Any company based in the U.S or Central Eastern Europe that wants to save money will have considered the option to outsource. The difficult question now is choosing where. Asia and Latin America are appealing due to the cheaper rates, whereas Eastern Europe has higher rates but is more reliable. This article will provide you with information and statistics as to why you should be looking at hiring Romanian developers.
Why outsourcing is attractive
If you look at the U.S offshore and nearshore rates, you are likely to find some of the best hourly rates and therefore saving you money. You can save on employee overheads like employee benefits, taxes, training, and retention. You are also able to scale your team according to business needs. If you wanted to hire 10 in-house developers, you would have to expect to pay at least $1.6 million. The same 10 developers hired nearshore or offshore would set you back $700 thousand (+/- travel). Companies can save over 50% of their developing costs. Retention is another massive factor that we will look at further on in this article.
The cheapest isn’t the wisest choice
As tempted as you are to hire the cheapest outsourcers, there are warnings that come with this. Before looking at these potential dangers, let’s discuss some of the average rates for a full-time employee.
The statistics are similar across all of the job types, with the U.S. having the highest rates and Asia having the lowest. But how can there be such a difference? Some factors that influence rates are the length of the project, work experience, location, tech stack, and the size of the team.
With this in mind, you can remove Asia from your list, in particular, India. There have been many cases of other outsourcing companies coming to the rescue when Indian outsourcers haven’t been able to deliver the necessary levels of quality. We are left with Latin America and Eastern Europe. While their rates are similar, there are other advantages to take into consideration.
The benefits of outsourcing in Eastern Europe
Unknown to most, Eastern European software engineers have a high level of education and skill. These countries have placed a lot of focus on educational programs that are based n engineering and science. Add this to the low labour costs and you have a great outsourcing combination.
Over the last 20 years, the world has seen a large shift in the previous Soviet Union area. The business work ethic of the Eastern Europeans is very similar to that of the Western Europeans. They have adopted their rules and social norms, in particular, the European Union’s Data Protection Act.
Other advantages include:
- Strong, proficient universities
- Close links to Western culture
- Close links to North American culture, especially in the style of communication
- Eastern Europeans are respectful of American culture and innovation in technology.
- Eastern Europeans feel their skills are more appreciated
If this is your first time outsourcing, you will be amazed at the large talent pool in Eastern Europe, they are innovative, hardworking and easy to communicate with. It won’t take much time to build a long-lasting relationship with them.
What about Romania specifically?
So, by now you may have narrowed your choice to Eastern Europe, but again, don’t just go for the cheapest offer. In general, the Baltics had less talent available than the Balkans. Looking at Romania specifically, they have the highest levels of readiness, English proficiency, and higher education training.
Only Serbia can match Romania’s English Proficiency, yet its GDP and population are far behind Romania. Romania has a population of 19,679 and a GDP of $23,629.
Being just one-time zone ahead of Western Europe and a mere three-hour flight from London, Romania is very centrally located. It has one of the largest IT professional populations in Europe, one of the main reasons for its annual outsourcing growth of 15-20%, the fastest growing IT outsourcing service provider within the European Union. Regarding the talent pool, Romania has been ranked 10th in the world for certified IT specialists. Major companies such as Microsoft, IBM, and Amazon, as well as significant Western companies, have chosen to employ thousands of IT professionals in Romania.
A.T. Kerney’s Service Location Index stated that in 2016 Romania was ranked 1st in Europe and 6th globally for the number of qualified IT specialists. Across the IT sector, there are 100,000. On top of that, Romania was ranked 3rd in the world as the most attractive software outsourcing country. It might not offer the cheapest rates, but they are still more appealing than those in Western Europe and the U.S. It’s superior technical skills still make Romania extremely competitive.
ANIS Romania published a report that showed an 11% increase in the turnover for the IT sector in Romania between 2017 and 2018. When breaking down the growth of exports, you can see that 75% of the software products that are exported go to the European market, 22% to the U.S. market and the remaining 3% to other markets. This growth sets to remain steady.
Full-time employment has also increased. There are now 89,850 technical specialists in full-time employment, a 7.5% growth.
Romanian developers are prepared and willing to work on mid-scale projects and large-scale projects. Once they begin, you will notice a high level of dedication, regardless of the size. This dedication also helps with working hours. They are flexible and therefore there are no issues with the time zone between Romania and the U.S.
While the cost may be higher than outsourcing in India, there are far more advantages and still much cheaper than rates you will find in the U.S. or Western Europe.
While you are saving up to 50% of developer costs, you can enjoy excellent levels of communication, hard workers who are dedicated to the project, and a level of talent that has been recognized globally.