Outsource Development to Eastern Europe

The global pandemic has changed the way we understand and treat the workforce. Why struggle with hiring in-house (which can take months) when you can partner with a reliable software outsourcing company in Eastern Europe and get the same results faster?

With that in mind, more and more companies are opting for outsourcing and remote teams. In this article, we are going to take a look at four major reasons why outsourcing to Eastern Europe is so attractive for aspiring startups, small-to-midsize businesses, and global enterprises.

Market overview of outsourced development in Eastern Europe

Out of the three established outsourcing regions in the world, such as Asia, South America, and Eastern Europe, the latter has an impeccable reputation for the quality of services and software developers’ dedication to projects. You may know that such world-known brands as Google, Oracle, IBM, Deloitte, and many others have chosen Eastern Europe for IT outsourcing. There are also thousands of smaller companies outsourcing in this region as well.

In Eastern Europe, software development outsourcing is among the top contributors to the countries’ exports. It means that many companies specialize solely in outsourcing services. In order to be able to compete in the global arena, these companies hire the best experts and help them grow professionally. So what makes Eastern Europe so attractive for IT outsourcing?

4 major reasons to outsource development to Eastern Europe

While there are many things that contribute to the overall popularity of the region, in this section, we want to focus on the main aspects that can tilt the scale in favor of Eastern Europe.

Tech talent pool

As for the number of software developers in Eastern Europe, the ABSL report suggests that in 2021, the combined tech talent pool in the region exceeded 1.3 million experts. Among the top countries that have the largest number of IT specialists are Ukraine, Poland, Romania, the Czech Republic, and Bulgaria. Technically, Poland has the largest number of software developers in Eastern Europe. However, if we take a closer look, we will see that the majority of those experts are employed in companies that offer global business or shared services. And only ⅓ of them are actually involved in software development. For comparison, Ukraine has the second largest number of developers, with more than 85% of them working for IT outsourcing and outstaffing companies.

outsource development to Eastern Europe

As for the remaining countries, the Czech Republic has the next largest pool of tech talent employed in Eastern European software development outsourcing. Romania has a wealth of developers, but research shows that the lion’s share of them are working for companies specializing in Business Process Outsourcing (BPO) and Global Business Services (GBS). Hungary and Bulgaria have the same tendencies as well.

Another critical aspect is the financial attractiveness of this region. The average hourly rates of professional software developers are lower in Eastern Europe than in the US, the UK, and the majority of Western Europe.

software developers in Eastern Europe

Additionally, the competition for tech talent in Eastern Europe is much lower as compared to Western Europe or the USA. There are fewer global leaders (like Microsoft), hiring directly in these countries. It means that instead of your regular 10 to 14 weeks (e.g., in the US), you can source software developers in Eastern Europe in 3 to 7 weeks, depending on your needs and capabilities of the selected vendor.

The number of companies

Overall, there are more than 3,500 software outsourcing companies in Eastern Europe, from small, boutique agencies to large IT outsourcing companies with 10,000+ employees. You can find vendors that specialize in software development, IT outstaffing, as well as niche expertise, e.g. AI & ML or Java development. The companies in this region also boast vast domain expertise. You can easily find vendors with in-depth expertise in any vertical, including fintech, e-сommerce, business services, or any other industry.

Favorable business climate

Eastern Europe has a reputation as a reliable IT outsourcing destination. Many companies have chosen to outsource their operations there or even open dedicated R&D facilities. Ten Eastern European countries were included in the A.T Kearney Global Services Location. Ukraine and Bulgaria have made it into the top 20 countries for outsourcing and are recognized for the availability of tech talent, financial attractiveness, and business environment. Many Eastern European countries are also ranked high in the Ease of Doing Business Ranking by the World Bank and Bloomberg Innovation Index.

Finally, some countries have come to recognize IT outsourcing as a strategic industry and established programs of government support to attract potential investors.

High-quality technical education

Many companies choose Eastern European developers for their technical education. Compared to other outsourcing destinations (e.g, Asia and South America), many countries in Eastern Europe have high-quality Computer Science education and provide easy access to higher education. Many countries have government-funded programs or provide free technical education in general.

