Eastern Europe is now one of the world’s most favorable outsourcing destinations. Many leading tech companies such as Apple, Google, IBM, and Microsoft open software development centers in Eastern Europe.
At the same time, smaller tech companies have also shifted their focus to Central and Eastern European developers. Though the custom software development rates in Poland, Ukraine, Romania, etc. are higher than in India or the Philippines, this cost still remains reasonable for the US or the UK.
Eastern European developers can deliver the exceptional quality of work, have a convenient time zone difference, and fewer cultural differences. All of that combined with the perfect cost to quality ratio makes outsourcing software development to Eastern Europe a perfect option. More and more brands today switch to leading Eastern Europe software developer companies.
Software development in Eastern Europe: Top countries to outsource IT projects
Ukraine, Poland, and Romania are the most popular destinations when it comes to software development outsourcing in Eastern Europe while Serbia, Macedonia, Bulgaria are runner-uppers.
Here are some facts about the IT industry in these countries.
In 2014, the new government of the country started supporting the investments from abroad. This led to a boost of investments in Ukrainian IT companies, which reached $630 million within the last 5 years.
Now the Ukrainian IT market is represented by over 1,000 software development companies where 160,000 IT professionals are currently employed. And this number will be exponentially growing because the country’s universities release 15,000 tech graduates on a yearly basis. To add more facts:
- In 2017, Ukraine was named the “Outsourcing Destination of the Year” by the Global Sourcing Association (GSA).
- Ukraine is featured in Gartner’s top 30 countries for offshore services.
- Ukraine is the world’s third country in the world by the number of certified IT specialists.
- Ukraine is the world’s 11th country that has the best developers, according to an average score across all HackerRank challenges as of 2018.
- Some of the world’s renowned startups such as Petcube, Preply, or Grammarly were born in Ukraine.
As a member of the EU with the fastest growing economy, Poland offers favorable conditions for companies that are thinking of offshore development centers.
With over 400 software companies featuring over 140,000 skilled professionals and the stable growth of the IT market of 5-10% a year, the country remains the top offshore destination in Eastern Europe. Additionally:
- Poland is the 11th in the world’s top 50 digital nations as per the Tholons Globalization Index 2018.
- The Top Coder ranking currently features the Polish developers at the 4th place in the world in terms of skills.
- Poland is the 3rd country in the world that has the best developers, as per HackerRank challenges scores in 2018.
Romanian government had once created favorable tax conditions for software development activities, so the industry has rapidly grown and attracted global tech companies such as Microsoft, Ericsson, HP and Huawei.
The country now has almost 100,000 IT professionals working at almost 20,000 companies, with the increment of 7,000 tech graduates annually.
- In 2017, software outsourcing Romania has grown up to $4.2 billion and generated 5% of the GDP.
- Romania is the 20th country in the world that has the best developers, as per HackerRank challenges.
- Due to the favorable business environment, financial attractiveness of custom software development rates, excellent tech skills, and availability, Romania is ranked 28th in the A.T. Kearney’s 2019 Global Services Location Index.
Software developers in Eastern Europe: Differences
Earlier we talked quite a lot about the software development market in various Eastern European countries: Ukraine, Poland, Romania, and Moldova. This article summarises and compares our findings and insights into the differences between Eastern European developers from the best countries for outsourcing software development in this region.
In recent years, Eastern Europe has become a mainstream outsourcing location for software development, because it offers an attractive cost-to-quality ratio, though not merely low rates like, say, you can find in India or the Philippines.
Geographically, all these countries are in close proximity to each other and Western Europe. Poland and Romania are the members of the European Union, hence, the European standards in data protection and intellectual property are applied to each software development company in Eastern Europe.
Moldova and Romania have a pretty poor infrastructure while Ukraine is constantly improving its transport and road infrastructure. The political situation in Eastern European countries varies but overall is fairly stable.
Eastern European software developers are proficient in English, have strong technical skills as well as decent soft skills.
In recent years, Eastern Europe has become a mainstream outsourcing location for software development.Click to tweet
Based on both our research and direct experience in Eastern Europe software development outsourcing, we note the following differences between Eastern European countries:
|English level||Intermediate to Upper-Intermediate||High||High||Intermediate to Upper-Intermediate|
|Size of Talent Pool||~ 160,000||~250,000||~110,000||~12,500|
|Industry focus||Startups, custom software development, eCommerce||Enterprise||FinTech||Mid-Size Projects|
|Core technologies||PHP, Python, Java, .Net||PHP, Java, .Net||PHP, Java||PHP|
* Tech rank on TopCoder and HackerRank
Reasons to outsource software to Eastern European developers
1. Technical stack
The technical skills of the Eastern European developers are well-regarded. All of the aforementioned countries were heavily influenced by, or indeed Former Republics of the Soviet Union, which left in its wake a legacy of relatively high-quality Technical Education (if not a little too specialized for contemporary tastes).
The focus of education in Eastern Europe has made the transition from more of a hardware focus to more of a software focus, in response to the former market expanding and latter contracting.
2. Language proficiency
The English level of software developers is highly important for successful cooperation. Overall developers in all reviewed countries have a good grasp of English as it is basically a mandatory requirement for the IT industry.
Eastern European developers work mostly with international companies where a high or at least moderate proficiency in English is a basic requirement. The second most in-demand foreign language among developers in Poland is German when in Romania French is almost as widespread as English.
3. Profile education
To be up to date with new technologies developers need to continue to self-educate and take additional training and courses. Opportunities for further education are becoming more widespread, administered privately by highly experienced practitioners from the IT Industry, i.e Lviv IT School.
