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IT outsourcing to Ukraine is something your business may benefit from. In 2020, Ukraine demonstrated 20% IT market growth. Moreover, the country boasts 170.000 IT specialists. It makes Ukraine one of the best locations for outsourcing IT projects.
However, there are some other reasons to hire Ukrainian specialists. Stay with us, and we're going to discuss the advantages of choosing Ukraine as your IT service provider, as well as some potential drawbacks that you should avoid while outsourcing your project.
The benefits of IT outsourcing for business
Outsourcing has recently become one of the best options to find extra IT specialists worldwide. 'Outsourcing remains an essential tool for client organizations to support their strategic goals. Requirements constantly evolve (even more so due to the COVID-19 pandemic), and the industry continues to support both established and new solutions.' — Deloitte claims.
Outsourcing will keep growing, and businesses should be prepared for it. Recent studies show that the size of the global IT outsourcing market can increase by $98 billion during 2020-2024.
In 2021, spending on IT services is expected to reach 1.2 trillion US dollars worldwide, a growth of 9.8% from the previous year.
Such figures come as no surprise. Today, literally every company needs IT support. For instance, It may be creating a landing page or developing a custom management system to work with a vast database.
But what are the reasons that push the demand for outsourcing up? We've analyzed the most popular of them.
Outsourcing is cost-effective
Most companies struggle to reduce expenses and use all possible ways to cut costs. However, hiring a team of developers is expensive for small and medium businesses. Moreover, some enterprises do not employ in-house specialists for specific projects. They prefer outsourcing.
There are two main reasons why outsourcing is less costly. Firstly, you can find a specialist with a lower hourly rate. Secondly, if you need to develop and maintain only one app, you don't need a full-time engineer. You'd be better off paying for actual work time spent on your software.
Outsourcing helps to save time
For example, you need to develop an application for your business. The estimated time of development is 400 hours. It will take one developer ten weeks to build this app (if we consider a 40-hours workweek). However, if you hire four outsource specialists, the project can be completed in 2,5 weeks.
Flexibility with expertise
Even if you have a team of developers, it does not mean they can fulfill any project. Outsourcing allows you to be more flexible, as you can find an expert in any field for a short-term project.
Hiring in-house developers means higher operations costs in addition to salary. Also, hiring in-house specialists requires time for their onboarding and mentoring. There is always a risk that you won't be satisfied with the result after months of probation.
Hiring an outsource specialist, you pay only for the time he works on the task. You reduce the risk of spending much time and money without getting anything.
Read also: Risks of Outsourcing Software Development
Tax rates are also lower
Both small businesses and large enterprises must pay taxes. However, outsourcing some projects may help to reduce tax expenses.
Ukrainian IT industry today: facts and figures
But Ukraine is not only reacting to global demand. Local specialists also design new technologies. If you want to be the first to know them, you should start now.
Here are some facts which prove that outsourcing IT services to Ukraine is a good idea:
- Over 100 Fortune 500 companies, including Google and HP, outsource IT services to Ukrainian companies.
- Ukraine is the 8th country in the list of Programmers Activity by TopCoder.
- Ukraine holds 45th place in Global Innovation Index.
- The Global Outsourcing 100 included 18 Ukrainian tech companies as the best IT services suppliers in their 2018 ranking.
- 68 Ukrainian tech companies made it to the 2020 Clutch Top 1000 list, representing the top 1% of all B2B enterprises in the Clutch catalog.
- More than 100 R&D centers owned by or working with global companies, including Google, Samsung, Siemens, and Huawei, are located in Ukraine.
12 Reasons to Choose Outsourcing to Ukraine
Ukraine should be at the top of your list when outsourcing software development because it has the most significant number of IT professionals in Central and Eastern Europe. Also, you're not likely to find a better price-to-quality ratio anywhere else in the world. Moreover, Ukraine is the second in Europe by the number of freelancers or self-employed professional developers.
However, there are also other reasons to consider Ukraine as the number one destination for outsourcing.
High Tech Backgrounds of Ukrainian IT Engineers
It is expected that in 2024 more than 20,000 local students will obtain a bachelor's degree in IT. It is 23% more than in 2020. Currently, higher education institutions annually produce an average of 16,200 graduates with bachelor's degrees in IT.
