What Type of Outsourcing Could Australia Benefit from?

Vlada Sirosh
Research Specialist

Updated – August 29, 2023

Let’s understand why Australia needs outsourcing in the first place and why such countries like Armenia and Kazakhstan can help it.


Why Australian Companies Outsourcing Overseas?

At the outset of the pandemic, Australia experienced a significant shortage of skilled labor across various sectors, including the tech industry. And the appearance of a highly-transmissible variant of the virus has exacerbated the problem. 

This issue holds Australia back from more robust economic development, so the government has implemented a set of initiatives that can close the skills gap. Yet, the shortage of programmers occurs because the required specialists aren’t moving to the country, making it impossible to fill the needs of a software development industry. 

The number of available specialists isn’t enough to account for demand. If Australia manages to close the skills gap, it could significantly improve its economy and development opportunities. 

But the question is—how to address the tech skills shortage in Australia if the country isn’t experiencing the influx of skilled developers? Qubit Labs has the answer—leveraging outsourcing in Australia by cooperating with specialists from such locations as Armenia and Kazakhstan.


How Large is the Software Development Industry in Australia?

As per Deloitte, the overall growth of digital technologies in Australia is around 75% per year. Meanwhile, the local digital sector is forecasted to increase by 40% by the end of 2023. Also, the country is known as one of the fastest-growing education and technology centers in the Asia Pacific region. It’s an attractive location for engineering students and tech specialists who are ready to embark on the career opportunities offered by the country. 

As of 2021, the approximate number of companies registered in the country was 225,000. And a significant part of them are custom software development companies. The local talent pool includes over 110k developers. The market is set for growth, and Australian companies are expected to increase their spending by 11.7%, mentions AFR. 

Software development in Australia is set for growth, but it won’t achieve the desired goals if it doesn’t have enough workforce. And the labor market is one of the troublesome spheres of the country. The shortage of programmers in the country is real, continuing to grow each year. Recent research by Deloitte suggests that by 2024, the tech skills shortage in Australia will reach around 100,000 developers. 

Although there are thousands of startups and companies in the industry of software development in Australia and a massive demand for their services, they can’t deliver the requested results. This is because they don’t have enough specialists, or the rates of those who are available are over their budget.

Thus, many of them face the question: “what type of outsourcing could Australia benefit from?”


The Increased Demand for IT Outsourcing in Australia

Now, as we have addressed “how large is the software development industry in Australia,” we clearly see that the competition for talent in Australia is high. So, local companies understand that attracting external suppliers is a must, not an option. 

For most startups, it’s critical to decrease their expenditures to be able to stay afloat, so reducing labor costs by outsourcing their software development projects is one of the go-to choices for local organizations. Most businesses have had to scale back full-time employees, which posed several operational challenges.   

They seek solutions that offer flexibility and would make them face the constant cost-pressures. Yet, they still need to get the work done and want to make sure it fits the required standards and is of the required quality. Outsourcing in Australia is a solution that helps businesses grow and be confident in their capacity. Also, it offers the tools that the organizations can’t achieve in-house.

Besides, Australia can tap into the global talent market when attracting developers from abroad, which offers cooperation with vetted specialists who can bring valuable knowledge to the companies. Additionally, it’s more cost-effective and allows businesses to scale up teams or decrease the number of team members whenever needed. 


What is the Role of Armenia and Kazakhstan in Outsourcing for Australia? 

Now we can finally explain how software development in Australia can benefit from outsourcing its services to Armenia and Kazakhstan.


Let’s start with Armenia for IT Outsourcing Australia.

This country is one of the most attractive destinations for such tech giants as Intel, Microsoft, and Google because they all have a physical presence there. The country can help address the shortage of programmers in Australia thanks to its vast pool of developers, the number of which keeps increasing. Armenia also boasts low hiring costs and well-established hiring processes. 

Many local tech specialists work in American and European IT industries, gain vast experience, and hone their communication skills. After spending a certain time abroad, they return to Armenia, attracting both local and foreign businesses. 

The Armenian tech sector has been growing at a rate of 27% for a couple of years, and local startups and custom software development companies easily make it to the international market, quickly becoming competitive. 

Some of the reasons why outsourcing in Australia can benefit from cooperating with Armenian developers are the following:

  • The number of IT enterprises and tech specialists is continuously increasing. The turnover volumes in the country have increased dramatically over the last couple of years.
  • Companies engaged in software development in Australia can hire developers in Armenia for as little as $2,000–$3,500 per month (while it’s $5,000–$7,500 in Australia).
  • Strong education programs and notable development capabilities, especially in the fields of engineering, computer science, physics, and mathematics.
  • Affordable labor expenses and operating costs.
  • The government is committed to improving the investment climate and offers strong support for the tech sector.

Therefore, Armenian tech specialists can help fight the tech shortage in Australia because they have extensive experience working with the Western market. Also the local IT sector consistently grows. There’s no need to worry about the distance or time differences because local programmers are flexible and can offer solutions on how you can synchronize the work with your remote team in Armenia. 


Now, let’s see how Kazakhstan can help address the shortage of programmers in Australia.

Kazakhstan is open to digital transformation, and its IT sector receives significant government support in the public and private sectors. Its tech ecosystem specializes in GovTech, smart city tech, and FinTech areas

The local government aims to increase the export of Kazakh IT products to $500m and produce around 100k highly-qualified IT specialists by 2025. Kazakh tech companies offer a bunch of benefits for software development in Australia, including a relatively low threshold to the sphere and skilled specialists. 

Its IT market is gaining momentum, offering many opportunities to build, test, and promote products without facing immense competition. The country is known for qualified engineers eager to gain practical experience and are enthusiastic about their jobs.

Other reasons why outsourcing in Australia can benefit from hiring Kazakh developers are the following:

  • There are over 8,000 tech companies in the country.
  • The IT sector is one of the key industries in the country that significantly affects its GDP.
  • Custom-made software is one of the most exported Kazakh products.
  • Building an R&D center in Kazakhstan is a cost-effective solution.
  • The volume of exports of IT services in the country has increased during the last couple of years thanks to creating a catalog of tech products and a program that helped local IT companies adapt to the foreign markets’ needs. 

Since we already know the answer to the question about how large is the software development industry in Australia, it doesn’t come as a surprise that Kazakhstan is one of the most popular outsourcing destinations for the country. Time zone differences won’t hinder the working processes because Kazakh developers already have experience in cooperating with foreign companies.


Qubit Labs — a Reliable Partner for IT Outsourcing Australia

Hiring software developers in Ukraine is an alternative to cooperating with employees from Armenia and Kazakhstan. Besides, the Ukrainian talent pool is larger than in the mentioned countries, notably around 252,000 developers. Local tech specialists have substantial experience of working with companies from different countries, so they’re flexible enough to match Australian business’ needs. 

Qubit Labs is one of the leading Ukrainian offshore development vendors that understand the peculiarities of working with foreign companies. We can match you with specialists from Ukraine, Romania, Bulgaria, Moldova, Kazakhstan, Georgia, PolandAzerbaijan, Brazil and Mexico according to your requirements and budget. 

Want to discuss details? Reach out to us to schedule a free consultation call.


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Vlada Sirosh
Research Specialist

Vlada Sirosh is a research specialist at Qubit Labs with 5+ years of experience working in the information technology and analytics industry.