Romania as a Nearshoring Destination for Israeli Companies

It’s no secret that Israel is one of the world’s leading hubs for innovation, renowned for its startup ecosystem and world-class engineering culture. Along with its impressive reputation comes high salaries and overall hiring costs, a finite talent pool with intense competition for top engineers.

As a result, some Israeli companies are looking to strategic nearshore markets to further scale engineering capacity and build out new teams or augment existing ones.

While some regions of the world and specific countries offer significant cost savings for outsourcing, there are valid concerns regarding the technical prowess of engineers, English proficiency, time zone alignment, and culture fit with existing Israel-based teams.

Looking to Central & Eastern Europe rather than more distant destinations like India or Latin America can alleviate some of these concerns. Both Poland and Ukraine have become increasingly popular nearshoring locales, as have Portugal, Spain, and Ireland, each of which offer their own specific benefits and challenges.

But a new talent market which stands out from the rest, especially for Israeli companies, is Romania. Eastern Europe’s hidden gem offers a unique blend of culture fit and engineering quality that has, until now, often been overlooked; it may even come as a surprise that there is a vibrant engineering talent pool within the country.

Value-to-Quality Ratio

While Romania certainly is not as inexpensive as hiring in other popular outsourcing regions like Ukraine and India, it does offer an attractive balance of value-to-quality in terms of top technical talent. The quality and expertise of engineers throughout the country, but especially in technical hubs like Bucharest, Cluj, and Iasi, is on-par with Western hubs, including Tel Aviv but at a better value.

In addition to compensation, costs for establishing dedicated office space are significantly lower than in Israel, even in the heart of the capital city, as is cost for hiring administrative, HR, and office management personnel. The caveat is that costs are not quite as low as many Americans, Western Europeans, and Israelis might assume, at least not anymore.

Although salaries for a Staff or Senior level engineer might easily exceed €100,000 gross annually, other associated costs of hiring here, like desk space and other benefits like health insurance, can offset higher salaries.

Product-Focused Engineering Companies

Within the last decade, there was a notable shift in the Romanian market. More engineers began collaborating directly with product companies, including many that are headquartered abroad. As a result, there is a wider pool of engineering talent here that have careers focused on direct experience developing products for startups, scaleups, and enterprises.

This is opposed to shorter-term engagements through outsourcing shops that focus on peripheral features, legacy code, or maintenance, which is seen more in Eastern European markets like Ukraine. While the technical ability of Ukrainian engineers can certainly be quite strong as well, this product-focused nature sets Romania apart from neighboring countries and contributes to Romanians’ ability to collaborate effectively with American and Western European companies.

Industries & Skillsets

There is a wide range of industries present within Romania, meaning that there is a significant talent pool for a variety of major and niche skillsets and tech stacks. From embedded technologies and automotive to SaaS startups, scaleups, and enterprises to gaming & casinos and anything in between, foreign companies looking to hire here have the opportunity to explore a broad pool of technical talent within Romania. In recent years, there has also been significant growth in the area of blockchain and cryptocurrency.

Cultural Values & Alignment

Based on feedback from Israeli engineering leadership, places in CEE like Poland present unique challenges for collaboration with their Israeli counterparts within an engineering team. While Poland undoubtedly has a stellar reputation for its engineering culture, the differences in how people communicate and approach both social and professional interactions can be difficult to bridge. In contrast to this Slavic culture that is distant from Israel’s own, Romania is, perhaps surprisingly, a predominantly Latin culture.

Although it neighbors other Slavic nations, Romania itself is more closely aligned with places like Italy, Spain, Portugal, and France, with Romanian being the 5th major Romance language. The cultural characteristics associated with this allow Romanians and Israelis to collaborate effectively due to their shared vibrance, intensity, and warmth.

English Proficiency

When working with globally distributed teams, professional working proficiency in English is critical for all members of any engineering organization. In addition to Romanians’ general openness and collaborating with foreigners and in globally distributed remote teams, the country also features one of the highest levels of English ability globally, ranking among the top 20 in the world.

A Possible Solution

With all of these cultural attributes in mind, Romania presents itself as a uniquely attractive option for Israeli companies looking to establish engineering teams outside of HQ, especially ones in the same time zone. Although other international outsourcing companies operate in Romania, at Carbon we believe that working with hyperlocal recruitment & staffing partner can ensure the success of these strategic initiatives.

Carbon has a skilled boots-on-the-ground team of Talent Partners in Bucharest at the heart of Carbon’s vetted talent network. With an intimate understanding of local culture, Carbon provides bespoke Recruitment & Staffing solutions that are uniquely tailored to each company’s specific needs.

Whether this means setting up a local entity and hiring on employment contracts, or utilizing Carbon’s Staffing model to hire engineers on permanent, exclusive freelance contracts, there is significant potential for Israeli companies looking to access new talent pools at better value that feature a better-aligned cultural fit, high English proficiency, and strong technical, product-focused engineers.

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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