Salary Adjustments in Eastern Europe 2025

Executive Summary

If you're managing teams in Eastern Europe, here are the critical steps you need to take now:

• Analyze local market conditions: Review inflation rates, exchange rate fluctuations, cost of living changes, and competitive pressure by role

• Implement comprehensive adjustments: Apply cost-of-living increases plus competitive market premiums based on skills and experience level

• Focus on high-risk roles: Development, Product, and bilingual Customer Experience positions face the highest risk of external recruitment

• Act before Q3: Make adjustments early to prevent talent attrition during the crucial year-end period

• Establish USD-based salary ranges: Create transparent compensation bands and communicate them clearly to your teams

• Use current market data: Rely on up-to-date benchmarks specific to each country and role

• Enhance your value proposition: Supplement salary adjustments with meaningful non-monetary benefits

Managing distributed teams across multiple countries? This guide will help you prioritize adjustments strategically while maintaining your competitive edge.

Overview

Eastern Europe occupies a unique position in today's global talent market—both geographically and economically. While it's no longer the ultra-low-cost region it was a decade ago, it hasn't fully aligned with Western European salary ranges either. However, if you're managing remote tech teams in countries like Poland, Ukraine, or Romania, you've likely noticed a critical shift: talent is pricing themselves in dollars, and there's a good reason why.

In 2025, simply tracking inflation isn't enough. Salaries are under pressure from multiple forces:

• Global competition from companies offering USD or EUR compensation

• Rapid growth of major cities as established tech hubs

• Rising talent expectations around professional development, benefits, and job security

Beyond Cost-of-Living: Why You Need Both COLA and Market Premiums

When adjusting salaries in Eastern Europe, relying solely on local inflation data is a common mistake—and it's insufficient. In this region, similar to Latin America, the real pressure doesn't just come from local cost of living increases, but from something more powerful: international benchmarks that talent actively monitors.

Most tech, product, and marketing professionals in these countries already work in English, invoice in USD or EUR, and know exactly what similar roles pay in Germany, the Netherlands, or the UK. Local benchmarks are no longer the standard.

The most effective and competitive approach combines three elements:

• Cost-of-living adjustment (COLA): Protects purchasing power against local economic changes

• Market premium: Keeps you competitive with what other remote companies in the region are paying

• Experience differential: Addresses the significant salary pressure between Mid and Senior levels

This guide provides total expected adjustments for each country, incorporating all three components. If you have talent across multiple regions, this framework will help you prioritize investments without losing competitiveness.

Data Sources and Methodology

The data and projections in this report are based on current information from:

• Poland: Market Screener, Michael Page salary surveys

• Ukraine: IT Ukraine Association, Moldstud IT Sector Analysis

• Romania: National Institute of Statistics inflation data (4.9% projected)

• Estonia: Trading Economics Consumer Price Index data

• Lithuania: Trading Economics CPI and local market research

Country-Specific Analysis

Poland: The Mature Market with Rising Expectations

Market Overview:

Poland hosts Eastern Europe's largest IT workforce: over 500,000 developers, primarily concentrated in Warsaw, Krakow, and Wrocław. As the region's most mature tech hub with strong international company presence, both talent expectations and salary levels reflect this sophistication.

Economic Context:

While the National Bank of Poland projects 4-5% inflation for 2025, IT sector salary ranges are growing well above this rate due to international benchmarking. Though living costs remain lower than Berlin or Amsterdam, compensation ranges are increasingly aligning with international markets for key positions. Polish talent understands their market value and is beginning to demand it.

Risks of Inaction

• Maintaining stagnant PLN salaries while talent receives USD offers creates immediate attrition risk

• Polish tech teams expect transparent processes, clear benchmarks, and regular feedback—stagnant compensation damages trust

• Replacing a senior professional in Warsaw today costs more than a preventive 15% salary increase

  
  

Ukraine: Navigating Between Macroeconomic Uncertainty with USD-Based Stability

Market Overview: 

Ukraine presents a unique situation. Despite ongoing conflict, the tech sector remains active: according to IT Ukraine Association data, over 200,000 professionals continue working remotely, primarily for foreign companies paying in dollars.

Economic Context: 

Salary adjustments in Ukraine must account for both inflation and heavy dependence on hard currency payments. If you're paying Ukrainian teams in Hryvnia, you're at significant risk of losing them. While projected inflation ranges between 8-10%, adjustment expectations are higher, especially for technical and strategic roles where cost-of-living, market premiums, and experience factors combine.

Risks of Inaction

• Most professionals expect inflation plus market adjustments, especially those working for international companies

• Senior-level talent increasingly requests compensation aligned with international benchmarks

• Without proper adjustments, expect quiet departures, particularly among professionals already billing in foreign currency

• Stagnant salaries signal disconnection or instability, even when other benefits are offered

  
  

Romania: The Silicon Valley of Southeast Europe

Market Overview:

Romania offers competitive salaries, excellent digital infrastructure, and young, highly skilled talent. Bucharest, Cluj-Napoca, and Timișoara lead the domestic tech scene. In 2025, salary adjustment expectations are rising, especially for professionals with access to remote positions at Western European or US companies.

