Europe’s up-and-coming tech hubs—and how to hire in them

What locations typically come to mind when you hear the phrase "tech hub"? Tel Aviv. London. New York City. Beijing. And of course, the San Francisco Bay Area (also known as Silicon Valley).

Each of these cities has solidified itself as a center of innovation that attracts entrepreneurs, investors, and top tech talent. But if you're hiring for technology roles in any of these cities, you'll likely face a myriad of challenges. In the U.S. market alone, an average of 317,700 openings are projected each year for tech occupations, making it difficult to attract and retain talent in these competitive markets.

There might be a better way to expand your team and hire top talent: by looking beyond the usual suspects and tapping into emerging tech hubs. Across Europe, countries are investing in resources and infrastructure to support tech talent, creating new opportunities for businesses willing to explore new hiring frontiers.

If you're nervous about hiring in an up-and-coming tech hub, consider the advantages of tapping into global talent pools.

Going global? No need to set up entities. Hire talent compliantly in 180+ countries with Oyster.

Competitive advantages of expanding to emerging markets

What's the real advantage of hiring in emerging tech hubs? You're getting first access to skilled talent before everyone else discovers these markets. As traditional tech centers become increasingly competitive, companies that expand their hiring horizons can secure top talent before the market catches up.

By being an early mover in these emerging tech ecosystems, you can unlock benefits such as:

• A larger talent pool: Less competition means access to a global talent pool of highly skilled individuals. With an estimated 281 million international migrants worldwide, companies that hire globally can tap into unique perspectives and experiences.
• Diversity and innovation: Hiring from new regions expands workforce diversity (both in experience and ways of thinking) and fosters innovation.
• Potential cost benefits: Many of these locations offer more affordable hiring options compared to traditional tech hubs where the median annual wage for tech occupations was $105,990 in May 2024.
• Access to niche skills: Different regions may have specialized talent trained in specific technologies or industries.

According to a Springboard survey, 75% of leaders at corporate companies say they face tech skills shortages, which has a negative impact on business performance. Expanding your hiring strategy to include emerging tech hubs can help future-proof your company by addressing skills shortages, decentralizing knowledge work, and giving you a competitive hiring edge.

What to consider when hiring in a new market

So what should you actually consider when expanding to new markets? While these locations offer significant advantages, each country brings its own challenges:

• Complex regulations: Each country has its own set of labor laws, tax regulations, and employment requirements
• Local compliance: Staying compliant can be overwhelming for companies unfamiliar with the local landscape
• Administrative burden: Managing payroll, contracts, and HR processes across borders

The good news? You don't have to navigate these complexities alone.

An employer of record (EOR) can help simplify hiring cross-border talent by handling compliance, payroll, and HR processes—allowing you to focus on finding the best talent without worrying about legal risks or administrative headaches.

Let's explore four European countries where the tech scene is growing rapidly—and how an EOR can make hiring in these locations seamless.

Europe's Evolving Tech Talent Landscape

The map for tech talent in Europe is being redrawn. For years, the conversation was dominated by a handful of major cities, but the rise of distributed work and focused government investment has changed the game.

What's driving this shift?

• Government investment: Countries are investing heavily in tech infrastructure and education
• Remote work adoption: Distributed teams have opened opportunities beyond traditional hubs
• Specialized talent clusters: Different regions are developing expertise in specific technologies

This shift creates a massive opportunity. The economic impact is significant, as remittances sent by migrants to low- and middle-income countries now surpass foreign direct investment in those nations. While competition in traditional hubs remains fierce, new centers are emerging with deep pools of skilled, motivated, and often more accessible talent. Understanding this new landscape is the first step to gaining a true hiring advantage.

Four emerging tech hubs in Europe to watch

Here's a quick comparison of these four emerging tech hubs:

Romania: A fast-growing tech scene with strong female talent

Key city: Bucharest

Romania has become an attractive destination for tech companies due to its low cost of living, low taxes, and a high proportion of female tech talent. The country's capital, Bucharest, is particularly known for its skilled workforce and growing startup culture.

Hiring challenges in Romania

Romania has strict regulatory requirements, such as keeping their government agencies informed about any changes to employment terms. Additionally, the primary language is Romanian, which may complicate contract negotiations and HR processes if the hiring organization isn't fluent in the local language.

How an EOR can help

An EOR can handle all employment documentation ensuring compliance with local labor laws. It can also manage payroll, benefits, and taxes, ensuring full regulatory adherence, as well as help navigate administrative requirements and eliminate language barriers that might arise.

Spain: A thriving ecosystem for tech startups

Key cities: Madrid and Barcelona

Spain is rapidly positioning itself as a global tech hub, thanks to its newly introduced digital nomad visa, thriving startup ecosystem, and diverse workforce. Barcelona alone is home to 2,000 tech companies and 210 technology parks.

Hiring challenges in Spain

Spain's employment laws come from multiple sources, including the constitution, the Workers' Statute, and collective bargaining agreements (CBAs). Each CBA groups employees into different professional categories, which determine salary ranges, working hours, and employee rights. This structure can make it tricky to ensure compliance without local expertise.

How an EOR can help

An EOR makes hiring in Spain easier by ensuring that employment contracts align with local labor laws and CBAs. Instead of companies having to decipher which professional group an employee falls into, an EOR handles compliance, manages payroll and tax filings, and provides a seamless hiring experience—without the need to establish a local entity.

Poland: A rising star in software development

Key city: Warsaw

Poland is emerging as a software development powerhouse, with Warsaw leading the way as an innovation hub. With a strong STEM education system and a booming IT sector, Poland is an excellent location for hiring tech talent.

Hiring challenges in Poland

Employment laws in Poland can be complex and sometimes bureaucratic, and local language requirements can add another layer of consideration. Even if a company operates in English, all employment documentation must legally be maintained in Polish, which can be a challenge if businesses aren't fluent in the local language.

How an EOR can help

An EOR removes hiring roadblocks by handling employment documentation in full compliance with Polish labor laws, ensuring that contracts and payroll adhere to local language requirements. With an EOR managing taxes, benefits, and HR administration, companies can hire talent in Poland without worrying about translation issues or regulatory hurdles.

Portugal: A rising hub for remote work and startups

Key cities: Lisbon and Porto

Lisbon was named the #1 emerging source of engineering talent by startup founders and recruiters surveyed by Sequoia. Porto, with its affordable living costs and high quality of life, is also drawing experienced digital nomads and young talent.

Hiring challenges in Portugal

Employment law in Portugal can be complex and sometimes bureaucratic, and local language requirements can add to the hiring process. Even if English is the working language of a company, employment documentation must be legally maintained in Portuguese, which can require extra administrative steps.

How an EOR can help

An EOR streamlines the hiring process by handling employment contracts and documentation in compliance with Portuguese labor laws. By managing payroll, taxes, and benefits, an EOR ensures that businesses can hire in Portugal efficiently—without needing to navigate local language requirements or complex employment regulations on their own.

Hire in emerging markets and beyond with Oyster

Ready to move beyond the talent scarcity in traditional hubs? Emerging tech hubs in Europe offer exciting opportunities for hiring skilled, diverse, and cost-effective talent. The challenge? Navigating the legal and administrative complexities of international hiring.

The good news is that you don't have to go it alone. A global employment platform like Oyster can handle compliance, payroll, and HR processes, enabling companies to hire top talent in new markets—quickly, efficiently, and with minimal legal or admin hassles.

Ready to expand your hiring strategy? Let's talk about how Oyster can help you tap into Europe's next big tech hubs.

About Oyster

Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.

Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.