Proper education means that Eastern European developers are more likely to have a good understanding of Computer Science, Software Engineering, and related fields and possess specific knowledge in the needed areas. They are also more likely to speak English confidently. Moreover, many companies have in-house educational programs, IT academies, and training arrangements to help their personnel grow.

Final thoughts

IT outsourcing to Eastern Europe is a great way to tap into the global tech talent pool, get access to unique or rare technical expertise, and expand your development capabilities without having to go over your budget. The region has a large number of IT experts and vendors alike, an established reputation, and a favorable business climate.

If you are looking for a reliable software outsourcing company in Eastern Europe, it’s best to choose the one with access to tech talent, an excellent business reputation, and a strong portfolio.

Why choose nCube as your IT outsourcing partner in Eastern Europe?

nCube has 14+ years of successful partnerships. Prominent companies, such as AstraZeneca, Greenpeace, doTerra, Life360, Encore, and many others have chosen us to become their tech partner.
Our engineers have strong technical expertise with major technologies, including Java, .NET, Python, iOS, Android, and more.
We boast an amazing retention rate: 85+% of experts stay over the lifetime of a project.
More than 60% of our clients choose to expand their teams within the first year of our partnership.

The question of safety has probably crossed the mind of any tech leader who has ever considered diving into outsourcing. In the age of uncertainty, it’s only natural that tech leaders may be apprehensive when it comes to handing off operations to other countries.

As a software outsourcing company from Eastern Europe, we at nCube can’t say that these apprehensions are misplaced. After all, the image of Ukraine and Belarus, the key hubs of IT outsourcing in Eastern Europe, hasn’t lately been at its best.

In this post, we want to give you a different perspective, based on our vision as a company that has been building teams of Eastern European developers for over a decade. Despite the economical and political challenges present in the region, we’ve successfully established a good rapport with many European and North American companies, helping them build sustainable development teams. Let us show you why the companies we work with still consider Eastern Europe to be a safe bet.

Enhanced risk management policies

In the modern globalized world, you cannot rule out geopolitical factors when taking your operations to other parts of the world. In 2014, Eastern Europe was shaken by conflict on the Eastern border of Ukraine, and in 2020 saw political instability reach Belarus’s capital city of Minsk. Just like at the beginning of the pandemic, software outsourcing companies located in these areas had to respond immediately so as not to disrupt the work of development teams. Many companies from Belarus chose to relocate to Ukraine, as the neighboring country provided a more stable environment for businesses, even despite its own challenges. When it comes to companies based in troubled areas of Ukraine, many of them have relocated to other parts of the country, which have been (and currently are) completely safe for work and travel.

The pandemic along with geopolitical tensions fall under the category of “black swan,” scenarios that nobody expects to occur. Yet, they happen. Thus, risk management is essential for any software outsourcing company, be it in Eastern Europe or any other part of the world. For example, we at nCube have an action plan in place to ensure our software development teams continue to work with minimum disruption in case of any unforeseen situations. We’ve already implemented a secure remote environment for our team members as well as conducted the necessary training to make sure everyone is aware of their steps in case of potential disruption to normal activities.

I’d be remiss if we did not mention Ukraine, a pivotal member and sturdy pillar in the world of outsourcing in Eastern Europe. As opposed to the geopolitical image created in the media lately, things actually look brighter on its outsourcing scene. Despite the challenges that the country is facing since 2014, when it comes to IT outsourcing in Eastern Europe, it has one of the fastest-growing markets. The best testament to this is that the export of IT services in Ukraine is estimated at $6.8 billion (as of January 2022), growing by 27% annually. It can only mean one thing – companies around the globe find the local outsourcing scene safe and worthy of their trust.

Embracing the New Normal

Covid-19 has upended things for many organizations out there, including software outsourcing companies in Eastern Europe. If anything, the challenges brought about by the pandemic have helped these companies become more resistant to difficulties. Creating an excellent remote environment for Eastern European developers has played a great role in this.

