Nearshore Software Development Trends in 2025 for UK Enterprises

In 2025, UK businesses are under cost pressure and cannot find enough local technology talent, so they are augmenting their software teams with developers from nearshore countries. This report examines how UK companies are using nearshore outsourcing to reduce costs, which regions they favour (with a focus on Eastern Europe), the qualities they seek in augmentation vendors (from professionalism to enthusiasm), how selection criteria reflect chief information officer and procurement priorities, and whether preferences vary by industry or company size. Insights from chief information officer surveys and interviews are included.

Cost-Cutting Through Nearshore Outsourcing

Facing persistent inflation and recessionary pressures, chief information officers have made cost control their top priority for 2025. Many information technology leaders expect to tighten budgets and reassess their global sourcing strategies this financial year. UK companies are no exception. Most of them intend to expand outsourcing, adding billions of pounds to total expenditure.

The primary drivers are lower operating costs and acute talent shortages. Nearshore software development — partnering with teams in neighbouring, lower-cost countries — has become a cornerstone of these efforts. By augmenting in-house staff with nearshore developers, UK enterprises typically cut labour costs by thirty to fifty per cent compared to domestic hiring. 

In Eastern Europe, savings average about forty per cent per year and can reach seventy per cent per employee, thanks to significantly lower salary levels without a corresponding drop in quality.

For UK organisations under pressure to do more with less, nearshoring delivers a practical, scalable way to contain costs while closing critical skills gaps.

Enterprise sourcing priorities

UK companies turn to nearshore team augmentation to trim fixed headcount costs while securing the specialised talent needed for digital initiatives. 

The trend is replacing permanent hires with flexible outsourced staff to weather economic uncertainty. Despite the technology talent shortage, the recessionary climate is expected to push more companies to cut or freeze permanent information technology positions in favour of outsourcing. 

Staff augmentation allows UK enterprises to scale teams up or down on demand, avoiding long-term salary commitments. This agility is especially valuable when chief information officers are under pressure to rapidly reprioritise technology projects. Many information technology leaders expecting a recession have delayed or halted discretionary projects, and augmentation offers a way to restart those projects quickly when needed by engaging external developers. 

Preferred Nearshore Regions for UK Enterprises

When UK companies outsource software development, they increasingly favour nearshore regions that combine lower costs with cultural and time zone proximity. Rather than the traditional offshore destinations such as India (which are geographically distant and often culturally distinct), UK enterprises are gravitating towards Central and Eastern Europe as the nearshoring hub of choice. India has gradually lost ground in information technology outsourcing, while nearshoring to Eastern Europe is on the rise.

Eastern Europe stands out as the top nearshore region for UK firms in 2025. There are several reasons for its popularity.

Geographic and time zone proximity

Eastern European hubs sit just one hour ahead of the UK, allowing real-time collaboration, overlap in working hours and cost-effective on site visits. In contrast, far-flung locations in Asia or Latin America introduce wide time gaps and coordination risk. Nearshore therefore offers UK firms the benefits of outsourcing with minimal disruption to daily workflows.

Large talent pool and high-calibre skills

The region hosts roughly one point three million software developers and thousands of information technology companies. Poland provides especially deep benches—Poland alone counts hundreds of thousands of engineers. Multiple Eastern European countries rank in the global top ten for developer expertise, thanks to strong computer science programmes and a longstanding emphasis on mathematics and engineering. UK organisations gain access to world-class talent that matches Western Europe for technical quality.

Compelling cost advantages

Lower wage levels and living costs create a thirty to fifty per cent labour arbitrage versus UK rates. Typical developer fees in Poland run about forty per cent below those of equivalent UK contractors. With the fully loaded cost of a UK engineer frequently exceeding one hundred pounds per hour, nearshore teams deliver annual savings per developer.

Cultural compatibility and English fluency

Eastern European teams share Western business norms—direct communication, pragmatic problem solving and agile ways of working—making collaboration smooth. High English proficiency further reduces friction, enabling nearshore developers to integrate almost seamlessly with UK in-house staff.

