The Cost of IT Services in Europe

What is the cost of IT services in Europe? Generally speaking, it depends on the region where you plan to hire an offshore development team.  After all, each country has different standards of living, business climate, and IT sector. That’s why analyzing software development costs in Europe is impossible without peeling back the onion and looking at each region individually, which is exactly what we will do in this post. 

But first, let’s dive deeper into the factors that influence software development costs in Europe.  

Factors that influence the software development cost in Europe

Accelerance’s Guide to Global Outsourcing Rates (2023) highlights 6 key factors that define the cost of IT services in Europe and globally.   

Location: Software development rates tend to be higher in countries with strong economies. As Europe is a versatile continent that consists of different nations with different economies, from stable to developing, the cost of IT services in Europe varies from country to country.  

English proficiency: A language barrier pertaining to international teams increases the likelihood of miscommunications, which can potentially lead to foiled deadlines and poor results. Europe includes some of the countries with the highest English proficiency in the world (the Netherlands, Austria, Denmark, etc ) as well as countries with moderate English skills among the population (France, Czech Republic, Spain, etc). At the same time, in Europe, you can build a skilled team with full-working English proficiency in such countries as Ukraine and Poland. 

Expertise: Just like anywhere in the world, software development costs in Europe depend on the skill set you need. If you’re hunting for hot skills, for example, Big Data, AI, Machine Learning, Cloud, or DevOps, you’ll have to pay top dollar, no matter where the offshore dedicated development team is located. However, the cost per hour of these specialists tends to be lower in some regions, for example, Eastern Europe and the Balkans.

Developers’ experience: Naturally, the more experience a developer has, the higher their cost per working hour. At the same time, software development costs in Europe and rates for senior IT specialists tend to vary in different countries.  

Project duration: Software development partnerships may last from a few months up to several years. There’s a common opinion that long-term contracts tend to be more affordable, whereas higher rates are applied for shorter engagements. 

READ ALSO: The Secrets of Cost Saving: Nearshore Software Development Rates in CEE and LATAM 

As a company that builds remote teams, we’d add one more factor that comes into play. 

Time zone compatibility: If you’re open to working with teams in a drastically different time zone, you might find tempting rates in countries like India or the Philippines. Developers in far-off offshore locations often command lower rates, and if you don’t require overlap and are ready to work asynchronously, this can be a cost-effective solution. When you’re looking for a team that can work during your business hours, you’ll inevitably come across Central and Eastern Europe that has higher rates than regions with zero to minimum common hours.  

Keeping these factors in mind will help you choose the optimum destination for your offshore dedicated team in Europe.  

In this research, we’ve taken a deep dive into the rates across Europe, pulling data from trusted sources like Accelerance, Clutch, PayScale, Glassdoor, Indeed, and Plane.com. We’ve relied on our own 16-year experience in building tech teams for businesses around the globe. 

Software development costs in Europe: Central and Eastern Europe (CEE) 

The reason why we start with this part of Europe is simple – we are a software development company that specializes in building tech teams in CEE. Operating in this region for more than a decade, we can confidently say that CEE is a goldmine for businesses looking for affordable and skilled talent. The following countries are currently the hotspots of IT talent in CEE:  

• Ukraine
• Poland
• the Czech Republic
• Hungary
• Bulgaria
• Romania
• Moldova

READ ALSO: Top Tech Hubs in Eastern Europe

When it comes to the cost of IT services in this corner of Europe, the most recent Accelerance report says that it varies from €64 to €89 per hour on average. According to Clutch.co, a firm aggregator, the average rate per hour for software development across most countries in CEE is between €24-€46, not including taxes and fees associated with a provider.  

In Poland and Hungary, software development providers tend to charge €47-€93 per hour. This price is common across Central Europe.  

On the other side of the spectrum, there are Ukraine, Romania, Moldova, and Bulgaria. These Eastern European countries stand out as the most affordable destinations where you can find a provider of an offshore software dedicated team, charging less than €24 per hour of their service. Consisting mostly of developing countries, Eastern Europe made great strides in improving its business climate and attracting investors in recent years while sticking to moderate software development rates. Moreover, it boasts 1.3 million software developers who are reputable for providing high-quality services for companies in Western Europe and North America. If you’re looking to cut back on software development expenses, Eastern Europe is definitely worth consideration.    

Here are the average software development rates in CEE: 

READ ALSO: Advantages and Disadvantages of Offshore Software Development Services

Software development costs in Europe: Western Europe

Unlike Central and Eastern Europe, Western Europe isn’t a go-to destination for reducing software development costs through outsourcing. To get the big picture when it comes to the cost of IT services in Europe, let’s see what it is worth to build a tech unit in Western Europe.  

Companies looking to hire an offshore development team in this part of Europe have to grapple with hefty software development rates. That’s why many local businesses prefer to build their units in other locations. As a company that works with businesses from Western Europe, we can say that lots of our clients face the problem of exorbitant software development costs in Europe. In particular, these are businesses located in the following countries: 

• Germany
• France
• The Netherlands
• Switzerland
• Denmark

Western Europe has some of the highest rates for IT services globally. According to Clutch.co, the majority of companies providing software development services in this region charge €95-€130 per hour for their services. A wide range of providers even have a higher price tag, charging between €140-€190 per hour.  

