Belitsoft Reports 2025 Trend: Companies Switching from Offshore to Nearshore Teams

Belitsoft has a long history of creating dedicated development teams and team augmentation expertise in Eastern Europe.

Surveys show an overwhelming number of IT firms are considering nearshore outsourcing as a cost-cutting strategy. In 2025,  many companies – especially in the UK – are moving their software development operations to nearshore teams. Eastern Europe has emerged as the nearshoring hub of choice for UK enterprises, while traditional offshore destinations like India are gradually losing ground in this space. UK companies are finding that highly skilled developers a short flight away can deliver better results, with fewer headaches. 

Drivers Behind the Nearshoring Trend

Quality, Control and Strategic Value

Companies are seeing nearshoring as a way to boost quality and maintain more control over their projects. 

Eastern Europe has a reputation for high-caliber technical education and engineering excellence – several countries rank in the global top 10 for developer skill in rankings and coding competitions. Firms report that productivity and code quality from Eastern European teams meet or exceed Western standards, debunking the notion that outsourcing is only about cheap labor. 

Furthermore, nearshore engagement models tend to be flexible and partnership-oriented. UK CIOs increasingly treat nearshore providers as an explicit extension of their own capacity, not just contractors. This means responsibilities like innovation and intellectual property can be more comfortably shared. 

In sensitive domains (finance, healthcare, etc.), proximity offers greater oversight – it’s easier to conduct on-site audits or ensure compliance when your development center is within Europe rather than across the globe. 

While cost savings initiate the nearshoring decision, companies also heavily weigh access to skills, greater speed to market and improved control when choosing a nearby country over a farshore one.

Time Zone and Collaboration Advantages

Unlike far-off locales (India, East Asia or Latin America) which are several time zones away, Eastern Europe is practically next door to the UK. Key tech hubs like Poland are just 1–3 hours ahead of UK time, allowing real-time collaboration and full workday overlap. 

Because the teams work in nearly the same time zone, they can talk to each other live, set up meetings during their regular work hours, and fix problems within a few hours instead of waiting a whole day.

Culturally and linguistically too, the alignment is strong. Eastern European IT professionals typically have excellent English proficiency and share Western business norms, making it easy to integrate nearshore developers into UK teams. 

Nearshore teams work almost like in-house staff. They avoid the communication and cultural problems that offshore teams often face, letting them move quickly and stay coordinated on complex, fast-moving software projects.

Geopolitical and Security Considerations

Companies rethink location strategy. Many are adopting an “India-plus” approach, supplementing Asia-based teams with nearshore teams for resilience. Amid an escalation of conflict in South Asia in 2025, some enterprises began evaluating Eastern Europe as a fallback location to ensure business continuity. 

In the UK context, firms increasingly prefer EU-aligned locations to ensure data sovereignty and regulatory compliance. Eastern European EU member states offer familiar legal frameworks (GDPR data protection) and strong intellectual property laws, reducing the worries of offshoring sensitive development work.

Cost Pressure and Economic Climate

Persistent inflation and recession fears have made cost control the top priority for CIOs in 2025. Nearshoring offers an immediate financial relief valve. By augmenting in-house staff with developers in lower-cost neighboring countries, UK enterprises typically cut labor costs by 30–50%. These savings are significant: for example, a senior developer in Eastern Europe might cost half as much as one in London, without a drop in quality. Such arbitrage is crucial as tech budgets tighten.  

Tech Talent Shortages at Home

The UK faces an acute digital skills gap, with companies struggling to hire enough software engineers locally. Nearshoring is a practical solution to fill critical talent needs. By 2025, UK businesses cannot find enough local technology talent, so they are augmenting their software teams with developers from nearshore countries. Eastern Europe offers a vast talent pool to tap into. The deep bench of skilled programmers (many with advanced STEM education) provides expertise in everything from fintech and AI to IoT. Access to skills is nearly as important as cost: in surveys, companies rank the ability to obtain specialized talent as a key motivator for nearshoring. With Eastern Europe’s engineers, UK firms can overcome hiring bottlenecks and accelerate development of new digital products.

Case Studies: Companies Transitioning from Offshore to Nearshore

A variety of companies – from finance to tech to healthcare – have recently shifted work from offshore vendors to dedicated nearshore teams in Eastern Europe. Below are a few case examples from 2025 that illustrate this trend and its benefits.

Financial Services

One large bank (with UK and EU operations) closed part of its Asia offshore center and established a nearshore back-office operations centre in one of the Eastern European countries. 

