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Eastern Europe Software Development Outsourcing: What You Need to Know

Eastern Europe Software Development Outsourcing: What You Need to Know

In the global software outsourcing market, there are three areas in the world that stand out: Latin America, Eastern Europe, and Asia. We at Bridge currently source talent from Latin America and Eastern Europe. The latter combines technical expertise and proximity to Western Europe, making it a perfect location for outsourcing.

It’s hard to pinpoint exactly when Eastern Europe software development outsourcing got started. But it was most likely sometime in the 1990s. Today, the region is known for having strong Science, Technology Engineering, and Mathematics (STEM) education, producing some of the world’s most well-known tech gurus like Jan Koum (founder of WhatsApp), Max Levchin (co-founder of PayPal), and Dmitriy Zaporozhets (co-founder of GitLab), as well as many leading scientists.

Currently, the region has a deep talent pool that companies like Google, Microsoft, Intel, Oracle, and similar are investing in. So what makes Eastern Europe such a prime location for sourcing talent?

First, let’s discuss why companies outsource in the first place.

 

Why do companies outsource at all?

When done with an experienced vendor that has been vetted and recommended, outsourcing can yield amazing results. Namely, the ability to reduce costs while churning out features and products at a faster rate. Also, outsourcing allows you to focus on your primary objectives, effectively decentralizing part of your business. Another advantage of outsourcing is access to a larger talent pool. So, effectively, you get Silicon Valley-caliber talent at significantly lower rates.

Unfortunately, not every vendor will give you the benefits mentioned above. Our clients at Bridge have come to us after nightmare experiences with outsourcing companies. For example, we’ve heard of examples where projects went grossly over budget and the result was catastrophic in terms of timelines.

Outsourcing vs In-House: What Is Best For Your Team?

With our approach, clients get the benefits of outsourcing without the risks. We partner with recruiters in the same outsourcing destinations such as Ukraine, but our clients hire engineers directly and remain the final decision-makers for hiring and firing. In other words, we offer full control and transparency.

 

Why outsource to Eastern Europe?

Eastern Europe is a prime location for outsourcing, and the region has proven time and time again to produce tech talent that shows initiative and speaks English fluently. To illustrate this, and help you understand why hiring a software developer team in Ukraine, Belarus, Romania, or Poland isn’t out of the question for your company, let’s look at some facts:

  • Google has stated that there are about 1 million software developers in Central and Eastern Europe.
  • Since the Google for Startups Campus opened in Warsaw, Poland, the startup community has hired 43,000+ employees across various industries.
  • A KPMG report stated that the US has created over 220,000 jobs in Poland
  • Polish-founded Booksy raised a $70 mln war chest to acquire salon appointment apps, expand internationally.
  • Snap Inc. (Snapchat) acquired AI Factory, a company with most of its team based out of Ukraine (70 employees), for $166 mln.
  • The Ukrainian founders of the 3.1+ million user neobank — Monobank — launched a fintech startup called Koto in the UK.
  • Google opened its first R&D office in Ukraine after acquiring CloudSimple, a cloud migration solution.
  • Romanian startup FintechOS raised $60 mln in Series B funding to fuel global expansion.

We’ll show you more examples of companies that have opened offices in Eastern Europe in a later section. Our point here is that Eastern European-born software engineers are helping both local and international companies succeed.

Read This Before Hiring Software Engineers in Eastern Europe

You might ask, is there a particular country we would recommend to source talent from? First, let’s look at Ukraine, Poland, Romania, and Belarus in more detail.

 

The best countries in Eastern Europe for outsourcing software projects

Despite the title, there’s no “best” country. All four countries have strong technical schools, talent, and government incentives.

IT outsourcing in Ukraine at a glance:

  • 200k IT professionals
  • 23k tech graduates per year
  • Grammarly, GitLab, DepositPhotos are examples of companies started in Ukraine
  • Nasdaq, Amazon, Adobe, SAP, Honeywell, Microsoft, Bosch, and Vodafone are examples of companies that outsource to Ukraine

US Tech Companies That Have R&D Offices in Ukraine (Google, Snap, Lyft and more!)

