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CEO at Relevant

Outsourcing Software Development to Eastern Europe in 2022: Which Destination to Choose?

Outsourcing

Picking a destination for outsourcing and choosing the right outsourcing partner can be a challenge for business owners. Would you face a language barrier if outsourcing offshore or lose control of the project due to the distance?

Yet, the global market size of IT outsourcing is valued at more than $92 billion, meaning there’s a hefty demand for such services.

global market size of IT outsourcing is valued $92 billion

From private entrepreneurs to big-time companies, many businesses find it more beneficial to outsource development rather than hire in-house because it results in better quality and is more cost-efficient. And it is even more beneficial if you’re outsourcing software development to Eastern Europe. 

In this article, you’ll find out about the key advantages of IT outsourcing to Eastern Europe, top destinations, as well as which country will be worth every cent.

Key advantages of software development outsourcing to Eastern Europe

When it comes to software development, many people think of Asia first, therefore consider outsourcing to Singapore or China, or India. Some may also choose software development outsourcing to London.

While saving costs is a priority for most businesses, Eastern Europe software development outsourcing provides many more benefits. Here are a few examples:

  • A high percentage of well-educated people
    The vast majority of Europeans have completed higher education thanks to the financial resources that the government has been channeling into this field. The GDP percentage of expenses on the education of people aged 20–24 in Ukraine and Belarus, for example, was consistently higher than that of EU countries for almost a decade (from 2009 to 2016).
  • A big pool of tech professionals
    The high literacy rate has caused the growth of a large labor force and talent pool that is perfect for jobs in software development. So, you will have no difficulty hiring skilled professionals to do the job – outsourcing companies sure don’t.
  • Cost-effective business relationships
    In Eastern Europe, the average compensation of a developer is far lower than the rates of developers located in Western Europe or the US. This is due to the difference in the economic and socio-political situations in these countries.
  • Strong data security
    Eastern European countries conform to the same norms as the rest of Europe. This means abiding by copyright laws, keeping non-disclosure agreements, and applying policies, such as the General Data Protection Regulation (GDPR).
  • High proficiency in English
    Many people in Eastern European countries are fluent in English, as well as other European languages. This helps when it comes to communication and building a strong partnership in different regions.
why outsource development to eastern Europe

Challenges of IT outsourcing

Outsourcing to Eastern European software development companies does come with a couple of challenges:

  • The difference in the tax collection processes
    Tax collection methods can vary from country to country. That’s why businesses opt for outsourcing agencies – a tech partner will take care of any documentation related to taxes.
  • Remote communication
    Outsourcing companies in Eastern Europe are most likely in a different time zone than you, especially when you are outsourcing development offshore. This limits the time when you can supervise the team directly and get results immediately. Discuss the communication plans before making a deal in order for the outsourcing partner to ensure a smooth communication process.

Top 5 outsourcing destinations in Eastern Europe

Despite its share of challenges, Eastern Europe software development outsourcing is one of the best ways to reduce expenses and fulfill your project needs. Here is a list of the five best countries for outsourcing software development.

Ukraine

Ukraine is number one on our list for several reasons, including the following:

  • Global recognition of technical specialists
    Ukraine is known for its skilled tech specialists and reputation for producing high-quality specialists and results in the tech industry. The country can offer more than 210k tech specialists. It is the birthplace of many renowned start-ups, such as Grammarly and Petcube.
  • A balance of quality and quantity
    Many reputable organizations, like SkillValue, have marked Ukrainian engineers among the best in the world. They have also shown off their skills in coding challenges by HackerRank, scoring an average of 88.7%. They have ranked 11th on the global leaderboard, thus surpassing highly developed countries like the USA.
  • Affordable developer rates
    Ukraine has one of the lowest tax rates in all of the Eastern European countries. In addition, developers’ salaries in Ukraine are between $25–$45. This is far lower than the salaries of developers in western countries like the USA or the UK.
  • High quality of work
    Lower or reasonable fees does not mean there will be a compromise in the quality of the work. Considering the focus on and praise for technical education, Ukrainian developers are known for being hard-working and having exceptional technical skills. In addition, most outsourcing companies in Ukraine have long adopted the agile approach to development which is known to show great results.
  • High language proficiency
    Software companies place a lot of focus on furthering language education. Due to this, Ukrainian developers have a good command of the English language. 

Poland

Poland is another mainstream destination for outsourcing software development. Here are a few reasons why:

  • Good education standards
    Software development is a popular subject in Poland. The country places much focus on STEM subjects, especially in large cities. This has led to a large talent pool consisting of 250k skilled specialists. Besides its large talent pool, Poland  also scored 98 at Hackerrank’s Global Coding Olympics.
  • Relatively low rates
    The cost of outsourcing to Poland ranges from $40 to $56. This rate is at the higher end, definitely higher than that of Ukrainian developers, yet much lower than what US salaries cost.
  • Quality of work
    Polish developers have substantial experience and a progressive viewpoint that allows them to provide good quality work.

Belarus

Belarus has gained a reputation for its fast-paced growth in the technology and IT industries. Thanks to its location near the UK, and large community of English-speaking people, Belarus IT outsourcing comes with many advantages.

  • Good education level
    Belarus has an amazingly high literacy rate, and there are over 50k specialists ready to be hired.
  • Affordable rates
    The salary of developers in Belarus is between $28 to $43 per hour. This places it at the lower end of Eastern European rates.
  • Good understanding of English
    Learning English is part of everyone’s education in Belarus. Thus, the developers there understand the significance of English in software improvement and worldwide outsourcing.

