Emerging European IT Hubs Worth Considering in 2026

Beyond the established hubs of London, Berlin, Amsterdam, and Dublin, several cities have matured into credible alternatives for international companies looking to balance talent quality, cost, and access to the EU market.

Lisbon and Porto have attracted significant investment from US and UK tech companies, partly driven by time zone alignment with North American markets and lower operational costs than Western European capitals. Portugal’s strong university pipeline in engineering and computer science, combined with high English proficiency, makes it particularly attractive for software development and data teams.

Warsaw and Krakow continue to absorb a disproportionate share of nearshoring activity from Western European firms. Poland produces around 80,000 IT graduates annually according to Eurostat, and median technology salaries remain significantly below Germany or the Netherlands while skill levels are comparable for backend, data engineering, and cloud roles.

Barcelona has strengthened its position as a hub for product and engineering talent, particularly for companies that want a Mediterranean-timezone office with strong startup ecosystem density. The city combines a large pool of international talent with lower salary expectations than London or Paris for equivalent seniority levels.

How Salary Costs Vary Across European IT Hubs

The salary differential between European IT hubs is one of the most important variables in any location decision. According to the TalentUp Salary Platform, a mid-level Software Engineer earns a median of approximately €59,700 in Germany, €47,100 in France, and €40,000 in Spain — a gap of nearly 50% between the highest and lowest of these three major markets. Eastern European markets show even larger differentials.

For location decisions, raw salary data is only part of the picture. Employers should factor in employer social contribution rates, which vary substantially: France carries some of the highest employer contribution burdens in the EU at around 45% on top of gross salary, while certain Eastern European markets sit well below 25%. The total employment cost per head in different locations is rarely proportional to the gross salary difference alone.

The European Commission’s Digital Economy and Society Index (DESI) provides annual country-level data on digital skills penetration, broadband infrastructure, and ICT specialist employment rates — all useful indicators for location planning beyond pure salary cost. Countries that rank highly on DESI metrics tend to have both the talent density and the infrastructure to support a technology office.

Regulatory Considerations When Opening an EU IT Office

Beyond talent and cost, international companies opening offices in the EU need to account for an evolving regulatory environment. The EU Pay Transparency Directive will require companies with 150 or more employees to report gender pay gaps by worker category from June 2027. For companies establishing a new office, the compensation structures set today will become the dataset examined in the first reporting cycle.

Starting with a defensible, market-anchored compensation structure — benchmarked to the specific country where the office is located — is significantly easier than retrofitting a pay equity framework after offers have been made and expectations set. The guide on salary benchmarking for international companies covers how to structure compensation consistently across multiple European offices from the outset.

Finally, talent retention is as important as talent acquisition. Companies that open offices in new markets often underestimate the cost of attrition in the first 12-24 months, when local competitors can poach new hires who were attracted by the international brand but weren’t offered a compelling long-term compensation package. A clear compensation philosophy and transparent progression frameworks — particularly important under the requirements of the EU Pay Transparency Directive — help anchor talent once they are on board. Location decisions that factor in retention, not just recruitment, tend to produce offices that become durable capability hubs rather than revolving doors.

According to TalentUp data, organisations that benchmark compensation systematically against external market rates are significantly more likely to report strong talent retention and employee trust scores. HR and compensation teams can use the TalentUp Salary Platform to access live, role-specific salary benchmarks across European markets and build the evidence base needed for credible, transparent pay decisions.

Eastern Europe: The Cost-Quality Equation for IT Hubs

Poland, Romania, Czech Republic and Hungary have matured into significant IT hub options for companies seeking to combine EU regulatory compliance with cost advantages relative to Western Europe. Warsaw and Krakow in Poland host major development centres for dozens of Fortune 500 companies and have built deep talent pipelines through strong university engineering programmes. Romanian cities, particularly Cluj-Napoca and Bucharest, have seen rapid growth in technology employment and offer salary costs 40 to 60% below Western European levels for equivalent engineering roles, while providing full EU labour market access and an improving infrastructure base. The Czech Republic, anchored by Prague’s established tech scene, sits at a mid-point: higher costs than Romania or Bulgaria but with a talent market that combines strong English proficiency, Central European cultural alignment, and well-developed professional services infrastructure. All four markets have seen significant wage inflation in technology over the past four years as the expansion of nearshoring operations has driven up demand for local talent faster than supply can adjust, which means cost projections from three years ago may significantly underestimate what competitive salaries look like today. Using current salary benchmarks from the TalentUp Salary Platform is essential when evaluating Eastern European hub options, because the markets are moving fast and the cost advantage calculations can shift materially between the planning and launch phases of a hub establishment.

