Cost of Offshore Development in the Czech Republic

From time to time I am asked to help setup an offshore development site in the Czech Republic. This post should answer all future requests:

The first chart below shows the falling exchange rate of US Dollar (from 42 Czech Korunas per US$ in 2000 to 15,80 CZK/USD today) and the increased salary of Java developer (from 40 000 CZK to 85 000 CZK in the same period). This means that the cost of development increased 565% in dollar terms!!!

And not only are Czech developers more and more expensive. The competition for talent increased the expectations for employee benefits as well. Here are top ten employee benefits expected in the IT industry (My favorites are number 5 and 6!):

Comments

  1. And yet companies are still tripping over one another to set up shop.

    In spite of the turning of the financial tables.

    In spite of the much higher benefits expectations of Czech (and in fairness, European) developers when compared to Americans.

    In spite of the fact that competition on the IT job market is such that filling these positions takes an inordinately long time.

    So what’s the draw? Czech developers are skilled, there’s no doubt, but that doesn’t seem to explain the trend (or rather why the trend seems to be continuing even now).

  2. Roman, you should have explicitly stated that you were referencing to developers in Prague. The other Czech IT centers (namely Brno and Ostrava [yes, I said Ostrava]) are not yet on the same level speaking about salary.

  3. There is also one interesting issue regarding working hours. I do not have enough data to compare Czech and US IT industry, but people are working more hours in Czech republic (1,997 – based on OECD data) then in US (1,797) on average.

    The question then is the quality of work or productivity per hour.

    source: http://www.forbes.com/2008/05/21/labor-market-workforce-lead-citizen-cx_po_0521countries.html

  4. agree, just two technical notes
    1 to Roman – cost increased 465% not 565%
    2 to Lukas Vlcek – not sure, depends if the salary levels given are from developer point of view or from employer, including all the taxes..

Trackbacks

  1. […] Staněk wrote a piece the other day to serve as sort of a permanent response to all the people who keep asking him about […]

  2. […] Boost @ Good Data June 6, 2008 — Roman Stanek A few days ago I wrote about the rising cost of software development in Czech Republic (and I am sure similar situation exists in many parts of […]

  3. […] počíst v reportu Patricka Zandla. V angličtině si můžete přečíst příspěvek na téma prezentace (od) Romana Staňka, jehož současný startup GoodData patřil ke sponzorům. Jak už jsem sliboval přes Twitter, na […]

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