This post was updated on March 09, 2017.
An increasing number of businesses are considering Ukraine as a primary destination for outsourcing their software development needs or opening their own offices there. In fact, the country has repeatedly ranked as a top outsourcing destination in numerous sources:
We’ve compiled a list of the key reasons that best explain why Ukraine has been gaining momentum as a destination for offshore software development.
Ukraine is home to the largest number of IT professionals in Europe. The country also ranks fourth in the world by the number of tech workers after the United States, India, and Russia. The country currently employs over 90,000 IT specialists, including 50,000 software developers. By 2020, Ukraine’s IT engineering workforce is expected to surpass the 200,000 mark (1).
Meanwhile, our own research shows that there are a number of technologies that are more widely used in Ukraine than they are in any other country in the world.
Ukraine’s 402 universities and colleges (4) boast more science graduates per year than many other countries prized for innovation, like Japan, Sweden, Norway, Belgium, and the Netherlands (5).
Ukraine has over a thousand IT companies that offer virtually every kind of software service, including web and mobile design and development, software development, quality assurance and testing, dedicated team building, R&D services, IT consulting, and full-stack solutions.
And it’s not just about the quantity. Recently, 13 tech companies that either have a large branch office in Ukraine or are fully local have been selected as the world’s top software outsourcing companies (6).
The country’s rich tech scene has also fueled rapid growth amongst the local startup community. Jooble, DepositPhotos, TemplateMonster, GitLab, PetCube, Mobalytics, Preply, Attendify, CleanMyMac, Grammarly, InvisibleCRM, Looksery (acquired by Snapchat in 2015), and Readdle are only a few of the big names that got started in Ukraine.
Additionally, Kyiv, Ukraine’s capital and major tech hub, has more investors than Warsaw, Vienna, Oslo, and Copenhagen (7). These include AVentures Capital, Chernovetsky Investment Group (CIG), Digital Future, Imperious Group, SMRK, TA Ventures, and Vostok Ventures.
Given the fact that Ukraine has one of the 50 most innovative economies in the world (5), it should come as no surprise that the country is home to more than 100 R&D centers for global tech giants, including Boeing, Ericsson, Siemens, Oracle, Aricent, Magento, and Wargaming, just to name a few. Many of these entered the Ukrainian market through M&As, joint R&Ds, or outstaffing companies like Daxx.
Agile Eastern Europe Conference, PyCon Ukraine, iForum, IT Arena, and DEV_Challenge are only a few of Ukraine’s major tech events giving the country’s IT professionals the opportunity to meet their peers and pick up on the best practices of the industry leaders. The largest conferences attract over 7,000 attendees and international speakers. On a more local level, smaller tech events take place all the time.
Eighty percent of Ukraine’s tech workers report having an intermediate or higher level of English proficiency (9).
Being only 1 hour ahead of most European countries, Ukraine is an incredibly convenient location for nearshoring, as it enables smooth communication and workflow between geographically dispersed teams.
The country also makes for an attractive offshore choice for North American companies, since the 7-hour time difference between Ukraine and the East Coast provides the opportunity for much more convenient shared working hours compared to India, Vietnam, the Philippines, and other lowcost outsourcing destinations.
Compared to its neighboring countries — such as Poland, Belarus, and the Czech Republic, Ukraine offers more competitive outsourcing rates paired with a much larger tech talent pool.
The average hourly rate for software development is within the $25–40 range, with the average software developer salary varying between $2,500 and $4,000 per month (excluding taxes and social contributions).
Admittedly, these rates may seem higher than in some other popular IT outsourcing countries. But they’re still significantly lower than those in Western Europe and North America, where an engineer of similar calibre could cost close to $100 per hour, or even more.
Additionally, the recent reforms in licensing have dramatically improved the ease of doing business in the country — Ukraine ranks 20th globally in terms of how easy it is to start a business here (10).
Compared to Ukraine, countries in South and Southeast Asia are a lot more culturally and ethnically diverse, with each religious or ethnic group celebrating their own unique holidays on which employees expect to receive paid vacation days. In Ukraine, however, there are only ten universally observed public holidays.
Ukraine belongs to a low-context culture, as do the western cultures, which means that here, facts and figures are more important than personal relationships, while in most of the Eastern world, top priority is given to honor and reputation.
The work ethics dominating the outsourcing industry in Ukraine is also very similar to that of Western businesses. Ukrainian tech workers aren’t just performers. They’re open to challenges and confrontation, get personally involved in the projects they’re working on, and are interested in facilitating their success. This is especially true if you communicate with them directly, without any third-party involvement.
Here’s what Alex Oleynikov, Director of Software Engineering at Compuweigh (USA), says about working with Ukrainian software developers:
“Our team in Ukraine is very loyal and dedicated, Ukrainian developers really strive to understand our business and add value to it.” (Read the full case study.)
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