'Life is pretty good here for IT people': Where techies earn five times the average salary

Romanian software engineers have seen their paychecks rapidly increase over the past decade. Will the country maintain its advantage as an outsourcing location?

When you look at the numbers, a software engineer in Romania makes as much as a van driver does in the UK. But when you take into account the cost of living, the picture shifts dramatically. In Romania, IT professionals make headlines for earning five times the average local salary, and most recruiters are talking about wages rising up to 15 percent next year.

Software engineers' salaries

However, for the moment, there is a significant gap in Europe between the East and the West. Tudor Constantin, an experienced Perl developer working in Cluj-Napoca for software company Evozon, has considered the idea of moving to Western Europe or the US, but gave up the idea after he compared income and living expenses.

"At the moment, it's not worth the trouble. A software developer in Cluj with seven years' experience earns an average of €1,700 a month," he says. "I've calculated using numbeo that in order to afford the same kind of life, I'd have to make about €8,000 in New York." He included rent, utilities, meals, cabs, and even the occasional beers and nights out.

Constantin would move abroad only if he were to set up his own startup. "In the US, there are investors, important technology websites, and ecosystems for entrepreneurs. I'd build a startup in Romania, because it's a low-cost location, and launch it in the US," he says.

Most senior software developers in the country have a take-home pay of €1,700 to €2,200 a month, according to a study conducted by recruitment agency Brainspotting. That accounts for €24,000 net a year, or the equivalent of $30,000. Junior engineers, with only a bit of experience, get €700 to €1,100 a month.

"Usually, companies look for Java, .Net, and PHP developers. They want employees who are more than simple doers. They want developers with good communication skills, people able to share knowledge," Maria Hostiuc, ICT recruiter at Brainspotting, told ZDNet.

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Higher on the payscale are project managers (who earn €2,000 – €2,500 a month) and IT managers (€2,100 – €2,700). Meanwhile, quality assurance and network/system administrator jobs start at €500 per month for a junior employee and can reach up to €1,800 for a dedicated senior professional.

Certain skills are paid better than others, Claudiu Lazar, IT recruiter at Adecco Romania, told ZDNet. Candidates for Ruby on Rails or Python are scarce and therefore companies are willing to offer them more, he says. "Salaries vary from €400 to €4,000 per month, dependent on experience and the job the company offers."

At the moment, software development managers get between €2,200 and €3,500 a month, software architects are in the €1,800 – €2,500 range, while database developers earn  somewhere in the €900 to €1,900 range. Other desired jobs are team leader (€1,500 – €2,200), software implementation consultant (€800 – €2,900), project manager (€1,600 – €3,000) and web designer (€500 – €1,500), according to Adecco.

Three-quarters of IT professionals are registered as employees for the companies they work for, while a good 11 percent receive their entire salary through a self-employed contract. The rest of workers are a combination of the two. "In some cases, the people who receive  their payment through a self-employed contract or through a mix of contracts, also receive a bonus of 15 percent on average," according to a study done by Brainspotting.

Changing jobs?

The end of 2014 is busy for both HR and IT professionals. "Right now, among our top recruiters in the field, we have Oracle, Electronic Arts, Siemens, and Amazon," a spokesperson for BestJobs.ro recruitment website, told ZDNet. Jobs ads for PHP developers get more resumes, compared to the ones offering a position of .NET/C++ application developer.

In the first ten months of 2014, the recruiter said there have been around 44,000 IT jobs posted on the site, an increase of over 35 percent year-on-year.

"Usually, most companies advertise a good work-life balance, with some even allowing their employees to set their own schedule if they're students. Other benefits are healthcare services at a private medical center and meal vouchers."

The job market is dynamic, so professionals in the field have learnt not to settle for less."Usually, an IT employee has the same job for two or three years, but there are some who change it after a year, if they find a more interesting project and are eager to learn," Adecco's Lazar says.

"Most of them change jobs because of the salaries. Not that they have low salaries, but because other companies are willing to offer them more. They're thinking about changing the job if they get at least 20 percent more," Maria Hostiuc, an ICT recruiter, told ZDNet.

Software developers and other professionals from this field are also motivated by how geeky the work environment is and by other benefits, like a company car and lately even all-inclusive holidays paid for by their bosses. They also stress phrases like "great team" or "freedom in taking job-related decisions" are attractive in a job advert.

Brainspotting's studies show that about a third of the IT candidate show "real interest for changing the current job", and only 16 percent of them are not interested under any conditions.

Harder and harder to find skilled developers

Depending on how much a company wants to spend, finding the perfect candidate for a job can take some time.

"There are positions for which we need up to a month to find the right candidate. Those are usually niched or need knowledge of new technologies. Therefore, the number of professionals is relatively low," Adecco's Lazar says.

Adrian Punga, head of technology and backend development at Kalon Global Group in Bucharest, agrees. He told ZDNet it isn't easy anymore to find people with strong IT skills, "mainly due to the big number of wannabes attracted by the higher than average pay in the IT sector".

"Good HTML5 developers are scarce as the technology is very new. Good UX designers are also hard to find because we don't have any education system that can produce them in Romania," he says.

Salaries will continue to rise in 2015

Adrian Punga gets job offers "at least once a month," especially from companies located in London and Berlin. It's a similar situation for many Romanian IT experts, Brainspotting says. 35 percent of these professionals have never had to reply to a job ad, its study shows, as the demand in high.

Salaries in the IT sector have grown at a rate three times higher than the average salary in the past year, according to the National Institute of Statistics in Romania.

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There are several drivers behind the change. First of all, companies like Oracle, Microsoft, or IBM have opened large offices in Bucharest and throughout the country. They want the best and the brightest - and have resources to pay them.

Secondly, outsourcing companies which pay well are experiencing an all-time high in the area. And third, there is an income tax exemption for developers who have finished a long-term academic degree.

This year alone, both Adecco and Brainspotting estimate a 10 to 11 percent salary growth in the IT sector. Projections regarding 2015 go even further. "We definitely see an increase next year of even 15 percent for more complex positions and those related to new technologies," Lazar says.

Luminita Fediuc, senior HR strategy consultant at Brainspotting, estimates job growth of 5 to 12 percent in 2015. "Our data suggests that the number of jobs available will continue to expand in the next three years," she says.

Worldwide, a Mercer survey projects a salary increase of three percent for the high-tech sector next year. According to the report, "professional non-sales IT employees were identified as most difficult to recruit and to retain".

Software developers like Adrian Punga or Tudor Constantin believe it is better, financially speaking, to work in Romania, where rent is only a fraction of that paid in Western Europe, and beer is only 1 euro a bottle.

Adrian Punga says he didn't think much about changing the country where he lives and works. "Life is pretty good here for IT people. Better than in most other countries. I remember I saw a study somewhere that concluded that Romania is just third in the world after the US and UK on the standard of living for IT people."

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