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Nearshoring to Poland: unlocking opportunities for Scandinavian businesses
Find out why Poland is a good pick for nearshoring.
According to Statista, the market volume of the IT global outsourcing market is expected to reach $777 billion by 2028, which is a massive increase from its current value of $460 billion. With more than 295,000 Polish software developers in the IT sector, the opportunity to get a piece of this big pie by nearshoring projects to Poland is very attractive.
But also, exploring nearshoring options has become crucial for companies seeking cost-effective and high-quality solutions. Understanding the benefits of nearshoring to Poland is particularly significant for Scandinavian businesses. Today, we will delve into the advantages of nearshoring to Poland and highlight why it is an ideal choice for many European regions. Furthermore, we will explore how to find a reliable software nearshoring partner in Poland that meets your specific business requirements.
The Polish shore is even nearer to business
After the pandemic, Poland became an even stronger player in the IT industry, as it turned into the most popular nearshoring destination in Europe. This was confirmed in a joint publication by Reuters Events and A.P. Moller-Maersk entitled “A generational shift in sourcing strategy: A global and European deep dive into near-sourcing, nearshoring and reshoring in the post-pandemic world.”
According to that report, only six EU-28 countries are cheaper than Poland in terms of total hourly labor costs. In Poland, these costs are only 40% of the EU average wage and they are almost 70% lower than the hiring of engineers from Norway or Denmark. Pointedly, Scandinavian countries have the highest labor costs in Europe. For example, salaries in Sweden are almost 3 times higher than in Poland, and the situation is similar in Finland.
Low labor costs do not mean that the skills of Polish IT specialists are subpar. Quite the contrary! According to a number of analyses available, Poland, compared to many other European countries, boasts a relatively high number of talent suitable for Knowledge Intensive Business Services (KIBS). This means that companies taking advantage of nearshore software outsourcing services in Poland gain access to very rare skill sets, and can scale their teams and business much easier, and more notably, cheaper.
The number of IT engineers graduating in Poland each year accounts for 10% of the total number of newly educated IT engineers in the EU. Tech education in Poland is at a very high level and Polish programmers are ranked among some of the best in the world. The range of competencies acquired is very wide and the country’s seasoned IT market helps new professionals quickly gain relevant experience, adopt new tech innovations, and improve their skills.
In the wake of the pandemic, Poland has risen to become a leading nearshoring player in Europe, offering competitive labor costs and a highly skilled IT workforce. With a robust tech education system and a mature IT market, Poland provides businesses with access to a vast pool of talent, enabling them to scale their operations competently and efficiently. All these elements set the stage for the rapid growth of nearshoring in Poland.
Advantages of nearshoring to Poland
There are a number of factors that make Poland an ideal nearshoring destination, particularly for Scandinavian companies. Here’s a short recap of why Poland might be a perfect fit for outsourcing software development.
- Cost-Effectiveness. As mentioned above, the labor costs in Poland are still significantly lower compared to all the Scandinavian countries, which makes it a great choice for process optimization. Simply put, a Polish IT consultant will still be 20-40% cheaper compared to their Scandinavian counterpart even with the same experience and skills.
- Proximity and Time Zone Compatibility. For Sweden, Denmark, and the other Scandinavian countries, educated and experienced engineers from Poland are easily accessible. Geographical proximity to Poland along with a well-developed road, air, and ferry transportation infrastructure are major advantages when it comes to collaboration and communication.
- Skilled Workforce. Poland’s educational system produces a large pool of talented IT professionals with a strong focus on technical knowledge compounded by a proficiency in English, making it easier to build successful teams.
- Growing Talent Pool. There are several thousand IT engineers graduating from Polish technical universities each year. It is quite possible to find a sought-after specialist in just a few days and/or put together a specialized team in around two weeks. In addition, the range of available skills of Polish IT specialists is noticeably greater compared to most European countries.
- Cultural Affinity. Poland shares cultural similarities with many European countries, including the Scandinavian countries, which obviously leads to smoother collaboration and understanding between teams.
- Stable Business Environment. With a solid infrastructure, political stability, and favorable investment conditions, Poland provides a reliable and secure environment for nearshoring partnerships. The country’s growth has been additionally driven by its business environment, as well as its compliance with the GDPR and data protection regulations.
Poland’s ability to facilitate seamless cooperation and enhance the overall efficiency of outsourcing projects makes it a great choice for nearshoring software development. Over the years, Polish tech companies have gained a reputation for providing quality products and services while Polish programmers have become some of the best in the world. A number of Scandinavian companies have found this especially promising and are willing to take advantage of nearshoring in Poland, all while easily maintaining their standards of quality and reliability.
A proven destination for Scandinavian success
Many Polish IT professionals find the opportunity to work for Scandinavian companies attractive, and appreciate the working conditions as well as their culture. The foundation of their culture is based on a work-life balance, flat organizational structures, consensus-based decision-making, and a concern for the quality of collaboration and teamwork. This cultural compatibility, so to speak, has made the cooperation between Scandinavian businesses and their nearshore teams in Poland straightforward, fluid , and more dynamic.
