IT Outsourcing in Eastern Europe in 2025

Eastern Europe: IT Outsourcing Market Landscape 2025

The IT outsourcing market in Eastern Europe has undergone significant transformation over the past decade, driven by advances in technology and software, a growing demand for skilled professionals, and an increase in remote work capabilities. While global outsourcing hotspots like India and China have historically dominated the IT services landscape, Eastern Europe has emerged as a key contender for businesses looking for cost-effective software development and IT services.

High-quality education

One of the major reasons behind Eastern Europe’s rapid growth in the IT outsourcing industry is the region’s strong educational systems, which emphasize STEM (Science, Technology, Engineering, and Mathematics) disciplines. Universities in countries like Poland, Ukraine, Romania, and Bulgaria produce a steady stream of highly qualified software engineers in Eastern Europe, particularly in computer science, software engineering, and information technology fields. Many Eastern European developers are proficient in multiple programming languages, including Java, Python, C++, Ruby, Golang, and PHP, making them valuable assets for global companies looking to outsource complex software development projects. The region also has a growing number of specialized programs and certifications in areas such as data science, artificial intelligence (AI), and blockchain, further enhancing the competitiveness of its tech workforce.

Adaptable and skilled workforce in emerging tech

The tech workforce in Eastern Europe is also recognized for its adaptability and ability to quickly learn and implement new technologies, such as AI, machine learning (ML), blockchain, and cloud computing. Eastern European developers are not only skilled in traditional software development but are also on the cutting edge of modern technologies, including the Internet of Things (IoT), DevOps practices, and cybersecurity, making them particularly attractive for businesses seeking to innovate. This technological expertise, combined with the relatively low cost of living in the region, makes Eastern Europe an attractive choice for companies looking to outsource their software development. In fact, several multinational companies, including Google, Microsoft, and IBM, have established research and development centers in Eastern Europe to tap into this talent pool.

Progressive tech hubs

Another critical factor contributing to Eastern Europe’s success in the IT outsourcing market is the increasing number of tech hubs across the region. Cities like Warsaw, Kyiv, Bucharest, and Sofia have become major centers for software innovation, offering excellent infrastructure, coworking spaces, and business support systems. These hubs have fostered the growth of a vibrant tech community, where collaboration between startups, established tech firms, and educational institutions thrives. This supportive ecosystem, along with a strong entrepreneurial spirit, has enabled Eastern Europe to become home to several unicorns and promising tech startups, further enhancing the region’s appeal to global players.

Remote and hybrid work

Eastern Europe’s growing remote work infrastructure has also played a crucial role in its rise as an outsourcing destination. With the shift to remote and hybrid work models, the region has rapidly adapted to the global demand for flexible working arrangements. High-speed internet access, digital tools, and a strong emphasis on cybersecurity make it a piece of cake for Eastern European developers to work remotely with international clients. Additionally, governments in several Eastern European countries have implemented digital nomad visas and remote work policies, making it easier for foreign companies to collaborate with local talent on long-term projects. This development further strengthens Eastern Europe’s position as a competitive and reliable software development outsourcing destination.

Impact of the War on the Outsourcing Landscape

The war in Ukraine has brought significant challenges to the country's IT sector, but it has also highlighted the resilience of Ukrainian developers and the broader Eastern European tech community. Many companies in Ukraine have adapted by shifting their operations to safer regions or neighboring countries. Ukrainian IT companies have also developed remote work strategies and business continuity plans that allow their teams to deliver high-quality software solutions to clients worldwide, against all the odds.

Meanwhile, neighboring countries like Poland and Romania have absorbed much of the displaced Ukrainian talent, further strengthening their IT sectors. As a result, the broader Eastern European IT outsourcing market is expected to remain robust in the coming years, with Ukraine continuing to play a key role (and even more once peace is restored.

Is It Better to Choose Eastern Europe for IT Outsourcing in 2025?