IT outsourcing in Poland at a glance:

  • 250k IT professionals
  • 15k tech graduates per year
  • CD Projekt is arguably the most famous Polish tech company, producing and publishing such games as The Witcher 3 and Cyberpunk 2077
  • IBM, Nokia, Intel, Samsung, Amazon, Microsoft are examples of companies that outsource to Poland

IT outsourcing in Romania at a glance:

  • 105k IT professionals
  • 6.7k tech graduates per year
  • UIPath and Softpedia were created in Romania and are headquartered there to this day
  • IBM, Siemens, Oracle, HP, and Amazon are examples of companies that outsource to Poland

IT outsourcing in Belarus at a glance:

  • 49k IT professionals
  • 16k tech graduates per year
  • Wargaming Group is a Belarussian video game studio that has developed and published games, including Massive Assault, World of Tanks, and World of Warships.
  • Mapbox, Rakuten, and Playtech are examples of companies that outsource to Poland

For full transparency, although Belarus makes our list and is still a strong contender in Eastern Europe, due to the political climate in the country, we would advise approaching Belorussian outsourcing very carefully from the legal and compliance perspectives.

Speaking of legal and compliance, at Bridge, we offer our clients a range of services apart from recruiting top-tier talent — legal and compliance, payroll and accounting, and HR and retention. We know all the ins and outs and peculiarities of laws and regulations in the countries we recruit in, so we can solve any problem, big or small.

Now, let’s move on to real salary figures for senior software engineers.

 

What are the salaries for software engineers in Eastern Europe?

Cost savings has always been a factor that drives companies to outsource. But in 2020, it became the biggest driving factor, according to a Deloitte survey. When you outsource development to Eastern Europe, you can expect to pay approximately 2-3 times less than you’d pay US-based or Western European-based software engineers.

What’s more, you could end up hiring a remote development team in Ukraine consisting of 1 backend developer, a frontend developer, and a QA engineer (almost a full standard team) for about the salary of one senior US software engineer.

Senior Software Engineer Salary in Eastern Europe in 2021

Country

Average Senior Engineer Salary

Ukraine

$48,000

Poland

$49,692

Romania

$34,349

Belarus

$36,600

Figures are taken from our Budget Calculator, Glassdoor, and SalaryExpert.com.

The salaries in the above table are averages for the entire country. In the biggest tech hubs in each country, salaries are higher. For instance, in Kyiv, Ukraine, senior software engineers make approximately $52,000. In Warsaw, Poland, it’s about $56,000. Senior engineers based in Bucharest, Romania make $38,800, and in Minsk, Belarus, seniors make around $40,000

 

What are the drawbacks to outsourcing IT to Eastern Europe?

We highlighted some examples of companies with R&D offices in Ukraine in our country comparison, and one question that comes up is — so why don’t tech giants just outsource through a software outsourcing company? The reason is likely because they didn’t want a third party to come between them and important business decisions.

https://bridgeteams.com/blog/risks-of-outsourcing-and-how-to-solve-them/

When you’re dependent on someone else, it can slow the speed of innovation, which we found extremely important during COVID. So we’re eagerly awaiting the 2021 surveys and reports from Deloitte and other research companies to see what’s changed and the dynamics of priorities and the driving factors for change.

The drawbacks of outsourcing include:

  • Not having full control over your business
  • Risking failure to save money
  • Frustrating your existing in-house team with having to deal with poor communication and setbacks caused by the software vendor
  • Time zones and spatial proximity may hinder development
  • Software engineers that are not fully engaged or invested in your product

However, there’s a better alternative to hiring remote talent than searching far and wide for the best software vendor – trusting the remote hiring campaign to Bridge Teams.

 


Takeaways

Outsourcing to IT Eastern Europe is a viable option for companies of all sizes. However, the single biggest thing we would recommend is weighing the pros and cons before deciding to outsource. Generally, it’s only advisable to outsource with a select few vetted vendors with a proven track record.

However, if you want all the benefits of outsourcing without dealing with a third-party company, Bridge is the best solution. By providing engineers we handpick through our extensive recruiting process, we save you time on recruiting. You get a dedicated employee who works only for you under a contract you provide. And you will be able to interview and approve each candidate yourself – an advantage no outsourcing vendor could ever provide.

Interested in learning more about Bridge? Contact us today!

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