Ukraine Beats its Global Competitors as an IT Outsourcing Destination

Jul 02, 2015

Several IT outsourcing statistics reports, including Tholons Top 100 Outsourcing Destinations 2014, have featured Ukraine as one of the most popular locations for offshore software development. When it comes to the reason for Ukraine’s popularity, however, many commentators fail to see beyond the country’s low costs.

At this year’s Sweden-Ukraine Business Forum, which takes place every summer in Kyiv, the representatives of Swedish IT companies affirmed that outsourcing to Ukraine is not only cost-effective, but also more beneficial compared to working with Asian developers.

Vaino Vaher, a Swedish software engineer who came to Ukraine to visit the forum, believes that while Indian tech talent is undoubtedly cheaper, it comes with a number of complications you wouldn’t have to deal with if you opted for offshore development in Ukraine.

Vaino considers the time difference between India and Sweden to be a major problem. India is four and a half hours ahead of Sweden (three and a half hours during daylight saving time), so while you are still in the middle of your working day, your offshore developers have already gone home. This slows down communication, and consequently project deadlines get longer and your expenses get larger.

Ukraine, on the other hand, is only one hour ahead of most European countries, so you won’t need to tweak your schedule to feel comfortable working with a Ukrainian team.

Vaino also thinks that due to their cultural standards, some Indians may not be accustomed to the higher social status of women in Sweden, which means your female project administrators might have trouble managing offshore developers based in India. This problem would never occur in Ukraine as culturally, it is much closer to Sweden.

Ukrainians also tend to be better at independent decision-making; they don’t need as much micromanagement as their Asian counterparts.

Ukrainians and Swedes have fewer cultural differences, and this should be the main selling point for offshore software development in Ukraine, says Vaino.

Industry leaders agree that the level of mutual understanding between European or American IT companies and Ukrainian software developers is much higher than it is with Indian tech workers. This fact has definitely facilitated the increase in the number of software outsourcing and consulting companies in the country. Today, outsourcing accounts for almost a half of Ukraine’s $5 billion IT industry.

IT is the fastest-growing industry in Ukraine, expanding about 30 percent every year. There are more than 50 thousand IT specialists in Ukraine, compared with 14 thousand in 2007. Prospects for the IT industry in the country are more than optimistic; by 2018, approximately 150 thousand people will be working at tech companies.

Such dramatic numbers have a very simple explanation: in Ukraine, tech specialists earn about 10 times more than those working in traditional industries, so there is hardly any extra incentive needed to encourage more Ukrainians to get involved.

Despite the salaries being so high by Ukrainian standards, they are still substantially lower than what you would have to pay to your local tech talent - basically a win-win situation for both parties.

And while it is possible to get an even cheaper workforce in other countries, many industry experts confirm that Ukrainian software developers are more organized and creative. They share Western European business culture, which enables effective communication and smooth management.

Want to set up your own software development team in Ukraine or hire a developer? We'll help! 

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