The researchers show that the proportion of university applicants taking IT courses will continue to grow at the current rate up to 16.1% in 2026. Therefore, in 2030 there will be 37,400 new specialists per year.
The Growing Tech Community
The central Ukrainian cities with the highest number of skilled engineers, UI/UX designers, project managers, business analysts, and other IT professionals are Kyiv, Lviv, Kharkiv, Dnipro, and Vinnytsia. Kyiv is well-known for it beyond the borders of Ukraine. The city made it into the top 20 European IT hubs.
Ukraine is also known for its vast IT community. It consists of 14 clusters, including 80 companies. The biggest cluster is in Lviv. The ones in Kyiv, Kharkiv, and Dnipro are among the largest.
1 500+ Software Development Companies
Programming outsourcing from Ukraine also makes sense because it has more than 1,500 IT companies. They offer virtually every kind of software development service. That includes R and D services, web and mobile development, IT consulting, UI and UX design, quality assurance and testing, dedicated team building, and more.
Strong Startup Community
The country's vibrant tech scene has also fueled the rapid growth of the local startup community. Some of the names that have started in Ukraine and you know for sure include Gitlab, Jooble, Preply, DepositPhotos, Grammarly, PetCube, Mobalytics, Attendify, CleanMyMac, People.ai, InvisibleCRM, Readdle, Looksery - sold to Snapchat the last year and much more.
More than 110 Multinational R&D Centers
Ukraine is one of the 50 most innovative economies in the world. Because of this, it should come as no surprise that the country is home to more than 110 R&D centers for global tech heavyweights.
Some of those include Microsoft, Wargaming, Apple, Samsung Electronics, IBM, Boeing, Skype, Ericsson, Siemens, Oracle, and Magento. Several of these entered the Ukrainian market through outstaffing models.
Strong Work Ethic
There are over 110 global R&D centers in Ukraine, which is a positive indicator that developers are on a similar wavelength to clients and companies in the US and Western Europe. With Ukraine outsourcing, you can be confident in the commitment to excellence and the work ethic you will receive. Facts and figures there matter as much as personal and professional relationships. Ukrainian developers get invested in projects for which they are responsible.
4 Out of 5 Ukrainian Developers Speak English
About 85% of tech professionals have at least an intermediate English proficiency level.
Software outsourcing to Ukraine also works so well because eighty percent of the tech workers state that they have an intermediate or higher level of proficiency in English. Most software development and IT outsourcing companies in Ukraine offer free English classes to their employees. It dramatically increases their chances of getting hired.
The Best Price for High-Quality Service
Compared to Belarus, Poland, and the Czech Republic, outsourcing engineering from Ukraine works well because the rates are better, and the tech talent pool is much larger.
The average hourly rate for software development is $18, while the average software developer makes about $27,000 per year. That is three or four times less than any software developer makes in the United States and the United Kingdom.
Speaking of cultural compatibility, the work ethic which dominates the Ukraine IT outsourcing industry is quite similar to what you will find with Western businesses.
Ukrainian developers are open to challenges. They get personally involved in the projects they're working on and want more than anything to bring them to a satisfactory conclusion. It is especially true when you communicate with them directly, without any intermediaries.
Intellectual Property Security
In Ukraine, IT outsourcing companies comply rigidly with NDAs, or non-disclosure agreements. These protect your ideas from being stolen or copied. You can feel secure that your project data will never be shared with a third party.
Favorable Business Climate
Year by year, Ukraine's economy has improved. The same could be said of its international policies, particularly when it comes to fostering healthy business relationships.
In 2020, the growth of the country's GDP was $155.58 bln, and it is expected to reach $262.28 bln in 2026. At the end of this year, the overall volume of IT service export was $5B, an increase of almost 21% compared to 2019.
Convenient Time Zone
Ukraine is only one hour ahead of most European countries. Because of this, it is a convenient location for nearshoring. The work hours make for smooth communication between geographically dispersed teams.
The country is an attractive offshore choice for North American companies, as well. The 7-hour time difference between Ukraine and the East Coast makes a lot more sense than outsourcing to India, the Philippines, Vietnam, and other potential options.
