Tech talent is the new oil. According to the KPMG survey, the global shortage of technology skills is soaring. There are more than 250,000 open jobs for software engineers in the United States only. And companies may be forced to wait for months to find the right experts. What’s more, hiring and retaining them is challenging and costly. 

To solve the problem, businesses, from startups to Fortune 100 leaders, opt for IT outsourcing. Moreover, the barrier between local talent and nearshore/offshore experts tumbled down when the whole world switched to the remote. So the focus is now shifting towards a talented workforce, regardless of their location. 

In this report, we explore Eastern Europe as an IT outsourcing destination. Can it solve the tech skills shortage? And where to look for top talent?


  1. Business strategies in the digital age: how to access global talent
  2. Overview of the Eastern European IT outsourcing industry
  3. Afterword
  4. About N-iX

About this report

IT outsourcing in Eastern Europe is one of the most productive sectors of the region’s economy. The scope of the report uncovers the latest trends of outsourcing in Eastern Europe and its tech talent pool. It examines the current state of information technology in Ukraine, Poland, Belarus, Hungary, Romania, Czech Republic, Bulgaria, Moldova, and the Baltic region. The report aims to help businesses, investors and decision-makers choose the most advantageous IT destination for mutually beneficial cooperation. We have also added examples of top IT outsourcing companies in Europe to ease your search for IT partners. 

Our researchers have collected the data from 20+ sources including reports and surveys by McKinsey, Deloitte, Bloomberg, Tholons, A.T. Kearney, and more to inform you about the availability of resources and technical expertise in this region.

Business strategies in the digital age: how to access global talent

Choosing an effective method of accessing talents is one of the most strategically important decisions a company may arrive at. If done properly, any company can unleash a whole world of new innovations and digital possibilities. With this in mind, organizations weigh all the pros and cons of outsourcing and insourcing as the most widely-used cooperation strategies. 

The GSA report states that nearly 70% of the companies are going to outsource more in the upcoming years. And nearly half of those plan to do it extensively. With global pandemic and volatility of the modern world, businesses have redefined the understanding of outsourcing:

  • It is more than just a simple cost-reduction solution. Businesses increasingly see outsourcing providers as partners for introducing innovations and reaching the new tech talent pools.
  • Companies are forced to speed up their digital transformation and are looking to augment their expertise promptly. The global pandemic has spurred many businesses to go digital, add new offerings, or undertake digital transformation sooner than they planned.
  • Businesses are redefining the ways they enter into outsourcing relationships and manage the ensuing risks. Cybersecurity and industry regulations are now major risks outsourcing vendors manage to mitigate while fostering innovation.

In what way does outsourcing bring value to businesses?

  • creating possibilities for digital transformation;
  • presenting vast availability of all kinds of IT resources;
  • enabling easier and faster project scaling;
  • creating a vibrant pathway for driving innovation;
  • allowing companies to focus on core functions;
  • giving the flexibility to change the size and scope of any IT activity;
  • offering a perfect price to quality ratio.

Eastern European outsourcing: Overview of IT industry

In today’s highly competitive and dynamic business environment, not many decisions are as critical for your success as selecting a trustworthy outsourcing partner. Most entrepreneurs are considering outsourcing to Eastern Europe to access skilled labor, reduce costs, and pursue new growth opportunities.

There are between 4,500 and 6,500 vendors that specialize in software outsourcing in Eastern Europe. Clutch lists 4,650+ vendors that provide IT outsourcing services.

software development outsourcing  to eastern europe: number to IT outsourcing companies in each country

Countries in this region have versatile industry expertise, which ranges from business and financial services to healthcare, education, and telecom.

software outsourcing eastern europe: industry expertise

Eastern Europe remains one of the most vibrant software development destinations due to constant growth and development of its IT sector and a high level of digital technology adoption. Countries like Ukraine, Poland, Hungary, Belarus, Romania have already defined IT as a major catalyst for their sustainable growth and technological advancement.

So which country has the biggest talent pool and the strongest technological expertise for delivering projects of any scope and complexity?


Ukraine has emerged as one of Europe’s leading and fastest growing destinations for global software development services. The country’s software development sector is progressing steadily year by year. The country offers a wide array of benefits – from its vast IT talent pool and extensive expertise to cost effectiveness and strong technical education.

Eastern European outsourcing: explore Ukraine

Over 1,600 companies in Ukraine provide a myriad of IT-related services (more than 850 listed on Clutch). More than 295,000 ICT professionals have developed strong expertise in different verticals ranging from fintech, healthcare to telecom, which helps the country maintain a competitive edge on the global IT market. More than 56% of all tech experts work for IT outsourcing and IT outstaffing companies.

