The existing answers are good, and I agree with most of the price ranges that are mentioned. There is a huge range in rates and they are most affected by the region and the type of organization you are dealing with.

For example, a small shop in E. Europe that is exceptional in Ruby and has professional management, great communication skills, and the ability to work agile (for real) is going to cost in the high 30's. A company in the same region but with less mediocre communication skills will get you into the 20's, but it won't be the same experience. In India, it's similar but the entire price range is a bit lower.

In order to understand how much you should pay, we use a simple approach like this:

- we figure out what kind of client you are. are you a bootstrapped startup? are you techy? can you manage it from your end? Do you have time to take on a lot of QA? are you experienced with this?

- knowing your client profile we can determine what kind of vendor will be successful with you. if you are an experienced client, have outsourced before, and know the ins and outs of software development you can work with freelancers, boutique shops, etc. if you are inexperienced with software and haven't managed this kind of thing, we might look for more of an agency type shop that will provide really good PM and awesome communication, etc. If you are pretty experienced and going long-term, you might consider an ODC model, too.

- Knowing the type of client you are and thus, the type of vendor you need allows us to recommend a region and specific development shops for you. When we know what/where we're looking for, it becomes easy to answer that magic question ,'how much should I pay?'.

This is basically the process that our entire business is based on :) Check out this video series that explains the process in more detail (complete with 2014 pricing numbers).

Good luck, and feel free to reach out if you need any help choosing that perfect development shop. They are out there.

Assuming that the company is reputable and they have:
A. already accomplished multiple similar nature projects,
B. enough project management and risk management experiences,
C. proper Agile or Scrum development strategies,
D. clear reporting mechanisms for their clients (in this case for you)
E. at least some sort of PPS (post production support) to fix the first and important bugs before your lunch your product

I think anything from $25-30/hour for 2 person team can be a good hourly rate for you.

Also based on my experiences finding a decent ROR developer is much harder than for iOS/Android developers or those working with other web technologies. This applies both for North American as well as for offshore resources.

Myself I have been an inside sales manager for Armenia based software development company for over a year, worked also in India in their IT hub Bangalore for 4-5 months Currently I am doing marketing consulting for some of the biggest software development companies from North America.

I would be happy to have a call if you want to know the best sources to find your developers as well as most important aspects to look at before signing your contract with them.

Best Regards,
Artash

I would ask a few questions up front.

1. Is this a one time project?
2. Will this project need updating in the future?
3. Have you done any outsourcing before?
4. Are you sure you can manage the project within that 4 month period.

You can definitely get a firm to outsource your project for you at between 20-40 dollars an hour. However, if you just hire remote employees full time it will usually cost you half the price of the firm and you'll be able to manage the people yourself, won't be abandoned when the project is 'done' and can have them refine features as your needs change.

For a legitimate small to mid-sized software development shop that focuses on RoR (you don't want too large a firm that won't treat you as important and you don't want a firm that says they do anything and hires to your specs) you should pay 20-30 (US$) in Asia, 25-35 in East Europe and 30-40 in Latin America. The key is to make sure they are experienced and passionate about Ruby, large enough to scale but small enough to care, they can leverage experience to maximize your efficacy, their culture matches your expectations, they have proven agile best practices, they are ethically and financially vetted, there are safeguards to protect your IP and they have business continuity processes. Those are the key factors.

We help companies, primarily startups, ISV's, small and mid sized companies select the right offshore Software dev company for their needs. We've assessed over 1500 such small to mid-sized service providers and currently we have 45 such partners in 24 countries. 12 are assessed expert in RoR and 13 are assessed experienced in RoR.

Our matching service is Free to clients. Your relationship will be direct with your partner and you will negotiate and expect to pay the above prices directly with your partner. We earn commission but because we are matching you up with an ideal fit, the service provider's risk is lower and thus you can expect to pay globally competitive pricing while working with a truly legitimate, assessed, professional software development partner.

Let me know if we can help.

Here are a couple sites that will help you with your question -

http://blog.venturepact.com/ebook-outsourcing-101-how-when-where-to-outsource

http://www.slideshare.net/RandyRayess/hourly-software-developer-rates-by-country

Hourly rates vary a lot depending on the quality of the developer so its hard to say how good a developer is just from a range of experience. The second component is that offshore developers will have different costs of living depending on which city you outsource to.

The first thing I would do is vet the developer to make sure they are really great at what they do. Then based on location and experience talented offshore developers will charge from as low as $40 per hour up to around $100 per hour.

But again I would focus first on vetting the developers to ensure that they are really great beyond just the '3-5 years of experience' as that does not actually say how good they are. You will find some developers that have coded for 2 years full time and have really dedicated themselves to it to be better than other developers that claim that they have 5 years of experience. # of years of experience alone is not sufficient to make a decision regarding whether or not the developer is really good.

