The Czech Republic, also known as Czechia, is a landlocked European country known for medieval monuments, castles, and figures. The capital city of Prague is well-known throughout the world as a popular tourist destination. But what most people don’t see is the Czech Republic as an outsourcing destination.
Countries like India, the Philippines, Mexico, and Ukraine get mentioned when speaking about outsourcing destinations. But Czechia can be an equally valuable destination for your IT outsourcing needs.
In this article, we will explore the top 6 reasons for outsourcing software development to the central European country of the Czech Republic.
What to know about the Czech Republic
- Capital: Prague
- Official Languages: Czech
- Currency: Czech koruna or Czech crown (Kč / CZK)
- Population: 5,128,314
- Timezone: Central European Time (CET), UTC +1
- Number of developers: 150,000
- Average developer’s salary: $87,289 ⁽*¹⁾
- Business Climate: A2 ⁽*²⁾
- Risk Assessment: A4 ⁽*³⁾
- Political Stability: 1.0 ⁽*⁴⁾
- Ease of doing business: 76.3 ⁽*⁵⁾
⁽*¹⁾ according to Glassdoor, Senior Software Engineer, 7-9 years of experience.
⁽*²⁾ according to Coface. It includes the ease of running a business, the political situation in the country, and whether the legal system provides fair conditions and business protection for companies. Rating scales: A1, A2, A3, A4, B, C, D, and E.
⁽*³⁾ according to Coface. It refers to the country’s ability to transfer currency for foreign payments. Rating scales: A1, A2, A3, A4, B, C, D, and E.
⁽*⁴⁾ according to The World Bank. These statistics show the political stability and absence of violence. It ranges from -2.5 (lowest) to 2.5 (highest).
⁽*⁵⁾ according to The World Bank Doing Business 2020 report.
Tech talent of Czech Republic
Most people would agree that the Czech Republic is a land producing world-class athletes and musicians. But the landlocked country has a large pool of quality coders too.
According to estimates, there are more than 150,000 IT specialists, with 20,000 graduating in 2022 with a degree in computer science.
In 2021, the Czech Republic ranked 30th in the Global Innovation Index Ranking by Wipo. According to the Global Skills Report by Coursera in 2022, the Czech Republic made it in the top 100 in global ranking with a Data Science score of 62%.
To make use of such a large talent pool, big tech companies like Microsoft and Oracle have already set up their R&D center in the country.
The coders are proficient in a variety of languages and domains. Whether it be front-end, back-end, hybrid, or mobile app development, CRMs like Salesforce, or full-stack development, you’re going to find the talent you’re after in Czechia.
These local talents have already developed some quality products. Seznam.cz is a search engine that beats Google locally. Popular anti-virus software Avast has a Czech team behind it. Video games like Hidden & Dangerous, Euro Truck Simulator, and ARMA: Armed Assault is entirely designed and developed by Czech developers. And it’s not to mention various local e-commerce websites and delivery apps.
So if you are considering the Czech Republic as an outsourcing destination, finding the right talent will never be an issue.
Czech IT infrastructure
The country of Czech Republic has a strong infrastructure in place for businesses. The country is a leader in the automotive industry, and it has 100+ years of history in this sector. More than half of tier-1 auto manufacturers have a factory in Czechia.
But the country has successfully carved a niche for itself in the field of cybersecurity. Avast is one of the best antivirus companies that is based out of Prague, Czech Republic.
The country is the first in Europe to build a Critical Information Infrastructure or CII. It is the first to create and sign an MoU regarding cyber defense in NATO.
All of these things make the Czech Republic one of the best-protected countries against cyber-attacks. So rest assured, your data is safe at Czech data centers.
We have already mentioned the impressive talent pool it has to offer. But what we didn’t say are the universities. In the Czech education system, universities often collaborate with companies to prepare their curriculums. So the graduates coming out every year do possess real-life skills.
Lastly, the Czech Republic is a stable state with a stable government. This is unlike Ukraine, Belarus, and other nearby countries that are battling for political stability. So your investment will never be at risk, nor will the employees stop working because of government interference.
Time zone close to European companies
Another benefit the Czech Republic has to offer is the time zone. Thanks to its geographical location in Central Europe, businesses in the UK, Switzerland, Sweden, Germany, and the Netherlands find it easy to operate with Czech developers.
The Czech Republic falls under the Central Europe Time Zone, which is 1 hour ahead of the GMT. Companies in the UK can make some adjustments to their scheduling.
Businesses in countries like Germany, Sweden, Norway, and France will be working in the same time zone.
Businesses in North American countries like the USA and Canada will also benefit from a 4-hour time difference. Contrast this with a location like India, where there’s a 12-hour time difference. The Philippines has almost a 13-14-hour time difference. So, businesses often find it challenging to work with developers because of the varying time zone.
