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Why banks are looking for their top developers in Eastern Europe

Now found in Budapest

Now found in Budapest

The financial crisis has been kind to top developers in Eastern Europe. Since 2008, financial organisations have shifted middle and back office roles including risk, HR and accounting to the East, but the biggest department to feel this trend has been technology. Banks like Barclays, Deutsche Bank and Credit Suisse are increasingly sending their development roles to countries like Czech Republic, Hungary and Poland.

There’s good reason for Eastern Europe’s rise. In Soviet times, education was highly focused on scientific and technology studies, creating a ready-made pool of technology candidates – many of whom are also multilingual.

Central Eastern Europe is consistently found at the top of the world ranks in educational achievement in math, science and technology. In 2013, 16 out of the 24 finalists of Google’s annual Code Jam programming competition were from Central and Eastern Europe, according to Bloomberg.

On the ground in Eastern Europe, banks are popular employers. Many have been hiring highly quantitative Eastern European candidates to work in London for years. Now that they’re saving the cost of London office space by opening local offices, banks are typically able to pay salaries that are higher than the local average for comparable roles.

Offshoring or near-sourcing doesn’t come without concerns for the banks though. There can be cultural and communication problems and local staff are often sought by competitors. Banks typically seek to mitigate this by repatriating senior Eastern European managers from the West – thereby ensuring that the East European businesses are run by people who understand the local culture but have also worked in a top financial centre.

Banks are at the forefront of a growing trend. McKinsey & Co. has estimated that outsourcing to Eastern Europe is growing three times faster than to India. In 2012, it calculated that there were 77,000 outsourced technology jobs in the region, and that this was growing at a rate of 17% annually.

Rogier Elsenburg, is Manager of recruitment firm Huxley BFS Benelux & France

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