Custom software development is one of the most popular directions of IT outsourcing for companies of all sizes. It allows SMEs, startups and large enterprises to quickly access the right technical talent, like remote developers for hire, and start working on a project with minimal delays.
Tasks of any size can be outsourced – from small fixes on existing projects to complete end-to-end product development from scratch or support for legacy systems.
Belod, you will find interesting statistics about the IT outsourcing market in Europe, like the most popular outsourcing destinations, the size of the industry in general, and other interesting facts and numbers. Also you can read a compare article about outsourcing and in-house software development.
2 Biggest Insights About IT Outsourcing in Eastern Europe
Eastern Europe has become a synonym for comfortable and qualitative remote software building. Well-educated experts in varied technologies share European values and speak foreign languages. The governmental support and business incubators create a fertile business soil for startups and enterprises. What’s making this region so beneficial and attractive?
A Driving Force of Digital Transformation
The digital transformation in Eastern Europe is propelled by the investment policies and strong support from the govermnents. The biggest region capitals host startup incubators abd business accelerators.
Global outsourcing keeps the region in focus, paying increased attention to countries like Ukraine, Serbia, Hungary, the Czech Republic, and others in the region. The PwC 26th Annual Global CEO Survey shows that the industry leaders are planning to invest in digitalization and upskilling.
The Potential of IT Outsourcing and Outstaffing
Eastern Europe outsourcing sector offers over 1 million software developers expert in trending technologies like AI, IoT, Big Data, FinTech, and more. Its revenue is expected to reach $23.69 billion by 2028, making it the most prominent sector of the European tech industry.
The competitive rates from $25 to $75 per hour on average make this region attractive both for nearshoring from Western Europe and cooperation with the US. The clients are choosing outsourcing because they are confident about the quality of the offered services, strong tech education, governmental support and business values of Eastern European IT companies.
Additionally, the relatively low average time to hire a software engineer makes this region a strategic choice for companies aiming to scale quickly.
Key Statistics into Eastern Europe’s IT Outsourcing Market
1. The IT outsourcing market revenue in Europe is projected to reach US$176.40 billion in 2024. It is expected to grow at a compound annual growth rate (CAGR 2024-2029) of 8.23%. — Statista
2. The time zone difference between Eastern EU providers also makes it easier to managing offshore teams, with fewer overlapping work hours and fewer scheduling conflicts.
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3. European countries offer affordable rates for outsourcing application development:
According to Clutch, there are more than 3,900 software development companies in Eastern Europe that provide outsourcing and outstaffing services. — Clutch
4. Top locations of IT outsourcing to Eastern Europe:
- Poland
- Ukraine
- Romania
- Bulgaria
- Czech Republic.
5. These countries have the largest number of skilled professionals working in the IT outsourcing and research and development sectors. Read more about benefits of IT outstaffing in Ukraine.
6. According to Eurostat, the region is home to a thriving community of more than 1.7 million IT professionals.
7. The most popular technologies among the IT companies in Eastern Europe:
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8. Compared to countries such as the USA, Australia or Canada, outsourcing to Eastern Europe can offer companies more affordable hourly rates.
9. More than a third of software engineers (36%) are located in Poland, another 25.6% in Ukraine, and 12.7% developers in Romania. — Grid Dynamics
10. Nearly 80% of Chief Information Officers (CIOs) in the Netherlands expect to outsource at the same rate or more in the coming years. This is the highest percentage in Europe. — CBI.eu
The UK is one of the best countries to outsource software development and the least cautious about doing business with developing countries of all the European markets. By 2022, technology jobs will account for 14% of all job opportunities in the UK.
11. According to Deloitte, outsourcers are already part of the delivery model in 65% of successful shared services organizations.
12. 77% of EU companies that outsource IT do so within the European Union. They also actively delegate to other European countries (17%), India (17%), the United Kingdom (14%), or the United States and Canada (11%). — Eurostat
How Much Does Software Development Outsourcing in Eastern Europe Cost?
Hourly rates across key Eastern European countries vary slightly based on the factors like the economic state of the country and cost of living. They also depend on the personal expertise and experience of the individual engineer, project complexity, and specific technologies. Let’s compare average rates in the outsourcing industry:
Country | Average Hourly Rate | Trending Technologies |
Ukraine | $25-50 | Custom software, Blockchain, AI, FinTech |
Poland | $30-60 | Enterprise software, Gaming, E-commerce |
Hungary | $35-55 | PHP, JavaScript, Python, React, SQL |
Romania | $25-50 | Custom software development, Cybersecurity |
Czech Republic | $35-75 | Java, PHP, Ruby on Rails, Python, C# |
Bulgaria | $20-45 | IoT, FinTech, Software development |
These are the most often chosen countries for IT outsourcing in Eastern Europe. Their teams are famous for being experts in trending technologies and multiple programming languages, dynamic IT sectors, and favorable tax policies.
The final cost of the project will depend on multiple factors, but insights into average software engineer rates provide a general understanding of how your budget will be allocated. For example, many companies choose to hire developers in Estonia due to the country’s strong tech ecosystem, transparent business environment, and high level of engineering expertise. This makes Estonia an attractive option for businesses seeking a balance between cost, quality, and innovation in software development outsourcing.
Average hourly rate for software developer in Eastern Europe remains competitive compared to Western markets.
Tech Talent Pool of Eastern Europe
To evaluate the Eastern European outsourcing market, we address the statistics of Eurostat in the number of employed ICT specialists. It will give understanding of the outsourcing industry size:
Country | Tech Talents Available |
Ukraine | 240,000 |
Poland | 744,100 |
Hungary | 197,700 |
Romania | 196,200 |
Czech Republic | 217,900 |
Bulgaria | 126,100 |
Overview of Eastern European Outsourcing Vendors
Europe offers so many mature and new tech companies, that every business can find a perfect IT outstaffing agency to match their request. We’ve analyzed the number of companies having accounts on Clutch. However, the real number of the companies will be bigger, as not every vendor is registered on this service.
Country | Tech Talents Available |
Ukraine | 604 |
Poland | 994 |
Hungary | 131 |
Romania | 379 |
Czech Republic | 145 |
Bulgaria | 203 |
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