Talent Availability and Skills Mix by Location

Beyond cost, the skills mix available in each potential hub location is a critical differentiator. Berlin and Amsterdam attract strong product and full-stack engineering talent and offer international candidate pools drawn by high quality of life, but competition for talent is intense and salaries reflect this. Dublin has built a specialist hub for enterprise software, cloud and fintech talent due to the presence of major US technology companies that have created a dense ecosystem of experienced professionals, but this also means that any employer entering the Dublin market competes directly with the compensation benchmarks set by US hyperscalers. Barcelona and Madrid have emerged as genuine alternatives to the established Northern European hubs for technology companies, offering lower costs than Paris, Amsterdam or Zurich while providing access to a large talent pool that is valuable for companies with broader European or Latin American operations. Stockholm and Helsinki remain the strongest hubs for deep technology and R&D roles, particularly in telecommunications, gaming and industrial software, where the Nordic engineering tradition produces specialists that are difficult to find elsewhere in Europe. Understanding the talent landscape in each potential hub location requires current, role-specific data: the peer group benchmarking analysis should compare not just cost levels but the depth of available talent in the specific engineering or product disciplines the hub will require.

Setting Competitive Pay for Your European IT Hub

Establishing competitive compensation for an IT hub requires more than picking a salary from a general market report. The relevant peer group for benchmarking is the specific set of employers competing for the same talent in the same location, not the average of all employers in a country. A fintech company opening a security engineering hub in Warsaw competes primarily with the Warsaw offices of other international financial services technology employers, not with the full range of Polish employers. Setting pay based on Polish national averages rather than Warsaw fintech employer benchmarks will produce below-market offers that fail to attract the talent needed, while overpaying relative to the actual competitive market wastes budget that could support headcount growth. A rigorous salary band audit for the new hub establishes the salary band architecture from day one, with bands calibrated to the right peer group and reviewed annually to track the rapid market movements common in Eastern European technology markets. The EU Pay Transparency Directive adds an additional dimension for European hub compensation: salary ranges disclosed in job postings must reflect actual band structures that are consistent with the pay of existing employees doing comparable work, which means hub salary frameworks need to be designed with transparency in mind from the start rather than retrofitted later. The TalentUp Salary Platform provides the hub-level salary benchmarks that make this possible, covering major European technology hub cities with role and seniority-specific data.

Remote Work and the Impact on EU IT Hub Strategy

The widespread adoption of remote and hybrid working has complicated traditional IT hub strategy in ways that are still playing out. When a company opens an IT hub in Warsaw, it is no longer competing only with other Warsaw employers for talent: it is also competing with remote-first employers in London, Amsterdam and beyond who can offer equivalent or higher salaries without requiring relocation. This dynamic has contributed to the rapid wage inflation visible across Eastern European technology markets since 2021, as local salary expectations have been pulled upward by remote employment offers from Western European and US companies. Hub strategy now needs to account for the remote-versus-office dimension explicitly: what is the office attendance expectation, how does this compare to the default for remote employers, and how much salary premium is needed to make the in-person option competitive? Location still matters, but for different reasons than before: a physical hub creates collaboration, culture, and career development opportunities that remote employment typically does not, and these factors matter most for the cohort of professionals who have decided that in-person connection is important enough to factor into their job choices. Designing compensation for a European IT hub means understanding both the market rate for local talent and the remote employment alternatives that top candidates will be weighing, which requires the kind of current, granular benchmarking data that the TalentUp Salary Platform provides across all major EU technology markets.

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