Introduction

For over a decade, nearshoring to Southeast Europe (SEE) has offered DACH companies a reliable cost–capability balance. Yet 2025 signals a turning point: the talent gap that once fueled growth in SEE is closing faster than most forecasts anticipated.
Rising wages across Europe, demographic stagnation in the Western Balkans, and accelerating DACH demand for skilled service delivery are converging into a single pressure point — shrinking nearshore capacity. This article explains why the window for cost arbitrage is narrowing, what that means for procurement and finance leaders in DACH, and how to respond strategically before 2027.

1. The Changing Cost Equation

According to Eurostat, average hourly labour costs across the EU reached €33.5 in 2024, with a record 8% differential growth between Western and Eastern Europe. In Germany, labour costs now exceed €43 per hour, compared to €12–€16 across most SEE economies — still attractive, but the gap is tightening as annual wage growth in SEE outpaces DACH by 3–4 percentage points (Eurostat, 2025).

Meanwhile, the proposed German minimum wage increase to €13.90 in 2026 and €14.60 in 2027 will further strain customer-service and shared-service budgets (Reuters, 2025). The paradox: rising wages in Germany also drive new outsourcing waves — but SEE markets are no longer endless reservoirs of affordable talent.

2. Demographics: The Silent Limiter

The World Bank’s 2025 Western Balkans Update warns of “persistent employment challenges and declining working-age populations.” Participation rates remain below 60%, and many skilled professionals are migrating to EU member states.
This trend limits the availability of experienced multilingual agents, engineers, and analysts — the exact profiles that DACH firms now depend on for nearshore operations.

Everest Group’s 2025 Europe Nearshore Report highlights the same issue from another angle: demand for nearshore delivery in Europe grew by 18% year-over-year, led by DACH clients seeking operational resilience and regulatory proximity (Everest Group, 2025). Supply, however, grew only 8%.

Put simply: demand is growing twice as fast as supply — a structural imbalance that will shape procurement strategies for the rest of the decade.

3. When “Cost Advantage” Turns into “Capacity Competition”

Procurement teams in DACH are used to negotiating based on hourly rates. But in 2025, rate alone no longer determines success — availability does.
A leading e-commerce provider recently faced a six-month delay in launching a multilingual support hub in SEE, not because of compliance or infrastructure, but due to talent scarcity in Tier-1 cities. The company eventually pivoted to a multi-location strategy, leveraging Sarajevo, Niš, and Osijek as a connected delivery ecosystem.

The lesson: capacity planning has become the new cost planning.
Organizations that treat SEE purely as a price arbitrage market risk missing the maturity shift happening across the region — from cheap labour pools to specialized delivery hubs capable of AI-supported customer service, finance automation, and technical support.

4. How Procurement Can Respond

1. Secure Capacity Early

Lock in delivery seats and training pipelines for 2025–2026. The “just-in-time” model no longer works when the region is near full employment.

2. Expand Beyond Tier-1 Cities

Talent saturation in hubs like Bucharest, Belgrade, and Zagreb requires moving to Tier-2 and Tier-3 cities such as Banja Luka, Novi Sad, and Varaždin. These markets retain language skills and offer stable retention rates.

3. Shift from Cost to Capability Metrics

When evaluating partners, prioritize time-to-ramp and process capability over minor rate differences. SEE vendors now compete on quality of automation and AI enablement, not hourly price alone.

4. Build Talent Resilience Partnerships

Engage local universities and training providers jointly with nearshore vendors to ensure a consistent talent pipeline.
As one global energy company recently discovered, co-funded academy models reduce recruitment time by 30% and create brand loyalty among new hires.

5. Outlook: The Arbitrage Window Narrows by 2027

The combination of rising SEE salaries (+6–8% annually), minimum wage escalation in DACH, and demographic contraction in the Balkans means the arbitrage window will narrow sharply by 2027.
By then, the distinction between “nearshore” and “onshore” will blur — not in geography, but in cost parity and skill specialization.

For DACH procurement leaders, the next 18 months are decisive: securing sustainable delivery models in SEE is no longer optional; it is a race for operational continuity.

Conclusion

The “SEE Talent Gap 2025” is not just an HR issue — it’s a strategic inflection point for DACH budgets.
Companies that act early will still capture value and stability through structured nearshore partnerships, while late entrants may find that the region’s best talent is already taken.
Southeast Europe is no longer catching up — it is being caught up with.