In our daily conversations with hiring managers, the same common challenges often come up: finding the right talent to scale tech teams, managing tighter budgets, and diversifying technology teams. One solution over 40% of our CTO network have explored to address these issues is offshoring or nearshoring their technology functions across the UK, Europe, and other regions. Establishing a technology hub overseas can offer significant advantages for organisations; expanding brand reach, accessing global talent pools, and reducing operational costs.

Cultural Considerations

Expanding into new locations requires a deep understanding of the unique cultural landscape that influence team dynamics and recruitment. A successful expansion starts with a dedicated project team tasked with exploring potential markets and assessing the real costs and benefits of each location. A crucial element is having an experienced leader on the ground, someone familiar with the local culture and market conditions, to steer the integration process. 

There are also a host of cultural considerations that come into play. From understanding what local candidates value in their careers to adapting to regional communication styles, a one-size-fits-all approach won't cut it. While your company's values will remain consistent, their interpretation will vary across geographies. This is important to consider when refining your interview process, and assessment criteria may need to be adjusted to be more objective. 

Engaging with local communities and stakeholders is vital to grasp these cultural dimensions fully. While resources provide a theoretical framework for setting up a tech hub, real success stems from on-the-ground interactions and establishig a local presence. This approach ensures that the new team feels like a natural extension of your main operations, rather than an isolated unit.

Deciding on your tech hub location: A framework:

1. Defining Core Objectives:

Clearly define your objectives early & assess each potential location on its own merits. Determine your priorities & trade-offs: Speed vs quality vs cost.arrow2. Location Considerations:

Choosing the right location requires a detailed analysis on considerations such as:

  • Cost: Include salaries, overheads, & travel.
  • Organisational Structure: Oultine roles and management frameworks.
  • Value Alignment: Ensure all alignment with core business values.
  • Collaboration Capabilities: Consider language, communication ease, time zones and logistical elements like travel and geopolitical stability.
  • Legal and Financial Frameworks: Address regulatory, tax and financial compliance.
  • Talent Pool Assessment: Evaluate the local market conditions and available talent.

When assessing the viability of the talent pool available in different regions, some considerations may include: 

  • Local Business Ecosystem: Identify successful businesses in the area to gauge competition and talent quality.
  • Sector Success: Assess sector performance in the local market.
  • Market Perception: Understand potential customer and partner perceptions of your product.
  • Educational Infrastructure: Review local universities and course quality.
  • Job Market Dynamics: Evaluate open job counts and how your roles would fit and compete.

arrow3. Reseach & Strategy:

Speak with founders, consultancies, established companies & contacts in your investor network to uncover the info you need. There are lots of resources available, but decisions will be unique to your business. Form a project team with members from HR, Talent, Legal, & Finance to address all relevant areas.arrow4. Decision Making:

After thorough research & deliberation, finalise the location. Make sure to communicate what this means to the wider business in terms of time needed from them to interview and upskill over the coming months.arrow5. On-the-ground Insight:

Local expertise is key. Effective execution relies on having a reliable local leader or team on the ground to drive the project forward.arrow6. Interations & Adapting:

Throughout the process you’ll need to iterate, take feedback & adapt. Regularly update & validate cost projections & budgets using real-time data to ensure accuracy & relevance.

 

Client Spotlight: Establishing an international presence in Bulgaria

Oliver Lochhead, Head of Talent @ Runa

"Launching a tech hub in a new location, like our Bulgaria expansion, has been hugely impactful and has also provided a significant learning experience along the way. My key takeaway? Don't underestimate the importance of in-depth research and analysis from the get go, accept that you may not get everything right off the bat, and be ready to adapt and iterate often to course correct. 

Putting together a project team to ensure you have diverse expertise is important to cover all bases. We ensured we had an ExCo sponsor who was readily available for anything that required escalation; Legal to navigate local employment law and regulation; Finance to be aligned from a budget and forecasting perspective; Talent teams ensuring our go to market strategy reflected the specific needs of the team, and each hire individually. Of course this all maps back to the org design which was defined through our People and Engineering functions collaborating.

Building a strong employer brand as early as possible will pay dividends and add huge value when it comes to talent attraction. Wherever a company chooses to set up a tech hub, it's more than likely the location will be incredibly competitive and brand recognition is of paramount importance.

If we went through this journey again, we'd prioritise setting aside and front loading employer branding budget and projects. We partnered on a local tech event which really boosted our brand recognition, people knew who Runa were, and engagement with our brand increased dramatically.

Why Bulgaria?

The rich ecosystem of high quality FinTechs & product-led start-ups already thriving in Sofia was a big factor in our decision to establish a tech hub there.

We evaluated the local talent pool by examining the number of open software engineering positions, helping us understand how well we could integrate & impact the active market.”

 

***

 

If you’re looking to build or expand a technology hub overseas, we’ve got you covered. We’ve successfully hired across Europe for companies like Mangopay, VoxSmart, CBRE, Spendesk, and Mileway, filling roles in France, Spain, the Netherlands, Luxembourg, and the Nordics. Reach out today to leverage our expertise in unearthing talent across Europe and diversify your tech squad with the best talent across global markets. 

For more talent strategy insights, download our 2024 Technology Hiring Report. Inside you'll find talent insight covering the modern talent stack, advocating for neurodiverse employees and candidates, optimising internal mobility, and how to retain and empower your female employees. It's also complete with salary benchmarking for permanent and contract roles, across London and the North of England. Download your copy here.

Written by Tori Dryden