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- That large companies are opening their development centers in Croatia means that the global IT scene has recognized the potential Croatia has in this sector
- Domestic legislation and the tax regime for high-tech workers are not competitive in the context of the EU
- In domestic IT, over the past two years, more than a billion dollars in investments have come in, shares in such companies are the main motivation for the most sought-after experts when choosing an employer
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One of the most successful European web retailers About You opened its own Tech Hub in Zagreb this week. They are aware, they say, that the best talents for the company are not only in Germany where About You was founded, but that ideal experts can be found all over the world. Therefore, they sought locations where a large number of the talents they are looking for are located, which is why they chose Croatia, they responded from the company that has become an indispensable web shop for numerous local consumers.
In addition to the Zagreb Tech Hub, About You has recently opened hubs in Cluj in Romania and in Prague in Czech Republic. The goal of such hubs is to become a center for this e-retailer in the local tech community, while on the other hand, the role of the hub will also be to provide a kind of ‘social anchor’, as they called it in the company, for their employees in Croatia.
As they convey, they are already looking for various profiles of experts, specifically experienced quality assurance engineers and software developers (Backend, Frontend, Fullstack, with PHP, Golang, NodeJS, React, VueJS, or Dart/Flutter experience) at various levels.
– Although our developers can work remotely from anywhere in the EU, we are very proud of the team spirit and work culture we have built at About You. By opening Tech Hubs, we want to offer our tech talents the best of both worlds, remote opportunities and on-site work culture – they stated from the company, adding that employees working in the Hub will be part of their international tech teams.
They are not the only ones who have recognized the broad pool of IT talent in Croatia. A month ago, the German software and consulting company Scheer opened a branch in Zagreb from which it plans further expansion in the Adriatic region and Southeast Europe. Scheer will thus employ experts through its own ‘Zagreb’ hub for key products who will work on projects across Europe from Zagreb, and since Scheer’s key partner is the software company SAP, the main scope of business is consulting on the application of SAP products and solutions.
What Does This Mean for Domestic IT Companies?
Last year, the largest global online retailer Amazon, specifically its company Amazon Web Services, opened a development center in Zagreb. One of the most positive news in the first pandemic year, 2020, at least as far as Croatia is concerned, was the announcement that Porsche, in collaboration with the Croatian IT company Infinum, is opening a development center in Zagreb named Porsche Digital Croatia.
As announced at the time, the goal of this center is to invest 10 million euros in various projects over the next few years, and in addition, the entire center was supposed to work on the development of software for Porsche’s ecosystem, which means they will employ, which they are already doing, software engineers, as well as experts in artificial intelligence and data science.
One such development center was also launched that same year by one of the most desirable Canadian employers, the IT company FreshBooks. FreshBooks is an online accounting application designed for small and medium-sized enterprises that allows them to easily manage finances without the need for an accounting service or hiring someone to do just that, and in addition to programmers, they employ experienced development engineers with several years of experience, so-called seniors.
All of them are coming to Croatia because they believe that there is a large number of IT experts here. But what does this mean for domestic IT companies?
– The very fact that large companies are opening their development centers in Croatia means that the global IT scene has recognized the potential Croatia has in this sector. Of course, the competition for employees will be greater, but we do not think that this means that everyone will suddenly switch to Microsoft, Facebook, or TripAdvisor because people in IT still have different desires and opportunities.
Namely, someone who works for a domestic IT company still has the opportunity to work for global names from various industries, such as fintech, medtech, etc. It is good that competition is coming because it is always positive, but there is a big difference between working in the listed companies and domestic companies, so I believe that most will choose what suits them – said for Lider Filip Ljubić, CEO of Q agency, which recently opened its own office in London due to its presence in foreign markets.
According to him, domestic companies will have to fight for IT experts in such an environment, and they will only succeed with ‘competitive salaries according to real desires and possibilities, as well as various benefits’.
– We at Q have focused this year on how to make our people as satisfied as possible. The benefits we offer have resulted in us receiving the Employer of the Year award for two consecutive years. Among other things, we offer our people subsidies for rent, cryptocurrencies, paid kindergarten, free yoga classes, free psychotherapy, Mental health day, and many others – said Ljubić.
Zoran Šteković, CEO of Shape, says that the fight for quality experts is not specific to Croatia; it is an integral part of life for every IT company on a global level. What they offer at Shape, he emphasizes, is care for the development of experts who have the opportunity to work alongside seniors and on excellent projects. Of course, the conditions must be competitive, and that is a prerequisite, but the learning and advancement that can be gained at Shape, he believes, cannot be obtained everywhere.
– The IT world is changing rapidly, and we believe that our advantage as a domestic IT company is our agility, as well as the combination of design and technology on which we place great emphasis. Along with all this, it is also important what kind of culture you have because people spend a lot of time at work and with colleagues, and we take pride in the culture and relationships within the company – said Šteković.
The Import of Foreign Experts is Slow
The globalization of the labor market, whether through the arrival of foreign companies in Croatia or through the availability of remote work for any company in the world, has been significantly changing the labor market in Croatia for some time, especially the IT sector, emphasized Mihael Sedmak, CEO of Agency04. He claims that the approach of the company he leads to this challenge is simple.
As a company, they strive to highlight their advantages in the market, which is a focus on the satisfaction of the people who work for the company. If employees are satisfied with their earnings and are enabled to work on truly interesting and complex projects, then, Sedmak deeply believes, Agency04 is a desirable employer.
– We have many experienced people working with us from whom a lot can be learned, which is an interesting benefit for juniors and mid-levels. Within the company, we regularly organize internal knowledge sharing, and with the Team Lead career path, our experienced engineers can choose to be knowledge spreaders – Principals. Of course, we strive to provide our employees with real benefits – more vacation days that they can actually use, benefits from the health and well-being sphere, benefits for parents, as well as a quality team and manager with whom a person works. If both the professional and human components of the relationship with the immediate manager are of high quality, then people are happy to stay in the company – emphasized Sedmak.
Davor Runje, chairman of the CISEx board, the association of independent software exporters, notes that in the circumstances in which the IT industry finds itself, considering the increasing competition in the market, as well as regarding remote work, the industry itself is doing what it can.
– Unfortunately, domestic legislation and the tax regime for high-tech workers are not competitive in the context of the EU. One problem is very high taxes on salaries. This problem has been partially solved by flat-rate businesses, but again at the expense of the domestic industry, which pays higher taxes than foreign competition that employs domestic experts through this very tax-attractive model. Another set of problems is related to underdeveloped legislation that does not allow for simple and tax-free issuance of shares in companies/startups. It should be noted that over the past two years, more than a billion dollars in investments have come into domestic IT, and shares in such companies are the main motivation for the most sought-after experts when choosing an employer – said Runje, adding that the import of foreign experts from outside the EU is slow and uncompetitive.
A pity, because, he concludes, for example, Poland has issued 13,000 visas for foreign workers through its Poland Business Harbor, who, attracted by the simple process and low taxes, are coming en masse from countries such as Ukraine and Belarus.
