What You Need to Know Before Outsourcing to Eastern Europe

The IT industry is developing at an incredible speed, but the main problem in this sphere is a global tech talent shortage that is going to reach 85 million by 2030. Currently, 44% of companies admit to facing this problem, and that is in addition to a lengthy recruitment process that usually takes up to 4 months. One of the solutions to this problem is outsourcing some functions to foreign professionals, and the Eastern European market is one of them. 

Outsourcing to Eastern Europe is a way out of this dilemma since currently there are over 1 million tech experts here, and their annual growth rate is around 5%. Local tech talent is more cost-effective and provides high-quality services, but these aren’t  the only reasons to opt for Eastern Europe outsourcing. Discover why hiring local software development specialists with the help of IT recruitment agencies is easier and discover the best places to do this!

Benefits and Challenges of Eastern Europe Software Outsourcing

The IT industry is experiencing constant development, and the Eastern European market is growing steadily too. It brings about benefits and also creates some obstacles for companies seeking Eastern Europe software outsourcing. Let’s consider both aspects closer!

Benefits

• Rich and Highly-skilled Talent Pool

The number of developers in this region exceeds 1.3 million people who have a wide spectrum of tech and industry specializations. The total yearly number of graduates in Eastern Europe exceeds 23k tech specialists, while the annual growth rate produces  1,300 – 2,200 software developers as well. These countries claim to have some of the best tech universities in the world, while local companies become excellent destinations for mentorship and internship programs.

• Cost-efficiency

A lower cost of living in many Eastern European countries results in lower salary rates too. The minimum hourly rate is around $28 and can reach as much as $75 by top vendors. This means there is almost a 5x difference with the US market.

• Time Overlap

Though Eastern European countries are located in a different time zone from Latin or North America, it is still beneficial for businesses since the overlap time is 3-4 hours. It allows for effective communication and the timely delivery of services that boost efficiency.

• Cultural Proximity

The US has had a great influence on many Eastern European countries, which they often consider an example to follow. It led to an affinity with many Western countries and a good knowledge not only of the English language but also of US laws and customs. Moreover, business etiquette and a strong work ethic have been borrowed from the West, so distant teams can collaborate smoothly, effectively, and have a straightforward interaction. 

Challenges

• Possible Language Gap and Cultural Differences

There are many fluent English speakers in Slavic countries, but still, you may find some language gap that can lead to misunderstandings. Therefore, it is important to ensure that the team you are going to collaborate with does not have this problem.

Another important aspect to consider is the apparent cultural differences that still exist in spite of many similarities. For example, American workers are often more competitive and willing to take risks-, while Europeans are usually risk-averse and generally more tolerant of each other.

• Lack of Trust, Transparency, and Control

Every team needs time and successful results to get used to each other and to earn and deserve trust from all of their team members. It is a challenging task to achieve this goal if people work on different continents in different time zones. It sometimes leads to a lack of trust and can create worries that the work won’t be completed correctly or that confidential information can be leaked. However, this challenge can be combated by regular reviews, setting clear milestones, and progress tracking.

Top Eastern European Countries for Software Development

Eastern Europe is a large region that includes several major players in the global IT market. Some of these countries have rocked the sphere of software development, not only in Eastern Europe but also around the world. Therefore, there are countries where the number and quality of teams and individual talent are more extensive and worth the attention of businesses. 

Ukraine

Ukraine is a leader in Eastern Europe outsourcing with over 285k tech specialists. The local IT industry has almost doubled in exports in the last 3 years, and the number of talented and skilled developers has increased by around 50% too. Unfortunately, a full-scale Russian invasion made over 50k tech professionals leave the country, and around 7k protect the country in the battlefields. However, there are still around 230k tech specialists in Ukraine whose hourly rate ranges between $20 – $55 and the quality of their work is very high. 

