The world of software development outsourcing changes rapidly and so do factors that prove critical in competing for the best and most challenging projects. Most of us remember the times, when outsourcing was considered only as a cost-effective way to manage low-end operations in India or China. Now, outsourcing has become something much more important for organizations – the solution for finding and growing talented IT individuals in a global, competitive, digitized market. Following this new approach we can observe the rise of a specific form of outsourcing called “nearshoring” (more about that in this article). Companies have started the race for talents in the most desired locations like the CEE region. For them it is much easier to manage remote teams that are in a close proximity to their headquarters and other local offices (US, Western Europe).
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 the whole R&D centers to selected CEE countries, such as: Poland, Ukraine, Romania, Slovakia or Czech Republic.
Large talent pool of skilled developers, project managers, UI/UX designers
High-quality of work and familiarity with western standards
Rich educational potential including Information Technology
Excellent language skills
Favorable location and rates
Vibrant business environment & good infrastructure
Let’s now analyze all these arguments one by one in the next paragraphs.
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. Please take a look at the most interesting cities based on IT talent saturation:
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
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.
Poland has an extremely interesting location between west and east. GMT+6 from New York, GMT+1 from London, GMT+0 from Berlin, Amsterdam, or Stockholm – making it a much better option than India or China. Poland is also a part of the EU which is a good proof of stability, security, and western work standards.
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.
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):
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. After choosing the perfect location for your software development team or software hub there is a time to start the process. The IT industry is highly competitive which affects the hiring delivery time – so it is important not to be over-optimistic regarding the timeframes. Usually, it takes at least several months to find and hire a complete software team. Your strategy must also include a proper budget and goals for the years ahead.
How can NxTide help You in creating Software Team or Software Hub?
NxTide is an IT consulting company specialized solely on creating IT software hubs and fully operational software teams. We are experienced industry experts who knows all the challenges of IT managment, IT recruitment and business transitions. We have helped many organizations to transform and scale their software development capabilities. That is why we have created this unique offer:
– dedicated to smaller, agile projects
– a small team of 5 – 20 Software Developers
– perfect also as a remote team extension
– easy to scale to IT Hub in future
Please read more about offshore development teams.
IT Outsourcing, Offshoring & Nearshoring in Poland
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