May 20, 2022

Eastern Europe isn’t just for outsourcing anymore

Forget outsourcing; startups should consider hiring directly in Eastern Europe

Victor Botev

4 min read

Victor Botev, CTO of Iris.ai

Founders are finally embracing the "work from anywhere, hire from anywhere" mentality. But for European and US startups, this often just means hiring in Denver or Bristol. It’s hardly inclusive. 

Nowhere is that more true than eastern Europe. I live and work in Sofia, but I’ve found most western companies still see Bulgaria as a place to outsource, not to hire directly. That limits wages and progression. So many more talented eastern European software engineers move west to build their careers. 

We founded Iris.ai as a remote-first company in 2015, and although we’re officially headquartered in Norway over half of our employees are eastern European — including me. With competition for talent fiercer than ever, here’s why tech companies should be building out operations in eastern Europe and hiring directly in the region.


Why eastern Europe is the place to hire now

As I said, talented individuals in tech used to leave the region for better jobs and challenging, lucrative careers. But that brain drain is starting to reverse. 

One reason: we’re creating more homegrown successes that are creating opportunities for talent to stay in the region and build fulfilling careers. Earlier this year, Payhawk became Bulgaria’s first unicorn, valued at over $1bn. Bolt, Wise, Rohlik, Vinted, UiPath, GitLab and Pipedrive are other successful examples from the region.

INSAIT — a new institute for computer science, AI, and technology backed by Amazon, Google and DeepMind being established here in Sofia — is an incredibly promising initiative that will accelerate our transition to a technological hub and help keep talent. It is backed by a progressive government that promises to nurture innovation within Bulgaria.

Founders that are not looking beyond their local region are, at best, paying over the odds for talent

Collaborating with the world’s leading technology universities will allow Bulgarian talent to learn from the best without the prohibitive costs of travelling abroad to study. Keeping students in Bulgaria throughout their degrees will be a big step toward reversing the flight of human capital — for example, I had to go to Chalmers University of Technology in Sweden to complete my education. Once you’ve left and find yourself with offers of work in the west, it’s hard to go back.

With big tech involved, eastern Europeans have the potential to connect with these global companies without needing to travel thousands of miles — this is huge, a first of its kind.

Part of the challenge in getting people to hire eastern Europeans is the poor reputation of our local governments. Corruption at the top taints views toward a very trustworthy workforce. But take my word for it: we are hard-working, focused and talented computer scientists. One Iris.ai employee recently remained in Odesa during shelling in Ukraine. As the bombs fell, he still willingly put in hours to meet deadlines — despite our protestations! That kind of loyalty and dedication is priceless — and humbling — but not uncommon.

How can startups take advantage of eastern European talent?

If the best talent can be anywhere, why leave a single stone unturned?

Startups should be looking more widely for new team members. Not because workers may be cheaper to hire, but because they are a huge, untapped resource right here in Europe. Even though I’ve noticed that eastern Europeans are less motivated by share options and results-based working than westerners, the overall cultural gap is far smaller than it is compared with Asia, for example.

Any founders that are not looking beyond their local region are, at best, paying over the odds for talent as they try to outcompete their peers. At worst, they are limiting their growth potential by not being able to scale. 

👉 Read: What tech leaders get wrong when hiring developers in Central and Eastern Europe

Personally, I’m excited about the future for Bulgaria. If talent can access world-class research locally through an initiative such as INSAIT, Bulgarians will be much more inclined to stay in Bulgaria and we will emerge as another country famous for startups and a thriving tech scene. 

The events in Ukraine have demonstrated the strong bond that we all feel as Europeans. Eastern Europe has so much to offer, and the European startup scene can only grow stronger when people have equal opportunities: building bridges, sharing knowledge and helping the overall economy.