Ease of doing business and regulatory alignment

Many Eastern European countries are European Union members, so their legal frameworks, data protection regimes and procurement standards are familiar to UK firms. General Data Protection Regulation alignment, straightforward contracting and strong intellectual property protections lower onboarding barriers compared with distant jurisdictions.

For chief information officers pursuing cost efficiency, skills access and delivery agility in 2025, nearshore augmentation in Eastern Europe offers a balanced, low-risk strategy that preserves quality while delivering measurable savings and scale.

Characteristics UK Enterprises Seek in Augmentation Vendors

Choosing the right augmentation partner is critical. The goal is to find a vendor that not only meets technical needs at a good price, but can also delight senior stakeholders (chief information officers, chief technology officers) and satisfy rigorous procurement standards. UK enterprises therefore evaluate potential software development partners on a mix of hard criteria (proven capabilities, security, compliance) and soft factors (culture, communication, enthusiasm). 

A chief information officer’s reputation is on the line when bringing in an external team, so they favour vendors who will make them look good by delivering excellence. 

UK companies in 2025 seek augmentation vendors with the following characteristics.

Proven track record and quality focus

Enterprises shortlist vendors that can demonstrate successful deliveries of comparable scale and domain. Chief information officers routinely interview several past clients to validate quality and reliability, aware that inadequate vetting is the root cause of many outsourcing failures. Procurement teams therefore favour suppliers with detailed case studies, strong testimonials and recognised industry awards. Formal credentials for quality management or maturity ratings add confidence that the partner’s processes and output will meet corporate standards.

Financial and operational stability

Especially for larger enterprises, the vendor’s business stability and governance are important. No chief information officer wants a critical partner to go bankrupt or collapse mid project. 

Thus, procurement will often evaluate the vendor’s financials. For long-term contracts, clients may request financial statements or proof of financial health. Large vendors are typically asked to carry sufficient insurance and may need to have certain certifications in the UK context. 

Operational maturity (having defined escalation paths, service level agreements and an account management structure) is also valued. 

Senior clients expect the vendor to have robust processes in place, not an ad hoc operation. Meeting these requirements ticks the boxes for corporate procurement and reduces risk for the chief information officer sponsor.

Domain expertise and skills match

UK enterprises shortlist vendors that can match their domain and technical stack. A bank, for example, will favour a partner with financial technology credentials and engineers certified in cloud, cyber security or data analytics. 

Selection teams examine portfolios, case studies and certifications to confirm those skills. 

Providers able to supply niche expertise — artificial intelligence, machine learning, blockchain — and scale engagement models from staff augmentation to full project teams gain an edge. 

The objective is to extend in-house capabilities with seasoned specialists, not general coders.

Balanced team composition

UK buyers favour partners that field blended teams: senior architects who set direction and mentor, and mid-level developers who add energy and cost-efficient capacity. Procurement therefore chooses suppliers that can sustain the right ratio of experience to enthusiasm over the life of the engagement.

Cultural fit and communication skills

Any outsourcing relationship requires tight collaboration, so cultural alignment is a key vendor trait. UK firms look for teams that can integrate seamlessly with their work culture, whether that means understanding agile ceremonies, having a similar approach to deadlines or being able to communicate openly. 

Eastern European vendors often win points here. Their developers typically have a Western work ethos, strong teamwork skills and excellent English proficiency. 

High English fluency is essential for most UK engagements. Developers must be able to participate in technical discussions and draft documentation in English. Time zone alignment, or at least overlap, also falls under fit—a nearshore partner who works roughly the same hours allows for real-time meetings and faster feedback loops, which chief information officers and project managers greatly prefer. 

Procurement questionnaires frequently include items about language capabilities, time overlap and cultural training to gauge this fit. 