Hourly rates vary from country to country, since in your question you have not mentioned the country, I will give you country wise rates that will give a clear idea on how much to pay. One more thing is worth mentioning is that most countries are going through pandemic, many businesses have closed, and many are on the verge of closing, thus the rates may fluctuate.
1. Offshore Software Development in Eastern Europe: According to a report issued by AVentures Capital, Aventis Capital, and Capital Times at the beginning of 2019, Eastern European countries such as Ukraine, Belarus, Poland, and Romania are now among the top 5 global software development centres. The total volume of IT exports from these countries was about $13 billion. Here are some other numbers regarding the state of the IT industry in the region:
1. $5 billion: the profit of the 477 IT companies that participated in the research.
2. 700,000: the number of IT specialists in the region.
3. 60,000: the annual number of graduates from tech universities.
4. 20-25%: annual revenue growth in the region.
The average hourly rate for software developer talent in other Eastern European countries is as follows:
1. Belarus: $28
2. Bulgaria: $34
3. Croatia: $25
4. Czech Republic: $34
5. Hungary: $39
6. Poland: $40
7. Romania: $26
8. Ukraine: $37
2. Offshore Software Development in Ukraine: Conveniently located in the center of Europe, Ukraine has been attracting foreign investors since the late 1990s and early 2000s, when the first software outsourcing companies started appearing in the country. Here are some numbers and facts regarding the state of the IT industry in the country:
1. According to the State Statistics Service of Ukraine, in 2019, IT service exports from the country grew by 15%. Now it makes up 16% of the export of all services, which in total brought the country $15.23 billion.
2. According to HackerRank test results, Ukrainian developers are 11th in the world in terms of tech skills.
3. As of 2019, there were about 160,000 IT professionals in Ukraine employed at nearly 4,000 IT companies.
4. The country’s IT industry grows by about 26% a year.
5. The average Ukrainian developer hourly rate for software developer services in Ukraine is $26.
Clearly, there are many pros of outsourcing software development to Ukraine and it fairly earns its place in the rating of offshore software development rates by country.
3. Offshore Software Development in Latin America: According to IDC, the Latin American IT industry will be growing in 2020 despite political uncertainty and low economic growth. As predicted by Ricardo Villate, vice president of the consultancy for the region, the IT market will reach 4.8% in 2020. IDC reports an increase in business spending on technologies related to AR/VR, AI, IoT, 3D printing, cloud, security, and robotics.
The latest data shows that the average software developer hourly rate in Latin American countries as of 2020 is:
1. Argentina: $55
2. Bolivia: $30
3. Costa Rica: $40
4. Chile: $50
5. Mexico: $55
6. Peru: $35
7. Uruguay: $55
4. Offshore Software Development in Brazil: Brazil is the leading software outsourcing country in Latin America and South America. According to an earlier study by Agile Engine, Brazil is the country with the greatest number of software engineers in the region – over 400,000. Additionally, Brazil is in second place among the top 50 digital nations in the Tholons Services Globalization Index 2019. The average software developer hourly rate in Brazil in 2020 is $40.
Offshore Software Development in Asia: A pioneer of software outsourcing, Asia boasts the biggest number of offshore software developers as compared with other regions. In 2018, only in India, this number amounted to almost 3 million. China is also an attractive offshore development destination. Chinese developers are the first across all HackerRank challenges. The Chinese government supports the tech sector by offering economic incentives. For example, now there are more than 50 science and technology industry parks across the country. In the Philippines, Cebu City is the country’s fastest-growing IT industry with over 200 offshore companies and 95,000 tech positions to fill. The Philippines ranks 5th among the top 50 digital nations in the Tholons Services Globalization Index 2019, with the capital Manila being the world’s second super city.
The offshore hire rates in other Asian countries are as follows:
1. Bangladesh: $25
2. China: $25
3. Malaysia: $30
4. Nepal: $25
5. Philippines: $25
6. Sri Lanka: $25
5. Offshore Software Development in India: India is the leading software outsourcing country in Asia, also being a top digital nation in the Tholons Services Globalization Index 2019. Every year, more than 120K IT specialists graduate from the country’s tech universities. In 2016, India was nominated as the second country in the world with the greatest number of STEM graduates – 2.6 million. The average developer hourly rate in India is $30.
6. Offshore Software Development in Africa: Africa’s IT outsourcing market is only emerging, but it has already demonstrated rapid growth and is now attracting overseas clients. It is predicted that the increasing number of the region’s young population will drive demand for high-quality service sector jobs and the country will soon enter the list of the best countries to outsource software development. North Africa, specifically Egypt, Morocco, and Tunisia, has quickly become a key outsourcing destination thanks to the time zone compatibility with Europe and a small time zone gap with New York. Besides, Morocco and Tunisia attract clients from France because of the same language. North African programmers have expertise in technologies such as Python, Ruby, and SQL.
South Africa is another preferable destination thanks to insignificant time zone differences and high proficiency in languages such as English, German, and Dutch. Besides, the region is featured in the Tholons Digital Nations and Super Cities rankings. South African developers are skilled in C++, PHP, and SQL. East African Kenya has a particularly high concentration of programmers. The capital Nairobi is home to thousands of Kenyan businesses, and the city’s infrastructure encourages technical innovation among young businesses and start-ups. East African developers are well-versed in Java, SQL, and mobile development.
The recent data shows that the software engineer hourly rate in African countries is:
1. Egypt: $20
2. Kenya: $20
3. Morocco: $20
4. Nigeria: $40
5. South Africa: $40
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath