Why 80% of Outsourcing Agencies in Europe, Singapore & Japan Are Quietly Switching to White-Label Offshore Teams

Recent industry reports consistently show that a large proportion of outsourcing agencies in Europe, Japan, and Singapore are facing similar pressures — talent shortages, rising labor costs, increasing technical complexity, and difficulty scaling delivery capacity.

Almost every single one is facing the same nightmare triad — talent shortage, crippling costs, and inability to scale fast.

1. The Brutal Developer Shortage in “Premium” Markets

• European Union: The European Commission (2024) reports a current gap of ~1.2 million developers, projected to hit 2 million by 2030.
• Japan: METI warns of a shortage of 790,000 IT professionals by 2030.
• Singapore: An experienced senior full-stack developer receives 12–18 serious offers per month on average.

Direct consequences for agencies:

• Having to say “no” to new projects even when margins are 50-60%
• Backlogs stretching 4–6 months
• Key clients threatening to move to Indian or Polish competitors

2. Local Payroll Is Eating Profits Alive

Real annual cost of one senior developer (salary + taxes + social contributions + insurance + office):

• Germany / Netherlands / Switzerland: €110,000 – €170,000 per year
• Japan: ¥12M – ¥20M (~€80k – €130k) per year
• Singapore: S$140k – S$220k per year

When project revenue is only 1.8×–2.2× the cost of the bench, real margins become razor-thin — or negative — especially on complex AI, Cloud-Native or Blockchain projects.

The verdict we hear from almost every founder and CTO:

“Hiring one more full-time employee = shooting ourselves in the foot.”

3. Projects Are Becoming Dramatically More Technically Demanding

European and Japanese clients no longer just want a simple website or mobile app. Today they demand:

• Generative AI & LLM integration (RAG, agents, fine-tuning)
• Cloud-Native architectures (Kubernetes, Istio, Terraform, GitOps)
• Zero-trust security and strict GDPR / ISO 27001 / PCIDSS compliance
• High-performance cross-platform mobile (Flutter, React Native, Kotlin Multiplatform)

Finding an in-house team that is both deeply skilled in bleeding-edge tech and capable of writing European/Japanese-standard documentation while communicating fluently in English or Japanese is… practically mission impossible.

4. The Solution 80% of Agencies Are Quietly Adopting: White-Label (Anonymous) Offshore Teams

This is exactly how the smartest agencies are operating today:

• They bring on a dedicated offshore team (most often from Vietnam or Eastern Europe)
• The team works 100% under the agency’s brand and email domain
• End clients never know a third party exists
• The agency retains 100% of the client relationship and can achieve 60-75% gross margins

We offer: 

• Dedicated team under YOUR brand & email
• Client never knows we exist
• Cost 35-45% of local
• Margin jumps to 60-75%

https://www.businessresearchinsights.com/market-reports/outsourcing-market-117810

https://mys-vn.com/blog/devops-trends-for-2025-aiops-devsecops-beyond/