We have started publishing a series of article on the main CEE IT outsourcing destinations. The first article of the cycle is analyzing Polish IT sector and provides its comparison with the Ukrainian one.
Polish IT Market Overview
Poland today is the largest IT pool in the Eastern Europe: it currently amounts to over 140,000 people occupying 1.7% share of the global IT market. What concerns the largest IT companies, they employ 55,000 of the total number of IT specialists, out of which only 34% work for companies with the Polish capital, the rest is employed by the foreign capital companies like HP, Microsoft, IBM, etc. However, the largest share of the Polish IT market belongs to the Application Development and Support. IT enabling services, user support/service desk are amidst the largest segments of the IT industry in Poland whereas the Ukrainian market comprises more of software development. Most services are delivered to the Western Europe entities – 80% of the Polish IT companies are West-oriented. However, 74% of the companies also choose to work with the internal entities. As to the technologies, Polish IT companies cover the whole bunch of these, including Java and MS stack, Web development, databases, and mobile. The experience in the aforementioned categories is vast, and more or less equals to the Ukrainian, however, if talking about enterprise software products, Poland offers more skilled specialists, though.
IT industry is having the highest demand among the Polish students – over 75,000 apply to IT specialities annually with up to 14,000 graduates. Practically 95% of IT students claim they speak English and 31% – German. The most outstanding educational institutions providing technical education are:
An average salary of the IT specialists is equal among the Polish companies. For instance,
Benefits and Taxes
Practically all Polish IT companies provide their employees with such benefits like private medical care, life insurance, sports cards, as well as on-the-job training.
Polish IT industry is also being built in order to create favorable conditions for business development. Almost all companies pay taxes under the CIT (Corporate Income Tax) model amounting to 19%. However, there are different extenuating circumstances helping to decrease the tax rate. For instance, a company may have a tax exemption within Special Economic Zone (SSE) or be subject to local tax exemption. This depends on the location and local government regulations.
If speaking about employee’s individual tax payment, the Income Tax is counted according to the income sum:
The attrition level in the Polish IT companies is comparatively low – 15%. Since some companies move their HQs from Poland to abroad or get acquired by large foreign companies the dismissal level of the IT staff varies. Not all employees are willing to move abroad or relocate to another town/city. The numbers are rather modest – 2-3% prefer being dismissed (usually by mutual consent of the parties) from their current position and shift to another company.
As to the probation period, it usually amounts to 3 months before the final decision is made. Within this time span, an applicant to the position is to work 2 working weeks in total in case of 3 months probation period. If the trial period does not exceed 2 weeks – 3 working days; 2+ weeks – 1 working week.
Before leaving a job an IT specialist will have to go through 1-month notice period starting from the 1st date of the next month you’ve informed your employer about your leaving.
In rare case the company needs to cut their headcount then the dismissal period is defined by the overall period an employee worked for a company:
Cost of Living
Prices in Poland are considerably higher than in Ukraine, however, if compared to the European countries still remain lower. Average monthly expenses for a person living in Poland amount to:
Currently over 50% of the companies have increased the number of their employees by 1-25%, 10% of the companies – by over 50%. The last group includes mainly new companies and startups being established and growing. The hiring tendency greatly depends on the increase in the external demand for the services and products, the establishment of the new spheres of operation, various restructurings, and acquisitions.
Ukraine vs. Poland
Poland overruns Ukraine in the number of the specialists (Ukraine’s talent pool comprises of 100K specialists), but definitely not in their expertise. Ukraine has also got a beneficial location, lower prices for living, food and transportation costs. As to the labor cost Poland significantly loses to Ukraine since Polish taxation model corresponds to the main EU requirements and requires official employment and big sums paid for different types of taxes, whilst Ukrainian developers mainly work as Private Entrepreneurs signing an agreement with an IT services providers and are subject to single tax payment of 5% from their income. Both Ukrainian and Polish companies have up to 3 months of probation period before hiring specialists. The attrition level in Ukraine is somewhere in between 12 and 20% since the specialists change companies due to various factors like the uncomfortable workplace, unsuitable location, team, insufficient knowledge to work on a certain project, etc.
This content was originally published here.