Comparison table of IT outsourcing in Ukraine with other countries
What exactly makes Ukraine a popular destination for IT outsourcing? Let's compare their main parameters to define the peculiarities of outsourcing in various countries:
|Country||IT market size||Hourly rate||Popular languages|
200,000+ software developers
295,300+ software developers
Scala, Go, Objective-C, Kotlin, Ruby on Rails
How to avoid hidden costs of outsourcing
And last but not least, we’re going to discuss how to choose the right IT provider and avoid all possible pitfalls of IT outsourcing. Unfortunately, there are some you should know.
Choose a Reliable Service Provider
Find the company that you're sure is the right fit to help you with your project. Look into their reviews, and be sure to do some additional research. Check whether they have clear guidelines on their outsourcing services or objectively answer all questions related to outsourced software development.
Check Software Engineering Projects Examples
Make sure the company has reliable software development projects examples. It should reveal a lot about them. Learn what types of projects the business has been involved in, their complexity, and other relevant factors.
Communicate and Get an Estimate
Discuss each nuance and detail of your project. Try to meet the development team and learn about their soft skills.
Manage the Outsourcing Relationship
The cost of proper management can add anywhere from 6 to 10% to your overall budget. Therefore, ensure that a project manager can handle the whole outsourcing process and that all the functions are well-coordinated. Learn first about how to manage a distributed team. Then you get to know whether outsourcing IT processes are right for your business and be ready for possible challenges with management.
Pick Your Pricing Model
You'll need to choose the pricing model that is most appropriate for you.
There are a few types:
- A fixed price model, where you approve the budget before the development starts, and it remains unchanged. The executor bears any risk of deadline violation.
- The time-and-material model, where you pay for the hours spent on the development process.
- There is a dedicated team model.
It's where you hire the whole dedicated development team that will be engaged in the development of your project exclusively until it's finished.
Easy way to outsourcing in Ukraine
Ukraine is one of the best destinations for outsourcing. It has various advantages: a huge pool of talents, affordable rates, easy communication, etc. Ukraine has enormous potential due to the large number of students enrolled in computer science and technology classes.
The companies outsourcing IT services to Ukraine should define the type of specialist or team they need. The budget of the project will vary depending on those choices. Besides, it's also important to estimate the required amount of development to establish the correct time frame.
If you decide to outsource to Ukraine, we will gladly help you with your development projects. Working with the Softermii, you will get all the abovementioned pros: a team with great English, relevant education, and deep expertise in development.
Contact us any time if you need to boost your IT project. We'll be happy to
help you achieve better results!
Frequently Asked Questions
Reasons for outsourcing to Ukraine vary: from the huge number of programmers working with different software to reasonable hourly rates. Let’s dwell upon the pros and cons of outstaffing to Ukraine.
Today, many EU and US companies choose Ukraine for outsourcing. Indeed, Ukraine is one of the best countries providing development services all over the world. Along with Poland and Belarus, this Eastern European country has entered the IT global stage and keeps conquering it.
The benefits of outsourcing to Ukraine are common to any industry. First of all, the Ukrainian staff has a good command of English, so there are no communication problems. Dedicated Ukrainian software developers have at least a bachelor's degree in computer technologies, and many of them continue their education. And, of course, the Ukrainian market is full of developers of different levels working with various programming languages.
Need another reason why outsourcing to Ukraine? Here it is: any business can afford to hire a dedicated software development team in Ukraine. The matter is that the development services are not very expensive here: about $18 per hour. Therefore, hiring Ukrainian developers is more profitable than hiring US and EU developers.
You already know the answer to why to hire Ukrainian developers, and now it's time to answer how to do that. You can find Ukrainian development firms and individual development engineering specialists on Upwork and Fiverr, popular freelance platforms. You can also hire a developer company on Clutch. Job boards will hardly help you find a team or an agency, but they will be useful to find an individual specialist.
You can also contact the
development company directly via call center if you already know the
company you want to work with.
When you choose outsourcing software development in Ukraine, you select a variety of dedicated specialists who stay up to date with modern programming language trends.
If you are considering staff augmentation, Ukrainian specialists are a great choice. Offshore software development in Ukraine is extremely popular in this country, and many developers prefer to provide outsourcing services to US or UK enterprises rather than to work in-house.
Software development outsourcing to Ukraine is the choice of many HR teams. They just contact specialists and build the teams that deliver the best results.
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