It is not just another sponsored report about Software Outsourcing!
Yes, yes, I know, this post might look like just another sponsored report about Software Outsourcing… I am one of the software outsourcing providers co-founder, this article is published at the software house website so why should you believe in any single word written here? Before you close this tab, let me tell you that I am not a fan of this kind of articles or pseudo-objective (usually sponsored) reports too. This is why I decided to dig deeper and find some real data that will show us if Krakow is really so good for software outsourcing.
Why should London-based IT companies consider outsourcing software development to Krakow?
For my research, I have decided to choose London as the city that I will use for comparison to Krakow. Why London? Because it is the best city for digital entrepreneurs according to EDCi (European Digital City index). You may say that comparing one of the biggest and most expensive city in Europe with relatively small and cheap Krakow is not fair, but let me show the data and see the calculation I have made.
Basic Data about London and Krakow
Let start with some basic data. How big are both cities and how many people live there.
Population and City Size
So London is 4.8 times bigger and has 11,37 times more citizens than Krakow. But does it mean that there is no point in outsourcing software development to such a small city? Let me show you how other numbers looks like.
Number of Students
There are only around 1,8 times more students in London than in Kraków. Where in London students are 4.15% of the city population and in Krakow they are 26.34% of the city population. In Krakow, you may find around 613 students on square kilometer and in London, only 229. You may see that Krakow is a really academical city. Easy access to knowledge and that big number of students at the much smaller area makes it easier to exchange knowledge and experience.
I have not limited those data to only IT students because of two reasons. First – it is extremely hard to find such accurate data. Second – from our experience not only IT graduates are working in IT (I would even say, that the number of non-IT graduate students is above 35% of all IT employees).
Average Software Developers Salary
Do you think that developers who earn less are not as good as those who earns more? This is a common misconception. But at the end of the day, it is all about the money… So let see how does it look like.
Average Software Engineer yearly salaries in London and Krakow
(This calculation has been made using current GBP to PLN exchange rate at the level of 5.06 – that is quite low recently)
The average Software Engineers salaries in London are 2.33 times higher than in Krakow. But is it the reason that you should think that underpaid software developers in Krakow will be less efficient or not as skilled as their colleagues in London? Comparing salaries alone and jumping into the conclusion only because of that might be a great mistake. Money is worth only as much as you can buy using them. This is why I would like to introduce you to the Cost of living + Rent index.
Cost of living + Rent index
It shows that living in London is 2.84 times more expensive than living in Krakow. So even if the developer in Krakow earns less he still could buy more goods in his city and save more money than developers in London.
Is it worth to outsource Software Development to Krakow?
Everyone who already asked for quotes from some Krakow based software outsourcing companies knows that rates for software development outsourcing in Krakow are usually around 1.5-2 times lower than in London. You might be afraid that because of lower fees you have to expect lower quality. But according to the data I have presented you above such statement is simply not true. Krakow has a great access to high-level education that produces great employees every year. Most of them speak perfectly English.
Software Developers actually are around 20% better paid in Krakow than in London (when comparing the real value of their salaries). That means that they are even more motivated to develop their skills and to be really engaged in building software products. There is also a status aspect. When average salary in IT in London is only slightly higher than an average salary in London in all industries, then average salary in IT in Krakow is significantly higher than in other professions. This is just another reason why software developers in Krakow are better motivated to sustain their status and do everything they can to not to lose their job.
There are many other unmeasurable reasons why Krakow IT companies are a great place to search for software outsourcing services. For example the fact that companies are competing at the jobs market by creating the best working cultures, or because the number of IT-related events in Krakow is growing every year.
Ofcourse the decision is up to you but remember that you may always contact us to learn more about how we could build your new software development team.