Software Nearshoring to Poland: Outline for 2024

Did you know that the Polish IT services market revenue is projected to increase by 7.6% annually from 2024 to 2028? And this dynamic growth isn’t just hype – Poland already boasts Europe’s 7th most potent IT market and ranks 3rd in competitiveness. The country has been attracting C-level managers of tech companies from the UK, Germany, Italy, and many other countries because of its nearshore destination capacity and geographical proximity to the most prominent Western European tech hubs. However, these are not the only factors prompting foreign IT product companies to favor offshoring and nearshoring to Poland.

I’m Dmytro Ovcharenko, CEO at Alcor, an R&D center provider and a software development RPO agency in Poland. Within a year, we build software teams with full back-office support from 1 to 100 developers for Western tech product companies in Eastern Europe and LATAM. 

After 15 years of experience in building software engineering teams for tech companies in Poland and other locations, I’m here to give you an overview of the Polish IT market and business environment, share the expertise of software developers in Poland, discuss the benefits and risks of nearshoring/offshoring to this location for a tech business, compare different models for cooperation with coders, and share tips for software nearshoring to Poland. So, buckle up! 

Nearshoring to Poland: Local IT Market and Business Environment  

I’ve already given you numbers that speak volumes about the Polish IT industry’s unprecedented growth and achievements. What else is worth your attention is the size of Poland’s software development market — over $9 billion in 2024, which makes it #1 in CEE. Here’s another data point: Polish ICT exports are on track to hit a staggering $13 billion by 2026, thanks to a consistent annual growth of 3.6%. IT outsourcing is a significant player in Poland’s market, with a projected volume of over $3 billion in 2024.  

Moreover, Poland is home to 11 unicorns, including Allegro, The Witcher, Brainly, DocPlanner, This War of Mine, LiveChat, and others. Not to mention that tech giants like Google, Oracle, IBM, Apple, Uber, Intel, and Amazon have recognized the attractiveness of Poland’s tech scene a long time ago, and all nearshored/offshored their software development to Poland.

The cherry on top — the Polish Investment Agency (PAIH) reported securing over $8.1 billion in foreign direct investments in 2023 (nearly double of 2022’s total). Leading the charge is Intel’s massive $4.6 billion investment in a semiconductor facility near Wrocław, a prominent Polish IT hub. Other tech hubs include Warsaw, Krakow, Katowice, the Tri-City (Gdansk, Gdynia, Sopot), and Poznan. These cities boast Poland’s highest concentration of software talent, equating to around 314,750 tech specialists. The local community of Java developers alone has around 95,000 devs. So, it might be exceptionally lucrative to offshore or nearshore your Java development in Poland.

Why Big Tech Nearshore Software Development to Poland?  

Huge Tech Talent Pool 

Having the most extensive IT talent pool in Central and Eastern Europe — 607,000+ IT specialists, Poland stands out as a prime nearshoring/offshoring location to find developers with rare and in-demand skills. This advantage is further bolstered by a steady influx of 20,000 technical universities graduates into the workforce each year.

High-Quality STEM Education 

Speaking of education, Poland boasts over 400 universities, 60 specializing in tech. Among all of them, 22 prestigious institutions are listed in the QS World University Rankings 2024, including the Warsaw University of Technology, Silesian University of Technology, AGH University of Science & Technology, Wroclaw University of Science & Technology, Lublin University of Technology, and many others. IT continues to be the most popular choice among Polish students, with over 75,000 of them currently enrolled in ICT majors. 

Stellar English Proficiency  

Polish developers impress foreign IT employers who nearshore/offshore their software development here with their strong English proficiency. Ranking 11th in Europe, most local programmers boast a minimum B2+ level of English, allowing for seamless collaboration with foreign employers and colleagues. This is especially convenient for foreign tech companies with an offshore development center in Poland. 

Lower Salary Rates 

Local salary rates are critical for American and European tech companies when deciding whether to use offshore/nearshore software development services in Poland. Just look at the salary ranges of Senior developers in Poland and the US: 

As you can see, the compensation of Polish programmers is 2-5 times smaller than the wages of their US counterparts, allowing the latter to save some good money on nearshoring/offshoring their product development here and invest it into other focus business processes. 

Data Security 

Another reason foreign companies choose IT nearshoring or offshoring to Poland is the country’s top-notch data security. Poland boasts robust copyright laws and adheres to the EU’s strict GDPR, which imposes strict data collection, storage, and management guidelines. By following GDPR regulations, companies not only benefit from automated processes but they also build trust and protect their reputation. This safe environment for sensitive information solidifies Poland’s allure as a premier IT nearshore/offshore outsourcing destination. 

