Outsourcing your IT project to Poland: all you need to know
Poland is a European country that covers an area of 312,696 km2. Its population of 38 million makes it the fifth most populous member state of the European Union. Warsaw, the capital, is the largest metropolis and IT hub in Poland, followed by other major cities: Kraków, Łódź, Wrocław, Poznań, Gdańsk, and Szczecin.
Poland has a strong history of scientists and researchers making substantial contributions to worldwide progress. The modern international public is most familiar with the work of astronomer Mikołaj Kopernik (Nicolaus Copernicus), physicist and chemist Maria Skłodowska-Curie, mathematician and cryptologist Marian Rejewski, as well as the famous Lwów School of Mathematics and Warsaw School of Mathematics.
Today's Poland is a parliamentary republic with a GDP per capita of 15,742.50 USD (in 2020), 457 higher education institutions, including 18 public technical universities, 10,490 ICT graduates (in 2020), and 218,513 ICT employees (in 2019). In PISA 2018 ranking, Polish students were placed in 10th place in Mathematics and Reading and 12th place in Science. Countless international businesses already reap the benefits of hiring Polish IT professionals, including Amazon, Bayer, Cisco, Citigroup, IBM, Intel, Motorola, Publicis Groupe, State Street Corporation, and Thomson Reuters.
In this article, we’ll focus on Poland’s image as one of the best IT outsourcing destinations in the world. Read further to learn how the country places in relevant rankings, which Polish cities to consider as your base of operations, what are the advantages and disadvantages of outsourcing to Poland, and what to expect from Polish employees.
Why is Poland one of the best locations for IT outsourcing?
Here are the top 5 reasons to choose Poland as your outsourcing destination:
- The economy has already bounced back after the Covid-19 pandemic. According to OECD (Organization for Economic Co-operation and Development), GDP in Poland exceeded its pre-pandemic level in 2021 and is forecasted to reach 5.2% in 2022.
- Poland is well-known for its business-friendly regulations. In recent years, Poland has introduced new regulations to simplify the creation of joint-stock companies and set legally binding deadlines for payments to better address arrears. The Polish Investment Zone allows companies that invest anywhere in the country to benefit from income tax exemptions.
- The country enjoys stable credit ratings from all major credit rating agencies. According to the governmental report “Invest in digital Poland 2021”, all three major credit rating agencies (Moody’s, S&P Global Ratings, and Fitch Ratings) give Poland a good investment grade (upper-medium grade).
- The Polish startup ecosystem and IT/ICT market are strong and growing. According to The report “IT/ICT Sector in Poland” published by the Polish Agency for Enterprise Development, the revenues in the IT/ICT sector in 2018 amounted to 16,000,000,000 EUR, increasing by 7.2% compared to the previous year. The industry contributed 8% to Polish GDP. The report “Invest in digital Poland 2021” states that there are approximately 4,700 tech startups in Poland. In 2019, almost 40% of them were cooperating with multinational corporations. A survey by the CEO World Magazine voted Poland the seventh most friendly country for startups in the world. Local businesses enjoy the greatest number of Venture Capital deals in the whole CEE region, with 313 of 733 disclosed funding rounds in 2020 granted to Polish companies. Poland is also home to 45 out of 100 top technology companies in the CEE region.
- Poland is home to almost half a million ICT professionals. The proportion of ICT specialists in total employment in 2021 was 3,5%, and the total number of persons employed in ICT was 407,517 in 2019.
Moreover, Poland repeatedly places high on international rankings concerning the outsourcing industry, innovation, and IT skills. You’ll find some of the key findings with links to full reports below.
Global Services Location Index
Kearney issues its Global Services Location Index (GSLI) biannually to help businesses around the world make informed decisions about their offshore operations. Based on 47 metrics across four categories (financial attractiveness, people skills and availability, business environment, and digital resonance), the index has been a valuable resource for companies of all sizes since 2004.
In GSLI 2021, Poland is ranked 14th place (3rd in Europe), with its financial attractiveness cited as its strongest suit. The research acknowledges Kraków and Warsaw as emergent start-up hubs and mentions Google and Microsoft plans to further invest in the country’s digital economy.