Additionally, communication style matters. UK clients often appreciate the direct communication and problem-solving attitude seen in many Eastern European and nearshore teams. Developers in these regions are often proactive in offering best practices to improve product quality, rather than coding without question. Such proactive communication can delight chief information officers, as it demonstrates the vendor’s team is engaged and thinking about the client’s best interests. 

Conversely, vendors that seem overly hierarchical, inflexible or poor at knowledge sharing tend to be avoided. UK enterprises seek a cultural fit where the augmented team feels like an extension of their own, sharing similar values, work discipline and collaboration norms.

Energy, enthusiasm and proactive attitude

Beyond hard skills, chief information officers often talk about the attitude of the vendor team. Senior stakeholders are delighted when they see external developers who are passionate about the work and go the extra mile. Enterprises therefore favour vendors who can instil energy and enthusiasm in their teams. 

This might manifest as developers who actively propose innovative solutions (not just doing exactly what is asked), who stay curious about the business context and who demonstrate a genuine eagerness to achieve results.

An outsourcing relationship is most successful when the vendor’s staff exhibit ownership of outcomes—treating the project as more than just a pay cheque. 

Eastern European teams are often praised for their dedication, self-motivation and pride in their craft, which often exceeds the commitment seen in some other outsourcing destinations. Motivation issues can plague low-cost offshore teams paid minimal wages, whereas nearshore developers tend to be more invested in the work. Vendors that cultivate a start-up-like enthusiasm or a can-do, problem-solving culture in their workforce are highly sought after. 

Such an atmosphere often correlates with younger, dynamic companies or teams where developers are continuously learning new skills. 

From the client’s perspective, an enthusiastic augmented team is more likely to innovate and deliver value-added insights, not just code to specification, and this delights chief information officers who see their outsourcing engagement driving business progress.

Security, compliance and process rigour

UK procurement demands evidence of security, compliance and mature processes. Vendors must hold current security certifications, apply secure development practices, and sign non-disclosure agreements and data-processing agreements. General Data Protection Regulation adherence is non-negotiable when personal data is handled. Buyers also expect disciplined project governance, plus supplier risk checks on sanctions status, financial health and, for critical contracts, on site audits. 

Chief information officers often interview proposed engineers, review CVs and run coding tests. Established suppliers accommodate these steps and emerge with enterprise-ready status—proof they can pass scrutiny and protect the client’s interests.

In summary, the ideal augmentation vendor for a UK enterprise in 2025 is one that combines hard credentials with a spark of passion: a firm with a proven, professional track record and compliance pedigree, and a team that is culturally aligned, motivated and eager to contribute. Such vendors not only deliver on paper but also build a trusted relationship, effectively becoming an extension of the enterprise’s own team. 

This is what ultimately delights senior chief information officers: when an outsourcing partner consistently meets key performance indicators, proactively solves problems and makes the chief information officer’s organisation more successful without constant oversight. 

As many chief information officers remark, they avoid investing in developing in-house information technology services that third-party vendors can do better. The underlying expectation is that the vendor will indeed do it better, faster or cheaper, justifying the chief information officer’s decision. The characteristics above are what give chief information officers that confidence in an augmentation partner.

Industry and Size Variations in Augmentation Preferences

While the core trends apply broadly, there are nuances by industry and company size in how UK enterprises approach team augmentation and outsourcing.

Enterprise size

Larger organisations tend to outsource and augment more extensively and systematically than smaller ones. Outsourcing adoption rises with company size. Micro firms still handle most work in house, but nearly all large enterprises delegate at least some functions to third-party providers. Large enterprises often have vendor management offices and procurement teams dedicated to optimising outsourcing contracts. 

In 2025, growth in outsourcing is expected across all company sizes, but especially amongst mid-market firms. Small and mid-sized enterprises have historically outsourced less, often due to cost or fear of losing control, but the ongoing technology talent crunch and need for rapid digital deployment have pushed even start-ups and scale-ups to seek augmentation. 

