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Outsourcing Tech to Eastern Europe: Best Countries for Each Industry

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The thought of streamlining your business processes through outsourcing, and making your organization faster, more profitable, and more secure, is enticing to say the least.

Sending your routine tasks to places such as Eastern Europe – one of the most popular outsourcing destinations today – is an excellent means of trimming the fat at your company. You get to leverage lower wages and cost-of-living in the outsourcing market, which can help everyone from startups to large corporations to prioritize that bottom line. The best countries for outsourcing have a low GDP but a high proportion of motivated, educated workers.

The trick is finding the right software development services, HR providers, biotechnology partners, and so forth – all of which depend on finding the right outsourcing destination.

This guide is here to help. We’ll discuss why companies are outsourcing work to Eastern Europe, the reasons it makes sense to outsource in today’s globalized economy, which countries are best, and a few challenges to anticipate.

Why Companies Send IT Outsourcing to Eastern Europe

There are several compelling reasons for outsourcing, and to Eastern Europe specifically, which we’ll get to in a moment. Overall, the main idea behind sending work to be done by another company is to take advantage of cost savings. These significant savings are accessible to businesses of all types, from the software and IT sector to healthcare management, marketing, and creative services ... and everything in between.

Let’s take a look at why Eastern Europe, in particular, is ideal for outsourcing IT efforts.

Large Pool of Highly Experienced Workers

For one thing, outsourcing to Eastern Europe offers a ton of options for workers in a variety of countries. Recently, Bulgaria, Hungary, Ukraine, Poland, Belarus, Romania, Switzerland, the Czech Republic, and Croatia have all become popular destinations for outsourcing work.

Not only do people in these countries have a high proficiency in foreign languages, they’re often well-educated and strongly motivated to earn wages from other countries. Such wages, while lower than in the outsourcing country, can be higher than their own.

This brings a wide pool of applicants to the table. Now, instead of having to seek workers in your own country only, you can find the best partners for your daily tasks in all of Eastern Europe (and beyond).

Emphasis on Technical Education

Because outsourcing is inherently a proposition that involves telecommuting, a strong degree of technical proficiency is a must. Happily, Central and Eastern European (CEE) countries place a huge emphasis on technical education today. Whether you’re looking for help in BioTech, FinTech, HR, or IT, you’ll find it here.

This makes for a very cost-effective acquisition of IT talent, lower development costs for web development or app development, and a reliable pool of highly trained workers. With all this in mind, it makes sense that Eastern Europe software outsourcing and IT services are so popular.

Forward-Thinking IT Community

It’s no secret that several cities throughout Eastern Europe have become tech hubs, such as Budapest, Bucharest, Prague and Warsaw. These cities offer massive talent pools that breed innovation, and software and IT professionals flock here for tech opportunities.

Big companies have noticed the growth of these Eastern European software and tech hubs, too. In fact, Microsoft has tech research centers in the Czech Republic, while IBM has an R&D center in Ukraine. Luckily, it’s not necessary to build an entire research compound to fully take advantage of the innovation happening in these regions. A solid outsourcing partnership will do.

Multilingual Capability for Collaboration

The outsourcing industry in these Eastern European countries is a melting pot, and children are raised speaking several languages including Polish, Czech, Bulgarian, German, French, and more. Beyond this, citizens also tend to have a very high degree of English proficiency.

Such multilingual capability creates huge opportunities for international collaboration between companies. Western countries like Canada and North America have nothing to lose—and everything to gain—by choosing an Eastern European-based outsourcing partner.

More Bang for Your Buck

Thanks to multiple economic and geopolitical factors, leading to cost-effective conversion rates, Western European and North American companies can take advantage of lower hourly rates from professionals in Eastern Europe.

In fact, over the last several decades, countries in Western Europe have chosen to “nearshore” many daily tasks. We’ve discussed how this benefits IT quite a bit. Let’s take a deeper look at how that works, as well as other industries you might consider when offshoring and nearshoring.

