Working with in-house and onshore teams may be one of the most productive ways and give you the most sense of control. But, as Forbes puts it:'' If you can’t hire them, you can’t take advantage of this productivity benefit.''
Forbes states that the IT market in the USA is experiencing a severe talent shortage, as there are just not enough engineers to satisfy demand. And the same situation is in the UK, Germany, and other Western European countries. Moreover, companies there are not only unable to attract and find talent, but they also can’t keep the talent they have because it’s being poached by other companies.
...with this severe talent deficit, we’re seeing offshore services flourish aggressively again, as it’s the only way to address the talent deficit. - Peter Bendor-Samuel, CEO of Everest Group
To stop struggling with the problem, many industry-leading businesses, such as Microsoft, Mercedez, Lebara, Gogo, Viber, and others have settled on partnering with an extended development team from Eastern Europe. What were they driven by? Let's take a look at some facts:
- Eastern Europe is home to almost 1, 000 000 software engineers ( according to the State of European Tech) and 3,000 + IT outsourcing companies.
- The competition for talent here is not as fierce as in the USA, UK, Germany, etc. because of fewer top engineering employers.
- The 2018 ranking shows that Eastern Europe has the greatest number of top-notch universities ( as compared to other outsourcing locations such as Asia and Latin America). Besides good education, that means also a high level of competition on the local IT talent market among IT specialists and high-quality engineering services they provide.
There are, however, a lot of aspects to take into account. How to choose the right country and the most suitable vendor? And which cooperation model to opt for?
To help you, we've researched top countries for successful IT team extension in Eastern Europe (Ukraine, Poland, Romania, Hungary, Czech Republic, Bulgaria, and Belarus). The research is based on The State of European Tech Report, Stack Overflow, and more.
In addition, we have compiled a list of top team extension services providers in different locations, based on companies’ websites, LinkedIn profiles, and lists like The Best of The Global Outsourcing 100 by IAOP, Clutch.co, Manifest, etc. to help you choose a reliable partner for staff augmentation in Eastern Europe.
Top countries for team extension services in Eastern Europe
Eastern European countries significantly developed infrastructure and tech education in the last 20 years. Moreover, the region is a thriving market for software development and team extension services. Now let’s view the IT market of Eastern European countries in more detail and find out where to look for an extended development team. View our detailed report on the IT outsourcing destinations of the CEE region.
Ukraine boasts more than 1,600 software development providers, the majority of which provide team extension services. The country offers a wide range of benefits: from its vast talent pool to extensive expertise, cost-effectiveness, and strong technical education. Stack Overflow states that Ukraine has the largest engineering talent pool in the CEE region.
Moreover, the country is well-recogniіed in the global IT market. Ukraine was included in Gartner’s top 30 outsourcing destinations and listed among the top IT outsourcing destinations in Europe. In addition, 18 Ukrainian IT providers were recognised by the 2018 Global Outsourcing 100 list by the International Association of Outsourcing Professionals (IAOP) as the best outsourcing companies.
One more reason to consider Ukraine as a place to look for staff augmentation services provider is the considerable potential of such cooperation. Indeed, many partnerships last for years, and small outsourced teams grow into large development centres. For example, Anoto cooperated with N-iX, a Ukrainian IT company, for over 12 years. Other instance, Lebara, British telecom, started from a team of 5 people and expanded it to over 100 software engineers.
There are many reasons to look for team extension in Poland. Developed infrastructure in the country and a vast talent pool are just some of them. Polish universities graduate 15,000 new specialists annually. Moreover, 500+ IT companies offer team extension outsourcing services. In addition, many global industry leaders have opened their R&D centers in Poland. For instance, ABB, Google, Siemens, Motorola, Intel, and many others have Polish R&D centers.
This country has been experiencing a lift of 13.4% in the IT industry, and the figure tends to grow. To encourage the development of the tech branch, the local government has exempted tech professionals from the 16% income tax. The leading IT cities in the region are Cluj-Napoca, Bucharest, and Brasov.
The country houses over 100, 000 tech professionals, which makes it especially attractive for businesses that look for team extension. Prague, Ostrava, and Brno are the cities with the most developed infrastructure that makes them particularly appealing in terms of staff augmentation in Eastern Europe.
The Hungarian tech industry represents about 6% of the country’s economy. The country has a 25% share of outsourcing within Eastern Europe. Hungary can boast over 85, 000 software developers, so many global businesses look for staff augmentation in this Eastern European country.
This Eastern European country houses over 55, 000 tech specialists. Almost 500 companies are operating on the Bulgarian IT market, the majority of which offer team extension services. Moreover, due to the favourable business environment, many multinational IT corporations (HP, SAP, Johnson Controls, Oracle, and others) have opened R&D offices in Bulgaria.