Geographical Proximity 

Poland’s location in the center of Europe allows for easy travel from other European cities (within 1.5-2 hours). A comfortable time zone (GMT+2) contributes to more efficient collaboration between Polish developers and their colleagues from other European countries. For US companies, the time difference becomes an advantage, enabling 24/7 operations and uninterrupted development processes.

Proficiency of Software Development Experts in Poland  

Polish developers are well-versed in popular programming languages like JavaScript, Java, Python, Typescript, PHP, Golang, and Node.JS and are skilled in AI and data science. The icing on the cake? Nearly three-quarters of Polish software engineers boast over 3 years of experience. This means you can find experienced nearshore/offshore coders with the exact tech stack your project requires, regardless of the technology you use. 

Even better, Poland is internationally renowned for the exceptional quality of its developers — the latest Coursera report ranks them 9th in Europe for tech skills. At the same time, the Harvard Business Review positions them even higher — 5th globally in terms of tech skills. SkillValue further reinforces this by placing Poland among the top 10 countries with IT experts possessing the most advanced software engineering expertise.

Want to hire a pro Polish software developer? We guarantee to do it in 2-6 weeks in your software R&D center! CONTACT US

Challenges & Risks of Nearshoring to Poland  

Complex Labor Law and Taxes 

While the country offers a thriving software development scene, tech nearshoring or offshoring to Poland can be tricky. The 2023 Global Business Complexity Index ranks it 4th in Europe for difficulty due to complex reporting standards, ever-changing regulations, legal hurdles for investment, and intricate HR/payroll rules. To navigate this, consider consulting legal and tax advisors or find a service provider who will handle legal compliance and ensure a smooth launch of your branch in Poland. 

Please read our article about B2B taxes in Poland to gain more insight into local laws and the taxation system! 

Time Gap with the US 

Poland is in the Central European time zone and is 6-10 hours ahead of the US, depending on the state. That complicates meeting scheduling and leaves little time for communication during your work hours as an American employer. However, savvy companies leverage this difference by creating a round-the-clock development cycle. In this way, your development team in Poland can speed up the overall development process by working on tasks while the US team still needs to start their work day. 

High Demand for Talented Developers 

The number of software development businesses in Poland increased by 3% from 2023 to 67,433 companies. All of them are trying to attract and hire A-players while nearshoring/offshoring to Poland, turning the Polish tech hiring market into a battle scene. However, it’s OK if you don’t nearshore IT services here but hire software developers in Poland in your R&D office via a reliable partner.  

Traditional IT outsourcing is no longer a viable option. But your own software R&D center from 0 to 1 in Poland is. CONTACT US

Tips for Efficient IT Nearshoring to Poland 

Focus on Employer Branding 

As practice shows, without employer branding, companies face offer rejections from top candidates. A US-based IT company, Sift, once encountered this problem when expanding to Eastern Europe. They aimed to hire 6-10 programmers quarterly but received few applications. To address this, they partnered with a local IT recruitment agency that executed a strong employer branding campaign using video & social media marketing. The agency also crafted an attractive employer value proposition (EVP) and streamlined the hiring process. As a result, Sift ended up securing 30 people in its dedicated development team via Alcor’s model within a year! Their trusted partner also covered other IT BPO services, including real estate, legal operations, and IT infrastructure integration. 

Offer Competitive Benefits 

Salary represents only a fraction of the overall employment package. The 2023 SHRM survey highlights a myriad of employee benefits, including health-related perks, retirement planning, paid time off (PTO), flexible work arrangements, educational and training opportunities, supplementary financial benefits, transportation and relocation assistance, among others. Crafting a robust Employee Value Proposition (EVP) enables organizations not only to entice top-tier talent to opt for them over competitors when considering nearshoring or offshoring to Poland but also to foster long-term retention of these valuable individuals. 

Pick a Cooperation Model 

The next step in successfully nearshoring or offshoring to Poland is to select the best model for cooperation with your future vendor. The 4 standard engagement models are IT outstaffing, IT recruitment, Employer of Record, and R&D center.  

Let’s take a closer look at each of them: 

IT Outstaffing  

One model for software nearshoring in Poland is IT outstaffing, also known as “staff augmentation” or “dedicated development team in Poland”. This approach presupposes the temporary “lease” of software developers from an IT outstaffing vendor to work on a specific task or project. IT outstaffing offers flexibility, allowing for swift team adjustments if needed. Moreover, compared to IT outsourcing to Poland, IT outstaffing provides more control over the development process and direct communication with developers.  

Yet, it is not ideal for app or other software development: 

1. You risk your intellectual property rights unless you sign a clear and detailed IP rights transfer agreement to ensure you own the IP rights to your newly created product. 
2. You might have issues hiring nearshore/offshore outstaffed software developers in-house because you’ll have to buy them out from your vendor, which is a pricy affair.  
3. Outstaffed developer loyalty will always be questionable since they only work on your product temporarily and are unlikely to go the extra mile. 