Low staff attrition in outsourcing companies of the Czech Republic
The Czech Republic still has a relatively nascent IT sector. This means there are fewer companies running after software engineers, SEO, and coders.
This is unlike the US and the UK, where there are more companies than labor force. The lack of talent is already a well-known problem in the US. Hence, attrition is high among companies in this region.
Attrition is also high among South Asian and East Asian countries. This is because of the time difference. The employees are forced to work graveyard shifts. This is detrimental to their physical and mental health. Therefore, employees working in the IT sector often need help to adjust their work-life balance.
Employees in the Central European time zone do not have to worry about time zone differences and can easily adjust to a 4-5 hour difference.
Also, as the country is a part of the European Union, companies in the Czech Republic respect all the legal aspects related to work conditions and employee satisfaction.
Therefore, you will see low attrition among IT employees in the Czech Republic.
Professional service delivery from Czech developers
Czechs is known to be highly professional at their work. This is because they have delivered high-quality products to the world. We have already mentioned Avast twice. Every Avast user will agree on the high perfection level of the anti-virus software.
When you outsource your software to Czechia, you can expect the highest quality of work in return. The coders and managers take their job extremely seriously and vow to deliver on time. Not only the work, but even after the delivery, you can reach out for rework to fine-tune your web development project. This professionalism is even seen among freelancers who work with little to no supervision.
The cost advantage of software outsourcing to Czechia
One of the main reasons that startups outsource software development is to reduce costs. By outsourcing to a developing country, they can save as much as half the amount.
Like other outsourcing destinations, the Czech Republic offers this advantage too. The cost of living in the country is reasonable. The salary averages around 110,001 CZK per month, which is around $5,007 per month. Compare that to the United States’ average monthly salary of $11,291 and the United Kingdom’s average salary of £3,789 or $4,119. These figures tend to go over the roof to as high as $12,000 per month for software developers.
But you can hire a software developer in the Czech Republic with similar years of experience and skill set for half that amount. An average yearly salary of a software engineer in the Czech Republic is 604,898 CZK according to PayScale (which is almost $30K) while in the UK, a work of an average engineer will cost more than $42K, and in New York, developers make $94,648 in average. By saving costs on staff, companies can spend more money on other business processes or on R&D.
The cost will also depend on whether you’re hiring an outsourcing company or a freelance web developer. Most probably, companies will add service taxes, among other things, that will increase the total cost. That’s not the case with hiring freelancers since they are responsible for their taxes.
What to watch out for when outsourcing development to the Czech Republic?
When outsourcing your development work to the Czech Republic development team, there are a few things to keep in mind. And these things are inherently important to the success of your project.
When do you want the project to get delivered? This is an important consideration to make. Teams can deliver the project in a short amount of time, while individual programmers will likely take more time to complete it.
Cost of development
Does your budget allow you to outsource to the Czech Republic? While you’ll get lower prices, hiring top talent is never cheap. When budgeting your development work, you should consider the currency exchange rate and other taxes. These can increase the total cost by 10-20% so pay attention to these details before signing a contract with your outsourcing partner.
On YouTeam, we guarantee that a price you see on our platform will be the final to be paid. What’s more, we provide legal support in contract-related questions between our clients and outsourcing companies.
When outsourcing work to a remote location, proper communication with the CTO is the basis of success. So you always communicate with the developers frequently. If you think you cannot because of whatever reasons, you must assign the task to someone to oversee the development process.
Cancellation and rework terms
Software development is an iterative process and, more often than not, follows scrum methodology. This means the first batch of delivered work might not be perfect. So you’d have to send it for rework for HTML adjustments and so on. You should mention the terms for rework and under what circumstances the project would be deemed canceled.
Disadvantages of outsourcing development to the Czech Republic
While there are many advantages of outsourcing to the Czech Republic, there are a few disadvantages too. Before outsourcing your work to a graphic designer or full-time development expert, you should note these down and take appropriate measures.
- The first problem you will encounter is the language barrier. English is not the primary language of Czechs who speak Czech as their primary language. Even though English is spoken widely, there are cultural differences that might make understanding each other difficult.
- With most outsourced development projects, getting real-time updates is a significant problem. Because developers are working in a different office miles away from you, it’s hard to see what’s going on with your project. That’s why some dev projects get delayed or canceled.
- Last but not least, there’s a chance of a data breach. You have little to no control over the data centers and how work is managed at their end. Even though the Czech Republic is extremely safe when it comes to cybersecurity, the risks aren’t null and void.
So this is something you need to figure out at your end before outsourcing your development work to Czechia.
Outsourcing to the Czech Republic can be advantageous if managed appropriately. With a large talent pool, excellent IT infrastructure, and a time zone in your favor, you’ll find everything you’re after in the Central European country. As the sector evolves, you’ll find even better services for your software project.
That said, you should choose the right platform to deal with developers. Not all platforms are created equal, and hence you must do your homework when selecting a platform for your software development project.