Why Startups Outsource Software Development to Eastern Europe in 2020
IT outsourcing has been a regular practice globally for over two decades now, and especially this year, that is 2020, has seen a spike in offshore software development that can become a continuing trend due to the COVID-19 pandemic. Recently, a rather sought-after outsourcing destination has emerged to be Eastern Europe, focusing on countries such as Poland, Ukraine, Bulgaria, Romania, Belarus, and Serbia. As such, from competitive hiring costs to high quality, English speaking software developers, eastern European countries have a lot to offer clients who select them for outsourcing software development.
Top reasons for startups choosing to outsource to Eastern Europe
- Cost-benefit. A major reason for hiring software engineers from Eastern Europe is the hiring cost advantage. On average, a software developer earns 95000 Serbian Dinar monthly (annually £8712) in Serbia, $ 23,349 annually in Poland, and RON 24631 ($5979) in Romania. Meanwhile, a software developer earns a much higher salary of £30,952 in the UK and $74532 in the US. Thus, a lot of money is saved while hiring Eastern European IT professionals.
- The skill development and quality of IT specialists are encouraged in Eastern European countries, which are taking education and professional training more seriously now, leading to a major talent pool for UK and US clients to choose from. Romania sees about 7000 graduates joining the IT industry annually, while Belarus is able to boast of the growth of several IT companies and a thriving tech scene due to a high government investment of 71.89% in 2018.
- The work culture and thought styles of Eastern European outsourcing companies are quite similar to that of Western Europe and the US. Thus, clients can be well assured that the programmers they hire are at par with their own culture — working on deadlines, offering creative solutions, and unafraid to innovate. These are some of the best developers who are top-rated globally, can communicate very well in English, and provide only the most innovative and optimal services in web development.
Top 5 destinations for software development outsourcing in Eastern Europe
Opting for custom software development in Ukraine comes with a few of its unique advantages.
- To begin with, Ukraine has a time zone that is conveniently close to both Europe and US time zones. There is a mere 7-hour time difference between Ukraine and the US, which allows active collaboration between the client and the development team.
- You will find that the offshore development team in Ukraine comprises of bright, talented developers who are always ready to give their best in software development projects. Currently, Ukraine has about 116000 software developers, and Ukraine is globally the 4th in terms of the tech professional population.
- The fact that Poland is a member of the European Union makes offshore development to Poland a further attractive choice. Being a member of the EU, the Polish IT sector and IT market receive continuous impetus for growth, and Poland is bound by the General Data Protection Regulation- so your confidential data will be protected at all costs if you work with Poland.
- Not only is Romania only a couple of hours away in terms of time zone difference with Western European countries, the high quality and skills of Romanian software developers further incentivize clients to choose the country as an outsourcing partner. The IT industry in Romania is constantly growing at a steady rate, which ensures that the standards of Romanian software professionals are also rising.
- In terms of maximum economic growth and stability as well, Romania is among the top 5 countries in the EU to experience the same. This offers a measure of guarantee to clients looking to outsource software development to Romania.
- One of the greatest benefits of software outsourcing to Belarus is getting access to the highly dynamic and ever-growing tech environment in Minsk, particularly through the Belarus High Technologies Park. The thousands of software development companies and startups in the Park are exempt from paying Value Added Tax incurred through IT outsourcing, which is a win-win for the companies as well as their clients.
- Belarus also stands out against competitor outsourcing destinations like Russia and Ukraine with its higher English proficiency score of 52.39 according to the 2019 English Proficiency Index. This ensures that Belarusian developers can engage in seamless English communication with the clients, and thus offer better services.
- A plus point here is that Serbian software developers have shown a high retention rate in their respective companies, meaning they are content in their jobs and positions- and that is good news for a client because it means they get to work with the same developer team all through the project. Serbia is also only one hour ahead of the UK and 6 hours ahead of the US, which means real-time communication won’t be an issue.
- Serbian foreign investment laws in particular, while very nuanced, are welcoming of clients in the form of foreign investors and companies that want to outsource software developers from Serbia, and the continuous state investment in R&D in technology also supports the same.
To wrap up, rising preferences of US and UK tech companies towards outsourcing software development projects to Eastern Europe have been noted for the past few years, increasingly in 2020 as remote working becomes the new reality worldwide. Eastern European countries Poland, Ukraine, Romania, Belarus, and Serbia are currently the five most sought after for Eastern European software development because of minimal difference in a time zone with the US and the UK, EU membership benefits in some cases, English language proficiency of the brilliantly skilled software developers, and attractive hiring costs, that is hourly rates of Eastern European developers are much lower than that of US/UK developers. It is undeniable that Eastern Europe presents a fresh world of outsourcing opportunities to US and UK tech companies now.
Galina is Head of Marketing at YouTeam, a Y Combinator-backed marketplace for hiring remote software developers.
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