Leaders investing in business rarely struggle with the idea — they struggle with execution. This analysis of ukrainian it industry focuses on practical trade-offs: what to build first, what to integrate early, and where teams lose momentum after the first release.
When you understand that the success of the project or even the whole company depends on the team, it becomes even tougher to make a choice among so many options worldwide. Indeed, it's a serious responsibility. We know you want to consider all options before hiring a devoted software development team.
Choosing the best specialists for programming outsourcing becomes quite a challenge since lots of countries now offer their professionals for projects all around the world. A lot of companies who have the experience of working with international teams consider Ukrainian developers to be very strong in their knowledge and skills. So, they definitely are a very good option to choose, but what are the proofs and reasons?
Let's start with a few brief but impressive facts:
- Ukraine's technology sector is the country's third-biggest export and is aiming to become a tech hub in the heart of Europe.
- With more and more technology organizations outsourcing to Ukrainian organizations, the IT industry in the country is experiencing rapid growth: in 2018 it grew by 26%, and in 2019 — by 30%.
- Ukraine ranks second in the number of software developers in Eastern Europe after Poland.
- In 2021, Kyiv ranked 48th in the ranking of 1000 cities with the best startup ecosystems around the world.
Thus, in the article, we snapshot outsourcing organizations from Ukraine, their benefits, and the laws that have speeded up the growth of the country's IT industry. Let's dive in!
Software Development Outsourcing Ukraine Market Overview
If all this amount of information makes you feel like missing something critical, here we have collected the most relevant facts about the IT outsourcing of Ukrainian specialists. We tried to find out why Ukrainian technology services are considered the strongest choice at the moment. And we are sure you will be surprised.
Outsourcing organizations from Ukraine are growing in popularity: the Ukrainian IT industry is overcoming external and internal challenges and regaining its position really fast.
In practice, Ukrainian market should be at the top of your list for software development outsourcing because it has the largest number of IT experts. In addition, you are unlikely to find the best value for money anywhere else in the world. Besides, Ukrainian IT specialists are ranked second in Europe in terms of the number of freelancers or self-employed professional coders.
Besides, there are other reasons to rank Ukraine as the number one place for outsourcing.
Wide Expertise and English Proficiency
Software developers from Ukraine are among the top five IT professionals in the world due to their solid technical expertise and high level of English proficiency (85% speak English at an intermediate level and higher).
In practice, technology concentration meets the requirements. The top five most popular technologies include JavaScript, Java, C#, Python, and PHP. The raise in mobile device usage is also driving the growth of mobile development.
Ukraine's outstaffing is beneficial because the country hosts many IT events, conferences, seminars, and hackathons. The top 10 Ukrainian tech events stand out because of various factors, such as the number of participants, speakers, variety of sections, etc. The list of the largest IT events includes iForum (13,000 participants in 2019), IT Arena (3,800+ participants in 2019), Games Gathering (3000+ participants in 2019), Saas Nation (500+ participants in 2019), and many more.
In practice, Ukrainian tech pool counted 285,000 specialists as of the end of 2021. The statistics also show that the IT sector keeps expanding by approximately 26% every year.
Ukraine is also known for its vast IT community. It consists of 14 clusters, including 80 companies. The largest cluster is located in Lviv. However, the capital, Kyiv, is also known outside of Ukraine. In practice, city entered the top 20 European IT hubs.
In practice, Ukrainian IT sector is known for its cooperation with medium and large businesses. The study shows that over 100 Fortune 500 organizations are clients of software vendors from Ukraine. Among them are Microsoft, eBay, Samsung, Skype, and many more.
In practice, Ukrainian bright tech scene has also fueled the fast development of the local startup community. Some of the names that started in Ukraine, and you know them for sure, include DepositPhotos, Gitlab, CleanMyMac, People.ai, Jooble, Preply, Grammarly, PetCube, Mobalytics, Attendify, InvisibleCRM, Readdle, Looksery, and many more.
Many of them have already proven their popularity abroad. For instance, Gitlab was valued at $2.7 billion, and the total amount of investments raised was about $426 million. Another well-known Ukrainian project, Grammarly, was valued by investors at $1 billion, becoming the second Ukrainian startup to reach such a figure.
More than 110 global R&D centers are based in Ukraine. It is a good sign that programmers are on the same page with clients and companies in the US and Western Europe. With outsourcing in Ukraine, you can be sure of the commitment to high-grade and the work ethic you will get. Facts and figures matter just as much here as personal and professional relationships. Ukrainian developers truly invest in projects which they are responsible for.