By embracing Remote, companies created a “shield” that makes the work of software developers uninfluenced by any external forces, like a new wave of a pandemic. The credit for this should go for the work of their Security and HR departments.

Security departments created remote IT infrastructures where Eastern European developers can work from anywhere in the world as safely and efficiently as if they were back in the office. To that end, a variety of data protection measures have been adopted by companies to eliminate risks related to portative workstations, including strong authentication, data encryption, privacy equipment, VPN, and more.

In their turn, HR departments of software outsourcing companies in Eastern Europe have worked on enhancing employee retention so that clients could work with stable teams, even during uncertain times. Within this strategy, the provider cares about the team members’ well-being, motivation, sense of purpose, work/life balance, etc whether they work remotely, in the office, or on a hybrid model.

As such, security and retention strategies implemented by the vendor are key to making your cooperation stable and reliable when it comes to hiring software developers in Eastern Europe.

Secure investment

Another concern of many companies outsourcing to Eastern Europe is, “How safe is this option when it comes to the project’s budget? ” We believe that building a development team through a provider of software developers in Eastern Europe is the safest option out there, especially compared with freelance platforms that often require a downpayment and are hard to pull money back if something goes wrong.

We at nCube don’t require any down payment. Our clients are billed monthly for each full-time employee who works on their project. Every team member logs in 8 hours in a 5-day workweek, and the workflow is owned and monitored on the side of the client. Such a model of cooperation, in our opinion, enhances the security of your outsourcing venture, as you pay for the hours your Eastern European developers actually invested in your project. That way, you can always count on a return on your investment in your team.

European standards of data protection

Many software outsourcing companies in Eastern Europe deal with the personal data of EU, UK, and US citizens. So, a reasonable question is, “How is this data going to be protected?” In the last decade, many Eastern European countries reformed their security services in line with EU guidelines. On top of that, personal data protection in Eastern Europe involves the implementation of IT security which every organization is obliged to follow.

Thus, when sourcing Eastern European developers, you can be sure that vendors put in due effort to run their business in line with the data protection regulations ruling in the client’s country, ranging from GDPR (EU), PIPEDA (Canada), and HIPAA (USA). In many cases, companies resort to data pseudonymization, which means that providers of IT outsourcing in Eastern Europe typically don’t have access to real user data, which is especially relevant for the Healthcare and Finance/Fintech domains.

The exact data protection strategies are typically outlined in the service-level agreements with each individual client. Signing such an agreement obliges the vendor of Eastern European developers to provide information on the type of data they collect, how it’s stored, accessed, transferred, and also typically includes post-collaboration data protection settlements. Additionally, many software outsourcing companies in Eastern Europe add extra levels of security, such as conducting security audits, round-the-clock CCTV surveillance, biometric key access to physical data storage, and more. Another common practice when working with software developers from Eastern Europe is to keep data on your own servers.

For instance, nCube implements all necessary administrative and tech methods to ensure no data leaks occur. We ensure that data will be removed or handed back to the client upon their request. Moreover, since we don’t store or maintain client servers, the risk of data loss is minimized significantly.

Afterword

Software outsourcing in Eastern Europe is having a moment. A well-known firm aggregator, Clutch, lists more than 2,500 companies that handle software development for companies based in Western Europe and North America. Moreover, Eastern Europe’s startup scene is booming, as new ideas and investments are coming onto the market all the time. These are the signals of the region’s maturity, security, and stability.

Many software outsourcing companies in Eastern Europe have weathered the storm caused by the pandemic, which showed that they excel at adapting to any speed bumps they can meet down the road. The challenges connected to the geopolitical situation have made those companies even stronger as well as strengthened their resistance to unpredictable circumstances in the future. Many providers have embraced the best practices of remote and hybrid work, creating secure and comfortable environments to ensure unimpeded work for their teams. Thanks to this, providers of software developers in Eastern Europe are now ready to respond to potential challenges posed by the volatile world we live in better than ever.