Romania

Thanks to its highly desired geographical position, Romania has secured a place in the top five destinations for Eastern Europe software development outsourcing. Here are a few reasons why it may be worth outsourcing to Romania:

  • Proper skill and training
    Romania focuses a lot on STEM subjects and has implemented several methods to link IT industries with educational institutions. However, you may face a lack of qualified candidates. Romania has a lower talent pool compared to the countries mentioned above.
  • Affordable rates
    You can hire Romanian developers for $26-$45 per hour. This also places the country at the lower price point of Eastern Europe software development outsourcing.
  • Technical prowess
    Software development outsourcing to Romania is also a good idea because the country has scored 81.9 in the coding Olympics and has secured 20th position on the leaderboard.
  • Multilingual environment
    Romanian developers are trained to be fluent in English and several other languages, like French, Italian, German, and so forth. Romania has an EPI score higher than its European counterparts.

Czech Republic

Tech specialists from the Czech Republic have gained an excellent reputation worldwide. Many business owners prefer to hire workers from the Czech Republic, and even large companies, like Microsoft, have offices in this country. Here are a few reasons for Czechia’s popularity:

  • A good level of higher education
    Every year, more and more graduates specializing in STEM come out of the Czech Republic.
  • Affordable rates
    The salaries of Czech developers range from $34 to $53 per hour. This places the Czech Republic at the high end of rates in Eastern Europe.
  • Substantial tech pool
    The country also has 100k specialists in IT. Czech developers have gained a good reputation among their Eastern European counterparts. Czechia ranked 9th in the World Programming Olympics and has better scores than advanced Western countries, like the US and UK.
Top 5 outsourcing destinations in Eastern Europe and their rates

The Czech Republic vs. Romania vs. Belarus vs. Poland vs. Ukraine: Which country is best for your outsourcing project?

All of the above-mentioned countries have more or less affordable rates, big IT hubs with a large talent pool, and people fluent in English and other languages.

Therefore, choosing a country from these five could be tough. So here’s a comparison table including all the info given above.

CountryHourly RatesApprox. Number of SpecialistsIT HubsStart-ups
Ukraine$25 to $50210kKyiv, Lviv, Odesa, Kharkiv, DniproGrammarly, Petcube, Bookimed, Preply, YouScan
Poland$40 to $56250kWarsaw, Krakow, Wroclaw, LodzDocPlanner, Stepwise, Mood Up Team, STX Next, Gecko Dynamics
Belarus$28 to $4350kMinsk, Gomet, Vitebsk, Mogilevn-iX, Instinctools, Itransition, Sphere Partners, Masquerade
Romania$26 to $51110kBucharest, Cluj-Napoca, LasiUiPath, NordLogic Software, DCSL GuideSmiths, Tremend Software Consulting, Atta Systems
Czech Republic$34 to $53100kPrague, BrnoSTRV, Limestone Digital, Sciant, Moravio, Kiwi

As you can see, Ukraine offers a lot more than the others:

  • It has the second biggest talent pool among the five countries yet offers middle-of-the-range outsourcing rates.
  • There is an overabundance of IT specialists. So, you can easily hire dedicated software workers at affordable prices.
  • Much focus is put on software development in Ukraine. That is why Ukrainian developers have a significant degree of skill in numerous programming languages. It has an enormous tech stack and expertise in website development and its developers are familiar with Python, Java, Ruby, SQL, and JavaScript.
  • The laws and taxation systems of Ukraine make it a favorable environment for clients.

Considering these factors, Ukraine comes out as the winner among the five countries. It is the most favorable destination for software development outsourcing to Eastern Europe.

How to choose the right IT outsourcing company

Now that you have selected the outsourcing destination, the next essential step is finding the right outsourcing partner. There are many professional software companies that can help you accomplish even the most challenging projects.

Here are the factors that you need to consider when choosing the right tech partner:

Technology and infrastructure

Infrastructure means the basic physical resources a company needs, like computers, workspaces, etc. We recommend choosing a company with good infrastructure as it will have sufficient tools and equipment required to do the job. This way you can make sure that your progress is not hampered by someone else’s lack of resources.

Scalability

The scalability of a company means that it can adjust the team size according to your needs. If you are planning on forming a long-term deal with an outsourcing company, it is better to check whether the company has the staff and infrastructure required to scale up—add more specialists to the team—or scale down, in case your needs change.

A skilled and experienced team

If the company you outsource has competent staff, they will be able to perform the job efficiently. Competent people will have the skills required to develop programs that meet your needs and fix any issues with ease.

To determine the competence of the staff, you can either check other clients’ customer reviews or work with them yourself. You can always change partners if you are not satisfied.

Company portfolio

One of the best ways to choose a company is to look at its portfolio. That way you can find out about its clients and performance.

Check out relevant case studies on the company’s portfolio to find out what projects they’ve successfully delivered to their clients.

Reliability

A reliable company should be able to provide you uninterrupted services. You should always choose companies that are reliable in the long run and can assure you that they will provide  uninterrupted services regardless of what happens on their side. You can check the reliability of companies by visiting their portfolios or asking their previous customers.

how to choose an outsourcing partner

Conclusion

With high literacy rates, location and time zone benefits, a large talent pool, and fluency in multiple languages, outsourcing software development to Eastern Europe provides many advantages.

Among all reviewed countries, Ukraine provides higher data protection, lower tax rates, lower salaries, and a higher talent pool compared to the other countries. But Ukraine has many outsourcing companies, which should you go for?

Choose a reliable company that has:

  • an experienced team,
  • the necessary technology and infrastructure for your project,
  • The ability to be scaled according to your needs, and
  • has cases that are relevant to your project’s objectives.

At Relevant Software, we provide clients with senior tech talent with deep expertise in different technologies and business niches. Our services include web, mobile, and SaaS development; DevOps; and quality assurance.

If you’re looking for a reliable outsourcing partner, get in touch with our team to discuss the specifics.

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CEO at Relevant
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