global shortage of skilled professionals is now partially covered by Eastern European professionals that offer a highly-skilled talent pool covering all the digital processes. In 2021, the region already counted 1.3 million experts. 

Quality Technical Education

The backbone of the outsourcing industry in Eastern Europe is quality education, with a 98.99% literacy rate. The region’s students focus on computer science, math, and languages, picking the most in-demand technical degrees in the global market.

Armenia invests in education to become a more attractive outsourcing destination and compete with larger countries. The country has been financing the “university-private sector cooperation for training specialists” educational program since 2020, which is already bearing fruit in engaging the younger generation in computer science. The companies run internships to give practical knowledge to beginners and have them as ready assets. 

Flexible Working Hours

The countries of Eastern Europe are easily accessible due to their time zones and locations. Even if there are five to eleven hours of time difference, already experienced agencies manage to collaborate without discomfort for both parties.

Even if the Armenian outsourcing agency has a time difference from an offshore partner, the working culture and policy suppose flexible working hours, making collaboration stressless, professional, and transparent.

Cultural Fit 

Even though cultural fit has little to do with expertise, companies DO pay attention to cultural similarities. That is why Eastern European countries are the most attractive for following business etiquette, providing easy interaction, and maintaining efficient collaboration. 

The generations of graduates from international universities - American University of Armenia, Eurasia International University, and French University in Armenia (UFAR) - have greatly contributed to nurturing IT specialists to work in different cultures.

Growing IT Community

With the growing demand for qualified IT experts, the region's countries increased their outsourcing capacity, offering more specialities and covering more industries. 

As for Armenia, the environment is highly conducive for tech startups, with tax incentives to support IT ventures. 

Focused on innovation

Local agencies and individual entrepreneurs show great potential and proactivity in keeping pace with technologies and being the first to adopt innovations. It means the region’s agencies can execute even the craziest projects.

High English proficiency

Most Eastern European countries have a good command of English with moderate to high English proficiency. It is definitely one of the predominant factors defining competitiveness. As for Armenia, language proficiency among outsourcing companies reaches upper-intermediate to advanced levels.

Favorable business climate

Eastern Europe and countries involved in outsourcing IT services are known as reliable IT outsourcing destinations for the laws of a healthy business environment. Most Eastern European countries are ranked high in the Ease of Doing Business Ranking by the World Bank and Bloomberg Innovation Index.

With technological readiness, Armenia has got a 47 score in the Ease of Doing Business, overtaking other Eastern European countries like Poland and the Czech Republic.

Ease of team scaling

With a large talent pool, outsourcing companies in Eastern Europe cover all digital processes, from engineering to design and marketing. This is extremely convenient for partners looking to outsource more than one process. 

Armenia already has great potential to offer, and it is time to think of expanding your services through outsourcing to new directions. Considering Armenian IT talents your potential partners? Check out our services. 

We are slowly approaching the major topic of the article, the detailed Eastern European outsourcing rates.

About the report

The following whitepaper covers ten Eastern European countries with expert insights and statistics evaluating the potential of outsourcing. The survey reveals the overall business climate of the region, including readability for partnerships, availability of corporate financial information, and the average credit risk based on financial, political, and economic data. 

Outsourcing rates in Eastern Europe compared to other regions

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Software Outsourcing Insights in Eastern Europe

The following data is based on the research of Eastern European software development agencies to estimate the average rate and provide a comparison between 2018-2019 and 2020-2021. The data and numbers for 2022 are generated based on extensive research. If you want to get more insight into outsourcing rates, per country and per profession, contact us. The research is carried out for 11 countries in total, focusing on Armenia as the main research topic. 

How Countries are Assessed

Software Outsourcing rates per country for 2018-2019 and 2020-2021

*The rates are calculated for medium-to-large companies (with 51-250 employees) offering their rates in different directories ready to outsource IT services.

*If you need a more detailed survey and statistics, including the rates per country, per profession, and level of expertise for a particular region, send us a message and we will provide you with up-to-date data. You can also check these outsourcing rates and country comparisons.

The survey for the past 4 years has shown Armenia is so far one of the most affordable destinations for IT outsourcing, providing a high level of expertise and covering top popular technologies including Blockchain, machine learning, Fintech, and cyber security. Again, as shown above, from the grand total monthly rates of Eastern European countries, Armenia has got 73% lower rates. 

Eastern Europe Outsourcing Rates Comparison

Armenia as an emerging direction for outsourcing

Already popular as an IT outsourcing destination among CIS and Middle East countries leading with high-tech research and development. In the past 5 years, Armenia has expanded its geography, competing with Eastern European countries as an attractive outsourcing destination. 

The small country in the Caucasus-Caspian region under the UTC+4 (AMT) time zone has a population of less than 3 million, but the IT sector already counts over 20.000 specialists. Both agencies and freelancers provide a wide range of services, including research, web and mobile software development, data science, computer science, and marketing. The major destinations for outsourcing are the USA, Canada, and Western Europe.

Armenia’s outsourcing market analysis

The main focus of this survey is the IT sector, one of the main driving forces of the economy. In 2020, the ICT segment accounted for 5.1% of the GDP of the Republic of Armenia. To compare, the growth rate in 2019 was 4.7%. Leading with the exporting values of manufacturing high-tech among the Caucasian countries, Armenia’s ICT sector is valued at about $137 million for Q3 2021. Over 1000 large and small agencies (including startups) with more than 20.000 specialists are operating, currently covering over 76 services and industries. 
Armenia appears to have favorable conditions for partnering with outsourcing agencies, with the following benefits to the global digital market;
 

• The resources and ability to carry out scientific research and experimental work.
• Along with a great number of web and mobile software engineers, there is an untapped talent pool of marketing and data specialists ready to add value.
• University foundation programs in IT; multiple internship programs, growing but still a low-cost labor force with a high level of competitiveness, and low operating costs.
• Sustainable and continuous improvement of the IT sector
• Experience in outsourcing and partnering with large transnational companies.
   

What is the future of outsourcing to Eastern Europe and Armenia? Bottom line

The truth is, the future is quite promising. With the development and expansion of technology, outsourcing services have become more accessible, safer, and more effective. Large companies outsource to save resources and find talent, ignoring the distance.  

The world is living in the days of big changes and growth in the digital environment, and it is an excellent chance for Armenia to promote its capabilities and become one of the most reliable outsourcing destinations with high-quality services and specialists. If you are still afraid of the challenges and mistakes of outsourcing, here is a useful guide on how to avoid them.