According to PayScale and our own speculation, in 2024, the software development costs in this part of Europe are as follows: 

The cost of IT services in Europe: Germany, France, the Netherlands, Denmark, Switzerland

Looking at these numbers, it’s not easy to find affordable talent in Western Europe. That’s why building an offshore dedicated development team in this region isn’t popular. 

READ ALSO: Offshore Development Center vs. In-House Team: Which one is Best for You?

Software development costs in the UK

The situation is similar in the United Kingdom. The high software development costs in the UK make the country one of the biggest beneficiaries of offshore software development. 

PayScale shows that retaining a developer in London will cost you around £53,000 per year. The average salary for a software developer in the UK is around £32,000 per year.  

If we break down the rates according to the level of engineers, according to the same source, we will see that the salaries of developers in the UK are high. 

Software development cost in the UK

If you’re up for bespoke development in the UK, you’ll pay in the range of €94-€141per hour for the service of an average local provider. You can also find firms that charge a bit higher – €141-€187. Fewer firms offer their services at the rates of €47-€93, which is the minimum price for this type of service in the UK.  

The cost of IT services in Europe: Northern Europe

This corner of Europe includes two main regions – Scandinavia and the Baltic states. Despite their geographic proximity, when it comes to the cost of IT services in Europe, the situation is drastically different. Before we dive deeper, which countries are in this region?  

• Sweden
• Norway
• Finland

The Baltic states:

• Estonia
• Lithuania
• Latvia

The best way to describe Scandinavian countries is a stellar quality of life, which assumes high prices for services. 

On the other hand, there are the Baltic states, which belong to fast-growing economies with a positive business climate that welcomes foreign investments. 

When it comes to the cost of IT services in Europe, Scandinavian countries can hardly be called affordable. Most of the local custom software firms maintain a price tag of €47-€93. A lot of local providers of offshore dedicated teams charge €94-€141 per hour of software development.  

If you’re looking to trim expenses by hiring an offshore development team in this region, it’s best to consider Lithuania, Latvia, or Estonia. Most providers here charge between €23-€46 per hour of software development. It’s also worth mentioning that Estonia has the biggest number of providers offering lucrative rates among all states in this part of Europe.  

READ ALSO: How to Reduce IT Development Costs

Finally, the Balkans

Countries like Croatia, Bosnia and Herzegovina, Serbia, Montenegro, Albania, North Macedonia, Greece, and Slovenia are hardly the first countries that come to mind when you’re thinking about outsourcing. However, the Balkans have a decent number of providers, despite the fact that the local IT sector isn’t as thriving as that of Central or Eastern Europe.  

With an up-and-coming tech industry, Croatia offers lower prices than Western Europe, though the rates for IT services aren’t the lowest in the Balkans. Most Croatian firms charge from €47 to €93 per hour, but you can access a wide range of companies developing software for €23-€46 per hour. Only a handful of providers cross the threshold of $100 per hour.  

The cost of custom development in Greece is the same, but in Slovenia, it’s more expensive to develop software – €47-€93 per hour is a common hourly rate.  

The cheapest options for outsourcing in this region are Albania, Serbia, Bosnia and Herzegovina, and North Macedonia – the countries can guarantee an average price tag of €23-€46 per hour. For your convenience, we’ve put together a table for a quick glance.  

Wrap up

We’ve analyzed the cost of IT services in Europe. For your convenience, we can single out the most affordable hotspots to build your offshore dedicated team in case you’re looking to optimize your budget: 

• Eastern Europe: (Ukraine, Poland, Bulgaria, Moldova)
• The Baltic states (Latvia, Lithuania, Estonia)
• The Balkans (Croatia, Albania, Serbia, North Macedonia, Bosnia and Herzegovina)

We may admittedly be a bit biased here, but if we were to name the best region that combines lucrative rates and a skilled workforce, it would be Eastern Europe. The region has a well-rounded IT sector that stands on the shoulders of talented developers with solid educational backgrounds, confident English and decade-long experience being part of Western European and North American teams. When it comes to the cost of IT services in this part of the continent, Eastern Europe doesn’t let you compromise between quality and price.  

We at nCube can help you build an offshore dedicated development team in the region of your choice. Here’s why you should consider us as your provider: 

Top 1% talent: We’re committed to providing you with the best software developers. By our rigorous screening process, we ensure you work with engineers who excel in tech skills, soft skills, and English proficiency.  

Fast team assembly: We understand the urgency of your projects, which is why we can find and integrate the talent you want to see on your team in a matter of weeks.  

Focus on talent retention: Building teams is just the beginning – we’re dedicated to taking care of them as well. Last year, we achieved an impressive 98% retention rate thanks to a comfortable work environment, competitive compensation, and attractive bonus packages.  

Cultural fit: Europe is a vast tapestry of cultures, and we specialize in finding engineers who will fit seamlessly into yours. We take care to embed our engineers into your workflows, culture, and management structure. 

Contact us to discuss if the team of skilled offshore developers can help you reach your goals.