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Going Far and Near to Find Software Developers? Explore Eastern Europe

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Did you know that Eastern Europe has one of the highest densities of software developers in the world? In particular, the CEE (Central and Eastern European) region offers 1.3 developers for every 100 people in the overall workforce. In comparison, in the USA, the highest percentage of programmers is in Washington DC with only 7%, whereas in Prague and Kyiv this ratio accounts for 50% and 41% respectively.

In this article, we aim to provide you with a complete overview of the current state of the Eastern European IT industry to help you make an informed decision when you decide to hire offshore software engineers in Eastern Europe. We have gathered the information from many surveys and reports to provide you with bare facts about the dynamics of the IT industry across the region.

The Driving Forces of the Tech Market in CEE

The latest report by Stack Overflow reveals that more than 80% of surveyed programmers code as a hobby, outside work. Plus, the fact that 87% of respondents have also learned a technology or a programming language by themselves only proves that most of the engineers are passionate about their work and view it as the true vocation in their life.

According to the report by Evans Data Corporation, there are more than 23 million developers worldwide and about a million of them live and work in Central & Eastern Europe. It is great to know that the vast majority of them consider their job rewarding. Apparently, this is exactly what drives the IT industry today.

With more and more people switching to a software developer career, the number of engineers compared to the overall labor force is growing rapidly. Nearly a quarter of them (24%) are located in Poland and more than a third (35%) are in the Ukraine and Romania. This demonstrates that countries in the region do care about their talent pool and take proactive steps towards developing their IT markets.

Granted, most of the capital today is still invested in the world’s largest tech regions: Silicon Valley (40%) and China (20%). But the strength of the tech ecosystem in the CEE is becoming more and more attractive to a lot of investors. According to the new data from Invest Europe, Private equity and venture capital investment into companies in Central and Eastern Europe (CEE) reached a record €3.5 billion in 2017. In comparison to the previous year, when €1,6 billion was deployed in CEE, this is a huge success. And 2018 is on track to exceed those, breaking levels of previous years.

It took a while for global investors to venture into the CEE region. Just a few years ago, it was not a target for foreign tech investors. However, thanks to external investments and local tech success stories, Eastern Europe has become a leading technology hub. Convenient geographical location and a massive talent pool make it an attractive destination for businesses that want to hire professional offshore developers.

The CEE IT industries are also fueled by technology startup activity. According to the research by East-West Digital News, in 2017, startups across the CEE raised €1.32 billion through VC and ICO funding, whereas London obtained €3.01 billion, according to the State of European Tech Report. Taking into consideration the purchasing power, London is almost three times as expensive as the CEE region.

Luciana Lixandru, a partner at Accel Partners, admits that several years ago it was uncommon to invest money in the region but now thanks to the rapid development of its tech market, companies can easily find both start-up capital and bigger funding batches. She claims that the wealth of technical talent is exactly what sets the region apart from other popular IT outsourcing destinations. CEE is known for strong math, science and engineering universities. And now, with more funding and more innovation, the region is able to retain its talent in contrast with losing its best employees to jobs overseas.

Top 5 Countries for Hiring Developers in Eastern Europe

The most typical questions that pop up when you are looking for professional developers in Eastern Europe are something like “What are the popular web stacks across the region?”, “How many back-end developers are there in Eastern Europe?”, “What are the developer salaries?”, etc.

Analyzing the percentage developer share for most common Web stacks in CEE and North America, the Java stack is not a leader in either region although it is the most popular programming language across the globe according to Stack Overflow. North America, by contrast, mostly uses Python, whereas in the CEE region PHP dominates.

Nonetheless, the percentage of developers who use Python for Web development is steadily growing in Central & Eastern Europe with Estonia and Slovakia occupying the leading positions. Experts predict that in the upcoming years Python will overtake PHP and become the most popular and the most wanted in the region.

Following the global trends, the distribution of mobile and web developers in CEE countries is the same as in most countries in the world. In general, in the CEE region, there are 2.4 back-end specialists per one mobile developer. In particular, the Ukraine offers the lowest ratio between mobile developers and backend web developers (1.8:1). Poland, Ukraine, and Romania have the greatest representation of mobile and back-end web developers in CEE.

Regarding salary and experience by developer type, specialists with more experience and expertise are naturally paid more. However, data scientists, DevOps specialists and engineering managers are paid considerably higher than project managers, full-stack developers, and CTOs even if they have less experience.

This is a trend across the globe. In the European countries, however, back-end programmers and embedded software developers are among the top earners. According to Accelerance statistics, outsourcing rates in Eastern Europe are much lower than in the USA and Latin America.

As data shows, today Poland, Hungary, and Romania attract the biggest funds among all other CEE countries. The Czech Republic is famous for such best-funded tech companies as security software firm Avast, fashion retailer Internet Mall and NetRetail Holding.

Last year, UiPath, a Romanian robotic form-scanning software company, announced it had raised $30 million in fresh venture funding, marking one of the largest early-stage tech investments in CEE. Another example of success is Prezi, an online presentation application that has put Hungary’s tech market in the limelight. Hungary has a 25% share of IT outsourcing within Eastern Europe and employs around 80,000 professional software developers. Regarding Ukrainian startups, they also obtain great capital for their businesses. Last year, Grammarly raised $110 million and Allset attracted $5 million. Now, thanks to outer investments Senstone is preparing for mass production of its device in China.

