However huge was the influence of the global pandemic on the IT industry, a new challenge that the planet faced early this year is likely to shake the very foundations of the civilization based on respect for international law and security. On February 24, Russia, supported by its minion Belarus launched a cruel and unprovoked invasion of Ukraine, shelling its cities and towns, capturing large swathes of territory, and committing war crimes and atrocities against its citizens on a large scale.
The act of aggression and barbarities of occupiers couldn’t pass unnoticed by the world community that responded sharply, introducing a barrage of sanctions against malefactors. These constraints sent repercussions across many fields and industries, and the IT realm couldn’t stay unaffected either.
The Post-War Landscape in the IT Sector of Eastern Europe
What did all reports in the outsourcing software development realm for the region shown in January-February 2022? Most of them painted a sound future for Belarus and Russia as IT destinations, noting, however, the gradual distancing of the latter from the global market caused by the Crimea annexation in 2014. By contrast, Belarus has been often termed a "Silicon Valley of Eastern Europe," where the IT domain remained the only robustly developing sphere in a largely Soviet-type economy.
February 24 has become a point of no return for the two perpetrators. After this date, not only did governments start to initiate punitive measures against them. Many blue-chip IT brands as well as startups sever ties with the two toxic nations and boycott digital products manufactured there. Even though hiring software developers from Belarus is still possible, all of this spells a drastic plummeting of the IT sector of Russia and Belarus, as well as the mass exodus of software specialists to countries with a more democratic political regime.
As a result, many western consumers of IT services turn their gaze elsewhere, trying to make the best of outsourcing software development. For those who want to outsource web development, Romania is considered to be one of the most attractive destinations.
IT Outsourcing: Romania in Focus
It would be a mistake to assess the condition of the Romanian software industry as a thing apart from the general economic situation in the country. The nation's GDP has been on permanent growth since 2015 and is expected to top the solid (for Eastern Europe) $19 billion in 2024.
The minimum wage is also increasing, having reached 2,300 lei ($499) last year. Such robust growth patterns are symptomatic of all industries, and the IT sector is no exception. One of the reasons for it is the 83% of internet coverage even in rural households, whereas in urban communities, this number is 93%, which places Romania ahead of Italy, Portugal, France, Belgium, and other leading European nations.
All these indices set an appealing background for the current health and future progress of the IT field. Here are the reasons why, while considering software development outsourcing Romania may appear the best choice for Western (and not only) companies.
1. Impressive Growth Parameters
The lenient tax legislation coupled with targeted long-term incentives from the authorities has created a stimulating environment for the IT sector. In 2019, it yielded over €6 billion to the country’s economy and displayed an astonishing annual growth rate of 13.4%, with a turnover of $7.4 billion that is expected to double by 2025.
To crown it all, business climate risk assessment, as well as national credit risk on business assessment, keep at the lowest possible level (A1). All of these facts serve as a valid reason why software vendors have reported a four-fold increase in their companies and teams in the last ten years. Half of the revenues generated in the domain (close to $3 billion) come from large businesses (over 250 employees), with small vendors of less than 50 workers trailing not far behind ($2.2 billion). The rest ($1.5 billion) is provided by medium-sized IT firms (between 50 and 250 employees).
Such impressive numbers contribute to Romania's high positions in many niche rankings. For instance, it is ranked 19th by Topcoder and SkillValue, whereas Global Services Location Index places Romania 28th as an outsourcing destination, and HackerRank believes the quality of Romanian developers to be among the top 20 in the world.
2. Favorable Geography
Being comfortably placed at the crossroads of transportation channels from Western to Eastern Europe and from Scandinavia to the Balkans, Romania is just a stone’s throw (that is, one or two hours ahead) from the countries of old Europe. Such a location makes it a perfect choice as a nearshore IT hub for customers from the continent.
If you hail from the USA or Canada, the time zone difference will be quite considerable (between 7 and 10 hours). But once chosen as an offshore destination, a Romanian software vendor would willingly accommodate its working and communication schedule to meet the client halfway.
Another perfect location to outsource developers from is Poland. Read more about hiring software developers from Poland.
3. Sizeable Talent Pool
Within the last five years, Romania has drastically enhanced its education budget spent on a multitude of high schools and over 40 technical universities, seven of which are on the top list of the global computer science institutions.
The Polytechnic Universities of Bucharest and Timișoara, as well as Babes-Bolyai University in Cluj-Napoca, are the recognized national leaders among those four dozen higher educational establishments specializing in high-tech learning.
As a result, the country boasts of the greatest number of math and computer science contest winners in Europe and over 7,000 university graduates that each year replenish the current 100,000-strong IT workforce (the second largest in Eastern Europe after Ukraine, by the way). Many senior students start working part-time at developing companies while still studying and get valuable hands-on experience during this internship to turn into full-fledged specialists by the time they graduate.
If you are interested to learn more about the Ukrainian IT market you can read one of our latest articles about hiring software developers in Ukraine.
4. Profound Technical Expertise
The high number of technically-oriented colleges and the thorough education they provide translate into top-notch skills Romanian IT experts have and, consequently, the first-rate quality of software products they create. The country clinches the 5th spot in the world as to the number of certified software developers who are proficient in all widespread programming languages with a special emphasis on PHP, C#, and Java.
So if you want to hire web developers that build high-end digital products for various industries – from fintech and insurtech to telecom and retail – and perform meticulous testing of them, Romania is where you should head for. The field of special competence where the Romanian IT workforce excels is mobile development and, notably, game development, which has strong ties with numerous major-league computer game manufacturers, including King and Bandai Namco Entertainment, Gameloft, Ubisoft, and Electronic Arts.