Global Innovation Index
Published annually by World Intellectual Property Organization, the Global Innovation Index (GII) has measured innovation ecosystems since 2007. After 14 editions, the GII is considered a valuable tool for business leaders, politicians, and other stakeholders interested in evaluating their progress towards a digital future. Poland ranked 40 on the Global Innovation Index for the year 2021 (27th place in Europe) and is considered to deliver performance in line with the level of development.
According to the report, Poland’s top strengths when it comes to innovation are, among others:
- the ease of resolving insolvency
- PISA scales in reading, math, and science
- information and communication technologies (ICTs) infrastructure
- government’s online services
- e-participation
- domestic industry diversification and market scale
- labor productivity growth
Ease of Doing Business Ranking
“Doing Business” was an annual report published by the World Bank Group from 2002 to 2020. The document featured the ease of doing business ranking based on the analysis of business-related regulations in selected countries. The bank’s experts compared how well the individual countries support the freedom of doing business, including business incorporation procedures, credit access, building permits, and taxation systems.
In 2020, Poland ranked 40 on the global list (which translated to 21st place in Europe). The report also mentioned Poland as setting the best regulatory performance in time to export documentary compliance (with less than 1 hour needed). The then-recent nationwide implementation of a customer service platform that made the process of getting electricity quicker was also highlighted.
The World Bank decided to drop the Doing Business project in 2021, but the Group is formulating a new approach to compare national economies in terms of investment and business possibilities.
EF English Proficiency Index
The EF English Proficiency Index (EF EPI) is an online survey conducted annually by an international education company EF Education First since 2011. The data for 2021 was based on answers from approximately 2 million test-takers from non-English speaking countries. In the report for 2021, Poland placed 16th among 112 Countries and Regions (and 14th in Europe).
Other rankings
The Polish economy is routinely recognized as innovative, entrepreneurial, and digitally advanced. Just in recent years, Poland earned:
- 39th place in the Global Entrepreneurship and Development Institute’s “Digital Platform Economy Index 2020”
- 41st place in IMD Business School’s “World Digital Competitiveness Ranking 2021”
- 23rd place in Bloomberg’s “Innovation Index 2021”
- 24th place in United Nations’ “E-government Development Index 2020”
- 9th place in United Nations’ “E-Participation Index 2020”
Are there any disadvantages of IT Outsourcing to Poland?
The time difference can be bothersome if you hail from the US. Poland uses Central European Time, which means it is 5 hours ahead of New York and 8 hours ahead of Los Angeles. For some companies, the overlap in working hours can be enough, while others will experiment with adjusting the office hours for better intercontinental communication.
It's also worth mentioning that the IT labor market in Poland is quite competitive, resulting in statistically higher salaries when compared to other CEE countries like Ukraine, Belarus, or Hungary.
Discover top IT hubs in Poland
Just as everywhere else in the world, the biggest cities in Poland attract a substantial fraction of the IT experts in the country. The descriptions below focus on summarizing the essential data from the business standpoint.
Kraków (Cracow)
City Area: 326.8 km2 (126.2 sq mi)
City Population: 780,796
Metropolitan Area: 1,023.21 km2 (395.06 sq mi)
Metropolitan Population: 1,725,894
Time zone: UTC+1 (CET) in Winter, UTC+2 (CEST) in Summer
Climate: temperate oceanic/semicontinental
Education: Kraków has more than 200,000 students at 24 higher education institutions. The list includes the Jagiellonian University - the oldest university in Poland and 1st best in the country according to The Center for World University Rankings (CWUR), as well as the AGH University of Science and Technology - the largest technical university in Poland, 1st best technical university and 3rd overall university in the country according to the same ranking.
Economy: According to the report “Polish Cities of the Future 2019/20” published by the fDi Intelligence, Kraków, with 95 FDI projects, is the second top Polish city in the Economic Potential, Human Capital and Lifestyle, Business Friendliness, and FDI Strategy categories. The report mentions software and IT services as the largest FDI sector in Kraków (with over 20% of the city’s investments between 2009 and 2013).
