Cost Savings and Other Benefits of Offshoring Your Tech Team

Author: Taslima Akhter,

UI/UX Lead at Zensprint

Published: Oct. 5, 2023

Modified: Feb. 2, 2024


For most tech startups and software companies, one of the biggest expenses is building and maintaining an in-house engineering team. In high cost regions like Silicon Valley, the average base salary for software engineers now exceeds $100k.

When non-wage labor costs like benefits, employer payroll taxes, equipment, facilities, and equity packages are factored in, the fully loaded cost per domestic engineer can exceed $150k or more.

Offshoring parts of your tech team overseas to regions like South Asia, Eastern Europe, and Latin America yields significant cost savings in terms of lower salaries and non-wage costs:

- Developer salaries can be 50-80% lower than US/UK averages depending on country.
- Employer taxes, healthcare contributions, and equity incentives are far lower.
- Operations like facilities, equipment, and HR can be managed more efficiently.

But for many startups and tech companies, cost is only one potential benefit. Offshoring with an experienced partner like Zensprint also provides:

- Access to specialized talent and expertise that may be scarce domestically. Certain skills like mobile development, DevOps, and QA automation can be hired more easily.
- Flexibility to scale up or down rapidly based on product needs without high severance costs or delays. Offshore headcount can be adjusted much quicker.
- Increased productivity and velocity versus domestic staff due to process rigor and work ethic. Time zone gaps also allow nearly 24/7 development.
- Higher quality code and products ensured by rigorous testing, code reviews, and QA processes. Bugs can be caught earlier.

For resource-constrained startups running lean, offshoring is a powerful way to get exponentially more ROI from limited budgets. By tapping global talent pools, teams can scale efficiently while controlling costs.