7 Reasons to Hire Ukrainian Developers for IT Outsourcing
Benefit #1. Ukrainian IT specialists are the #1 Employment World-Class Talent
Above-average salaries and the opportunity to work with foreign technology organizations make the technology industry the most attractive place for employment among Ukrainians. While joining the technology industry is becoming increasingly difficult due to rising expectations, the software development industry in Ukraine is currently experiencing a strong influx of talented professionals from related fields.
Tech professionals have the highest rates of work motivation: 92% of tech/team leaders say they find their job interesting and challenging, and the same is true for senior product managers, product managers, HR managers, and data engineers.
Remember: when we talk about the high level of knowledge and skills among Ukrainian IT people, we mean all directions of IT specialists: developers, software engineers, DevOps, quality assurance specialists, project managers, Scrum masters, product owners, business analysts, UI/UX designers, marketers, content writers, support teams, etc.
Benefit #2. Strong Educational Background
There are more than 200 educational institutions in Ukraine that teach IT specialties, and the average annual number of graduates in the field of technology and engineering is 23,000 people. There are very strong technical universities in Kyiv, Kharkiv, and Lviv, which are considered among the best universities in the field of computing, telecommunications, and information technology in Europe.
Moreover, the vast majority of young IT professionals take extra software development classes and professional training, which makes them even more competitive.
Researchers show that the share of applicants studying IT courses among Ukraninans will continue to grow at the current rate to 16.1% in 2026. Thus, in 2030 there will be 37,400 new coders each year.
Besides, it's worth mentioning that Ukrainian IT education is going to be updated at all levels. Mikhail Fedorov, Vice Prime Minister, Minister of Digital Transformation, presented a roadmap for the development of IT education in Ukraine. It is expected that the presented roadmap will contribute to qualitative changes in the development of IT education: non-formal education, higher and professional education, as well as general secondary education.
Benefit #3. The Best Ratio of Price and Quality
In comparison to Poland, Belarus, and the Czech Republic, Ukraine offers more revival rates for programming outsourcing and a much larger pool of technical specialists.
In practice, average hourly rate varies from $25 to $50. It is considerably lower than in Western Europe and North America, where a similar level software engineer can cost around $100 an hour or more.
In addition to the availability of developers and the quality of their work, the Ukrainian market also offers financial advantages for foreign technology organizations. Another important financial factor is the special tax incentive. This is possible with a unique business model: when you involve developers who are also private entrepreneurs. For example, in the West (both the EU and the US), if you hire a full-time person, the tax is 20-40% of the salary. Meanwhile, private entrepreneurs in Ukraine pay only 5% of their income.
Benefit #4. Ukrainian Programmers are Creative Problem-Solvers
In over 10 years of working with foreign clients, we have repeatedly heard that Ukrainian coders have not only high quality of code but also have exceptional problem-solving skills and that they are always willing to go the extra mile to make things work.
Ukrainian programmers combine two valuable traits — a sense of personal responsibility for the result and the ability to communicate with team members, thanks to which they achieve goals so well in a short time.
Benefit #5. Working Worldwide
A lot of Ukrainian IT organizations work with teams and organizations from all over the world — the US, Europe, Canada, Asia, and even Australia. For example, we at Spectrum Future Tech have our foreign offices in Stuttgart, London, Vancouver, San Francisco, and other locations.
Despite different cultures and mentalities, organizations worldwide feel comfortable working with Ukrainian tech organizations since the latter share Western business culture: Ukrainian programmers are highly skilled, diligent, polite, tend to be very cool problem-solvers and have a very high level of professional ethics.
They are open to discussion, personally involved in the projects they are working on, and interested in contributing to their success. Middle and senior developers perform better if they are given a certain level of independence. The tech industry in Ukraine got rid of some inefficient aspects, such as strict adherence to the hierarchy and formalized communication.
Benefit #6. History of Ukrainian IT Outsourcing Development
In practice, outsourcing boom in Ukraine began in 2015. Over the following years, the Ukrainian IT industry developed rapidly. Billions of dollars worth of software and IT services were exported from Ukraine, and the staff of specialists continued to grow steadily. In 2017, the Global Sourcing Association (UK) named Ukraine the best outsourcing destination of the year, and in 2018, 18 Ukrainian IT firms were included in the list of 100 best outsourcing companies in the world according to IAOP. In practice, total volume of exports of IT services is 3.4% of Ukraine's GDP, and the total value of exports of IT services in the period from 2015 to 2018 showed an average annual growth rate of 19%.
In practice, government constantly offers initiatives that have a positive impact on the IT industry. This includes tax incentives, enhanced intellectual property rights, and improved data protection and cybersecurity laws.