Outsourcing facts: The number of employees in the business services sector in Kraków was estimated at 70,000 in 2019, according to the ABSL’s report “Business Services Sector in Poland 2019”. As many as 34 out of 217 business services centers in the city employed more than 500 employees. In 2019, the average office space rent was 13.3-13.5 EUR/m2/month. About 6,600 ICT students and 16,700 technical and engineering students attend higher education institutions in Kraków. A gross monthly salary of a Developer with three years of experience is most often between 2,095 EUR and 3,955 EUR. Data Science Engineer typically earns from 1,630 to 3,720 EUR, and DevOps Engineer from 2,905 to 4,650 EUR per month.
Warszawa (Warsaw)
City Area: 517.24 km2 (199.71 sq mi)
City Population: 1,795,569
Metropolitan Area: 6,100.43 km2 (2,355.39 sq mi)
Metropolitan Population: 3,100,844
Time zone: UTC+1 (CET) in Winter, UTC+2 (CEST) in Summer
Climate: oceanic with humid continental influences
Education: Warsaw hosts about 500,000 students attending four major universities and 62 smaller higher education institutions. The University of Warsaw is the 2nd best university in the country (according to the abovementioned CWUR). The Warsaw University of Technology places 5th in the same ranking.
Economy: A report “Polish Cities of the Future 2019/20” names Warsaw as the largest draw for investors in the country, attracting 262 FDI projects. The report mentions a mature shared services market, the multi-lingual business services workforce, the city’s good transport links, and the talented workforce as the top reasons behind global companies’ involvement in the Polish capital. The report ranks Warsaw as the place with the highest economic potential and the best city in Poland when it comes to business friendliness, connectivity, human capital, and lifestyle.
Outsourcing facts: In Warsaw, the number of employees in the business services sector was 56,300 in 2019, according to the report from ABSL. The report also states that among 238 business service centers, 31 employed more than 500 people. When it comes to the office space, in 2019, the average rent in the city center was 21 EUR/m2/month and 12-14 EUR/m2/month outside the city center. There are approximately 13,800 ICT students and 16,800 technical and engineering students in Warsaw. A gross monthly salary of a Developer with three years of experience is usually between 2,675 to 3,955 EUR. Data Science Engineer earns from 1,630 to 3,720 EUR, and DevOps Engineer can count on 2,905 to 4,650 EUR per month.
Wrocław (Wroclaw)
City Area: 292.92 km2 (113.10 sq mi)
City Population: 641,928
Metropolitan Area: 3,372 km2 (1,301.94 sq mi)
Metropolitan Population: 1,250,000
Time zone: UTC+1 (CET) in Winter, UTC+2 (CEST) in Summer
Climate: oceanic, but borders with humid continental
Education: Wrocław is the 3rd largest educational center in the country. About 135,000 students attend 30 institutions of higher education, including the University of Wrocław (7th best University in Poland according to CWUR) and Wrocław University of Technology (11th best).
Economy: Wrocław, with 91 FDI projects, placed 3rd in the Overall Ranking in the "Polish Cities of the Future 2019/2020". Wrocław ranked 4th in Economic Potential, 3rd in Human Capital and Lifestyle, 10th in Connectivity, and 2nd in the Business Friendliness category. The report acknowledges the Wrocław Agglomeration Development Agency's international cooperation with various chambers of commerce, special economic zones, real estate agencies, and human resources agencies by placing the city in 3rd place for FDI Strategy.
Outsourcing facts: The abovementioned report from ABSL states that Wrocław was home to 47,500 employees in the business services sector in 2019. 20 out of 169 business services centers were employing more than 500 people. In 2019, the average office space rent was 12-13 EUR/m2/month. Wrocław hosts about 7,800 ICT students and 13,200 technical and engineering students. A gross monthly salary of a Developer with three years of experience is roughly between 2,325 and 4,185 EUR. Data Science Engineer typically takes from 1,745 to 3,955 EUR, and DevOps Engineer usually earns 3,140 to 4,765 EUR per month.