It’s not a surprise that North America along with Western and Central Europe cannot boast attractive prices for software development, which just drives companies to seek IT outsourcing services in more remote regions with less developed economies. And compared to various global outsourcing destinations, Eastern European countries can boast of a few unique advantages over Latin America, Asia, or the Middle East. It is this synergy of cost-effectiveness, quality, and cultural alignment with the Western markets that has increasingly made Eastern Europe an attractive option for organizations looking at IT outsourcing solutions.

Eastern Europe vs. Latin America

Latin America is geographically close to North America, which is a big advantage for businesses looking for nearshoring. However, when it comes to technical expertise, it may not have the same depth as Eastern Europe. Take countries like Ukraine and Poland, for instance — they've been global leaders in advanced fields like AI, blockchain, and fintech for years. While Latin America is steadily growing its IT sector and definitely has a talented workforce, it hasn’t yet reached that level of specialized skills that offshore Eastern Europe is famous for.

Eastern Europe vs. Asia

Asia, especially countries like India and China, has been a go-to for outsourcing software development because of its large talent pool and affordable rates. However, the distance, major time zone gaps, cultural differences, and occasional language barriers can make seamless collaboration a bit tricky. Eastern Europe, in contrast, is much closer to Western Europe and North America, making communication smoother and more in sync with real-time work hours. Plus, the cultural alignment between Eastern Europe and Western markets tends to lead to overall better project management and communication.

Eastern Europe vs. the Middle East

The Middle East has recently been putting more focus on tech and building its software outsourcing industry, but it’s still relatively new to the game compared to Eastern Europe. Eastern Europe has a well-established tech infrastructure and a proven track record in delivering IT outsourcing services. With its longer history of success, it’s safe to say Eastern Europe will remain a top choice for businesses that need high-quality and cost-effective IT services in the years to come.

For these reasons, Eastern Europe is likely to remain a preferred outsourcing destination in 2025 and beyond.

Top IT Outsourcing Eastern European Hubs

As I have mentioned before, there are several key hubs drawing businesses that need to outsource their software development in Eastern Europe. Let's take a closer look at the leading countries and the unique benefits they can offer:

Poland

Poland has solidified its position as a tech powerhouse in Eastern Europe, with over 400,000 professionals in the IT sector. If you're looking to hire software developers from Poland, you'll benefit from their expertise in enterprise software, gaming, and e-commerce applications. Poland's favorable geographic location enables real-time collaboration with companies based in Western Europe. The country boasts highly qualified software engineers with proficiency in a wide range of programming languages. The average rate for Polish software developers is between $30 and $60 per hour, offering a slightly higher rate but ensuring reliability for various outsourcing needs.

Ukraine

Despite the challenges of war, Ukraine remains the top IT outsourcing destination in Eastern Europe. This is backed up even more by the over 240,000 IT professionals in the country who possess solid knowledge of the technology arena, including fintech, AI, and blockchain software development. Ukrainian developers are known for their ability to manage large-scale and complex projects with high efficiency and creativity. The general cost of living enables companies to acquire high-quality talent at affordable prices. The range for software development is between $25 and $50 per hour.

Romania

Over the years, Romania has emerged as a key hub for IT outsourcing, boasting a talent pool of over 240,000 software developers. If you're looking to hire Romanian developers, you'll find their expertise in cybersecurity, software development, and IT services highly sought after. One of the primary advantages Romania offers is its favorable tax policies, which attract businesses aiming to reduce costs while maintaining high-quality standards. These policies include a 0% income tax rate for tech staff, a decade-long 0% income tax rate for R&D companies, and additional deductions for R&D-eligible expenses. The hourly rate for Romanian software developers typically ranges between $25 and $50, offering an ideal balance between affordability and expertise.

Bulgaria

Although relatively small in size compared to its neighbors, Bulgaria remains a very important hub for IT outsourcing in Eastern Europe. Bulgaria boasts an IT workforce exceeding 110,000 professionals, with an additional 5,000 STEM graduates entering the field each year. Famous for its potential in software development, mainly in the fields of automation, IoT, and fintech, this country is one to consider. A skilled workforce and hourly rates between $20 and $45 make it a relatively less expensive choice for companies that need to outsource software development projects.

