What Can Western Balkans Offer in Software Development?
Taking into consideration the growing demand for IT experts with a global IT shortage, according to the KPMG report 2020, many businesses with headquarters in the US and Europe tend to hire developers Eastern Europe.
In this article, we discuss why organizations are interested in outsourcing to North Macedonia, Serbia, Albania, and the Balkans in general. We dive into the IT market state of each country to see if it would be beneficial to outsource software development to a particular location, as well as if there are any viable alternatives.
The Balkans as an Outsourcing Destination
The growing demand for IT services outsourcing to the Balkan countries has been caused by the lookout for locations with favorable rates and well-educated resources that could be beneficial to businesses located in Europe and the US. In the results, such Balkan countries as Serbia, Albania, Montenegro, and others attracted a significant number of foreign businesses interested in BPO and software development outsourcing.
In the past decades, Balkan countries have been investing in their educational systems, each to a different extent. This caused an increased and growing number of young IT workforce available in the Western Balkans. Yet, the Balkan IT market is relatively young and can boast more motivated young specialists than highly experienced and skilled IT experts.
Balkan IT SW engineers generally have a good command of English and speak at least one European language. What’s more, Balkan countries have cultural similarities with Western European countries, making business operations and communication seamless and convenient. Given that the Western Balkans are located in close proximity to Europe and share the same time zone with them, outsourcing and offshoring to the Balkans are in demand.
The majority of Balkan companies tend to employ a small number of employees of up to 50, which makes outsourcing of large IT projects complicated but comes as a perfect solution for small startups and SMEs. Also, Balkan countries have much more favorable labor costs compared to European countries, which makes IT services outsourcing a cost-effective option for European and US businesses.
If you plan to outsource to Macedonia, Albania, Montenegro, Serbia, or Bosnia and Herzegovina, below you can find brief information about the state of the IT markets of the most popular outsourcing destinations:
Since IT outsourcing Macedonia and Bosnia and Herzegovina is less popular than software outsourcing to Serbia, Albania, and Montenegro, below we will take a deeper look at these three Balkan countries.
Outsourcing to Albania: Overview of the Albanian IT Market
Albania is one of the preferred outsourcing destinations due to its convenient location, low labor costs, and favorable tax system for foreign businesses interested in BPO and IT services outsourcing. Why outsourcing to Albania? Being located in the heart of the Balkans, Albania attracts foreign businesses with its multilingual and talented IT workforce, affordable rates, and stable banking system.
Although according to the RadioLiberty publication, Albania and North Macedonia have finally started accession talks to become part of the European Union, and the Albanian economy has been showing steady growth, currently, Albania remains the poorest European country, which causes the low rates for different services, including software development.
With the government working towards improving business conditions for foreign investors, the educational system still lacks improvements and modernization. Although there’s a considerably large number of young IT specialists with good command of English, German, and French, there’s limited availability of Senior-level IT experts, who tend to move to more developed European countries.
Here’s a short description of the Albanian IT market:
- Time zone: GMT+2
- The size of the tech talent pool: 35,000
- The biggest tech hubs: Tirana, Durrës
- Popular technologies: Java, Python, PHP, .NET (AADF)
- Average monthly salary: 88,100 ALL ($864/month)
Let’s take a look at the pros and cons of hiring Albania web developers:
|Young and multilingual IT talent pool||Low government support for R&D and innovations|
|Favorable labor costs and tax regulations||A limited number of experienced programmers|
|Convenient location and time zone|
And here is an average developer salary in Albania specializing in different programming languages:
- Java developer: 106,000 ALL/month ($1,026/month)
- .NET developer: 102,000 ALL/month ($987/month)
- C++ developer: 105,000 ALL/month ($1,015/month)
Why Companies Hire Developers Montenegro: IT Market Overview
According to the ITU report 2020, Montenegro is an open economy, macroeconomically stable European country with 620,000 inhabitants and a large inflow of foreign direct investment (FDI) per capita. It has liberal economic conditions for foreign trade and favorable tax policies for foreign countries interested in investing in Montenegrin businesses or outsourcing services to Montenegro.
With tourism, energy, agriculture, and food processing being the most developed industries of Montenegro, the country has been investing in the growing scientific base and R&D solutions for the mentioned industries in the past years. However, IT services are not the main focus of the country at the moment, and the ICT market remains relatively small. Yet, Montenegro has been ranked 49th as per the Global Innovation Index 2020, leaving behind other Balkan countries.
Although Montenegro is not part of the European Union yet, the euro is the currency used in the country since 2002, making it comfortable for European countries to work with Montenegrin businesses. Given the convenient location and timezone, organizations with European headquarters tend to outsource website programming Montenegro.
Here are the main points of the IT market in Montenegro:
- Time zone: GMT+2
- The size of the tech talent pool: 10,540
- The biggest tech hubs: Kotor, Budva
- Average monthly salary: €2,610 ($3,150/month)
Let’s now take a look at the possible benefits and drawbacks of offshore web development Montenegro:
|A young and motivated IT workforce||Small IT talent pool|
|Convenient location for offshoring and outsourcing||The educational system needs improvements|
|Same time zone and currency with European countries||Limited English proficiency|
For your reference, here are the average salary rates of different programmers operating in Montenegro:
- Java developer: €2,740/month ($3,264/month)
- .NET developer: €2,630/month ($3,133/month)
- C++ developer: €2,680/month ($3,192/month)
IT Outsourcing Serbia: Reviewing Serbian IT Market
Serbia is one of the preferred Western Balkan countries for software development outsourcing due to its steady growth and development of all sectors, including educational and ICT ones. Thanks to the government initiatives to improve the educational system and facilitate the development of the IT industry, software development Serbia outsourcing is quite a popular option among European businesses.