Currently, over 4,000 companies sustain 13% of Ukraine’s tech talent export thanks to their high level of professionalism and expertise. They are known for strong tech skills, efficient teamwork, and punctuality, as well as their robust experience. This talent pool which is ranked 7th in the level of technical skills in the world, is annually extended by over 20,000 tech graduates, thanks to the elite Ukrainian educational institutions. There are many IT outsourcing companies in Ukraine too, and some of their top providers are Program-Ace, Itera, and Softjourn.

Poland

Poland is ranked 7th in the European most successful IT sectors. Its income exceeded $9.3 billion in 2022, and the number of tech specialists has reached 430k. 66% of these professionals are employed by foreign-based companies, while the skill level ranking takes 3rd place in the world. 

Poland has the highest hourly development rates in Eastern Europe: a junior developer makes around $33k a year, while a senior one earns $60k annually. However, the demand for Polish tech experts is still high, so the average time for vacancy filling can be around 6 months. 

The top Polish software development companies are BinarApps, Uptech, Altkom Software&Consulting, and Startup Developemnt House.

Romania

The value of the Romanian IT sector was 4.9 billion Euros in 2022, and the country is recognized to have the fastest-growing IT market in Europe. The number of tech specialists exceeds 190k in Romania and more than 15k local tech graduates extend this talent pool every year. An hour of software development in this country costs between $28 and $55, and the main peculiarity of local professionals is their multilingual nature: in addition to English (31%), local developers are fluent in French (10%), Italian (5%), Hungarian (10%), and German (3%) languages too. The best IT service providers in Romania are Splashdev, ServUS Tech, and Bento Intelligent Soft.

Bulgaria

Bulgaria is an important player in the world’s IT sector with a software development market valued at €832.9m in 2022. There are over 100k IT specialists working in this sphere, and by 2024, this number is planned to increase by at least 12k. 30% of them are employed in IT outsourcing, and the average salary of a developer in this country is only $20k a year. The quality of the projects created by local tech experts is also very much appreciated all around the world since they take the 13th position in the list of the best developers in the world. There are over 2,300 software companies in Bulgaria including such well-known names as ScaleFocus, Musala Soft, and Telerik Progress.

The Czech Republic

The IT industry in the Czech Republic looks very attractive in terms of Eastern Europe outsourcing too. The industry reached $1.3 billion back in 2021, and experts predict that it will outpace the country’s GDP by 2026. The number of outsourcing companies exceeds 7,700 in the country, while the talent pool is over 150k at the moment. The cost of their service is also quite reasonable: from $30 to $50 per hour, and this is the country that takes the sixth place on the list of countries with the world’s best developers. The educational system of the country guarantees a regular supply of over 14k young specialists every year too. Many of them wish to be employed in the largest IT companies including Denevy, Bartonova, or A Group Consulting. 

Estonia

IT is one of the fastest-growing industries in Estonia with annual revenue of over $1 billion. It generates 30% of added value to the country’s economy and has the biggest number of startups per capita — 1450 startups. There are over 6,000 companies operating in the ICT sector with over 53k employees in total. The current tech pool of Information and Communications Technology (ICT) experts is around 30k, and more than 1k tech degrees are given to graduates every year. Estonia is considered to be the birthplace of such well-known companies as Skype, Pipedrive, and Fortuno too.

Hungary

When it comes to exporting IT services, Hungary was one of the first European countries to do that. Currently, it is a top destination that expects to bring about revenue of $1.57 billion in 2023 and grow by over 8.6% a year. The projected market value of IT outsourcing in Hungary is $0.56 billion. Software development makes up 6% of the country’s GDP, and over 80k specialists are employed in this sector. Over 20k tech students graduate from universities and colleges annually too. An average salary of a person working in information technology is around $1,500/month in Hungary. Top IT service companies operating in Hungary are Lexunit, Andersen Inc. Software Solutions To Transform Your Business, and IncQuery Labs.

Croatia

ITC export of Croatia is expected to reach $1.36 billion by 2026, growing at 3.2% each year, while the revenue of this sector is planned to be €4.86 billion by 2026. The expertise of professionals working in ITC is characterized as being very high and worth their cost. Currently, there are 35k IT professionals, and one-quarter of them are senior developers. One more important point to mention is that the talent pool of the country experiences growth of over 19%, while the average rate is only 6%. The most well-known software development companies operating in Croatia are Notch, Continium Labs, and CloudBit.