IT outsourcing companies in Europe: Ukraine

The country is home to more than 100 R&D subsidiaries of international companies from a variety of industries including software, gaming, telecoms, and e-commerce. Global companies like Microsoft, Samsung Electronics, Apple, Wargaming, Boeing, Skype, eBay, Siemens, IBM opened their R&D centers in Ukraine.

In addition, Ukraine is gaining weight in terms of IT industry recognition. The country ranked 20th in the AT Kearney Global Services Location Index. The country has also ranked 2nd in its category in the 2020 Global Innovation Index by Wipo. What’s more, 13 Ukrainian IT companies, including N-iX, were featured in the 2021 list Global Outsourcing 100 by the International Association of Outsourcing Professionals (IAOP) as the best outsourcing providers.

Read more: Software development outsourcing to Ukraine: All you need to know


When it comes to Eastern European outsourcing, Poland is one of the top candidates. The country has a fast growing economy, which makes it an attractive software development destination for various organizations overseas. The country has an impressive tech talent pool of 450,000 ICT professionals. Nearly 40% of the tech experts work for IT outsourcing companies. The lion’s share of Polish IT specialists work for global business services, business processes outsourcing, and other types of companies. The country has the largest working population in Central Europe, comprised mostly of people under 34 years old.

IT outsourcing in Poland, Europe

Clutch lists around 950+ vendors offering software outsourcing services. Additionally, around 17,000 IT graduates enter the Polish software development market annually.

IT outsourcing companies in Europe: Poland

The country’s IT services market reached $8.24B in 2020. Moreover, Poland was ranked 15th in Tholons Services Globalization City Index in 2020 with Krakow and Warsaw as the major centers of the country’s IT development.

In addition, Polish R&D activities are becoming increasingly financed by the private sector thus fostering interest among global market players. For instance, companies like ABB, Google, Siemens, Motorola, Delphi Automotive, Intel, and McKinsey opened their R&D centers in Poland.

Related: Software development in Poland: IT hubs, developers, companies


The IT industry in Romania employs over 192,000 ICT specialists. Romanian developers are ranked 23 by SkillValue and 20 by TopCoders ranking. Experts in this location have strong knowledge of English.

outsourcing software development to eastern europe: Romania

In 2020 the IT industry growth accelerated and reached $6.16B. Also, export of software and IT services accounts for 1.9% of Romanian GDP. As an outsourcing destination, Romania scored 28th position in the AT Kearney Global Services Location Index.

IT Outsourcing companies in Europe: Romanian vendors

After Romania joined the EU in 2007, its IT business has prospered and attracted global companies like Hewlett-Packard, Huawei, Ericsson, and Gameloft. Moreover, the regional department of Microsoft in Romania runs two global business support centers in Bucharest and Timișoara and makes a significant contribution to the development of the country's tech industry. Additionally, Oracle employs more than 3,000 Romanian specialists.

The Romanian government actively supports IT industry development by exempting software developers from the 16% income tax and introducing a number of incentives for local IT companies.

Read more: Want to hire developers in Romania or Ukraine? Read this first

Czech Republic

The Czech Republic is one of Europe’s top locations for outsourcing IT-related services with around 199,000 professionals employed in the information and communication sector. Every year approximately 4,000 ICT graduates enter the market from Czech universities, bringing new expertise in-house.

IT outsourcing in Europe: Czech Republic

The country is experiencing a 10% increase in IT outsourcing year over year. Czech IT industry growth is fueled by the strong inflow of high-value-added projects of the local IT companies and interest of global investors.

IT outsourcing companies in Europe: Czech Republic

Such world-leading companies as Google, Microsoft, Oracle, CA, RedHat, Skype, NetSuite, Tieto, and IBM chose the country for both direct investment and outsourcing.  Moreover, internationally recognized IT brands like Avast, AVG and Socialbakers have their roots in the Czech Republic.


The Hungarian software development industry is one of the most dynamic sectors. The country has a large share of outsourcing within the IT market in Eastern Europe with around 175,000 specialists employed in the ICT sector. Hungarian developers rank 4th in the SkillValue ranking.

IT outsourcing in Eastern Europe: Hungary

According to the Hungary Information Technology Report, IT services sales reached $2.41B in 2020. Budapest remains the driving force behind the country’s development and is ranked 24th in Tholons Services Globalization City Index in 2020.