As a result, Poland, along with Estonia, Latvia, and Lithuania, has become one of the most popular destinations for Scandinavian companies searching for solid and reliable nearshore technology providers. For instance, such renowned Scandinavian brands as ABB, BEC, Volvo, and others have long chosen Poland as their key nearshoring destination.
As more Scandinavian companies continue to benefit from this unique partnership, it is crucial to understand how to find the right software nearshoring partner in Poland, which we will explore in the next section.
In 2016, BEC from Denmark established a partnership with Avenga. According to Troels Ottesen, Head of BEC Poland, the biggest challenge at the time was that the market for IT competence in Denmark was too shallow. There was a huge talent gap because the demand for IT professionals was greater than that which was available. The company has grown significantly thanks to its partnership with Avenga in Poland. In 2017, BEC employed 62 people in its competence center in Warsaw. Amazingly, 4 years later the headcount at Nykredit and BEC Financial Technologies was over 550.
“Avenga is able to satisfy our most urgent needs. They’re really great at finding the right people at the right time. In the financial services sector, reliable and stable long-term partnerships are crucial. Avenga has proven to be a solid partner that has helped us successfully implement our strategy of increasing the number of employees. The professionals Avenga provides us with meet our requirements and needs 100%. Working with Avenga, we can count on an exceptional level of stability, support, and advice, which makes our relationship strong.” Troels Ottesen, Head of BEC Poland
Discover how our partnership with BEC led to significant growth and filled the talent gap in Denmark’s IT market. Success story
How to find a proper software nearshoring partner in Poland
When looking for a decent software outsourcing company in Poland, there are seven major factors you should consider.
- Evaluate the number of IT professionals. Consider the number of IT professionals available, the cost and quality of their work, and their communication skills. With a large provider, you can scale your business up or down quickly.
- Consider the location. Look for partners with offices in major business centers around Poland which house the country’s major technology and business hubs. The distance to travel to the nearshoring provider’s office can affect the strength and precision of the cooperation.
- Assess the work culture and values. The work culture and values of the contractor will also affect the focus and unity of the partnership. A good nearshoring partner builds solid relationships based on trust and predictability.
- Check the expertise and experience. An excellent nearshoring partner has the appropriate proficiency, successful experience (including experience working with Scandinavian companies), and a good reputation in its market. This translates into its recruitment capabilities.
- Review industry rankings and feedback. Assess a vendor’s potential through industry rankings and feedback from existing clients, as well as its certifications, business partnerships, and awards.
- Look for flexibility. A flexible company will be adaptable to your needs. It should be able to quickly assist in finding specialists, choosing the optimal cooperation model, and managing IT outsourcing. Having the ability to cover the various competency-, personnel-, business-, and process-related needs will foster a flexible approach to choosing a cooperation model that suits your requirements.
- Prioritize data security and intellectual property protection. In nearshoring, the importance of data security and intellectual property protection cannot be overstated. Choose a partner who pays close attention to security and has the appropriate countermeasures in place to safeguard your business.
Finding the right nearshoring partner in Poland involves carefully evaluating a variety of factors, from the number of IT professionals and their expertise to the company’s flexibility and commitment to data security. By following these steps, businesses can ensure a successful and beneficial nearshoring partnership that aligns with their specific needs and objectives.
JN Data is a Danish company providing IT operations and infrastructure maintenance services for the Scandinavian financial sector. The company ensures its clients’ applications are always on, meaning they are efficient, secure, stable, and compliant. When looking for a nearshoring technology partner in Poland, JN Data sought someone who could help them live up to the promise of their service. Furthermore, they sought a company with shared goals, visions, and an in-depth understanding of the local market. Having launched our cooperation in 2018, JN Data and Avenga have built a strong partnership built on the quality of Avenga’s IT professionals and JN Data’s acquired trust in our skills and mindset. Together, we’ve achieved JN Data’s business goals and plan on doing so in the years to come.
“Over the last five years, we have built a solid and transparent partnership with Avenga, which helped us overcome any business and tech obstacles we might have encountered. Sharing a common goal – a long-term stable relationship – Avenga is now our business partner and technology consultant. If you’re looking for a local partner with extensive knowledge of the local market and want transparent cooperation, we can highly recommend Avenga.” – Ivan Timm, Head of JN Data Poland
Find out the foundation of the strong relationship between JN Data and Avenga in Poland. Success story
Poland’s nearshoring advantages, including cost-effectiveness, proximity, cultural compatibility, and skilled workforce, render it as an ideal destination for businesses seeking growth opportunities, in particular Scandinavian businesses. The combination of the country’s competitive labor costs, an extensive pool of talented IT professionals, and a reliable tech infrastructure ensure success even in the most complicated projects. By strategically partnering with software nearshoring providers in Poland, businesses can tap into the country’s vast potential and achieve their growth objectives. Poland’s compatibility specifically with the Scandinavian market’s requirements for a nearshore partner makes it a perfect fit for facilitating seamless operations and driving business success.
Success within IT is generally determined by the proper selection of specialists and access to highly competent professionals within the industry. Contact us to find out how our team of 1,700 Polish experts can help you operate with flexibility and agility without overextending your internal workforce.
Avenga is a recognized technology partner with a comprehensive know-how and tested experience in a number of industries, including pharma and life sciences, insurance, financial, automotive, and smart manufacturing.
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