Learn more about staff augmentation in Eastern Europe! 

IT Recruitment 

This model of cooperation with developers requires you to hire an IT recruitment agency in nearshore/offshore locations like Poland. This vendor will handle the entire hiring process — from creating an ideal candidate profile and sourcing to interviewing eligible candidates and managing offers. The outcome is a top-notch team of star software developers who are loyal to you as an employer and dedicated only to creating your product. This is a long-term type of partnership that allows you to participate actively in the decision-making regarding hiring and terminating your team members.  

However, this model for nearshoring and offshoring to Poland rarely covers the employment of these developers, HR payroll, tax planning and management (if needed), employee benefits, and onboarding/offboarding — functions Employer of Record providers usually handle. Plus, not all IT recruitment vendors offer operational functions like office lease, procurement management, or stock options assistance, for instance. Consequently, these and other back-office hurdles will fall on your shoulders. 

Employer of Record 

Another model that allows you to nearshore your software development to Poland is an Employer of Record (EOR) solution. I have already said a few things about it in a previous abstract but EOR providers mainly act as the legal employers of your nearshore/offshore software developers in Poland. As a result, you don’t have to set up your legal entity here but can still work with local developers without breaking any laws. An EoR partner also handles your developers’ payroll, taxes, accounting, and employee benefits. Not to mention their onboarding and offboarding.  

However, EoR vendors don’t cover IT recruitment. So, you’ll still be responsible for attracting, interviewing, and hiring qualified software developers in Poland. 

But what if you need a different cooperation model for nearshoring or offshoring product development to Poland? Well, there is something better, namely…  

Software R&D Center 

Your own software R&D office in Poland is an extended and more comprehensive approach to nearshoring or offshoring in Poland than IT recruitment and EOR. This is an all-in-one turnkey solution for foreign tech product companies looking to offshore or nearshore in Poland. It encompasses full-cycle IT recruitment, Employer of Record, and full operational service.  

The result? Your R&D branch in Poland with a loyal team of developers, reduced costs, and complete control over the development process.  

Just look at the results of cooperation between a US-based IT company People.ai, that develops a platform with the help of ML and AI that streamlines team management, marketing processes, and sales, and a professional provider of software R&D center solution, Alcor. To avoid all the typical hurdles when offshoring to Eastern Europe, Alcor provided People.ai with a complete cycle of support in real estate, legal, and finance issues. Alcor took care of every minor step in setting up the R&D office — from IT infrastructure deployment to office preparation and redecoration.  

Within just 4 weeks, People.ai had a fully functioning R&D center. Eventually, it was staffed with 25 skilled developers. People.ai received complete control over its R&D center and all intellectual property rights.    

We’ll set up your own product development center in Poland in 2 months! Would you like to learn more? CONTACT US

Once that is set, you can move on to the last crucial step:  

Choose a Reliable Service Provider 

When evaluating potential offshoring/nearshoring partners in Poland, consider these factors: 

• Expertise: Do they have nearshoring/offshoring experience in your specific industry? 
• Guarantees: What guarantees or quality control measures do they provide? For example, professional providers of software R&D center services usually compensate for delayed nearshore/offshore developer hiring timelines and offer candidate replacement warranties. 

• Case Studies: Can they showcase successful cases of nearshoring/offshoring with previous clients? 
• Client Reviews: Are they represented on independent platforms like Clutch, where you can find unbiased client testimonials? 

Need help hiring top Polish programmers? Alcor vows to recruit 5 developers in a month. CONTACT US

Considering IT Nearshoring to Poland? Set up Your Own R&D with Alcor  

Alcor is an all-in-one provider of the software R&D center solution in Eastern Europe and Latin America trusted by renowned companies like Grammarly, People.ai, Samsung, Ledger, ThredUP, Gotransverse, and many others. Unlike typical development outsourcing, offshoring/nearshoring product development to Poland with Alcor: 

1. guarantees a loyal team of pro developers,
2. avoids buyout fees,
3. and is designed for long-term product development and maintenance.  

Our internal IT recruitment department of 40 seasoned recruiters performs full-cycle IT recruitment and hires the best Senior/Lead developers in your team. Our hiring quality is evident as clients approve 80% of our candidates, while 98,6% of hires pass probation and stay with clients for an average of 2.5 years. The good news is you won’t need to set up a legal entity in Poland! We handle everything with our Employer of Record (EoR) services. This includes onboarding/offboarding, payroll, taxes, benefits, and legal compliance with all local laws. 

With our all-in-one solution, we can build you an R&D team in Poland and provide 360° operational support. This includes helping you with office leases, equipment procurement, migration services, WFH options, and addressing any operational challenges you face.