- Why companies outsource IT development
- Why the Eastern European talent market is gaining attention
- Outsourcing Software Development to Eastern Europe: Which Destination to Choose?
- Czech Republic
- Why choose Pentalog as your IT Outsourcing partner in Eastern Europe?
Finding and retaining skilled talent is the biggest barrier to emerging technologies adoption by companies, according to a new survey by Gartner. It can take up to 9 months to hire IT specialists. And even after finally onboarding them, companies need to do all they can to retain talent and avoid damaging departures.
To address the shortage of technology skills, tech companies of all sizes, from startups to large corporations, are turning to IT outsourcing, especially in Eastern Europe. This business model has shown that there is no longer a barrier to remote working, whether nearshore or offshore.
This report looks at Eastern Europe and its outsourcing hotspots. In what way does IT outsourcing bring value to businesses? Which country is best for outsourcing software development services? We reveal all below
Why companies outsource IT development
Nowadays, companies do not outsource only to save development costs, but to forge strategic partnerships that drive innovation and growth.
In other words, IT outsourcing allows companies to:
- Have quick access to a massive talent pool of tech experts in cutting-edge industries
- Set up dedicated development teams faster and adjust their size depending on business priorities and goals
- Reduce time-to-market for their products
- Increase scalability
- Improve quality due to good market practices and industry innovation
Why the Eastern European talent market is gaining attention
Eastern Europe is one of the most popular IT outsourcing destinations due to its dynamic business climate and intense growth. Countries such as Poland, Romania, Hungary or even the Czech Republic know this and launched a multitude of political and economic measures to sustainably support the tech industry.
The region is home to more than 1.7 million qualified IT specialists (source: Eurostat) working for leading tech companies or freelance, and more than 2,500 companies specializing in software development outsourcing, according to Clutch.
Outsourcing Software Development to Eastern Europe: Which Destination to Choose?
This study reviews the Eastern European tech landscape and its main software development hubs to help you find the right IT outsourcing destination for your needs.
Which country has the biggest talent pool? In which technology is each country proficient?
Which location is best for your outsourcing project? Find everything you need to know below.
According to the world rankings, the best developers are based in Poland, making it one of the most attractive destinations for outsourcing software development in Central and Eastern Europe. In fact, Polish developers are ranked 1st in HackerRank for best developers and 7th by SkillValue.
With more than 500,000 specialists in emerging technologies, including 250,000 developers available on the market, and 11,000 new tech graduates every year, Poland has the largest labor force in Eastern Europe.
Thanks to the expertise of the tech community, Poland has become a vital innovation hub where the largest companies in the industry have based their R&D centers. In 2021, Poland ranked 40th on the Global Innovation Index.
Learn more: Outsourcing IT to Poland: the best country for computer programing quality
Nicknamed the ‘Silicon Valley’ of Eastern Europe, Romania has adopted emerging technologies with success. In 2018, the emerging technology sector made up 3.74% of Romania’s GDP, the equivalent to 9.03 billion dollars (source: Eurostat).
In terms of innovation, Romania is ranked 48th in the 2021 Global Innovation Index, and 40th in its income group (high-income countries). Romania is also an attractive country for foreign investors due to its 8 innovation hubs located in Bucharest, Cluj-Napoca, Timișoara, Craiova, Iași, Sibiu, Brașov and Oradea. Large corporations such as Microsoft, Huawei and even Hewlett-Packard have therefore chosen to base their operations in Romania.
Learn more: Romania: a popular offshore IT outsourcing destination in Eastern Europe
Although relatively unknown for its IT outsourcing capabilities, the Czech Republic remains a top outsourcing destination for tech companies.
In fact, with more than 209,000 IT specialists, including 110,000 developers, the Czech Republic boasts the second biggest talent pool in Eastern Europe (sources: Eurostat, Statista). Every year 7000 young tech graduates enter the labor market to respond to the industry’s growing demand.
Czech developers are particularly proficient in Java, PHP, Ruby on Rails, Python, C#, and C++, among others. Their expertise is also known worldwide: it is ranked 9th in the top places for web developers by HackerRank and has developed several successful products, such as Avast antivirus.
The Czech Republic’s welcoming business environment also attracts foreign investors, as well as large corporations from the tech industry, such as Google, Oracle and even IBM. In 2021, 19 Czech software development companies dominated the Deloitte Technology Fast 50 Central Europe rankings, which lists the most innovative and dynamic companies in the region.
The emerging technologies industry in Hungary is one of the country’s most dynamic sectors, representing 5.62% of GDP. To date, Hungary is home to more than 84,500 IT engineers, bolstered by 3000 young graduates every year.
As the first European country to introduce computer programming into the school syllabus from primary school onwards, Hungary trains IT engineers whose skills are renowned worldwide. It ranks 5th for the best software developers in the world by HackerRank, and 3rd for the best Java developers.
Due to their technical expertise and government investment, Hungary has attracted numerous multinational companies, such as Siemens, Ericsson, Deloitte and Nokia, who have decided to base their R&D centers there. It ranks 40th in Forbes’ Best Countries for Business.
The emerging technologies sector is one of the most dynamic in Moldova’s economy and the Moldovan government considers it a priority for economic development.
In Moldova, more than 26,000 people work in the IT sector, 11,500 of whom work for IT services companies. Supported by a university system geared towards science and technology, approximately 2000 young graduates enter the job market every year (Source: Invest Moldova).
To support the competitiveness and innovation of the Moldovan IT industry, the government implemented several initiatives to create new entrepreneurship hubs and launch programs specifically to support to startups. This policy resulted in Moldova ranking 6th in the Global Innovation Index for its income group (lower middle-income countries) and 64th in the general ranking.
Learn more: Why choose Moldova as an IT outsourcing destination?
In Bulgaria, the IT development sector is the country’s most dynamic and is expected to make up 8.9% of its GDP in 2022.
Obviously, Bulgaria is not home to the largest community of developers in Europe, but the country uses well-developed IT infrastructure. The Bulgarian government therefore created Sofia Tech Park in 2015, Bulgaria’s first science park, and invested in many education programs geared towards these emerging technologies.
Tech giants such as Oracle, IBM and VMware are well aware of this and already started setting up operations in the country several years ago. Bulgaria ranks 2nd in the 2021 Global Innovation Index in its group (upper middle-income countries) just behind China.
Why choose Pentalog as your IT Outsourcing partner in Eastern Europe?
Pentalog is a digital services platform that helps clients worldwide along their product lifecycle – from ideation, through design, development, recruitment of tech profiles, to growth strategies to achieve Product Market Fit.
With more than 27 years of experience in agile development and outsourcing of IT projects, Pentalog has extensive experience in successfully implementing and delivering all kinds of remote projects:
- We have an international team of more than 1600 carefully selected and regularly trained IT engineers.
- With SkillValue Insight, an algorithm which objectively measures talent, we help clients onboard the best tech specialists fast.
- Due to our expertise in Growth and Innovation, such as UX/UI, product design and Growth Hacking strategies, we help businesses design, build and scale their digital product.
- Our products are 100% managed using the Agile methodology, to provide transparent project management and an iterative development strategy that adapts to changes and supports innovation throughout the entire product lifecycle.
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