By Bogdan Negru, 10th May, 2021
From software development to team augmentation, Eastern Europe has a lot to offer U.S. companies.
Companies turn to external IT expertise for a wide variety of reasons. From flexible scaling and budget control to IT talent gap solutions, engaging geographically dispersed technology resources on a contract basis offers numerous advantages.
The question is where to seek out the right tech professionals to complete a software or web development project or integrate seamlessly with an existing team. For some time, locations in Asia-Pacific, including India and the Philippines, were the de facto choice for U.S. enterprises. Recently, however, Eastern Europe has emerged as an attractive alternative and is fast becoming the “go-to” for many North American businesses.
With increasing alacrity, companies are turning to EU member nations like Romania, Bulgaria, Hungary, Slovakia, and Poland, as well as neighbors such as Ukraine and Belarus.
Already, such tech luminaries as Apple, Microsoft, Google, IBM, Dell, and Cisco have established innovation centers and leveraged local talent in Eastern Europe. Other prominent companies, such as Morgan-Stanley, are doing so as well.
What does this region have to offer premier brands and small and mid-sized businesses? And how can U.S. companies make the best use of the available resources? As an IT expertise provider with deep roots in Eastern Europe, here’s our perspective.
Key Benefits of Partnering with IT Experts to Eastern Europe
Eastern Europe offers a highly competitive combination of talent, cost savings, and qualitative benefits. There are certainly cheaper outsourcing locations on the planet, but highly qualified IT professionals are available in Eastern Europe at a fraction of the cost of comparable teams based in the U.S.
When quality factors are taken into account, Eastern Europe is arguably the best value for the dollar.
Take as an example the Tholons 2021 Top 50 Digital Nations report, which includes in its rankings the skills base, local digital infrastructure, cost factors, innovation capabilities, and risk. Eastern European countries rank well, with Poland, Romania, Hungary, Slovenia, and Bulgaria all making an appearance on the list. Similarly, Poland, Hungary, Romania, Slovakia, the Czech Republic, and Ukraine all place within Gartner’s top 30 locations for offshore services. It’s hard to go wrong.
Risk vs. Reliability
Tholons accounts for risk in its ratings, and most companies considering their IT outsourcing options do in their decision-making as well. On this measure, Eastern Europe again proves advantageous.
Economically, the Central and Eastern European region (CEE) is expanding rapidly, notching 115% per-capita GDP growth from 2004 to 2019, according to McKinsey’s Digital Challengers report. What’s more, productivity is rising. And even with the onset of Covid-19, CEE countries realized 78% of 2019’s growth in just five months.
The region is also attracting more outside investment. In 2019, nearly €4.5 billion in venture capital poured in, up 500% from 2015. This is spurring further development of an already robust tech sector and digital infrastructure.
Fiber, for instance, is available to at least 47% of the CEE population and 4G reaches 92%.
Beyond economic stability and infrastructure, companies must also consider intellectual property protection and data security issues. Working with EU member countries, such as Romania and Poland, offers helpful safeguards, including the General Data Protection Regulation.
Let’s dive more deeply into the talent question, as it’s a key component of Eastern Europe’s value proposition.
Across the EU, the number of IT specialists is on an upswing, expanding 40% from 2011 to 2019. This was six times greater than total employment growth. Developer jobs and other roles in the technology field are particularly attractive in Eastern Europe. When taking living costs into the equation, many Eastern European tech professionals are better off than their Western European counterparts, which helps attract the best and brightest into these professions.
As Western Europe deals with IT talent shortages, Eastern Europe has been growing its labor pool. Poland, for instance, boasts almost 300,000 professionals, and Romania nearly 120,000.
In fact, a 2019 PwC survey found private businesses in Romania, along with those in Slovenia, most likely to have the in-house talent to realize their digital technology goals. In other words, there are skills to go around.
And the skills are top-notch. A 2019 SkillValue report put Slovakia, Poland, Hungary, and Ukraine in the top 5 globally. Large volumes of well-trained developers are continually graduating from elite educational institutions. In the city of Prague alone, Charles University, the University of Chemistry and Technology, and the Czech Technical University all rank in the top 500 worldwide.
A key contributor to tech talent availability and quality is the large proportion of women in STEM fields in Eastern Europe. The communist legacy pushed women into the workplace in large numbers decades ago and younger generations are following in their footsteps. In Bulgaria, for instance, women make up 30% of the tech workforce. In Romania, more than one in four tech professionals is female.
A big question for companies interested in international software development or team augmentation is how well these resources will integrate with their own leaders, managers, and IT staff. Will they form a cohesive unit capable of productive collaboration?
When drawing from Eastern Europe, the answer is an emphatic “yes.” English language skills among IT pros are quite strong, as proficiency is essentially mandatory for success in the industry and the larger business economy.
It’s why Poland, Romania, and Bulgaria are among the countries achieving top marks for English fluency. Other Eastern European countries like Hungary, Slovakia, and the Czech Republic are rated “strong” and beat out all Asian locations with the exception of the Philippines and even many parts of Western Europe.
Communication is about more than language, however. Fortunately, Eastern Europe has abundant cultural overlap with the U.S. A significant proportion of local talent has worked with global companies, orienting developer communities to accepted professional standards and common project management methodologies. These professionals are a good fit in terms of their teamwork abilities, willingness to speak up and offer ideas, and other cultural markers that are difficult to quantify but no less important.
Eastern Europe even delivers on convenience. Morning in U.S. markets is late afternoon in Eastern Europe, facilitating meetings and conversations and enabling U.S. teams to pick up at the start of the day when their overseas counterparts are either leaving off or working concurrently when needed.
For all the upsides of Eastern Europe, it’s important to note that no region is perfect. When partnering with overseas businesses, there are risks. Some companies have struggled with poor quality code, unmet project needs, high turnover among developers, and invoicing and payment confusion that can arise when dealing with financial transactions across borders.
Fortunately, there is a proven way to avoid these complications while taking advantage of all Eastern Europe has to offer
— partner with an IT solutions provider that knows the market and maintains a large bench of pre-vetted professionals subject to rigorous hiring and training.
Even better is to work with a U.S.-based company employing U.S. resources for client-facing functions, such as business needs evaluation, technology architecture, and project management. Doing so will afford maximum convenience and effortless calibration.
Combining U.S.-based leadership and management with Eastern European IT talent is the approach LiftUp Solutions has applied in delivering over 770 projects for more than 320 current clients. Whether you need help with digital transformation, software or web development, testing, or team augmentation, LiftUp can match you to the experts you need and deliver the quality and experience you expect.
The best way to get started for development projects is an initial technical conversation with one of our top solutions architects. Or for team augmentation, allow one of our representatives to conduct a needs analysis. Either way, you’ll speak with an expert, not a salesperson, and always walk away with some helpful perspective, whether you decide to engage LiftUp or not.