In the past decade, the Serbian government has been investing in the physical infrastructure for IT services, as well as R&D solutions and IT outsourcing. Thus, with the growing number of Junior IT experts entering the local IT market after receiving a degree in a university, Serbia now has the largest IT talent pool in the Balkans. However, given the fact that the IT force is still young and doesn’t have much experience, the number of Senior-level programmers remains limited in the country.
As per the Vojvodina ICT Cluster report, although the Serbian government has been working towards improving local laws for attracting foreign investors and businesses interested in IT outsourcing, the current laws and tax regulations remain complex and strict, which causes difficulties for foreign companies to some extent.
Here are the main characteristics of the Serbian IT market:
- Time zone: GMT+2
- The size of the tech talent pool: 75,000
- The biggest tech hubs: Belgrade, Novi Sad
- Average monthly salary: 129,000 RSD ($1,324/month)
For businesses that want to hire developers in Serbia, we summed up the advantages and disadvantages of outsourcing and nearshoring to Serbia in the table below:
|Good education||Strict and complex labor laws|
|Shared time zone with European countries and convenient time zone difference for US businesses||Compex contractual specifics|
|High English proficiency (#15 as per EF EPI 2020)||Hard to source Senior-level programmers|
If you plan to hire developers in Serbia, it may be useful to compare average salary rates of different coders:
- Java developer: 146,000 RSD/month ($1,478/month)
- .NET developer: 133,000 RSD/month ($1,346/month)
- C++ developer: 137,000 RSD/month ($1,387/month)
To conclude, IT outsourcing Serbia can be characterized by a young IT workforce that consists of young and talented programmers with strong educational background and a high command of English. Given the convenient location, time zone difference, and average salary rates of software developers from Serbia, IT outsourcing and remote teams in Serbia are in high demand.
However, with the current complexity of government regulations for companies aiming for software development outsourcing Serbia, as well as the limited availability of Senior-level coders, IT outsourcing Serbia has its pitfalls to keep in mind.
Summing Up: Outsourcing Software Development to Serbia vs. Montenegro vs. Albania vs. Ukraine
As we reviewed the most popular Balkan countries for software development outsourcing, it’s worth mentioning one more country that has been quite popular as an outsourcing destination in the last decade.
Ukraine is on the rise as a beneficial outsourcing location with the largest and growing IT talent pool in Europe (200,000+ IT experts, as per TechUkraine) and 160+ R&D centers opened by Fortune 500 companies, such as Microsoft, Apple, and Samsung Electronics, according to the Deloitte report.
Let’s compare the characteristics of each country so that you could conveniently review Ukraine, Montenegro, Albania, and Serbia IT outsourcing and choose the best option for your business. The average monthly rate for Middle developers is compared based on the SalaryExplorer statistics, as well as on Mobilunity Recruiting Team research over local job portals:
|Size of a tech talent pool||35,000||10,540||75,000||200,000+|
|English proficiency (EF EPI)||Moderate (#43 as per EF EPI 2020)||Low (not in TOP 100 of EF EPI 2020)||High (#15 as per EF EPI 2020)||Moderate (#44 as per EF EPI 2020)|
|Education level||Good||Moderate (improving)||Good||Good|
|Talent availability||Moderate (high unemployment rates, limited number of Senior IT experts)||Low (a limited number of IT experts and Seniors, in particular)||Moderate (limited number of Senior experts)||High|
|Average monthly rate for Middle developers||88,100 ALL/month ($846/month)||€2,610/month ($3,106/month)||129,000 RSD/month ($1,306/month)||$2,000/month*|
* Ukrainian rates are based on the data of our internal Recruiting Team
Depending on the needs of your business or project specifics, you may settle on the best outsourcing destination from the countries above. However, if you are looking for highly skilled IT experts with vast experience in your field, it may be beneficial to pick Ukraine to outsource your IT services.
Mobilunity as Your Reliable IT Outsourcing Provider
Mobilunity is a renowned Ukrainian company that provides first-class IT outsourcing and outstaffing services to businesses with headquarters in Europe, the US, and all over the world. Being in the global IT market for 10+ years, Mobilunity experts know how to source the best experts and select the right candidates to meet the needs of the business.
For businesses in need of dedicated development teams, it can be beneficial to opt for software development solutions in Ukraine. We at Mobilunity follow the best industry practices and our time-proven methods for selecting and managing dedicated IT resources. You can check some of our case studies below:
For the Danish electronic trade solutions provider Byg-E, Mobilunity experts sourced dedicated programmers highly skilled in .NET and VB/C# to contribute to the company’s workflows and team augmentation.
NOA is a Swiss startup promoting digital innovations in the arts industry, and the company needed not only a Senior-level programmer to assist with the platform development, but also a well-versed CTO to facilitate the business and communication processes.
3e Joueur had previous experience with IT services outsourcing but couldn’t find a credible provider to cooperate with. After starting working with Mobilunity, 3e Joueur was able to find the high-quality dedicated IT resources they needed and build a remote development team.
The Swiss online insurance broker esurance has been working with Mobilunity since 2017. First, the company needed an extension to the esurance dev team, which grew to a dedicated development team working towards the company’s goals remotely.
If you are looking for a dedicated development team that can provide high-end software development services, get in touch with Mobilunity representatives, and let us help you build your dream team.