IT outsourcing companies in Europe: Hungary

In addition, the country has attracted a number of multinational companies such as Siemens, Microsoft, Deloitte, Ericsson, Nokia, TATA, etc. to establish their R&D centers. The Hungarian government has doubled the amount of financial support for the R&D sector for the 2016-2020 period and launched a number of incentives, giving fast access to technical knowledge by means of regular workshops, meetups, and conferences.

Related: Top destinations for software development: Hungary vs Ukraine


The Bulgarian IT market employs around 101,000 ICT specialists, and this number is expected to reach 60,000 by the end of 2021. The country also benefits from the presence of the global IT giant – Hewlett-Packard, which employs more than 6,000 IT specialists. Approximately 2,000 ICT graduates enter the market annually and more than 220 educational establishments offer diverse opportunities for technical students.

IT Outsourcing companies in Europe: Bulgaria

The country’s IT outsourcing sector added $1.67B to the state budget in 2020 and has been showing a double-digit revenue increase for the fourth consecutive year and reached 3.8% of the GDP.

IT Outsourcing companies in Europe: Bulgaria

Bulgaria has a rather high number of R&D offices of multinational IT corporations such as HP, SAP, Johnson Controls, Oracle, VMware, CISCO, ProSyst, and Atos. Moreover, in 2015, the country was named “Offshoring Destination of The Year” by the UK’s National Outsourcing Association (NOA). Overall the BPO sector’s contribution to the country’s economy reaches almost 5%.

You may find this interesting:
Hiring Bulgarian developers: talent pool, expertise, education and more


Belarus hosts 500+ IT companies with over 155K employees providing hi-tech outsourcing services to multinational companies. Belarusian developers rank 7th in the TopCoder ranking.  The country’s IT talent pool is constantly expanding with approximately 2,500 new software engineers graduating from 50+ higher educational establishments every year. The total production and sales revenue of the IT industry in Belarus amounted to $2.36B in 2020. 

IT Outsourcing companies in Europe: Belarus

What’s more, some of Belarusian IT companies were included in the Software Magazine’s Software 500 ranking of the world’s largest software and service providers and were recognized by the International Association of Outsourcing Professionals (IAOP).

Belarusian IT outsourcing companies in Europe

Keep reading:

Eastern European software development: Belarus vs Ukraine

How to hire the best software developers in Belarus

IT Market overview: Baltic countries

The Baltic region is recognized as one of the most economically stable locations in Europe, boasting high levels of digital solution adoption and effective legislation that ensures data security. The launch of e-programs, ease of doing business, cyber security and low corruption rates foster IT industry development in the region.

Nevertheless, the pace of software development market growth and digital technologies adoption in Estonia, Latvia, Lithuania are still moderate compared to the Eastern European market leaders.

If you are interested in the Baltic companies or the state of IT industry in this region, check out our article IT outsourcing destinations overview: Estonia, Latvia, Lithuania.


Around 50,000 specialists are employed in the ICT industry in Lithuania, with nearly 800 future experts graduating every year.

outsourcing software development to eastern europe: Lithuania

The country has attracted the attention of Google, AIG, and Nasdaq which decided to set up their regional development centers there. Moreover, such global companies as Uber, IBM, Wix, HP, Virtustream, and Unity have already opened their R&D and IT development centers in Lithuania.

IT outsourcing companies in Europe: Lithuania

On the whole, IT companies in Lithuania have received substantial investments over the past years, which stimulated the growth and development of the IT industry within the country.


The ICT sector in Estonia employs around 53,000 specialists with less than 1,000 people graduating with degrees in technical disciplines every year. Estonian ICT services exports reached $956M in 2020. Two major cities contribute the most to the development of the Estonian IT industry – Tallinn taking the lead (67.5%) and Tartu as a runner-up (12.5%).

IT outsourcing to Eastern Europe: Estonia

Estonia is known as the birthplace of Skype and TransferWise along with such influential startups as Pipedrive, Cloutex, Click & Grow, Grabcad, Erply, Fortumo, Lingvist, etc. Moreover, the country attracted such global market players as Microsoft, SAP, Acronis, Parallels to open their R&D centers.

IT outsourcing companies in Europe: Estonia

According to Statistics Estonia, 17% of local enterprises have a formally defined ICT security policy and around 42% of them are engaged in the IT sector. This ICT security policy was developed mainly to avoid the potential risk of destruction or corruption.