Economic Context:

Although projected inflation of 4.9% remains more contained than other regional countries, market pressure comes from external salary benchmarks pushing local ranges upward, particularly for senior and mid-level roles.

Risks of Inaction

• 60% of digital talent in Romania already works for international companies, elevating expectations of fair compensation

• Strong pressure exists for Senior Product, Development, and Marketing roles to align with French, German, or UK ranges

• Without proper adjustments, expect to lose top talent to companies operating with international salary bands

  
  

Estonia: Advanced Tech Hub with Premium Expectations

Market Overview:

Estonia is a digital leader with e-residency systems, fintech hubs, and scalable startups. Tallinn has become an expensive city, and Estonian talent's purchasing power has declined despite moderate projected inflation of 4.5%. Competition in AI and blockchain has driven up adjustment expectations, with local talent expecting increases that reflect both inflation and benchmarking with Western Europe, especially in technical roles.

Risks of Inaction

• Estonian talent benchmarks salaries against Netherlands, Germany, or Sweden—not regional competitors

• Inadequate adjustments signal being out of touch with market expectations, not just economic constraints

• Senior development and product professionals are particularly sensitive to compensation as recognition of their value

  
  

Lithuania: Growing Fintech Hub with Clear Expectations

Market Overview:

Vilnius has emerged as a significant financial and digital hub, with many companies choosing it as an operational base for Customer Experience, Marketing, and Product roles. While living costs remain lower than Estonia's, salary expectations increasingly align with international markets. Lithuania shows one of the highest rates of salary benchmarking usage in the region. Expected inflation is 3.5%.

Risks of Inaction

• Tech and creative professionals in Lithuania actively monitor international benchmarks—local inflation adjustments alone are insufficient

• Younger, mobile talent readily accepts international offers without hesitation

• The risk extends beyond losing current talent to struggling to attract new professionals if salary ranges aren't updated proactively

  
  

Implementation Roadmap

1. Assess Current State

Review existing salary structures in each Eastern European country where you operate. Identify gaps between current compensation and recommended ranges in this guide.

2. Analyze Market Pressures

Cross-reference local inflation data, exchange rate trends, and international market benchmarks. Remember: don't adjust solely for cost-of-living—factor in external competitive pressure and experience premiums.

3. Prioritize by Risk

Define implementation timeline by country, role, and experience level. Prioritize positions with highest attrition risk or critical business responsibilities.

4. Communicate Transparently

Establish clear adjustment criteria and communicate them openly. Explain all factors considered: inflation, market benchmarks, performance metrics, and growth potential.

5. Measure Impact

Assess salary competitiveness before and after adjustments. Use targeted surveys to evaluate perceived fairness, satisfaction levels, and retention risk.

6. Maintain Currency

Update salary benchmarks every six months. Use reliable sources like Deel, Remote, Glassdoor, Index.dev, or established local consultancies.

Frequently Asked Questions

Is cost-of-living adjustment sufficient to retain tech talent? No. Inflation adjustment represents only part of the equation. To retain competitive talent in this region, you must add market premiums, experience differentials, and establish salary ranges referenced in USD or EUR. COLA-only adjustments typically leave you below actual market benchmarks.

Does salary adjustment make sense for single-country employees? Absolutely. Even individual contributors can hold key roles in product development, customer support, or operations. Losing them can impact deliverables, quality, or business continuity. Additionally, replacement involves recruitment, onboarding, and knowledge transfer costs that often exceed proactive salary adjustments.

Should we pay in local currency? Not unless legally required. If paying in local currency, adjust for both inflation and exchange rate fluctuations. Ideally, reference compensation to USD bands. Leading companies already operate with dollar or euro ranges, even when final payments are made in local currency.

What non-salary benefits effectively retain talent in this region? Genuine schedule flexibility, professional development opportunities, industry certifications, project or performance bonuses, additional paid time off, personalized benefits, and clear career advancement paths.

How can I tell if our salaries are misaligned? Review local inflation and exchange rate trends. Compare your ranges with established benchmarks (Deel, Remote, Glassdoor, Index.dev) and conduct brief internal surveys to measure satisfaction and retention risk.

How frequently should we review salaries? Every six months. Eastern European markets evolve rapidly. Annual reviews leave you behind companies that adjust quarterly.

The Bottom Line

In Eastern Europe, retention isn't just about good intentions—it's a strategic financial, cultural, and competitive practice. Companies that proactively adjust compensation retain talent. Those that support decisions with solid data build stronger reputations. And organizations that plan in USD stay ahead of the competition.