Eastern Europe is now one of the world’s most favorable IT outsourcing destinations. Many leading tech companies such as Apple, Google, IBM, and Microsoft opened 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, the Czech Republic, 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 exceptional quality IT services, have a convenient time zone difference and have 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 European software development 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, Hungary, and Georgia are runner-uppers.
Here are some facts about the IT industry in these countries.
In 2014, the country’s new government started supporting investments from abroad. This led to a boost in investments in Ukrainian IT companies, which reached $630 million within the last 5 years. Kyiv, Lviv, and Kharkiv are the largest Ukrainian IT hubs.
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 2020, the country’s global IT export has reached above $5 billion.
- In 2021, Ukraine was named the “Delivery Destination of the Year” by the Global Sourcing Association (GSA).
- Since 2021, more than 126 Ukrainian startups have raised their venture capital funding.
- Ukraine is featured in Gartner’s top 30 countries for offshore services.
- Over the last 2021 year, Ukraine’s number of certified IT specialists has increased by 29K, which in total means 212,000 professionals.
- In 2022, according to EECA University Rankings, about 41 Ukrainian universities, including 3 are in the top 100 best institutions of higher education.
- Some of the world’s renowned startups, such as Petcube, Preply, and 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 outsourcing software development.
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 4th place in the world in terms of skills.
- Poland is the 3rd country in the world with the best developers, per HackerRank challenges scores in 2018.
- In 2021, Poland was in the top 20 best offshore countries in the world.
The Romanian government had once created favorable tax conditions for companies providing software development services. 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 an increment of 7,000 tech graduates annually.
- In 2017, software outsourcing in Romania has grown up to $4.2 billion and generated 5% of the GDP.
- Romania is the 20th country in the world with the best developers, 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, and Romania. 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 near each other and Western Europe. Moldova and Romania have 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 and have strong technical and soft skills.
In recent years, Eastern Europe has become a mainstream outsourcing location for software development.
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||~ 285,000||~401,000||~140,000||~24,000|
|Industry focus||Startups, custom software development, eCommerce||Enterprise||FinTech||Mid-Size Projects|
|Core technologies||PHP, Python, Java, .Net||PHP, Java, .Net||PHP, Java||PHP|
* According to the Future of IT report, 2022
** Please, remember, that hiring a senior developer with exceptional skills will always cost more than an average price.
Reasons to outsource software development to Eastern European developers
1. Technical stack
The technical skills of 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 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.
Eastern European development teams can offer years of experience in different programming languages and in various niches, such as healthcare, e-commerce, blockchain, artificial intelligence, IoT, and others. Additionally, Eastern European software engineers are good at mobile app and web development. Web development implies creating interactive web pages while iOS and Android developers are building mobile applications for given operative systems.
2. Language proficiency
The English level of software developers is essential for successful cooperation. Overall, developers in all reviewed countries have a good grasp of English, which is a mandatory requirement for the IT industry.
Eastern European developers work primarily with international companies where a high or at least moderate proficiency in English is an essential requirement. The second most in-demand foreign language among developers in Poland is German, while French is almost as widespread as English in Romania.
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 IT industry practitioners, i.e., Lviv IT School.
4. Development rates
In terms of offshore software development rates compared 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 2021.
- United States: $50,000 per year – junior, $104,699 – middle, $180,000 – senior.
- United Kingdom: $32 per year – junior, $78,454 – middle, $149,510 – senior.
- Poland: $10,000 per year – junior, $21,000 – middle, $27,000 – senior.
- Ukraine: $14,000 per year – junior, $26,000 – middle, $35,000 – senior.
- Romania: $14,000 per year – junior, $24,000 – middle, $50,000 – senior.
- Moldova: $22,000 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. Most 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 approaches.
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. Convenient location and time zone
Another important thing to consider is the ability to synchronize and cooperate with the outsource developers. Engineers from Eastern Europe are located about 2 hours from London and 7 hours ahead of New York, allowing the established development process with both in-house and outsourced employees.
Even though the time difference may be somewhat inconvenient for workers, it is still possible to have several hours overlap during which you can schedule important meetings or spend time discussing the workflow and tasks the engineers need to do.
7. Talent pool size
The talent pool size is an essential issue in 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 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 401,000 in Poland, 140,000 in Romania, 285,000 — in Ukraine, and 24,500 in Moldova. Approximately half of these are software developers. There are also several software developers from Ukraine, for instance, who have chosen to work in Poland, as well as Moldovan developers, who 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 global technology companies, Ukrainian developers are well prepared to work with the most cutting-edge technologies, and 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 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 vary slightly because of the different costs 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.
Software developers from Eastern Europe: FAQ
What are the best countries to outsource software development to in Eastern Europe?
According to experts, the three top locations for IT outsourcing in the Eastern European region are Poland, Romania, and Ukraine. Poland and Romania are members of the European Union; hence, the European standards in data protection and intellectual property are applied to each software development company in these countries. Ukraine, alternatively, is not a member of the EU but is known for its highly skilled IT specialists and affordable rates.
What online collaboration tools are required to work with remote developers?
Unlike traditional collaboration tools for remote working, such as Slack and Zoom, distributed development teams require lots of additional software. For instance, code management tools — GitLab and Bitbucket — are critical to the success of any product. In this blog post, we discuss all the collaboration tools essential for the effective cooperation of your dev team.
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 that 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 recommendations or showcases. The birth and evolution of the 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 400 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.