What makes IT outsourcing in Ukraine so attractive to foreign companies, and what’s driving the success of the industry internally? After all, BRDO reports that the country’s exports of IT services in 2020 reached a historic high of $5 billion, exceeding exports of minerals and transportation services for the first time.
For international clients, there must be more to it than meets the eye — saving costs and getting some of the most experienced engineers money can buy. For Ukrainian IT firms, is it luck, coincidence, or have they earned their place under the sun by doing hard work?
But before we get to answering those questions, a little introduction is in order.
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And now, back to our topic: should you or should you not work with Ukrainian developers, be it through outsourcing or augmenting your team? Let us give you a few objective reasons to make your decision an easy one.
A young and thriving industry that survives crises
As a nation, Ukrainians have a long history of overcoming adversity. The way the country’s IT market responded to the pandemic is a testament to that resilience. The IT services exports, hit by a decrease in growth in April of 2020, quickly restored balance in July, as the number of vacancies went back to pre-pandemic levels (analytics by DOU, the top Ukrainian programing-oriented medium).
Over the past five years, the segment of IT services export has been growing at an impressive rate of 20 to 25%.
Source: IT Ukraine Association
Here are some more stats that describe the Ukrainian IT industry:
- According to various sources, there are anywhere from 3,000 to 5,000 software development companies currently operating in Ukraine.
- IT engineers, investors, and startups participate in over 1,000 tech events held yearly in the country.
- Over 100 Fortune 500 companies chose Ukraine’s IT services (data by UkraineNOW).
- The number of R&D centers of global companies like Google, Samsung, and Siemens located in Ukraine exceeds 100 (as per this report).
- The country is in the top 30 startup ecosystems worldwide. You can find the list of successful Ukraine-based startups here.
- In 2020, a record $571 million was invested in Ukrainian-founded startups.
Steady growth, great quality of work, and predictable financial outcomes are some of the defining traits of the IT industry in Ukraine. No wonder Ukrainian IT companies constantly receive top ratings and prestigious awards worldwide.
Ukrainian tech players have been repeatedly recognized for their excellence. Below are only a few ratings to give you an idea:
- The UK’s Global Sourcing Association named Ukraine the winner of its prestigious World’s Delivery Destination nomination in 2021.
- HackerRank puts Ukraine above most Latin American, North American, and European countries in its rankings of the world's top programmers.
- SkillValue goes even further, saying Ukrainian developers are the 4th best worldwide.
- 13 Ukrainian tech companies made it to the top of the 2020 Global Outsourcing 100 list compiled by the International Association of Outsourcing Professionals.
- The 2020 Clutch Top 1000 list of the best B2B providers includes 68 Ukrainian IT businesses. Only 1% of all B2B enterprises in the enormous Clutch catalog make it to the ranking.
There are many good reasons why IT companies from Ukraine receive high rankings. And as always, it's people who are at the core of every business's success.
A vibrant community of professionals
Kyiv, Kharkiv, Lviv, Dnipro, and Odesa are the five IT hubs that command and shape the landscape of Ukrainian development. An estimated total of about 205,000 tech specialists are currently employed by the country’s IT sector (data by Beetroot). Many of them join non-government IT associations that drive social responsibility initiatives and facilitate government cooperation.
From the very first days of the pandemic, the Lviv IT Cluster has been at the forefront of the battle against Covid-19:
- First, the organization provided tens of thousands of free express Covid tests to the local IT community. The effort brought together over 40 IT companies in the region, resulting in 6 million hryvnias collected in under a month.
- Later, the IT Cluster financed insurance for Lviv’s medical workers and provided many of them with protective suits.
- Finally, the association played an important role in vaccinating the employees of software companies, delivering over 30,000 doses of Covid-19 vaccines.
Similar initiatives were started by most of the 20 IT clusters that exist in major hubs and smaller cities all over Ukraine. The Covid-19 crisis has brought the Ukrainian IT community together, giving new meaning to teamwork and ethics.
IT Ukraine Association
IT Ukraine Association’s mission is to bring positive change to the country’s IT industry. The association connects Ukrainian IT businesses with the state, as well as international partners to ensure steady growth and sustainable development. Educating the youth and promoting corporate social responsibility is high on the list of the organization’s priorities.
These non-government associations are important agents of change that create new vectors and propel the Ukrainian IT industry forward. But that progress wouldn't be possible without a solid foundation.
A tradition of tech education
More than 30,000 tech students majoring in 23 software-related professions graduate yearly from Ukraine’s educational establishments (February 2021 statistics by BRDO). Additionally, the Ministry of Education introduces new programs to improve the overall quality and relevance of education, like the US-funded Ukraine Improving Education for Results.
It all starts with education, but it’s the hands-on practice that makes developers from Ukraine so good.
Diverse skills and experience
Ukrainian developers and testers are involved in various projects that use multiple combinations of technology and programming languages. This means they acquire new skills at an increased rate.
Here are some stats gathered by DOU to prove our point (the source is in Ukrainian, so we translated the most relevant statements for you):
- 56% of Ukrainian engineers work on outsourcing projects.
- More than half of the entire talent pool has two to five years of experience.
- On average, engineers have worked in 2-4 companies throughout their careers.
- As for frameworks and libraries, the top three choices are React.js, Node.js, and Angular.js.
Another interesting fact: most Ukrainian engineers are satisfied with their projects. 40% of them consider them interesting, and 18% find their work enjoyable.
Great quality at reasonable rates
As we get to the topic of compensation, the Ukrainian outsourcing market can offer some very competitive salaries and rates. Instead of tiring you with endless rows of numbers, we’ll compare salary data from Ukraine to neighboring Poland and the Czech Republic.
The median software developer rate in Ukraine amounts to just $25-40 per hour.
In Poland, you’d have to pay at least $40-$56 per hour for the same work. Similarly, the corresponding hourly rates for Czech developers would be at $34-$53.
While the difference isn’t huge, keep in mind that you’re getting the same — if not better — quality of work. Other expenses like renting an office or buying supplies will also be considerably lower in Ukraine. All these factors combined are enough to tip the scale in favor of hiring developers from Ukraine.
According to EF’s report, over 85% of IT tech professionals in Ukraine speak English at an intermediate — or higher — level of proficiency. Of course, many Ukrainians will have an accent, but it’s soft and easily intelligible, just like with most Eastern Europeans.
Solid work ethic
Another characteristic that Ukrainian developers share with their European counterparts is a similar work ethic. You can expect a likeness in business values and mentality and a goal-oriented mindset. The EU’s recognition of these similarities was the foundation for the EU Association Agreement, effective as of December 2017.
A convenient geographic location
Ukraine’s location is perfect for both nearshoring and offshoring. The country’s EET (UTC+2) time zone is compatible with those of the neighboring EU countries, and it also overlaps with the working hours in the US. Compared to Asian countries with outsourcing potential (like India or the Philippines), Ukraine has a clear competitive advantage for efficient real-time communication.
Favorable conditions for business
According to a report by Trading Economics, the index of ease of doing business has been steadily improving in Ukraine over the past decade. Just look at the graph below: the country went from being #152 in the world in 2010 to #64 in 2020!