Last but not least, Belarus is home to over 500 IT companies that offer outsourcing services in general, and staff augmentation services in particular. Moreover, the talent pool is constantly expanding here, with approximately 4,000 new ICT graduates each year.
All in all, there are many options to choose from, but we hope that this brief overview will help you find the country for team extension.
Benefits of staff augmentation in Eastern Europe
The vast talent pool and high quality of services
Ukraine, Poland, Romania, Hungary, Czech Republic, Bulgaria, and Belarus are the EE countries with the most significant number of software developers. The region houses a talent pool of almost 1M tech professionals, with more than 50, 000 ICT graduates every year.
2)The geographical and cultural proximity of Eastern Europe
Expanding your software development team with professionals from a distant country may seem like a challenging task. Eastern Europe, however, has well-developed international transportation, so it is easy to organize business trips and meet your extended development team in person.
CEE boasts a network of easily accessible airports, relatively modern highway and rail systems, and well-developed digital infrastructure. - McKinsey report
Only one-two hours of time difference divide Eastern Europe (depending on the country) and the UK. Concerning the USA - there are comfortable time overlaps with the region, when you can schedule a call, which is of great importance in cooperation with an extended development team. Also, you can benefit from the time difference: your remote development team works, when you sleep and vice versa. This means that the project is controlled 24/7, which is a powerful advantage.
3) Cost-effectiveness of staff augmentation in Eastern Europe
In terms of the price/quality ratio, Eastern Europe is one of the most attractive outsourcing destinations. The rates, however, vary among different countries, and each of them has its peculiarities. Staff augmentation in Hungary (where taxation makes almost 55% of the total cost of employment) is more expensive than, for instance, in Ukraine.
4) Government support
In various ways, the governments of CEE countries foster the IT industry and encourage R&D investments via a variety of incentives, including tax breaks, investment subsidies, streamlined bureaucratic processes, and funding for training partnerships with universities.
How to choose the right cooperation model?
There are three main cooperation models for staff augmentation: an extended team, a managed team, and an outsourced team. Each of these models has its peculiarities, which should be considered, as they work for different purposes.
With this model, you get additional development capacity and expand an existing team. In this case, you have the most significant share of responsibility. You manage a team yourself, and you are in charge of product development. This model also brings more flexibility, as everything is done according to your business requirements.
In this case, you and the chosen vendor build a core development team. If you select the managed team cooperation model - you share the risks and responsibility with the vendor. You share your product vision and project roadmap, make critical tech decisions, while the vendor ensures administration pertaining to your team at its development centers. Moreover, the HR team of the vendor will help you meet your special requirements through custom recruitment. The managed team model allows you to handle your outsourced team as an in-house one, whereas the vendor gives you all the necessary tools for that and provides assistance.
If you choose an outsourced team model - you give the right to make decisions to your vendor. The IT outsourcing provider scales the team and develops the product from discovery to final release.
So, the model you choose depends primarily on how much control you want to have over the final product.
You may also find helpful our guides on:
Top Eastern European companies that offer staff augmentation services
N-iX has offices and development centers in Ukraine, Belarus, Poland, Bulgaria, Sweden, Malta, and the US. Due to the broad geography, this team augmentation services provider managed to build many long-term strategic partnerships with such global industry leaders as Lebara, RateSetter, Gogo, and many others.
This team extension services provider builds and hosts dedicated development teams ranging from 5 to 50 experts and development centers ranging from 50 to 100 experts, helping fast-growing companies to scale and develop their business in the long-run perspective.
N-iX has an impressive internal talent pool of 1,000 tech experts and a strong employer brand. Moreover, we have 30+ experienced recruiters on board, so we can quickly find the right specialists to boost your project.
This Poland-based team augmentation services provider has been operating for 15 years now. The company offers team extension services to businesses of all sizes. It can help you with web development, quality assurance, AI/ML, and more.
This staff augmentation services provider is based in Belarus and has domain expertise in business and financial services, as well as media, telecom, and other industries. Along with staff augmentation, the company offers custom software development, CRM Consulting, and e-commerce development.
This is another vendor that offers a team extension in Eastern Europe. Based in Cluj-Napoca, Romania, this staff augmentation vendor can help you with software development, mobile app development, Big Data consulting, and more. The vendor operates in business services, consumer products and services, and other industries.
Based in Sofia, Bulgaria, this software development vendor offers team extension, web development, custom software development, mobile app development, UX/UI design, and many other services. The company has extensive expertise in such industries as education, healthcare, manufacturing, and more.
Team extension brings a wide range of benefits: from the access to additional talent pools and flexible scaling to cost-effectiveness and the ability to innovate. All these aspects are critical for businesses that want to succeed with their software products.
We hope that our research will help you partner with a reliable vendor for team augmentation in Eastern Europe.