Outsourcing to Eastern Europe: Trends & Market Insights

Nikoloz Khotcholava

Last updated on April 21, 2025 | 17 min read

Eastern EuropeIT marketOutsourcingSoftware developmentTrends

• Eastern Europe has greatly benefited from recent trends in the global outsourcing market, making it a prime destination for companies looking to delegate work.
• This article analyzes regional outsourcing trends, costs, and market opportunities.

For companies looking to accelerate the development of their software applications and cut down on growing costs, outsourcing has proven itself to be a reliable path that reduces operational expenses, provides access to specialized talent unavailable locally, and shortens time-to-market by eliminating recruitment delays. The IT Outsourcing market in Eastern Europe shows remarkable growth potential. Statista’s Market analysis indicates the sector is on track to generate $5.31 billion in revenue by 2025, positioning the region as an increasingly notable competitor in worldwide outsourcing services. Since joining the EU in 2004, Eastern European countries have experienced significant economic advancement. Poland has transformed from a GDP per capita at 48% of the EU average in 2004 to 82% by 2024, marking a substantial economic catch-up. The ten “Big Bang” EU members that joined in 2004 have seen notable improvements in GDP per capita, wages, health, and education, contributing to economic convergence with older EU members.

This economic growth is further accelerated by substantial EU funding directed toward digital transformation. The Digital Europe Programme invested over €760 million in 2024 to enhance digital solutions, including AI, cloud technologies, and cybersecurity. Additionally, the Horizon Europe Programme is allocating more than €4.5 billion for 2023-2024 to support digital transformation, focusing on core digital technologies and their integration into daily life.

Despite the clear benefits of outsourcing, the question of choosing the proper outsourcing destination remains open. Due to the surge of Western European and North American companies seeking lower operational costs and skilled technical talent, Eastern Europe is the ideal location for growing startups and experienced firms. This strategic geographical shift, coupled with the emergence of innovation hubs in Estonia and Lithuania specializing in cybersecurity and AI development, has transformed the region’s outsourcing market. Currently, project development outsourcing dominates the revenue of the region’s IT sector, with an expected market size of nearly $18 billion by 2029. In this article, we’ll break down key trends that could make Eastern Europe your next outsourcing destination and how it compares to other regions in the outsourcing market across the world.

How Eastern Europe adopts the latest IT outsourcing trends

We’ll first look into some recent worldwide outsourcing trends in the IT outsourcing market that make Eastern Europe a more prospective region to outsource to when compared to established giants such as China or India.

Increased demand for nearshoring

Eastern Europe has become a prime target for outsourcing due to a global increase in demand for nearshore outsourcing. According to a Eurostat analysis from 2022, 77% of companies within the European Union outsource to other countries within the EU, with other European countries being the second most sought-after outsourcing destination.

Outsourcing is especially on the rise in countries like Poland, Ukraine, and Romania, mainly due to their cultural similarities to Western markets, but also their skilled IT labor, lowered costs, and geographical location. In comparison to India or China, Eastern Europe’s time zone proximity to the West makes it a more reliable location for outsourcing. It should be the first choice for companies that are looking to minimize logistical challenges and increase collaboration opportunities with their outsourcing partners, thanks to reduced lead times and more reliable communication pipelines.

Adoption of hybrid work models

Since the start of the decade, an increased demand for hybrid and work-from-home models has been perceived worldwide, and the IT industry is no different. According to Statista, an average of 22% of people across the European Union worked from home in 2023, noting an 8% increase from 2019.

Eastern Europe’s growing adoption of hybrid work models is another reason that makes it a viable outsourcing destination, allowing companies to tap into the region’s IT talent without any relocation costs.

Increased demand for data security and compliance

With rising concerns over data protection regulations around the world, companies are looking to outsource to countries with strong legal frameworks for data security. Countries in Eastern Europe that are within the European Union are in an advantageous position thanks to numerous privacy protection laws implemented since 2018.

The most obvious one is the General Data Protection Regulation (GDPR), enacted in May of 2018, in addition to the Digital Services Act (DSA) and Digital Markets Act (DMA), fully effective as of February and March 2024, respectively.

These laws ensure that countries within the European Union, especially those in Eastern Europe, remain the most appealing outsourcing locations for clients looking for reliable data protection practices while retaining lower prices and expert IT talent.