The result was immediate – the bank saw improved process efficiency, significant cost savings, and stronger compliance alignment with EU regulations by bringing the work closer to home. The nearshore team  now handles AML checks and IT support that were previously done in India, and the bank reports better oversight and faster issue resolution. 

This case typifies many banks and insurers, which have long offshored for cost reasons but are now adding Eastern European teams for critical tech and operations work (where data security and time-zone alignment are very important).

Software/Tech Industry

A multinational software company decided to set up a dedicated development team in one of the Eastern European countries – shifting some product development away from its Indian R&D center. The nearshore team quickly became a driver of innovation, contributing to core product features and improvements. 

The company credits this move with accelerating its product release cycle and cutting time-to-market by around 40% for certain software modules. Proximity enabled real-time collaboration between the firm’s UK architects and the nearshore developers, vastly speeding up iterative development. This example shows how even tech giants are leveraging Eastern Europe not just for cost, but to boost innovation capacity and agility.

Health/Life Sciences

In the healthcare sector, a mid-sized UK healthtech provider outsourced its medical data transcription and analysis operations to a specialist firm in Eastern Europe. This shift (from an earlier vendor in Southeast Asia) led to marked improvements in service quality and turnaround time. The nearshore team – well-versed in EU healthcare regulations – was able to process patient records more accurately and respond quickly during UK business hours, an important factor for sensitive health data services. Moreover, the provider gained scalability, easily ramping the nearshore team up and down as demand. This case highlights that even heavily regulated industries like healthcare can benefit from Eastern European nearshoring, provided vendors meet standards. Many Eastern European IT firms are experienced in domains like medical software or clinical data, and understand compliance (GDPR, patient privacy), making them suitable partners for Western healthcare clients.

Eastern Europe as the Preferred Nearshore Destination

Eastern Europe has firmly established itself as the premier nearshoring region for Western companies. 

Unmatched Tech Talent Pool

Western firms can find nearly any expertise they need – from AI/ML engineers to cybersecurity experts to mobile app developers – somewhere in Eastern Europe. 

Expertise Across Industries

Eastern Europe offers broad domain expertise that caters to all industries seeking outsourcing. Tech startups and software product companies, of course, find top-notch software engineers here. But so do banks and financial services (who leverage Eastern European developers for everything from algorithmic trading systems to mobile banking apps).

Telecom firms use Eastern European teams for telecom software and network management (many telcos historically outsourced to India, but now augment with Eastern European developers for cutting-edge networking software where close collaboration is needed).

Manufacturers and automotive companies look there for engineers who can build embedded systems, connect factory machines to the Internet of Things, and support Industry 4.0 initiatives. 

Retailers and e-commerce brands bring in nearshore developers to launch or improve web and mobile apps.

Because talent here covers so many niches, a UK business can usually find a partner that already understands its sector. An insurer can choose a team that has delivered policy management platforms before. A games studio can hire game programmers.  Eastern Europe offers a one-stop talent shop for almost any domain.

The market is also expanding fast. Statista forecasts that IT services revenue in the region will reach roughly US $15 billion in 2025.

Geographic Proximity

Many Western European companies treat their Eastern European centers as an extension of their domestic operations. Germany, France, and the Nordics have heavily nearshored there for years for this very reason (German firms favor Poland). Now UK companies are following suit in greater numbers, attracted by the same proximity advantages.

Conclusion

Nearshoring presents a viable solution for many UK firms  as the cost gap with far-off locations narrows and the demand for speed and flexibility rises.

Going forward, we can expect this trend to continue and even accelerate. The fundamentals driving it – economic pressure, talent scarcity, the success of early adopters – are unlikely to abate soon. 

Eastern European countries, for their part, are continuously investing in their IT sectors to keep the growth going. The region is forecast to remain a top outsourcing hotspot well beyond 2025, with steady market growth. We may see more UK companies establishing their own captive development centers in cities like Warsaw, alongside engagements with third-party vendors. 

In conclusion, the migration from offshore to nearshore development teams is a defining trend of 2025 for UK firms striving to balance cost, talent and risk. Eastern Europe’s rise as the “nearshore Silicon Valley” of Europe is a testament to the region’s capabilities and close alignment with Western business needs. As companies continue to “rightshore” their operations (finding the best-fit location for each function), Eastern Europe has secured its place as a critical piece of the global tech puzzle – a region where UK businesses can build the future, near home, with confidence and competitive advantage.