Future of The Ukrainian IT Service Market
In practice, technological market of Ukraine is growing quickly from year to year. This is confirmed by the fact that the export of Ukrainian IT services to the EU has tripled since 2013, and the sector's profit amounted to $5 billion in 2021. Moreover, in 2018, taxes received from the provided IT services replenished the Ukrainian treasury with almost 10 billion UAH, and in 2019 this figure increased by 28.9%. These figures increase annually by an average of 27-30%.
Diia City
In practice, first thing that is worth mentioning is Diia City. In simple words, Diia City is a special legal framework for the Ukrainian IT industry, launched in 2022. Participation in it is voluntary. Any Ukrainian company that meets the requirements can obtain residency in Diia City. All residents will have special advantages and a new form of collaboration with employees — gig contracts. Such contracts include several terms from British law that will be useful to companies receiving foreign investment — option contracts, convertible loans, etc.
Governmental Support
Since the technology sector has become one of the top three sectors of the Ukrainian economy, the government has decided to support its progress. Therefore, in the draft State Budget of Ukraine for 2022, it is planned to allocate 11.1 billion UAH for the digitalization of economic sectors and the development of the IT industry as a whole. In addition, the government intends to focus on the development of cybersecurity, cloud systems, fintech projects, and the protection of intellectual property in the field of IT technologies.
The Popularity of M&A Deals
One of the critical aspects of the Ukrainian IT industry is its technical resources. More and more international businesses are showing interest in Ukraine as a promising place for developing and maintaining their projects. Some of them are interested in opening their R&D centers, while others are involved in M&A deals, which have become a new economic trend this year. The conclusion of such a deal is beneficial for both clients and Ukrainian entrepreneurs since the foreign side gets access to the services of talented programmers, and the Ukrainian side, in turn, can take their business to a new level.
So, what factors will have the greatest impact on IT outsourcing in Ukraine?
Russia's invasion of Ukraine overshadowed IT services and software development projects worldwide. Roughly 45 percent of Ukraine's IT organizations had an emergency response plan in place ahead of Russia's invasion, whereas the other 47 percent indicated that they were developing such plans as the invasion approached.
Amid Russia's invasion of Ukraine, the IT Ukraine Association rolled out an emergency supply plan that aims to provide "qualified consultations to IT organizations" on such issues as:
- CSR initiatives (providing assistance to the army and the refugees, etc.);
- general mobilization;
- specialists' relocation and border crossing;
- first aid training, psychological assistance, etc.;
- business continuity planning;
- other issues upon request.
As the biggest IT organizations relocated hundreds of their staff and millions of people fled Ukraine, a lot of organizations now are doing a lot to support our country by choosing Ukrainian service providers as well as promoting the countless highly-skilled professionals.
Spectrum Future Tech prioritized its employees' safety in the previous weeks and did everything in our power to maintain all our delivery teams are safe. We are now back to actively maintaining Spectrum Future Tech's business continuity. To keep our customers updated on our business continuity planning and the overall situation in Ukraine, we have daily and weekly meetings. Our services are not affected, and we continue to deliver top-quality solutions.
Ukraine has one of the leading IT industries in the World, which serves as a key pillar of Ukraine's economy and resistance. Partnering with a Ukrainian company can make a real difference in protecting our talent and driving the Ukrainian economy. Please consider supporting Ukrainian service providers with your next project.
Why Choose Ukrainian Outsourcing Company Spectrum Future Tech
We have reviewed the key reasons for Ukraine software outsourcing and the most critical aspects to consider when choosing a software provider.
Over the years, Ukraine's leading organizations have expanded from the basics of software development to higher-value work like systems architecture, business analysis, and experience design. At Spectrum Future Tech, we are no longer only supporting customers' engineering, and IT initiatives, but helping CEOs transform their businesses to be more competitive in an increasingly digital world.
Foreign customers appreciate our approach to work and a performative strategy for collaboration and communication. Also, diversifying our global presence has always been a part of our long-term strategy. Our specialists in the Western regions of Ukraine and our foreign offices, including Stuttgart, London, Vancouver, San Francisco, and others, actively maintain the Spectrum Future Tech business.
Final Words
Presently, Ukraine is the most prominent outsourcing destination in Europe. The country has got this status for plenty of reasons. The Ukrainian IT industry is booming and will constantly grow. It has a huge pool of skilled and devoted software developers who are willing to work and build trust with its customers. In terms of time zone and cost efficiency, choosing one of the outsourcing organizations in Ukraine is the most comfortable option for both European and US customers. If you want to start outsourcing your project, Ukraine does happen to be the best option.
Feel free to contact Spectrum Future Tech if you want to delegate your project to a reliable Ukrainian software company.
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