Adoption of AI-powered automation

Integration with artificial intelligence (AI) and machine learning (ML) has also become a growing trend in outsourcing.

These systems can help with anything from customer service automation to helping conduct code reviews. Robotic Process Automation, or RPA, is a technology that complements AI while specifically automating repetitive, rule-based tasks such as data entry, system monitoring, or information processing while minimizing human error. Meanwhile, tools like GitHub Copilot can assist developers by generating needed pieces of code or detecting bugs more quickly.

Countries like Poland, Romania, and Slovenia have established themselves as hubs for AI-powered solutions, mainly through the European Commission’s AI Factories initiative, which is planned to begin rollout in 2025. These so-called factories are imagined as ecosystems that stimulate innovation and progress in the AI field. They are intended to bring together the talent, data, and equipment necessary to create the best AI applications across various fields, including medicine, energy, and meteorology.

Eastern Europe vs. other regions

Next, we’ll look at how Eastern Europe compares to other regions, specifically Asia. According to Statista, Asia boasts the largest IT outsourcing market in the world, with a projected revenue for 2024 of $114.8 billion. The revenue is further expected to grow by 9.34% annually until 2029, resulting in a market volume of $179.40 billion by the end of that year.

Compared to the global market, Eastern Europe’s growth projections are more modest, with Statista estimating the regional market to reach approximately $7.17 billion by 2029. However, the region compares favorably when looking past sheer market value. For example, even if costs are higher than tech giants such as China or India, they are still competitive and appealing to clients in Western markets.

Furthermore, the quality of these outsourcing services is much more evident in Eastern Europe, partly thanks to the comprehensive data protection and labor regulations offered by the European Union, striking an optimal balance between the work itself and how affordable it is.

The geographical difference between regions significantly impacts outsourcing decisions. While Asian markets provide companies with 24/7 operational coverage through time zone differences, recent trends reveal increasing demands for nearshoring. This positions Eastern Europe as a more appealing outsourcing destination, offering minimal time-zone differences and greater cultural compatibility.

The best destinations to outsource to in Eastern Europe

For anyone looking to outsource their work to a country in Eastern Europe, it’s essential to know that each country offers unique benefits while presenting distinct challenges. The balance depends on their regulations, readiness to comply with EU laws, and specialization of their broader IT talent.

Below is a list of some of the most reliable countries within Eastern Europe that are all effective options for IT outsourcing for different reasons:

Poland

With over 546000 professionals in its IT workforce, Poland is Eastern Europe’s largest IT market. With specialists mainly in cybersecurity, AI, and software development, and thanks to its cultural alignment and strategic location near Western Europe, it is a prime destination for US companies looking to outsource their work beyond North America and Western Europe. Recognizing Poland’s position as the region’s tech leader, DevsData LLC established its flagship Eastern European office in Warsaw to leverage this extensive IT talent pool for its clients’ projects.

Poland also offers competitive prices for the quality of its IT talent’s work, with an overall range of $28-$38 per hour depending on specialization and experience, making it accessible for various project budgets while still delivering high-quality results.

To find a reliable outsourcing partner in Poland, take a look at some of the top picks from this article.

Ukraine

Despite having a smaller IT workforce than Poland, Ukraine still boasts a lot of talent, with over 300000 developers specializing in AI and blockchain technologies. Leveraging Ukraine’s deep technical expertise, particularly from technology centers like Kyiv, DevsData LLC has developed a specialized remote talent acquisition program that connects clients with highly skilled Ukrainian developers while ensuring seamless project management across borders.

Though the country continues to face significant geopolitical challenges, it has, regardless, turned into a high-activity research and development (R&D) hub, thanks to numerous benefits offered to its programmers and IT workers. Furthermore, its prices are the most effective in the region, thanks to steep tax cuts, usually ranging from $33 to $60.

If you’re looking to find an IT recruitment partner in Ukraine, this article lists some of the best recruitment companies that operate in the region.