Specialized Tech Industries for Eastern European Outsourcing

Eastern European outsourcing partners work in many capacities and industries. The most common of these are the IT industry, financial technology (FinTech), biotechnology (BioTech), and human resources.

Information Technology (IT)

Many countries in Eastern Europe have a deep understanding of what’s required in the IT market. Their culture of software development outsourcing and the wealth of IT outsourcing companies means that students in those countries are raised to be good software engineers, programmers, and IT specialists.

It’s easy to earn a technical education in these countries, too. Courses in the most important programming languages – Java, Python, and Oracle, for instance – are available early on in students’ coursework, meaning graduates are well-suited to join a development team or work at tech companies.

For that reason, organizations that decide to partner with European developers for low-cost IT services or tech support are usually quite satisfied with their partnerships.

Biotechnology (BioTech)

Biotechnology is a huge and growing field. Focused on making treatments, therapies, and medications more available to people across the world, it is also a very important one.

Unfortunately, many organizations in this industry lack the full array of resources needed to carry out their experiments, manufacture certain therapies, or meet their own supply needs. Outsourcing to other countries where costs are lower and supply chains are different can help solve these issues.

That’s why several biotech startups have blossomed in countries like Poland, Russia, and Estonia. These countries have ample resources at hand for biotechnology research and development, making them ideal to take on related outsoured work.

Financial Technology (FinTech)

Any company needs excellent oversight of its financial accounts. The good news is, there exist many partners in Eastern Europe well suited to help you with your fintech (FinTech) needs.

While you can find highly qualified partners worldwide to outsource financial services like accounting and bookkeeping to, you have to look closer to find an outsourcing company that can meet your FinTech needs, including software development. With so much technological innovation happening in Eastern Europe, the region is prime for FinTech outsourcing work.

Challenges of Using Eastern Europe as an Outsourcing Destination

There are, of course, challenges that come with outsourcing to Eastern European tech talent as well. Distance, language barriers, and cultural differences can all post unexpected roadblocks if you don’t know to look for and manage them.

Rather than reverting to more expensive and time-consuming in-house positions, though, it’s better to simply prepare yourself for what these challenges might be. These include, but aren’t limited to:

  • Language barriers to English speakers: The truth is, thick accents or lack of complete English fluency can sometimes get in the way, especially on projects that require technical writing— or any kind of writing at all. If this is your case, be sure to include an English proficiency test in your partner selection process. However, if you only need software or app development, imperfect English is a non-issue.
  • Cultural differences: Every country has its own holidays, standard working hours, and expectations of the work environment. These may differ heavily from those of the outsourcing country, especially in a country as far away as the USA, however, differences in days off isn’t usually a dealbreaker. Just ask about such differences in advance and prepare to accommodate them.
  • Infrastructure challenges: Due to political and economic shifts in recent years, some Eastern European countries have been warned about the potential for rolling brownouts or blackouts. The same goes for spotty WiFi availability, either for provider reasons or related to insecure connections during bad weather. If tasks you’re outsourcing aren’t time-sensitive, these realities will lead to even lower costs for you. If they are, make certain to choose a partner with highly stable power and internet connections.
  • Political instability: Political instability can throw a city or country into turmoil quickly — look no further than how the Ukrainian economy has shifted since Russia declared war. When choosing a partner for outsourcing services, it’s necessary to beware of any potential for such a scenario. It may even be helpful to have additional outsourced resources on hand in other locations in the event that your current partner’s situation changes.

How to Get Started With Eastern European Outsourcing

For IT and software development companies, outsourcing work to Eastern Europe is a no-brainer for cutting costs, streamlining your business, and sleeping better at night. That’s assuming you find the right company to help you out, of course.

Not quite sure how to navigate finding the right outsourcing partner in Eastern Europe (or anywhere else)? That’s where TDSGS comes in. We can help you narrow down the thousands of options out there and find the best-fit outsourcing partner for your particular needs. We take a carefully curated approach to each client, reviewing your needs and matching them with the perfect outsourcing company in the location that works for you.

Want to learn more about our bespoke services and find out why we’re a leading global provider of outsource company matchmaking? Get in touch today!

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