The Latvian ICT sector employs more than 32,000 specialists. Approximately 700+ computer science students graduate every year from Latvian universities thus accelerating industry growth.

outsourcing software development to eastern Europe: Latvia

The ICT services turnover reached $840.1M in 2020. As a result, the information and communication technologies (ICT) sector has become the third largest exporter in Latvia, following timber and food products sectors.

software outsourcing eastern europe: vendors in Latvia

The evolution of the Latvian IT market led to the birth of such large IT service providers in the country such as Tieto, Evolution, Accenture Latvia, and Lattelecom Technology. Moreover, international companies like IBM, PwC, Accenture, KPMG, Siemens, ABB, etc. have already opened their R&D centers in Latvia.


The Moldovan IT industry is one of the most dynamic sectors of the country’s economy and remains the priority area for development and expansion for the Moldovan government. According to the Future of IT Report, the contribution of ICT to the national GDP was 2.54% in 2020, which resulted in the creation of high value working places and improvement of employee retention within the country.

Outsourcing to Eastern Europe: Moldova

More than 29,000 specialists are involved in the IT sector with around 1,700 students graduating from Moldovan universities with degrees in computing or a related field every year.

IT outsourcing companies in Europe: Moldova

According to IDC, the total value of offshoring/nearshoring services grew from $56M in 2013 to $56M 2018. The ICT services exports reached more than $500M in 2020  and are likely to double in the upcoming years.


The collected data reflects dynamic growth of the IT market across Eastern European countries. This region has become a number one choice for many global companies looking for a software development partner due to its solid talent pool, technological excellence and great price-quality ratio.

Countries like Ukraine, Poland, and Romania are taking the lead, offering a myriad of cutting-edge technology-related services. Poland has the largest tech talent pool with 490,000 ICT specialists, although only 42% of the experts work for IT outsourcing companies. Ukraine remains one of the leading destinations for IT outsourcing in Europe, boasting the second largest talent pool with around 295,000 ICT professionals and estimated IT market growth of 15-20% year by year. Romania has 191,000 IT specialists. The Czech Republic and Hungary have also attained a competitive position among top 5 Eastern European outsourcing destinations in terms of IT market capacity and annual industry growth rate of 10-15%.

On the contrary, countries like Moldova, Bulgaria, and Belarus are falling behind market leaders in terms of innovation adoption and overall technological capacity. Nevertheless, they’ve introduced a number of incentives to attract foreign investments and foster IT industry development. Meanwhile, Baltic countries launched a number of e-programs and created a favorable business environment in the region.

About N-iX

  • N-iX is a global software development service company with offices and development centres across Europe and in the USA.
  • With more than 20 years of experience and over 2,000 technical experts, the company has developed diverse technological expertise. N-iX has been recognized as a reliable IT outsourcing vendor by numerous industry associations (GSA UK, IAOP).
  • N-iX partners with technology leaders across a variety of industries encompassing manufacturing, fintech, telecom, healthcare, retail, agritech, logistics and supply chain, etc., to help them effectively implement digital transformations.
  • The company provides a wide array of services in different verticals such as cloud solutions,  data science, big data analytics, BI, AI, enterprise mobility, embedded software, SAP and OpenText consulting, VR & AR, and much more.
  • N-iX has formed strategic partnerships with a number of global businesses including Lebara (renowned telecom brand), Gogo (world’s leading in-flight connectivity provider), Currencycloud (global payments platform), to name a few. N-iX has cooperated with over 100 clients across the globe such as Fluke, OpenText, Travelport, TuneIn etc.

outsourcing software development to eastern europe


  1. COVID-19 digital transformation & technology by McKinsey
  2. COVID-19 Digital Engagement Report by Twilio
  3. Software Development CEE Report
  4. Global software marketplace insights: Eastern Europe by SourceSeek
  5. State of European Tech 2019
  6. State of European Tech 2020
  7. A.T. Kearney 2019 Global Services Location Index
  8. Tholons Services Globalization City Index in 2020
  9. Bloomberg Innovation Index 2019
  10. World Bank Group. Doing Business Report 2020
  11. Global Innovation Index 2020 by Wipo
  12. The World Bank. Service Exports
  13. The World Bank. ICT Service Exports
  14. The Hays Global Skills Index 2019/20
  15. Tertiary education graduates: main subject areas
  21. Bulgarian Outsourcing Association Report 2018
  22. QS World University Rankings 2020
  23. Software development in Ukraine: 2019-2020 IT market report by N-iX
  25. ABSL
  26. Future of IT Report by Emerging Europe

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