In 2007 Western European companies went nearshore mainly to cut costs. By 2020 that reason had already weakened. In 2026 it has essentially gone.
Rates converged, then cooled
Through 2021 to 2023 engineering salaries across Central and Eastern Europe spiked as everyone hired at once. Since then the market cooled and rates flattened. The gap between a mature firm in Poland, Romania, Bulgaria or Ukraine and a comparable one next door is now small. Choosing a partner on hourly rate alone is a race to the bottom, and in today's oversupplied market there is always someone cheaper and worse.
AI changed the math again
With AI assisted development, raw "bodies per euro" matters even less. What matters is senior judgment, architecture, and teams that actually know how to use AI well. You are buying capability and trust, not headcount.
So why nearshore at all in 2026?
Three reasons, none of them price:
- Communication and collaboration, which depend on proximity, time zone, language and business culture.
- Team stability and seniority, which come from the right team setup and a partner that keeps its people.
- Access to the right, AI fluent skills you simply cannot hire at home right now.
A word on Ukraine and the region
The old framing of "cheapest, biggest talent pool" is dated, and for Ukraine it is tone deaf. Ukrainian firms have shown remarkable resilience and many now operate distributed across the region; others sit in Poland, the Baltics, the Balkans or Romania. Choose on fit and stability, not on a cost map from 2010.
The takeaway: when a provider leads with "we are cheaper," that is the weakest possible reason to talk to them in 2026.