#1

Poland is known as a regional leader in providing IT services. Almost 90% of the Polish IT workforce resides in seven cities and metropolitan areas: Kraków, Warsaw, Wroclaw, Katowice, the Tricity area, Lódz, and Poznan.

According to the Polish Investment and Trade Agency, over 40% of all outsourcing R&D centers in Eastern Europe are located here. The Polish startup scene is actively expanding and is famous for companies like DocPlanner, online healthcare platform, Brainly, social learning network, Kontakt.io and Estimote, education tech startups, and many others.

#2

The Ukraine 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 market-leaders like Microsoft, Samsung Electronics, Apple, Skype, eBay, and IBM set up their R&D centers in Ukraine.

Moreover, in recent years, the Ukraine is taking the lead among other CEE countries in terms of IT industry recognition. The country was included in Gartner’s top 30 offshoring and outsourcing destinations in 2016. In 2017, 13 Ukrainian IT companies, including N-iX, were featured in the Global Outsourcing 100 by the International Association of Outsourcing Professionals (IAOP) as the best IT outsourcing providers. This year, the Global Outsourcing 100 list includes 18 Ukraine-based software development companies.

The rapid growth of the software service industry in the Ukraine provides the foundation for many tech startups, such as PetCube, Grammarly, Jooble, Raddle, Senstone, Depositphotos, Template Monster, and others. Outsourcing serves as a catalyst for new successful startups to appear. The Ukraine is going to become a startup powerhouse with many more success stories to come.

#3

Belarus is one of the fastest emerging centers of offshore programming. It is a home for such IT unicorns as Wargaming (creator of the online game World of Tanks), PandaDoc (a sales automation and document management solution), Masquerade (MSQRD, the app that adds overlay filters to selfies), and many others. About 90% of Belarusian IT companies develop customized software. And, only 30% of them provide solely IT services. According to the data of the Hi-Tech Park in Minsk, 30% of their member companies work on Fintech projects. And the others specialize in healthcare, telecommunications, cybersecurity, and big data.

#4

Deloitte calls Romania the “new sexy” destination for IT Outsourcing as it is developing faster than any other region in the world except Asia Pacific. Interestingly, Romania ranks third among the top 41 countries with the highest number of women in the tech workforce in the world. According to the Honeypot 2018 Women in Tech Index, Bulgaria has the highest percentage of women working in tech with 30.28%. Romania is third with a 26.3% share. And in second place is Australia with 28%.

According to the Stack Overflow Survey 2018, approximately 1 of 10 developers are female globally. It is nice to know that CEE countries have the lion’s share of women in the tech world. Women are reported to have the highest representation as data scientists, mobile and web developers, quality assurance engineers, and graphic designers. Men dominate in the field of systems administrators and DevOps specialists.

Although Romania is still behind other CEE countries in terms of tech startup activity, in 2017 it became known for 3 major success stories: Vector Watch, CyberGHost VPN, and UiPath. All of them were acquired by mature companies for more than $10 million. Judging from this, the future of the Romanian tech industry looks quite promising.

#5

Estonia has one of the highest rates of startups per capita in Europe. It is best known for two success stories: Skype and Transferwise. When Skype was bought by Microsoft in 2011, its ex-employees founded more than 40 companies, e.g. Pipedrive, Transferwise, Taxify, etc. Interestingly, when Skype and Transferwise relocated their main offices to Stockholm and London, a large part of their operations still remained in Tallinn.

This is a common case. GrabCAD, that provides online collaboration tools for CAD files used in 3D printing, is known as a company from Massachusetts. However, it was founded in Tallinn. And now GrabCAD’s product is still developed mostly in Estonia. Pipedrive, a SaaS CRM provider, relocated to New York but kept a large part of its software development in Tallinn. And there are many other similar examples.

Conclusion

Today, software companies located in CEE drive the Fourth Industrial Revolution. The region has become not only the global outsourcing destination but also a fertile soil for new tech companies to develop. CEE developers have written the code for such global companies as Kayak, Bible, BBC, BuzzFeed, Reuters, Deutsche Bank, Lebara, Travelport, Currency Cloud, etc. Additionally, CEE is known for a number of tech startups such as Alior Bank, Grammarly, Transferwise, Prezi, and many others. The reason behind all these success stories lies in the profound technical education of software developers in the CEE region. For example, coding is one of the subjects that is taught in Estonia’s schools from kindergarten on. Plus, CEE countries put a great emphasis on mathematical skills. This has resulted in very positive results in programming. For instance, developers from Poland and Ukraine always occupy top positions among other countries in terms programming skills. Finally, professionals in this region relocate and occupy top engineering positions at many global companies like Google, Facebook, Amazon, etc. Bearing all this in mind, if you are looking to hire developers for your next outsourcing project, Eastern Europe is definitely the right place to consider.

Read more: https://www.n-ix.com/blog/

About the author

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Marta Hlova

Marta Hlova is a creative Content Marketing Manager who works with N-iX to help businesses implement technology transformations. Marta believes that success comes to those who hustle and are always looking to learn new things.