In the ever-evolving landscape of technology, businesses worldwide are constantly seeking out skilled and experienced tech talent to fuel their innovation and growth. Traditional hubs like Silicon Valley and India have long been the go-to destinations for tech recruitment by American companies. But there’s the often-overlooked region of Eastern Europe. Some tech leaders like VMware, Progress, HP, IBM and others, have successfully used the talent to create their extended development force.
Eastern Europe is a region that has been attracting more and more attention from American businesses in recent years, especially when it comes to finding and hiring top software development talent. The region offers several advantages for companies looking for software development, data analysis, IT consulting, and other tech-related services. The region has seen the expansion of American companies with tech Research and Development teams, Professional Services teams, or more complementary to the core functions like Network Operations teams or Support teams.
Let’s explore some of the benefits of hiring tech talent from Eastern Europe, as well as some of the challenges and best practices for doing so.
Why Hire Tech Talent from Eastern Europe?
There are many reasons why American businesses should consider hiring tech talent from Eastern Europe, here are some of them:
Cost savings
According to a report by Accelerance1, the average hourly rates for IT outsourcing in Eastern Europe range from $22 to $67, which is significantly lower than the rates in the US, which can go as high as $150 or more. This means that American businesses can save up to 70% on their IT costs by outsourcing to Eastern Europe, without compromising on quality or efficiency.
Talent pool
Eastern Europe has a large and diverse pool of tech talent, with over 2 million software developers2 working in the region. The region is well-known for its high-quality education system, especially in STEM disciplines, and its tech experts are reputed to be skilled, motivated, talented, and knowledgeable. They can handle complex technical problems and deliver innovative solutions for various industries and domains.
Location and time zone
Eastern Europe is 6 to 9 hours ahead of the US time zones, depending on the location. This means that there is an overlap in the working hours, which facilitates real-time communication and collaboration. Moreover, Eastern Europe is easily accessible by air, with many direct flights from major US cities to the region’s capitals and hubs. Although it might not be the best time overlap a sound advantage of the time zone difference is when one is building a 24/7 team. Situating a dedicated team in this zone can help cover specific shifts. Furthermore, more self-sustained teams in the region complement to speed of delivery with ready functionality just as the day begins in US.
Cultural affinity
Eastern Europe has a strong cultural affinity with the US, as it shares many of the same values, norms, and business practices. The region has been westernizing in recent years, and its tech professionals are fluent in English and familiar with the American market and customer expectations. Eastern European tech professionals are generally culturally adaptable and eager to learn new ways of doing things.
Ecosystem and growth
Eastern Europe is a region that is constantly innovating and growing in the IT sector, with many successful startups, R&D centers, and tech communities emerging in the region. In the past years, the region has seen tens of unicorns emerging in the region, most of which in tech. Furthermore, historically the region has been very strong in science and tech studies with high schools and universities, focused on engineering, software development, physics, mathematics, etc. Local governments are realizing the importance of the sector and provide various stimuli to tech investors in the region.
What are the Challenges of Hiring Tech Talent from Eastern Europe?
Despite the many benefits of hiring tech talent from Eastern Europe, there are also some challenges that American businesses should be aware of and prepared for, such as:
Tax laws
The taxation system in Eastern Europe can vary between countries and can be confusing for American businesses looking to operate in the region. For example, some countries have payroll taxes for foreign companies, while others do not. Some countries have double taxation treaties with the US, while others do not. Therefore, it is important to consult with a local tax expert or a reliable IT outsourcing partner before engaging in any business activities in the region.
Hiring market
The IT market in Eastern Europe is highly competitive, as the demand for tech talent exceeds the supply. This means that retaining a developer in the region can be challenging, as they may receive multiple offers from other companies or clients. Therefore, it is important to offer competitive salaries, benefits, and incentives, as well as to provide a clear career path, a supportive work environment, and a meaningful project for the developers.
Information security
Working with a remote team in Eastern Europe can also pose some information security risks/ Therefore, it is important to ensure that the necessary security measures and certifications in place, such as encryption, firewalls, VPNs, NDAs, ISO, and GDPR compliance, and to monitor and audit the security performance regularly.
Operational flexibility
Working with a remote team in Eastern Europe can also pose some operational challenges, such as adjusting to different work styles, methodologies, and expectations. It is important to align the goals, roles, and responsibilities of the team members, and to adopt a flexible and agile approach to the project management, such as using Scrum, Kanban, or other frameworks, and to accommodate the feedback and changes from the client and the end-users.
How to Hire Tech Talent from Eastern Europe?
There are different ways to hire tech talent from Eastern Europe, depending on the needs, budget, and preferences of the American business. Some of the most common ways are:
IT outsourcing
Hiring an IT outsourcing company or a dedicated team from Eastern Europe to handle the entire or a part of the IT project. This is a somewhat cost-effective and convenient way to access a large pool of tech talent, expertise, and infrastructure, without having to deal with hiring, management, or legal issues. The IT outsourcing company or the dedicated team acts as a partner, who takes responsibility for the quality and delivery of the IT project.
IT staff augmentation
There are multiple service companies, where you can hire individual developers or specialists from Eastern Europe to augment the existing in-house team of the American business. This is a somewhat flexible way to fill the skill gaps, meet the deadlines, or handle the peak workloads, without having to commit to a long-term contract or a large team. The individual developers or specialists act as an extension of the in-house team, who follow the instructions and guidelines of the American business. This is a flexible model but with additional administrative cost added to the rate.
IT freelancing
This is a fast way to find and hire tech talent, without having to go through a lengthy or complex hiring process. The freelance developers or contractors act as independent workers, who deliver the task or the project according to the specifications and requirements of the American business. Oftentimes times American companies would choose this method to kick off some operations in the region and test in a more risk-minimized way the market.
Hiring tech talent from Eastern Europe is a smart and strategic move for American businesses, as it offers many benefits, such as cost savings, talent pool, location and time zone, cultural affinity, and innovation and growth. However, there are also some challenges, such as tax laws, the hiring market, team communication, information security, and operational flexibility, that need to be addressed and overcome. Therefore, it is important to do thorough research, consult with experts, and partner with a reputable and experienced IT outsourcing company or a dedicated team from Eastern Europe, that can help the American business achieve its IT goals and objectives.
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