Did you know the global IT outsourcing industry is worth an estimated USD 569.79 billion? It’s also expected that there’ll be a 3.78% growth in the upcoming years, from 2023 to 2028. This growth will eventually lead to a market value of USD 685.97 billion by 2028. These are some crazy high figures, but with the number of companies that now outsource to other countries, it’s not surprising.
Eastern Europe is one of the leading regions for outsourced software development work, and in this article, we’ll discuss why that is, the challenges of outsourcing as well as which Eastern European countries to consider (if you’re looking to outsource).
What are the advantages of outsourcing software development to Eastern Europe?
You’re probably wondering, “Why Eastern Europe?”. Well, there are several advantages of outsourcing software development to Eastern Europe. This region offers cost-effective solutions with access to highly skilled professionals. The governments in these countries also offer a lot of support for local and international tech companies. Let’s break it down further.
One of the main reasons tech companies outsource software development to Eastern Europe is because they offer competitive rates compared to Western Europe and the United States. For example, according to PayScale figures, you can hire two senior software developers from Poland for the same price as a single senior developer in The United States.
Highly skilled professionals
The saying “You get what you pay off” may spring to mind, but did you know that Moldova is ranked #1 on the Developer World Ranking scale by SkillValue? Romania follows at #3, with Ukraine close behind at #4 and Poland coming in at the rear at #7. These rankings prove that Eastern Europe is home to a large pool of talented developers.
Quality of work
Eastern European developers are known for their dedication to quality and attention to detail. The region has a reputation for providing top-notch software solutions that follow the best practices of the industry and meet international standards. For example, successful IT companies, such as GitLab and Grammarly, were founded in this region.
Several Eastern European countries, such as North Macedonia, Bulgaria, The Czech Republic, and Croatia, are working hard to attract foreign businesses by offering tax breaks and incentives to the IT industry. This helps create a supportive environment that motivates growth and innovation in the software development sector. This is also beneficial for companies with established teams in these countries who plan to expand.
Time zone proximity with Western Europe and the United States
Eastern Europe shares a convenient time zone with Western Europe and the East Coast of the US, allowing for real-time collaboration and faster project delivery. For example,
Location proximity to Western Europe
Without stating the obvious, Eastern European countries are geographically close to Western Europe, which makes travel and on-site visits more convenient.
Intellectual property protection
Eastern European countries have strong intellectual property laws and regulations in place, which provide assurance and protection for businesses that are outsourcing their software development projects to the region. The benefits for businesses include a decreased risk of IP infringement and increased confidence in the quality of software development services.
However, there are still concerns when outsourcing to any foreign country, including Eastern Europe. It’s important to ensure the legal and security framework of your project is in place to protect sensitive data and proprietary information.
What are the challenges of outsourcing software development to Eastern Europe?
Despite the many advantages of outsourcing software development to Eastern Europe, there are still challenges that shouldn’t be overlooked, including
Communication and language barriers
Although a lot of Eastern European countries have a high English proficiency level, there may still be language barriers as English isn’t spoken widely and is still a second language to the majority of the speakers. This means miscommunication can occur, leading to misunderstandings and delays in project delivery.
Outsourcing software development to Eastern Europe can present challenges in ensuring consistent quality control due to the lack of direct supervision and control over the development process, resulting in varying quality standards that may require additional effort to maintain.
While Eastern Europe is known for its strong pool of software development talent, the high demand for these professionals can result in a shortage of experienced and qualified individuals. This can make it challenging to find suitable resources for particular projects.
Time zone differences between Australasia and Western America
Eastern Europe may have a convenient time zone with Western Europe and the East Coast of the US. However, the same can’t be said about Australia, New York, or parts of Canada. The businesses in these parts of the world may find collaboration difficult as the time difference can slow down decision-making processes and increase response times.
Infrastructure and technological challenges
Infrastructure and technological capabilities in some Eastern European countries are less developed compared to Western countries, which can impact software development efficiency and speed.
Political and economic stability
The stability of Eastern European countries' politics and economics can vary. It is important to consider the stability of the country where you’ll be outsourcing, as political instability or economic downturns can have a significant impact on the project.
Eastern European countries to consider
There are many countries in this region. However, some countries are better than others when it comes to outsourcing software development work. These include:
As this country is ranked #1 on the Developer World Ranking table, it, of course, had to feature on our list. Moldova shares its borders with Ukraine and Romania. However, it’s much smaller than its neighboring countries, with just under 3.5 million people calling Moldova home.
The average annual salary for a software developer in Moldova is 19,000 USD.
Another country that sits on the Developer World Ranking table is Romania. They also rank high on the EF English Proficiency Index Ranking, making it an ideal country to consider for outsourcing. So it shouldn’t be surprising that big tech companies like Adobe, Microsoft, and IBM have opened offices in Bucharest, Romania’s capital city.
The average annual salary in Romania is 10,580 USD
Poland has a reputation for producing tech unicorns, which are private companies with a valuation of over $1 billion. This indicates that Poland also produces highly skilled tech professionals. Software developers in Poland earn an average annual salary of 26,498 USD, which is slightly higher than their Southern European counterparts but still lower than American developers. Overall, Poland's tech industry is thriving and continues to attract top talent.
Why you should outsource to Eastern Europe
There are many reasons why you should consider outsourcing software development to Eastern Europe. Firstly, it’s a region with a highly skilled and talented pool of software developers, thanks to its education system that emphasizes mathematics and science. The cost of labor in this region is relatively lower than in Western countries, making it an affordable option for businesses. With a time zone proximity to Western Europe and the United States, communication and collaboration are easy. Developers in Eastern Europe are known for their professionalism, dedication, and attention to detail. The region also boasts of a strong IT infrastructure and a favorable business environment, making it an ideal destination for outsourcing software development projects.
However, outsourcing software development to Eastern Europe doesn’t come without its challenges. So do your due diligence or use a service like Joberty to find highly skilled professionals that suit you and your company.