How is Eastern Europe fuelling innovation for global technology businesses?

Innovation and access to skilled talent have gone hand in hand since the rise of the Roman Empire, through to the Industrial Revolution and up the modern day where Silicon Valley has become the global epicentre of the tech industry. Access to specialised talent has enabled the creation of developed nations. It has also supported the growth, and accompanying defensive competitiveness, of many leading companies across the globe.

A region made up of several culturally distinct countries, Central & Eastern Europe (CEE) includes: Poland, Hungary, Czech Republic, Slovakia, Romania, Bulgaria, Moldova, Ukraine and Belarus. Eastern Europe has, in recent years, emerged as a powerhouse of software engineering talent, attracting numerous global companies to its cities, including Google, Amazon, Stripe, Lyft and Fitbit.

It should not come as a surprise, given our British-Romanian origins, that we at Carbon believe the region has significant untapped hiring potential for both European and US-based companies.

Top 8 reasons to hire developers in Eastern Europe:

1. Eastern Europe is home to a large and growing pool of technical talent

According to Atomico, a leading European venture fund, Eastern Europe is home to a combined 1.1 million professional software developers. Poland and Romania have the largest talent pools with 300,000 and 200,000 developers respectively. If formal technical studies (excluding coding boot camps) were removed from the qualifying criteria, the total number of professional developers in Eastern Europe would be significantly higher.

2. High English proficiency

English is the default language for international software development teams, so ensuring a high level of proficiency is paramount for companies looking to build high quality user-focused products. Despite certain global biases and inaccurate stereotypes, the level of English proficiency in most Eastern European countries is very high.

In fact, Poland ranks 13th in the world and is classified as having very high proficiency. Slovakia, Romania and Hungary follow closely behind and the majority of Eastern European countries have a noticeably higher English proficiency than Switzerland, France or Spain.

Source: Education First - English Proficiency Index (2022)

3. A history of technical skills and education

One thing that countries in Eastern Europe share with each other is their history of Communist rule. Under Soviet rule there was a focus on heavy industry and engineering so STEM subjects (science, technology, engineering, and mathematics) were widely promoted during the 70s and 80s in Eastern Europe. That has continued to this day and given rise to some of the leading Polytechnic universities in Europe, if not the world.

As seen below, the majority of Eastern European countries have a larger proportion of their students pursuing STEM – particularly Information and Communication Technologies – than the UK, or even the European Union's average.

Source: The European Commission

Interestingly, the reputation of Eastern Europe’s technical universities can be seen in an internal hiring memo which circulated Twitter in 2020. The memo details the most sought after universities for software engineering candidate referrals and, in Europe, only three were listed: Cambridge, Oxford and the Polytechnic University of Bucharest (Romania).

Internal hiring memo at Twitter 1.0

4. Greater gender diversity

An often cited shortcoming of the tech industry is the lack of gender diversity, forcing many companies to actively seek new ways of attracting female engineers to their ranks. While this might be a problem in the United States, Eastern Europe has a large and growing population of female tech talent, thanks again to the region’s strong emphasis on STEM.

Eurostat - Women in STEM across Europe

Global companies looking to bolster gender diversity could look towards Eastern Europe for their future female hires. Diversity hiring is one of core values at Carbon.

5. Eastern Europeans are world-class competitive programmers

Although not the sole measure of determining a strong engineer, the ability to solve complex coding challenges like those published by world-leading testing provider, HackerRank, is a clear signal of aptitude. HackerRank collected data from a global community of 1.5 million developers and produced the following global ranking:

_HackerRank: Which Country Would Win the Programming Olympics? _

As seen above, 7 of the top 20 countries are all in Eastern Europe, higher than the UK, Israel and even the United States.

6. Substantial cost savings

Given the high wage inflation the tech industry has seen in recent years, every business is looking at new ways to optimise their payroll costs. A reduction in hiring is not often the answer for fast growing companies, unless you can operate with a skeleton team like Twitter 2.0. Hiring ‘more with less’ has become the goal for most companies today, many of which are looking at innovative ways to efficiently scale. Typically, that means exploring new markets like those that Carbon has deep networks in.

On average U.S. companies save 50 - 60% hiring engineers in Eastern Europe.

There’s a reason why Stripe, Binance, Lyft and many other leading US technology companies are building development centres in the region.

7. A high number of developer candidates per open role

100,000 IT graduates enter the workforce in Eastern Europe every year, resulting in a surplus of talent compared to local demand. Therefore, despite a growing base of highly skilled software engineers, Eastern Europe provides a unique opportunity where the labour market remains far less competitive than in the UK, US or Germany. In comparison to the US, Eastern Europe has a much higher number of developers per open role.

Carbon’s core Eastern European markets (Poland, Romania and Hungary) each have on average 27 software engineering candidates per vacancy. The US has seven candidates per vacancy, which is almost four times more competitive from a talent liquidity standpoint. Global companies considering hiring distributed teams in Eastern Europe can attract plenty of candidates and scale quickly and efficiently.

8. Home to naturally low talent attrition

As a partial result of the high number of candidates per open role, Eastern Europe sees very low talent attrition. So companies that hire in these markets benefit from higher employee retention and minimise the hidden, yet expensive, indirect costs associated with employee churn.

Keeping an engineering hire for 4+ years is a common occurrence in Eastern Europe.

The relatively low talent attrition across CEE can also be attributed to the region’s Communist past and the subsequent socio-cultural norms. Eastern Europeans are regarded as conservative and family orientated with a moderately high aversion to risk. As a result, they treat job switching with a large degree of consideration, often staying in a job for a long period even if certain things may not be to their liking. Stability of employment is very important to most Eastern European developers.

💎 Eastern European talent: unlocking value across borders

Fuelling constant innovation is a critical aspect of every business' growth; it can make or break companies, particularly those operating within the highly competitive tech industry. Hiring development teams in the strategic Eastern European talent markets enables companies to attract – and more importantly, retain – top tier technical talent for a fraction of the costs in the US. The region’s high level of English proficiency, coupled with its exceptional computer science skills among both men and women makes Eastern Europe an ideal place for building distributed, gender-diverse teams.

Unlock innovation at HQ by scaling with Carbon’s roster of qualified, cost-effective Eastern European engineering talent. Interested in learning more? Read some of our success stories.

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Carbon is the go-to staffing specialist for Eastern European and North African technical talent. Trusted by the biggest names in technology and venture capital, Carbon’s hyperlocal expertise makes entering new talent markets for value-seeking global companies possible.

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