Small and mid-sized enterprises may rely on outsourcing to fill expertise gaps they cannot hire for internally. Start-ups bring in external developers to release a minimum viable product quickly, bypassing the cost and delay of permanent hires, while large enterprises conduct formal procurements—complete with security reviews, audits and site visits—and favour established partners that can scale. Smaller firms favour boutique partners or freelancers for their speed and flexibility, but they are also learning to vet suppliers carefully because a failed project can be ruinous. 

Enterprise clients can enforce stringent service levels through formal contracts, while small and mid-sized enterprises often rely on faster, relationship-based selection of augmentation partners.

Industry sectors

All industries in the UK are leveraging technology outsourcing to some extent, but technology, financial services and the public sector are amongst the heaviest users of team augmentation. More than sixty per cent of technology and financial services firms already outsource back-office work, and both sectors are still expanding their use of third-party partners in 2025. 

Technology start-ups embed global talent from day one, while banks and insurers have long shifted information technology development and support offshore to lower costs. Financial services buyers impose particularly strict vendor checks, demanding registration in approved qualification schemes and adherence to information security and payments data standards. They might also prefer nearshore locations for data sovereignty and oversight reasons. Many banks and financial technology companies have found Eastern European talent particularly useful for development of trading systems, mobile banking applications and so on, given the strong pool of financial technology-savvy developers in key cities.

 The public sector likewise relies heavily on information technology outsourcing, channelling work through multi-year framework agreements with pre-approved suppliers. 

Lately, even public agencies have shown interest in more agile staff augmentation, not just large contracts. However, public sector projects demand high transparency and value for money, and vendors must go through procurement frameworks and meet accessibility, security and compliance rules. 

Eastern European vendors that have UK entities or partnerships have started to tap into this market by qualifying on such frameworks, offering the public sector an alternative to the big consulting firms at a lower cost.

Retail and e-commerce

These firms ramped up digital initiatives and often use augmentation to accelerate development. They value partners with experience in customer-facing technologies and who can be responsive during peak seasons.

Manufacturing and logistics

Industry 4.0 and Internet of Things projects have prompted more collaboration with external software teams, and they might prefer vendors with knowledge of industrial systems and those who can integrate software with hardware.

Healthcare and life sciences

These sectors are cautiously increasing outsourcing and need vendors who understand healthcare regulations and can ensure patient data protection. Cultural alignment is key here due to user-centric design needs and regulations.

Telecommunications and media

Many telecommunications companies have used Indian information technology services for years, but are now adding Eastern European augmentation for software-defined networking development, where proximity helps coordination.

Cost and talent drive outsourcing everywhere, but risk tolerance varies by sector. A bank’s chief information officer may require on site inspections and thorough background checks, whereas a technology start-up often relies on code tests and portfolio reviews. Geography follows suit. UK buyers typically look to Eastern Europe, and within the region Poland attract companies in niches where they have earned strong reputations.

Procurement and Chief Information Officer Attitudes

Chief information officer opinions on outsourcing span a spectrum shaped by recent outcomes and corporate strategy. 

Transformation-minded leaders treat augmentation as an explicit extension of their own capacity. A chief information officer at a major NHS trust, for example, executed a cloud-first shift with external partners at a fraction of in house cost. Other public sector leaders have pulled some functions back inside to regain agility, yet still tap vendors for niche skills.

The prevailing pattern is balance. Keep strategic leadership internal and delegate work that outside specialists can do faster or cheaper. By 2025, most organisations run a hybrid model—a compact in-house group of product owners and architects collaborating daily with a nearshore development squad—combining control with scale and savings. 

Relationship quality is now central. Deals are iterative and consultative rather than transactional. Vendors that offer thought leadership and challenge ideas constructively win favour, especially in fast-moving fields.

How Belitsoft Can Help

Belitsoft is the nearshore partner UK organisations trust when they need to save 30 to 50 per cent on development spend, overcome hiring bottlenecks, and remain fully compliant, all while working within the same business hours. From enterprise cloud modernisation to start-up MVPs, our Eastern European engineers become an extension of your team within days and deliver production-grade software at London quality.