Comparison of Top IT Outsourcing Hubs

Here is a comparison of the top destinations for outsourcing software development to Eastern Europe based on key factors.

How to Choose Your Perfect IT Outsourcing Destination

Picking the best country to outsource software development to Eastern Europe is a critical decision — absolutely key for ensuring the success of your project. Here's a step-by-step guideline on how to choose an ideal destination:

Evaluate Your Project Needs

What is your project basically all about, and what are the specific technical skills and expertise it requires? For instance, if your project is concerned with some serious and elaborate fintech or AI development, then the strong tech talent of Ukraine in such areas may be the best fit.

Estimate Your Costs

Decide on the budget for outsourcing by comparing the average hourly rates across different countries. While countries like Bulgaria and Ukraine offer more affordable rates, Poland and Romania charge higher fees but provide additional advantages, such as higher proficiency in English.

Assess Cultural Compatibility

Collaboration and outsourcing do very well if cultural compatibility is maintained. Most Eastern European countries culturally align quite well with their Western counterparts. For example, Poland and Romania rank very high on communication skills.

Consider Time Zone Overlaps

Look into time zone overlaps to assess the possibility of real-time communication and effective collaboration. Eastern European countries have minimal clock-zone differences from Western Europe, which makes it convenient for coordinating and managing remote teams.

Verify Legal and Tax Policy

Every country has a different legal and regulatory framework. Hence, it is important to verify and understand the local laws and tax policies. Romania and Bulgaria, though, offer very attractive tax benefits that assist in decreasing the overall operational costs.

Evaluate the Infrastructure and Stability of the Country

Besides the technical expertise and cost elements, consider the business environment in general for each country. Look at the internet infrastructure and ease of doing business. A stable economy and a well-developed infrastructure equate to fewer disruptions. The software development process will be smoother and more free-flowing.

Pitfalls of IT Outsourcing to Eastern Europe

While software outsourcing in Eastern Europe is quite attractive, here are a few issues to consider:

• Shortage of rare talents. As the demand for IT outsourcing continues to grow, finding developers with niche skills in advanced areas like AI or blockchain can be difficult.
• Reduced control. One of the major risks of outsourcing is the lack of direct oversight, making it harder to manage contractors compared to in-house specialists.
• Unclear billing. Navigating complex payment structures of foreign countries or dealing with vague billing terms can be frustrating, leaving companies feeling less in control.

Huntly Can Help You Hire in Eastern Europe

Huntly is set up to ensure hiring IT talent in Eastern Europe is a lot smoother for businesses, enabling them to seamlessly attract top-quality candidates. With experienced and advanced matching algorithms, Huntly ensures you get only the best software developers in Eastern Europe and IT specialists in key markets, such as Ukraine, Poland, Romania, Bulgaria, and beyond.

With Huntly, you can:

• Access broad IT talent. Our platform connects you to more than 1,000 local European recruiters who have vast personal networks of IT specialists. Get access to the talent communities of software developers and engineers across varied tech domains, including AI, fintech, blockchain, and cybersecurity.
• Control over hiring. Unlike outsourcing, Huntly focuses on recruitment, ensuring you get direct control over your hires, just as you would with in-house specialists.
• Experience transparent and flexible payments. We keep things simple and straightforward when it comes to payments, offering a clear and flexible process without hidden fees or complicated terms: you pay only after the hire is done.
• Optimize your hiring process with an intuitive platform that will help you fast-track the right candidates and reduce the time to hire.
• Save on recruitment costs. Huntly allows for a tech recruitment 3X lower in cost and thus releasing cash for other business operations.

How it works:

1. Post your job advertisement on our platform for free. 
2. Decide on the fee for a successful hire and keep control of your budget.
3. Get high-quality candidates referred by our network of proven recruiters and pre-screened by Huntly experts, so you don't have to settle for anything less than the best talent on the market.

With Huntly, you get to simplify your recruitment efforts and stay ahead of the competition with access to a talent network attuned to your specific needs. Huntly makes it easy to find and hire developers in Europe.

A successful case of filling 4 senior tech positions in Romania and Poland simultaneously within a month only proves our expertise.