Trójmiasto (Tricity, the combined area of Gdańsk, Gdynia, and Sopot)
Urban Area: 414.81 km2 (160.16 sq mi)
Urban Population: 748,986
Metropolitan Area: 3,069.21 km2 (1185.03 sq mi)
Metropolitan Population: 1,232,287
Time zone: UTC+1 (CET) in Winter, UTC+2 (CEST) in Summer
Climate: oceanic with continental influences
Education: With 13 higher education institutions in Gdańsk and seven more in Gdynia, the Tricity area is an important academic center in Poland and home to approx. 74,000 students. The University of Gdańsk is the 19th best University in Poland, and the Gdańsk University of Technology is the 22nd (according to CWUR).
Economy: In the overall ranking of Polish cities of the future by fDi Intelligence, Gdańsk was 5th, and Gdynia scored 10th place. Both cities received the same ranks in the Economic Potential category as well. Additionally, Gdańsk was 5th in the Human Capital and Lifestyle and 5th in the Business Friendliness category. Gdynia placed 4th in the FDI Strategy.
Outsourcing facts: The “Business Services Sector in Poland 2019” report from ABSL says that the number of employees in the business services sector in Tricity reached 25,500 in 2019. Among 146 business services centers, 11 employed more than 500 people. In 2019, the average office space rent was 13.5 EUR/m2/month. Tricity is home to about 5,300 ICT students and 8,900 technical and engineering students. A gross monthly salary of a Developer with three years of experience is typically between 1,860 and 3,255 EUR.
Polish Developer Profile
Polish Developers enjoy worldwide recognition for their skills. Poland ranked 7th in the Pentalog’s report “World’s Best Developers 2022” (based on 500,000 developer tests conducted on SkillValue). In 2019’s ”Ranking Countries and Industries by Tech, Data, and Business Skills” by Harvard Business Review, Poland placed 5th in Tech skills. HackerRank, a technology hiring platform famous for its coding challenges, also attempted to find out which country has the best developers. The platform experts compared 50 countries with the most developers on HackerRank, and Developers from Poland ranked in 3rd place with a 98/100 score.
The 2019 report "IT/ICT Sector in Poland" estimates around 450,000 employees working in the IT/ICT market in 2018, including 250,000 programmers. According to the report, computer science is the most popular field of study in Poland, with 70,000 students learning it each year.
We can get a glimpse of what Polish developers typically do at work by analyzing the report "Polish Startups 2021", based on a survey the Startup Poland Foundation conducted among startup founders and managers. Asked to indicate the IT area to which their main product belongs, most Polish startups pointed to:
- Artificial Intelligence and Machine Learning (AI/ML)
- Ecommerce
- MedTech
- Education
- Analytics and research tools (including business intelligence)
- Productivity and management solutions
- Big Data
- Industry 4.0
- Fintech
In regard to programming languages, Inhire’s “Tech Market Snapshot in Poland Q1 2022” pinpointed the most popular ones among employers. Most job offers in that timeframe looked for these programming skills:
- JavaScript (23%)
- Java (20%)
- Python (17%)
- TypeScript (12%)
- C# (7%)
For more insight, let's consult Bulldogjob's "Polish IT Community Report 2022", based on a survey with 7382 participants from early 2022. According to the survey results, people in the 25-30 age group represent about 34% of the IT specialists in the country, followed by 25% of 20–24-year-olds and 16% of 18–24-year-olds.
73% of survey respondents have completed a college degree. Of those who have already completed their education, 55% chose computer science as their specialization. Another 30% studied other technical or science fields. 57% of responders worked as Programmers, 15% as Testers, and 11% worked in Admin or DevOps roles. 72% were employed by outsourcing companies. Unfortunately, only about 14% of the IT specialists who participated in the survey were women, despite diversity and inclusion policies being increasingly common in the industry.
How to outsource your IT Project to Poland with Maxima?
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