Software Developers from Eastern Europe

All the countries mentioned above are great, and not only great for Eastern Europe software outsourcing. They are home to thousands of successful software development companies that can be an example to follow too. According to Clutch, there are over 3,300 companies offering similar services in Eastern Europe, and their top tier is taken up by such names as:

• You are launched, Ukraine
• itCraft, Poland
• Deviniti, Poland
• Artelogic, Ukraine
• Incora, Ukraine

How to Choose the Right IT Outsourcing Company

If you are considering outsourcing some tech functions to Eastern Europe, you should know how to choose the best company for this purpose. These ideas may be helpful to you for making this choice.

1. Define Your Objectives and Set a Timeframe

It is necessary to have a clear understanding of what you want to get far as a final product. Therefore, you need to set clear goals and make a plan on how to implement them into reality. As soon as you prepare that, you can check with an outsourcing partner regarding the scope of work. 

2. Find Several Software Development Companies Providing Outsourcing Services

Your next step is to find a team that meets your needs. You can use a traditional search engine or get a recommendation from a reputable recruitment agency like Staffing Partner. It is important to look through the company’s portfolio, experience in dealing with similar projects, and other clients’ reviews,

3. Analyze and Compare

When you make a selection of several suitable companies, you need to research them more deeply in order  to narrow down the search significantly. You can contact the previous clients of these companies and speak to a company representative to discuss whether or not they had similar projects to yours before. A legit company won’t keep secret what they used to work with and will surely explain how they dealt with other projects and what benefit these brought about. After that, you should compare the companies on your list and make your conclusions.

4. Consider How a Vendor Approaches Business Goals

A software developer should understand your needs clearly, so you should get many questions from your potential partner if they are really interested in this collaboration with you. You should also ensure that a development team deals with all the stages of the process, including after-development support, customization, maintenance, and backup. 

5. Think about What Technology is the Best for You

Your developer must be up-to-date and follow the latest trends, adopt new technologies, and specialize in the programming languages you need.

6. Discover the Communication Practices of Your Vendor

An excellent level of understanding is key to any project’s success, so you should ensure that your communication with a vendor will be systematic and effective. You should discuss, share, and explain your ideas to be on the same page with the development team.

7. Evaluate the Development Methodology and Security Practices

It is better to hire companies with adaptive planning, timely delivery, regular project updates, and effective communication tools. Another aspect to consider is your confidential materials and the way sensitive data will be transferred and handled by the team.

8. Consider a Company Structure and the Way this Team Works

One more crucial aspect is the team structure and how it works to deliver results. It should be well-managed and organized to achieve the goals set by you. 

Benefits of Working with StaffingPartner

You can understand how developed and promising software development in Eastern Europe is, but finding efficient teams or individual candidates by means of outsourcing can be a challenging task. This is where the professional help of recruiters is very useful, so it is always reasonable to turn to StaffingPartner to get the best talent for your team. The companies that have tried finding development teams with the help of our hiring agency have experienced a number of benefits including:

• Access to a huge database of skilled and experienced tech experts;
• Saving time and money on the hiring process;
• Search for really suitable candidates for every vacancy;
• A smooth recruitment process without delays and problems;
• 100% satisfaction rate with hired specialists;
• Extended search for candidates with compelling job ads and a careful selection of the best candidates;
• A wide range of recruitment services for individuals and businesses.

Conclusion

Eastern Europe is a great destination for outsourcing software development. It combines excellent quality with a reasonable cost, and finding candidates for such projects is much easier and faster thanks to a large talent pool. No matter which country from this list you choose, there is an excellent chance for you to get skilled development teams or individuals that will contribute to the success of your business. Do you need professional assistance in finding the best candidates via outsourcing? StaffingPartner recruitment agency is always ready to help!

FAQ

Want to know more about outsourcing? Read this Article: Outsourcing the HR Function for IT Industry & Tech Companies