Developers from Ukraine, Poland, Romania, and Moldova excel in web development and custom software development. Programming skills of the Eastern European developers can be measured using data from Hackerrank, TopCoder, which are reputable sources in IT industry. Poland, Ukraine, and Romania rank highly on both Hackerrank and TopCoder. Moldova is ranked 28th on TopCoder. According to Infoshare, the most popular and hence most widely used programming language in Eastern Europe is PHP.
4. Development rates
In terms of offshore software development rates comparison by Eastern European countries, their developers offer fairly low prices as compared to Western counterparts. Software development in Eastern Europe usually costs two or even three times cheaper than in the US. The highest rates for all types of developers among the reviewed countries are in Poland — $50-$99/hour, which is still lower than in Western Europe.
The lowest prices for outsourcing software development are in Moldova — $20-$24/hour. Ukraine and Romania offer intermediate prices of $25-$49/hour.
To be more specific, let’s compare the annual rates for in-house Java developers and hourly rates for freelancers in different countries based on the data at Indeed.com, Glassdoor.com, and Payscale.com as of June 2019.
- United States: $39,000 per year – junior, $102,699 – middle, $202,000 – senior.
- United Kingdom: $19,673 per year – junior, $69,454 – middle, $149,510 – senior.
- Poland: $8,000 per year – junior, $84,000 – middle, $152,000 – senior.
- Ukraine: $15,000 per year – junior, $32,000 – middle, $49,000 – senior.
- Romania: $12,000 per year – junior, $18,000 – middle, $50,000 – senior.
- Moldova: $10,000 per year – middle.
And here are the hourly freelance rates, based on the data at Upwork.com:
- United States: $11 per hour – junior, $50 – middle, $80 – senior.
- United Kingdom: $10 per hour – junior, $130 – senior.
- Poland: $20 per hour – junior, $85 – senior.
- Ukraine: $25 per hour – junior, $80 – senior.
- Romania: $15 per hour – junior, $80 – senior.
- Moldova: $15 per hour – junior, $70 – senior.
5. Cultural value set (culture fit or “culture add”)
Despite the communist past of all of these countries, developers’ culture can be defined as western and progressive. The majority of the developers’ community are young people with more of an open mindset. In the context of mentality and personality, Romanians and Moldavians tend to be more risk averse which sometimes leads to a lack of innovative approach.
Ukrainian and Polish developers, in turn, have more comprehensive experience working with global technology companies and top software development companies in Europe and other countries.
6. Talent pool size
The size of the talent pool is an essential issue in terms of choosing an outsourcing location for software development in Eastern Europe. It is often hard to estimate the number of software developers in exact numbers however local agencies tend to provide reports about their countries stats once in a few years.
The official statistics generally display the number of employees both in IT and Communications. Among IT sector employees there are also Q&A engineers, designers, business analysts, project and product managers etc.
Based on the averages of figures reported the ICT industry employs 244 000 in Poland, 110 000 in Romania, 160 000 — in Ukraine, 12 500 in Moldova. Approximately half of these are software developers. There is also a number of software developers from Ukraine for instance who have chosen to work in Poland, as well as Moldovan developers are often recruited by Romanian software development companies.
Each of the observed countries has something specific to offer in terms of expertise in software development. Romania is well known for its engagement in fin-tech, Poland suits perfectly for R&D departments of the global technology companies, Ukrainian developers are well prepared to work with the most cutting-edge technologies, Moldova is a fairly good choice for midsize projects to outsource.
Offshore software development in Eastern Europe: how and where to find a company
If you’re thinking of hiring Eastern European developers for your project, here’s what you can do:
- Look up the profiles and read the reviews of software agencies on platforms such as Clutch, LinkedIn, Upwork, etc.
- Contact the local recruiters so they can assist you by choosing the developer(s) from their curated talent pool.
- Open an offshore development center in an Eastern European country with the help of a local software agency.
- Reach out to local IT communities that connect the clients with the best outsourcing companies in Europe.
So which country in Eastern Europe to choose for software development?
If you are hesitating on which country to select for your project, here are some clues:
- Evaluate the tech stack that is required for your project. Each Eastern European country has its own strengths regarding the tech skills of local software engineers. For example, HackerRank reports that Ukrainian developers are the first in security and belong to the top 5 in mathematics and distributed systems. The same report shows that the Polish engineers are the first in Java and belong to the top 5 in the following domains: algorithms, tutorials, Python, and Shell.
- Evaluate your budget. The hourly rates of developers in different Eastern European countries slightly vary because of the different cost of living, but it does not impact the quality. Check the custom software development rates per country and choose the one that fits your budget.
- Is your company an established business or a startup? For example, Ukraine is the best place for startups while Polish development houses tend to focus rather on enterprise solutions, so this point is also important to consider.
Speaking of top software companies in Europe, no matter which country will become your final choice for outsourcing software development, it is important to make sure you have thoroughly screened and pre-vetted your offshore partners.
Up to you: each Eastern European country has pros when it comes to software development
The best way to optimize this hiring process is to create a due-diligence checklist which will prevent you from losing sight of important points.
Usually, decisions regarding outsourcing software development to offshore locations (including Eastern Europe software outsourcing) are made based on some recommendations or showcases. The birth and evolution of British product GoPlanr.com can be an example of such a product success being developed by Ukrainian developers.
We at YouTeam make it easy and safe to find a perfectly matching team of engineers for any type of project. Over 200 vetted dev shops from 32 countries, including top software companies in Europe, are available on our marketplace. We can compile a list of candidates available to start working on your project next week in 48 hours or less.