In today's digital world, IT outsourcing has become more critical for companies that strive to maintain their competitive edge and agility. The US Bureau of Labor Statistics predicts a 25% growth in IT jobs by 2031, elevating the demand for software development services. This means that offshoring destinations like Eastern Europe, particularly Poland, that are rich with affordable tech talent will secure their place as a top outsourcing destination in the world.
This article explores the potential of the Eastern European IT industry, guiding businesses in maximising benefits from IT outsourcing to Poland.
Before we dive in, let's take a minute to get acquainted with how you can hire skilled Eastern European developers via the professional recruiting agency Alcor. They offer a reliable alternative to traditional outsourcing and specialise in filling mid- to upper-level roles for Western product companies in Poland, Romania, and other Eastern European countries.
Overview of the European outsourcing market
IT outsourcing refers to the practice of entrusting some technical tasks, projects, or operations to third-party service providers. This enables companies to tap into external knowledge and resources and reduce expenses while concentrating on their fundamental strengths.
With a large (over 1 million coders) and a relatively inexpensive pool of qualified IT professionals, Eastern Europe has become a popular outsourcing location. Outsourcing centres have sprung up all over the region, luring businesses from all different corners of the globe in search of affordable yet high-quality information technology services. According to Statista, the Eastern European IT outsourcing market is going to reach $5.07bn in revenue in 2023, showcasing a robust annual growth rate of 13.76%.
Moreover, the region hosts about a hundred Fortune 500 businesses, including Apple, Google, Motorola, Samsung, Huawei, Siemens, Intel, and BigCommerce. These influential players successfully leverage outsourcing services from Poland and other Eastern European countries.
Factors shaping the future of the Eastern European IT outsourcing market
The future trajectory of the Eastern European IT outsourcing market is being influenced by numerous factors. Let's examine them.
Technological advancement
The rapid and persistent evolution of technologies like artificial intelligence and machine learning plays a pivotal role in shaping the current state of the Eastern European IT outsourcing industry. Businesses are increasingly seeking specialised tech skills and innovative solutions, driving the demand for outsourcing partnerships that offer advanced expertise.
Changing business dynamics
In response to the ever-changing market circumstances like economic instability, fierce competition for skilled talent, and rapid adoption of new technology trends, companies are now re-evaluating their plans. In this case, outsourcing serves as a silver bullet, providing organisations with the ability to quickly adjust the scope of their operations while improving their cost efficiency.
Cooperation and innovation prospects through outsourcing
Outsourcing fosters collaborative relationships among global teams, facilitating information exchange and the creation of innovative solutions. The highly qualified workforce in Eastern Europe can foster productive collaborations that enhance innovation and productivity.
Opportunities in the Eastern European IT outsourcing
Within the European IT outsourcing industry, foreign enterprises have access to a wide array of possibilities that may facilitate their success in a fiercely competitive environment. Let's look at the main factors that will drive IT outsourcing to Eastern Europe.
Growing demand for specialised skills and expertise
One of the primary possibilities is rooted in the increasing need for specialised skills and experience. Many IT companies require information technology expertise that may not be readily available locally. For instance, in the USA, 69% of executives struggle to find skilled tech talent.
The Eastern European IT ecosystem, especially in Poland, is rich with software developers with different levels of expertise and skill stacks, serving as an ideal remedy for prevailing talent needs. By engaging in the practice of outsourcing to Poland, companies can tap into a vast pool of over 430,000 tech experts and get the precise talents needed to elevate their business.
Cost-effectiveness and competitive advantage
The European IT outsourcing industry offers enormous opportunities in terms of cost-effectiveness and the potential to achieve a competitive edge. The pursuit of cost optimisation continues to be a significant factor for organisations to engage in IT outsourcing. In this context, the Eastern European region emerges as a compelling option due to its balanced price-to-quality ratio.
These countries provide favourable cost-effectiveness, making them financially viable for foreign enterprises aiming to optimise resources without sacrificing quality. For instance, while a mid-level software developer in the United States earns on average $95K to $110K a year, in Poland, a programmer of the same expertise receives from $40K to $55K. In Romania and Bulgaria, these figures are even lower: about $33K-$48K annually.
IT specialists from Poland, Romania, Bulgaria, and other Eastern European locations offer a superior level of service. This ensures that foreign companies gain a competitive advantage by getting high-quality products that resonate with customers and end-users. Notably, the quality of work from these professionals not only remains uncompromised but also offers cost savings and new ideas for your projects.
Challenges and risks in the European IT outsourcing market
Although European IT outsourcing is full of potential possibilities, it is not without obstacles and risks. It is essential for foreign IT companies to possess a comprehensive understanding of these issues to make well-thought decisions and effectively develop prosperous and secure outsourcing relationships within the European context.
Language barrier
Cross-border outsourcing can lead to communication challenges due to cultural and language differences. However, nearshoring and offshoring to Poland can be considered a viable option due to the high English proficiency of its IT experts, ranking 11th out of 33 European countries and 13th globally. Similarly, countries like Romania (17th) and Bulgaria (21st) also score well in this aspect. Therefore, cooperation with these software developers will be effective and fruitful.
Possible data breaches
Data protection standards, such as the General Data Protection Regulation (GDPR), are meant to protect foreign organisations that engage in cross-border IT outsourcing. However, not all outsourcing vendors operate in countries that are GDPR compliant. While non-disclosure agreements provide some sort of protection, they might not be sufficient to safeguard against intellectual property (IP) theft or sensitive data breaches. Thus, instead of putting your software product at risk, there is a better option to take advantage of the Eastern European market: recruitment process outsourcing. By opting for it, you will get your own team of developers who will work just like your in-house team, ensuring the confidentiality of your IP.
Enter the Eastern European market via a reliable IT recruitment company
If you want to feel the benefits of Eastern Europe without risks, the IT recruitment agency Alcor is your best choice. Alcor specialises in providing hiring services to tech companies, seeking highly skilled software developers in Poland, Romania, and other Eastern European countries.
This IT recruitment agency provides access to a well-trained IT workforce of over 600,000 developers ready to make invaluable contributions to your business' success. The dedication to on-time delivery guarantees that companies acquire the necessary talents within the agreed-upon timeframes. Alcor guarantees to hire five developers in one month and 20 programmers in a three-month period.
Copyright 2023. The article was made possible by site supporter Alcor.