Other IT behemoths eagerly follow suit and employ Romanian software talents opening their R&D centers and branches all over the country on a large scale. The biggest among them are Oracle Romania and IBM Romania (both report around €200 million turnovers), Ericsson Telecommunication Romania (€161 million), and Bitdefender (€140 million).
5. Solid Command of English and Western Work Ethics
As an international hub for remote software development, Romania sports strong proficiency in English (15th place according to EF English Proficiency Index) as the major communication means in the IT world of the 21st century. 90% of software engineers are fluent in it, and a significant portion of them also speak Spanish, German, and Dutch.
Besides, Romanians manifest strong communication skills that they have acquired and permanently polish through constant interaction with international customers. While cooperating with clients from Europe and North America, developers from this country pursue Western approaches and corporate culture in their routine pipeline, which makes them a perfect fit as a partner for those who share such a mindset.
6. Superb Price/Quality Ratio
This is probably the primary reason why people outsource, and Romania as an outsourcing destination won't disappoint you in this aspect. Developers in North America and Western Europe charge the exorbitant $50-100+ per hour (and depending on the qualification of the expert, it may be even higher where the sky is the limit). Of course, the quality of IT products they deliver is excellent, but are you ready to pay through the nose for things that can be obtained much cheaper elsewhere?
Judging from the table, Asia and Africa are the most attractive outsourcing destinations, but developers from these regions are notorious for the low quality of their software. Eastern Europe is a perfect combo of moderate rates and first-class quality of products they deliver. Among Eastern European IT powerhouses, Romania, with its lower average salaries than even its neighbors, looks especially attractive as an outsourcing location.
Where should you steer once you opt for Romania as an outsourcing destination?
Web Development: Romania’s Major Hubs
The IT industry in Romania concentrates in and around five main centers that are spread evenly across the country.
- Bucharest. Naturally, the capital is the key spot where IT companies lodge. And it is not only because of its size (in fact, the 16th largest European IT hub). The city is proud of its affordable rent and utilities and offers some legal and taxation boons to businesses that choose it as their headquarters to boot. So it is no wonder that many big-time players in the realm (such as Adobe, Amazon, Microsoft, and Intel) have opened their offices there.
- Cluj-Napoca. The city is home to over 15,000 IT specialists that work for 1,300 developing companies, which eventually turns it into the Silicon Valley of the country. One of them (AROBS Transylvania Software) is a local giant, while many other smaller businesses and startups tread on its heels and offer a wide range of IT services. Transylvania Industries Cluster functioning in the city is called to facilitate innovation endeavors in the locale.
- Iasi. Like the previously mentioned city, this one has a lasting academic presence and an AROBS branch. Its affordable infrastructure attracts numerous startups that crop up there on a permanent basis.
- Timișoara. With a multitude of tech events regularly held in the city, it is vibrantly developing into a center of an IT startup ecosystem and a major attraction for foreign investors.
- Brasov. Being quite moderate in its size, the city yields 3% of all national revenues generated by the IT industry.
In addition to these traditional outsourcing hotbeds, one more young dragon has appeared recently – Sibiu. Its two universities have strong IT schools, especially Lucian Blaga University with its Faculty of Computer Science and Faculty of Informatics. Besides, residents of Sibiu sport a higher proficiency in German in comparison to people of other Romanian cities.
Thus, in terms of outsourcing web development, Romania is a very appealing destination. However, there are some fine points you must bear in mind before starting your cooperation with vendors from this country.
How to Handle IT Outsourcing to Romania: Tips to Remember
Like any remote cooperation model, outsourcing software services has a number of challenges to address. What do we recommend to pay foremost attention to if you select Romania as your outsourcing destination?
- Take a close look at your potential partner. Some preliminary research is necessary. And not only to assess their expertise, tech stack, and completed projects. You should come to grips with their values, working style, and soft skills. All of these can be discovered during face-to-face (although remote) interviews and live coding sessions that will help you gauge the professional level of your vendor-to-be.
- Check the company’s reputation. Because of the volatility of the market, some unscrupulous developers may start to jump ship even while the project is underway, seeking better employment conditions with other companies. To avoid such defections, you should contact customers who have cooperated with this vendor before and check whether they faced such problems.
- Take thought to local payment and taxation systems. In the country where you hail from, money transfer systems and currency exchange policies may differ significantly from the Romanian ones. The same is true about the legal framework concerning taxes. Make sure you grapple with these before you start your cooperation.
- Don’t neglect security compliance. The last thing you would like is to compromise your current data or future software product. To prevent it, NDA should be included in the contract you sign.
- Have the requirements laid out fair and square. Even if you speak the same language, some misunderstandings may arise, so make sure you see eye to eye with the vendor on all major details of the project, including its scope, goals, budget, deadlines, tech stack, deliverables, etc.
- Schedule communication sessions. In remote cooperation, regular communication is mission-critical. You should plan the frequency and mode of online meetings, choose communication channels that both sides are comfortable with, and identify milestones that should be reported by the vendor.
- Refrain from micromanagement. Romanian devs and project managers are highly flexible and adaptable, but they dislike being watched over the shoulder. If you barge in every now and then with astute remarks and unsolicited advice, they will feel like they are distrusted and bossed around. Let the outsourced team perform their duties and don’t overdo with control and supervision.
Outsourcing is a viable cooperation model widely practiced in the IT industry. The recent changes in the political situation in Europe make Romania a magnet for international customers. Clients from North America and Western Europe appreciate affordable prices and first-class quality software solutions delivered by a multitude of Romanian vendors employing high-profile specialists with an excellent technical background and great command of English.