Romania

Romania’s IT sector has grown exponentially over the past decade, with a thriving community of professionals in software development, particularly enterprise solutions and cybersecurity. The country offers a strong educational foundation in STEM fields combined with competitive rates and EU membership benefits. To capitalize on Romania’s unique combination of technical proficiency and cost efficiency, DevsData LLC maintains recruitment partnerships with technical universities and IT hubs in Bucharest and Cluj-Napoca, creating direct pipelines to emerging Romanian talent.

This growth has helped it achieve proficiency in fields such as embedded systems and enterprise software solutions, while its competitive overall range of hourly rates ($12-$25) positions it as an attractive alternative to other locations for projects of varying complexity and budget requirements.

For a list of top outsourcing companies in Romania, take a look at this article to browse some reliable picks.

The Czech Republic

With a talent pool of around 140000 IT professionals, the Czech Republic’s developers specialize in fields such as game development, software engineering, and AI automation. Furthermore, there is a strong focus on IoT and robotics, while its geographical location within Europe makes it an excellent choice for clients based in the US.

Drawing on the Czech Republic’s excellence in specialized technical domains, DevsData LLC operates a dedicated technical assessment center in Prague that identifies top-tier Czech developers for clients with demanding enterprise requirements.

The Czech Republic has slightly higher, but still competitive, hourly rates of up to around $60 alongside reliable infrastructure and adherence to EU regulations and laws. The country is an excellent choice for those looking to outsource work on complex, high-security projects, as that is precisely what its specialized IT workforce excels at.

To browse top outsourcing agencies within the country, follow the link to the article.

Hungary

With over 80100 professionals in its IT workforce, Hungary has established itself as a prominent outsourcing hub in Central Europe. The country’s ICT sector, which includes IT outsourcing and services, represents a significant portion of its economy, contributing around 10% to the nation’s GDP. Its strategic location in the heart of Central Europe, combined with cost-effective solutions, positions Hungary as an attractive destination for companies of various sizes looking to outsource their operations. Aligning with Hungary’s expertise in complex enterprise solutions, DevsData LLC has established strategic recruitment channels throughout Budapest’s tech ecosystem to connect clients with Hungarian development teams that specialize in scalable business applications.

Looking for top-tier IT outsourcing providers in Hungary? Browse our curated selection in this article.

Bulgaria

Bulgaria has emerged as a strategic outsourcing destination with approximately 10000 export-focused ICT companies in its ecosystem. The country’s IT sector is experiencing steady growth, with projections showing the IT outsourcing market reaching $252.80 million in the next 5 years at a 9.21% annual growth rate. Bulgaria appeals to international corporations across various sectors thanks to its competitive operating costs, skilled talent pool, and advantageous geographical location within the EU, making it particularly attractive for companies looking to optimize expenses while maintaining high-quality standards. To enhance candidate outreach in this promising market, DevsData LLC operates a regional recruitment center in Sofia.

To find trusted IT outsourcing partners in Bulgaria, look at our carefully selected recommendations in this article.

How DevsData LLC could help with outsourcing to Eastern Europe

Website: www.devsdata.com
Team size: ~60 employees
Founded in: 2016
Headquarters: Brooklyn, NY, and Warsaw, Poland

Successful outsourcing to Eastern Europe requires partnering with established technology providers who understand both regional specifics and international business needs. DevsData LLC specializes in providing development services and maintenance through its comprehensive presence in Eastern Europe. Their service portfolio spans complex backend systems, frontend web applications, mobile app development, Big Data and data analytics, DevOps and cloud infrastructure, enterprise application development, and custom technology consulting. This diverse technological capability enables them to address varied client requirements while maintaining consistent quality standards across different solution categories and business sectors.

With offices strategically positioned throughout Eastern Europe in Warsaw, Kyiv, Bucharest, Prague, Budapest, and Sofia, DevsData LLC offers clients direct access to the region’s expanding technology ecosystem. Their google-level in-house engineers bring deep technical expertise to every engagement, while their US specialists ensure clear communication and alignment with Western business expectations. This distributed yet coordinated presence allows them to identify optimal technical resources based on specific project requirements and regional strengths. Their teams maintain close connections with local technology communities, giving clients insider access to emerging talent pools across multiple Eastern European markets.

