Eastern Europe is catching up on developing its software development sphere. For Hungary, namely, the tech industry is expected to drive the most revenue in the next decade. As a result, the region boasts thousands of professional developers and IT talents.
Alcor is a leading IT recruitment provider in Eastern Europe, with 10 years of experience in recruiting tech gems to fill positions in IT product companies. Our team has thoroughly analyzed Hungary as a destination for offshoring. Find the key benefits below.
Why is hiring Hungarian developers worth it?
Considerably lower salaries & taxes
In comparison with US salaries, remuneration in Hungary is 3 times lower, according to our salary research data. Its taxation is also favorable for businesses. The personal income tax, for instance, equals to 15% regardless of the level of income. The corporate income tax amounts to 9%. Last but not least, the employer pays 13% for the social security tax which accounts for 31.5% in total. All in all, with taxes and salaries being among the lowest in Europe, the Hungarian developer cost is much more appealing.
Favorable business environment
By 2027, the market size in Hungary is predicted to reach $1.95 billion. Furthermore, the digital economy brings in more than 25% of the country’s GDP, hence the effort into developing it by introducing tax relief schemes, partnering with tech companies and increasing the investment in the R&D sector for the next 5 years. Such a rapidly expanding ICT industry and an advantageous business environments encourages tech giants, such as Microsoft and Nokia, to work with Hungary as an offshoring location.
High-quality tech education
Not only does Hungarian talent pool amount to 80K, but it’s also known for its highly skilled specialists. This is not a coincidence: 70 higher education institutions, including Budapest University of Technology and Economics, Obuda University and the University of Szeged, prepare competitive 2,700 ICT and 12,000 STEM graduates annually. Hungarian developers are also ranked highly in the Global IT skills, taking the 30th place with a whopping 72% and 78% score in technology and data science.
Decent English proficiency
The level of English among Hungarian programmers is another factor that contributes to making this offshoring destination appealing. As stated in the EF English Proficiency Index, the overall English proficiency in Hungary is high, which puts it on the 17th place out of 112 countries. Thus, Hungarian programmers will have no difficulty in cooperating with English-speaking companies.
Convenient time zone
Whenever choosing an offshoring location, considering time differences is an essential stage to ensure that your team will work smoothly. Thanks to Hungary being in the GMT+2 time zone, it’s relatively easy for both EU and US companies to establish their team there. Moreover, it takes 2 hours by plane to travel to Hungary and meet your remote development team if needed.
How to cooperate with Hungarian developers?
Cooperate with independent freelancers
Your first way is to use international freelance marketplaces, such as Upwork, Hired, Toptal, and Freelancer. This option cuts your costs on in-house benefits, including training and social packages. And while you can find rare experts in programming there, the downside is that it takes time to check their knowledge. Another considerable drawback is the lack of dedication to your product, as freelance software engineers usually have more than one project to work on.
Delegate software development to IT outsourcing firms
Local IT companies can act as outsourcing providers. In Hungary, it’s especially popular for web and mobile app development tech services. This solution looks quite cheap and not time-consuming, but there’s a significant pitfall to it — you won’t be able to oversee the team and product development, not to mention that external software developers aren’t usually committed to your company. When being allowed to see only the final outcome, you may opt for one too many adjustments, which will all result in hidden fees and, potentially, poor deliverables.
Turn to IT outstaffing agencies
Outstaffing leaves you more room for convenient cooperation. Via this model, you will work with Hungarian software developers through a third-party vendor. Therefore, you’ll manage an outstaffed team more effectively than an outsourced crew. Still, in the long run, you might want to hire your development team for good, but you’ll have to deal with high buy-out fees to do so. Other disadvantages include no shared corporate culture and not enough dedication.
Partner with IT recruitment providers
Choosing a recruitment service provider will alleviate most of the flaws of the models mentioned above. To begin with, you won’t have to handle candidate selection and interviewing. Secondly, the team will be hired to work for you, so there are no looming buy-out fees and higher levels of dedication from software engineers. Finally, internal management is entirely up to you and you’re not required to share your data with a third party, thus securing your intellectual property.
As your trusted IT recruitment provider, Alcor goes the extra mile by offering additional perks, such as strong employer branding, managing payroll & accounting, tackling legal compliance, and setting up your IT infrastructure. Our services are transparent, incur no additional fees and have been highly praised by our clients. Moreover, we guarantee hiring at least 5 developers in 1 month with an 80% CV pass rate. Sounds too good to be true? Explore our model and see for yourself!
