Professionalism, low taxes and high motivation: 5 reasons to look for IT specialists in Central and Eastern Europe
The world has turned into a global village, and that may come in handy. In 2022, when looking for IT specialists for the team, you don’t have to focus on your region and your country alone. Expand your horizons by embracing the whole world. We have found 5 reasons why American and Canadian companies should put aside their doubts and fears and consider IT specialists from the countries of Eastern and Central Europe.
Reason 1. Staff shortage in local markets
The demand for developers is steadily growing every year. Being digital is no longer an advantage, but a necessity for any business. It has become especially acute after the COVID pandemic, when online experienced a huge boom. Even before 2019, there was a clear shortage of personnel in the IT field, and now even more so – since every medium-sized business has its own IT department, let alone large companies, where the staff of such specialists can amount to hundreds of people. As a result, during the last year, companies in the USA ended up looking for 200,000 IT specialists. This indicates a huge demand for quality candidates, who are already in short supply within the country.
Reason 2. Experienced and high-quality specialists in foreign markets
The main sources of IT specialists for North America are the countries of Central and Eastern Europe (Czech Republic, Slovakia, Hungary, Poland), the Balkan countries (Romania, Bulgaria, Serbia, Albania etc.), the Caucasus, Turkey, some countries of Western Europe, in particular, Spain. And in last year’s Daxx report, for example, Ukraine was named the best country in Eastern Europe for hiring programmers.
These are the countries with plenty of high-quality technical personnel. In general, there are more than 1.1 million developers in Eastern Europe. Half of them live in Poland and Ukraine. According to the State of European Tech report, there are 4 developers per 1000 population in Ukraine.
In the countries of Central and Eastern Europe, there is a fairly high-quality technical education and many specialized universities. For example, Ukrainian technical universities turn out about 20,000 specialists every year. For 4-6 years, these students have been studying not only programming, but also mathematics, logic and English. They can work equally well alone and in a team. By undergoing internships at leading IT companies, they develop essential soft-skills still being students and work on real projects even before the graduation.
There will be no “language barrier” whatsoever. According to the EF English Proficiency Index, Eastern European countries topped the list of 30 countries with high level of English. More often than not, part of the academic disciplines in Ukrainian universities is taught in English. In Europe, institutions of higher education also offer English-language programs – there is nothing new here.
Candidates from Europe are interested in professional growth, learning new technologies and working on interesting projects. They regularly participate in hackathons and work as mentors. Developers from five Eastern European countries took places in the list of countries with the best programmers in the world according to SkillValue: the Czech Republic took 5th place, Ukraine – 4th, Hungary – 3rd, Poland – 2nd, Slovakia – 1st.
Besides, Ukraine and Poland are represented in the ratings of Gartner, Kerney and the World Bank as one of the strongest technological states of Central and Eastern Europe. Developers in this region have extensive experience in working with cloud services, artificial intelligence, Big Data, they know how to manage projects and are open to learning the newest programming languages.
This may come as a surprise, but the active hostilities currently taking place in Ukraine have actually not changed the situation on the IT labor market. As you know, on February 24, 2022, Russia launched full-scale invasion of Ukraine. For 1-2 months after that, Western clients and employers of Ukrainian IT workers were not sure about the future and, accordingly, put some projects and hiring in Ukraine on hold. But starting from April-May, the Ukrainian IT market regained its position and once again the number of available job offers in IT exceeds the offer of specialists.
Thanks to determined heroic resistance and the help of partners, Ukraine has the opportunity to defend itself from the enemy. By receiving Western weapons and having a sufficient military reserve, Ukraine declares the need to preserve the potential of people in the economy. IT specialists are much more interesting for the state when they bring money to the economy, rather than in the trenches.
Reason 3. Low taxes and convenient legislation
After the collapse of the USSR, the countries that were part of it gradually adapted their legislation to the globalized world. Many of them gave their citizens the opportunity to create legal statuses that allow them to legally work at the B2B level, concluding cooperation agreements between individual entrepreneurs and the company to which they render IT services. In some countries, IT specialists prefer B2C and B2B relatively equally (Poland, Romania), in others B2B is the main type of cooperation.
For example, in Ukraine, being employed as a private entrepreneur and not as a full-time employee, an IT specialist can pay only 5% turnover tax + social contribution, which currently amounts to about 55 euros per month. As a result, about 90% of Ukrainian IT specialists work according to this scheme. In Poland, the income tax for private entrepreneurs in the IT sector is 12%. When providing services within the country, VAT is added, but if you pay a Polish developer from abroad, VAT is not charged.
Spain, Croatia, the Czech Republic, and Hungary also have a simplified taxation system. And in Portugal, for instance, IT specialists have the status of Non-Habitual Residents (NHR). The NHR provides for the payment of a tax at the rate of 20% on the income received in the country and 0% on the income earned outside its borders.
In Slovenia, an in-house IT specialist has to pay about 40% of his/her income in taxes. However, if such a specialist enters into a B2B contract with a company, he/she pays less than 10% of taxes. Therefore, it is profitable to cooperate with such developers, especially if they are contracted as private entrepreneurs and not work in-house.
Reason 4. These guys are used to working remotely
The IT industry of many countries of Central and Eastern Europe works to a greater extent for Western markets. First and foremost, it attracts orders from American companies. This effect has been amplified by the pandemic, which has made the world even more global and more digital – work in the office took a backseat, as projects can be created remotely from anywhere on the globe.
For example, before the pandemic, only about 15% of Ukrainian IT specialists worked remotely, and after 2019, 92% of developers switched to remote. What we can see now – programmers are able to effectively plan their work and communicate within the team, regardless of where they are. They know how to work with the world’s most popular task managers (Jira Software, Rally, Asana, Pivotal Tracker, GitHub Issues and others), which makes remote work even easier.
The export of IT services in Ukraine is growing every year, and it already occupies an ever-increasing share of GDP. Outsourcing in the country is generally widespread – for example, as many as 12 Ukrainian outsourcing companies are in the world’s TOP-100. This means that Ukrainians know how to work for foreign customers, easily adapt to their mentality, hold meetings with them and create quality products.
An additional plus: time difference between countries. Poland uses Central European Time (GMT+2), Ukraine is one hour ahead (GMT+3). The time difference with Canada will be 6-7 hours, so the employer will already have the results of the work done by the developer from Poland or Ukraine at the beginning of the working day.
Reason 5. “IT” salaries allow them to have a higher standard of living
Developers all over the world earn roughly the same amount. But the same sums for a resident of the USA or Western Europe and for a resident of Central and Eastern Europe mean a completely different standard of living. Having an average “IT” salary, developers in Ukraine or Poland enjoy middle-class lifestyle. They can afford to buy their own housing in new condominiums, use private medical services, have quality recreation and be confident about the future.
So, they hang on to their jobs, and at the same time burn out less and worry less about household troubles. In contrast to more expensive countries – where mid-level developers have to save money and don’t feel too comfortable financially.
AboutHR recruiters are well-versed in global markets, the specifics of finding rare professionals, and the differences in candidate expectations. We can help you find specialists in accordance with your market preferences, or offer our options of markets to search. The importance of recruiting is discussed in more detail in this article.
You should not limit yourself to the search for IT specialists in your country alone. There are many regions and countries outside of North America whose developers are just as professional and skilled at creating projects. They speak excellent English, are used to working remotely and are ready to give 100% in their work. Expand your hiring horizons, and this will help reduce the personnel shortage and get really high-quality IT specialists in the team.