DevsData LLC has built a proven track record spanning diverse industries during its 8+ years of market experience. Their developers bring over 10 years of experience in Eastern European development practices, with particular specialization in Big Data and Machine Learning implementations. The company has successfully completed 100+ software projects for more than 80 clients worldwide, consistently earning perfect 5/5 satisfaction ratings on both Clutch and GoodFirms platforms. This consistent performance demonstrates their ability to translate client requirements into effective technical solutions while navigating the complexities of distributed development models.

The company’s experience working with global corporate clients and high-growth startups from various countries, including the US and Israel, showcases adaptability across different business contexts and technical environments. For companies exploring Eastern European development opportunities, DevsData LLC provides immediate operational capabilities through an existing regional presence, eliminating the need for extensive setup procedures or unfamiliar market navigation. This comprehensive approach transforms abstract outsourcing strategies into practical implementation, connecting businesses with Eastern Europe’s expanding technical capabilities through established operational frameworks.

In addition to a diverse service portfolio, DevsData LLC maintains an extensive recruitment infrastructure with 65000 pre-screened candidates. The company’s government-approved recruitment license ensures ethical hiring practices and compliance. The evaluation process includes a 90-minute problem-solving challenge assessing both technical skills and communication abilities, ensuring candidates possess verified expertise and collaboration capabilities. Operating on a success fee model, clients only pay when satisfied with hired specialists, with an additional guarantee period providing further security.

For further information about DevsData LLC’s Eastern European outsourcing services, contact them at general@devsdata.com or visit their website at www.devsdata.com.

DevsData LLC in Poland:
DevsData IT Recruitment Agency Poland
Al. Jerozolimskie 181B,
02-222, Warsaw, Poland
poland@devsdata.com Copy email

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Conclusion

Even if it brings in less revenue than some other regions, Eastern Europe still proves to be a top outsourcing destination. With a global increase in demand for nearshoring and strong privacy protections, Eastern Europe can fully leverage its proximity to Western Europe to meet these growing needs. Its adherence to EU regulations and laws guarantees that clients should have no cause for concern, even when hiring talent for high-security projects.

The accelerating deglobalization trend has fundamentally shifted outsourcing strategies, with the European Union increasingly prioritizing nearshoring to enhance supply chain resilience and reduce dependencies on distant markets. This macroeconomic shift strongly favors Eastern European countries, which offer the perfect combination of proximity, cultural alignment, and skilled workforce at competitive rates. As Western European companies recalibrate their strategies in response to trade uncertainties—particularly with the anticipated challenges in US-EU trade relations under the Trump administration’s proposed tariffs of 10-20% on EU imports — Eastern Europe stands to benefit significantly from this intra-European refocusing.

With analysts warning that US trade measures could potentially erode the EU’s GDP by up to 1.5% (approximately €260 billion), Western European businesses will likely intensify their search for reliable nearshoring partners within the EU’s economic zone. Eastern European IT sectors are uniquely positioned to absorb this redirected investment and collaboration, creating a counter-cyclical growth opportunity despite broader global economic tensions.

Furthermore, Eastern Europe offers excellent value, with competitive pricing that often rivals Asian markets while delivering superior transparency in business practices. This combination creates a compelling proposition where clients receive high-quality work at reasonable rates, representing an attractive balance of cost and quality.

In addition to all of the above, ongoing and recurring funding by the European Commission and tech giants like Microsoft and Amazon have made the region particularly adept at adopting AI-powered solutions. This ensures it will stay relevant in the years to come, both for startups and veteran firms looking to hire developers from its sizable talent pool.

With over eight years in the Eastern European market, DevsData LLC offers exceptional expertise for organizations seeking regional talent. Their team combines American specialists with local knowledge, serving international clients from startups to corporations worldwide, including the US and Israel. The company’s database of 65000 pre-vetted candidates and government-sanctioned recruitment license provide businesses with reliable, compliant access to Eastern Europe’s technical professionals.

For questions about DevsData LLC’s recruitment services, contact general@devsdata.com or visit their website at www.devsdata.com to learn more about their offerings.

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Nikoloz Khotcholava Copywriter and Marketer

Nika Khotcholava is a dedicated copywriter with four years of experience crafting engaging content across various platforms. His background in social media management has sharpened his ability to communicate ideas effectively and collaborate closely with designers to bring creative visions to life. Nika thrives in fast-paced environments and enjoys learning something new every day.

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