10 Reasons Why IT Outsourcing in Poland is Growing Rapidly
10 Reasons Why IT Outsourcing in Poland is Growing Rapidly
In recent years Poland as long as the whole CEE Region has experienced very rapid economic growth. Around 10% of this growth is estimated to come from IT outsourcing and software development services. Poland, as a regional leader with the largest IT talent pool of almost 500k software developers has taken most of this growth. It seems that this industry trend is going to continue in the next decades and here are the 10 reasons to confirm it.
1) IT skills shortage in developed countries
This is the primary reason why outsourcing started several decades ago. IT industry is very vibrant and requires more and more people to enter the workforce. Unfortunately, this pace can’t be sustained by the local, supply of STEM graduates – and that brings us to outsourcing & nearshoring. According to U.S. Labor statistics, as of December 2020, the global talent shortage amounted to 40 million skilled workers worldwide. By 2030, the global talent shortage is expected to reach 85.2 million. Сompanies worldwide risk losing $8.4 trillion in revenue because of that.
This global IT skills shortage brings us to Poland. In recent years the Central-Eastern European region has become one of the top destinations for software development. Investors, mature businesses, global corporations are all willingly outsourcing IT projects, software development teams or even the whole R&D centers (Build Operate Transfer model) to selected CEE countries (mostly to Poland). You can read more about this topic in this article.
2) Large IT talent pools in CEE region
According to the global IT workforce, there are more than 856,500 software developers in the CEE region, of which Poland has the biggest share, with almost 460,000, which makes it the largest IT hub. It seems that the market is still full of opportunities for potential employers to enter and take advantage of that.. Here is the list of the most interesting cities based on IT talent market share:
Over 0,8M population, 13% of total IT Engineers supply
Over 1,8M population, 24% of total IT Engineers supply
Over 0,7M population, 12% of total IT Engineers supply
Over 1,8M population, 9% of total IT Engineers supply
Over 0,7M population, 8% of total IT Engineers supply
Over 0,7M population, 7% of total IT Engineers supply
Over 0,6M population, 6% of total IT Engineers supply
Over 0,5M population, 4% of total IT Engineers supply
3) Top-quality software skills
4) High-level STEM education
Poland and all post-soviet contries have developed very strong, STEM, public eduational institutions. In addtion to that the majority (> 80%) of high shool graduates decides to continue their educational path at least to bechalor / engineering degree level. According to the latest data there are over 450 universities in Poland itself. The university programmes has been harmonized with the EU Bologne standards to make it easier to compare different skills and diplomas. All of this proves the ambitions and enormous potetnial that lies in this region of Europe.
5) Top-level english languages skills
Year after year Poland is performing extremely well in annual English Proficiency Index produced by EF Education First (a ranking of 88 countries based on their population’s proficiency in English language,). It received the top grade of “very high proficiency”, ranking 11th in the world and ninth in Europe, ahead of Portugal and Belgium but just slightly behind Germany. According to the EF English Proficiency Index (EF EPI), Poland was the best performing country in Central Europe. The data gathered by educational firm EF Education First is based on over 1.3 million test takers.
6) “Western” work ethics
This argument is very often underrated in many decisions – probably due to campliance reasons. The fact is the proper culture of work can be achieved through many years of education, experience and following the market leaders. This is the path that many Central European Countries (incuding Poland) have chosen to go and now, after this transformation process thay are ready to take the lead in many areas of business.
7) Favorable, close location
Poland has an extremely interesting location between the West and East. It’s close proximity to world financial centers as New York (GMT+6), London (GMT+1) and Berlin, Amsterdam, or Stockholm (GMT+0) – makes it a much better option than India or China. This is why Poland became the leader and the greatest beneficiary of “IT nearshoring” driven by US and EU companies. It’s also worth to mention, that Poland is a member of the European Union, and NATO security pact, which indicates further it’s stability and future development.
8) The IT hourly rates
Although Poland is a member of the EU since 2004, it has still to offer very attractively labour costs even in the IT industry. The average rates are around 50% lower than in Europe and 60% lower than in the US. Yes, it is true that you could find more competitive countries for outsourcing – but in IT the end game is to find quality for an attractive price – not the opposite. Considering all cons of Poland the rates are still a bargain. The below table shows the differences for 5 countries.
9) Vibrant business environment and solid infrastructure
The prestigious CEO Magazine ranked Poland in the top 3 the world’s best countries to invest in and to do business in for 2020. Despite the economic challenges introduced by COVID-19, Poland’s economy showed enourmus resistance and strenght which proved very promising for investors. This ranking compared 80 economies according to business and investment environments, including institutional framework. There were assessed such factors as investor protection, market potential, infrastructure, taxes, workforce, quality of life, technological readiness, corruption and freedom. (table beloow):
10) IP legal protection standards
Many of companies around the world have exerienced an infringments of their intelectual property and patent rights. That is why there are still doubts when making crucial decisions like opening a nearshore Research & Development IT Hub in “emerging countries”. When it comes to CEE region this is not a matter. The coutries aligned their laws to international (US) and EU standards to create fully safe and stable environment for business.
The final concusion
We all can agree that outsourcing in IT industry is not only going to stay, but also intensify in the next comming decades. This industry will be the first to take full advantage of fully remote work, digital tools setting up standards for other to follow. Another fact is, that local human resources are shrinking. Western economies are suffering from this problem for years. Companies accross the world must prepare themselfs for a global war for IT talents. Those willing to take action now will be beneficiaries in future. Poland and the whole CEE region should be considered as a great opportunity to build something with appropriate level of quality and security near home country.
Launching your own software development team or IT hub in Poland
We hope that our article and arguments have convinced you that Poland is the perfect location for creating a nearshore IT entity of your company. Now it is time to prepare a strategy that incude: goals, time frame and budget.
The project can be deployed by your own team or with the help of an external, local IT Partner located in the destination country. For example company like NxTide is specialized in helping other companies to establish local Software Teams or larger Software Development Hubs in major cities in Poland. We can prepare the whole deployment strategy for you and then run all recruitment and quality control processes making it faster and more cost-effective for you. Here is what makes us unique:
We are an IT company with real, industry IT Experts on board
We have over 7 years of experience in creating small and large Software Teams
We are focused on delivering realistic results
That is why we have created a dedicated and flexible offer to meet our client needs::
1) Software Development Teams: for companies looking to expand their software development teams or to create small remote teams from scratch.
2) Software Development Center: for companies looking for larger, more permanent solutions like IT hub or IT operations center (20+ software developers). Our innovative Build Operate Transfer model makes the whole process faster, more efficient, and transparent.
If you would like to know more about NxTide please visit our page: https://nxtide.com/about-us/
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