Why outsource to Ukraine

Over the last decade, Ukraine has become one of the most attractive countries for IT outsourcing in the world. Among other practical reasons to outsource to Ukraine, there are five that I consider the most important:

  • solid education base and a huge amount of certificated professionals;
  • competitive prices and the whole range of IT services;
  • perfect location;
  • Western business approach;
  • rapidly growing IT industry.

1. Thousands of certified IT professionals

When planning to outsource some work to another company, you may be concerned about the qualification of the staff. However, the quality of higher technical education in Ukraine is recognized worldwide and produces the best technicians in Western Europe. That is why there are many IT talents in Ukraine and they can easily deal with the most complicated challenges.

Ukrainians constitute around 1% of the world’s population, but that 1% includes 6% of the world's highly educated professionals in Math, Programming, and other technical sciences. Many youngsters choose IT in Ukraine because of the salary, which is three times higher than the average around the country. In addition, it is very popular because of the career opportunities. Ukraine got the second place after the USA in the Most Master-Level Certified Nation contest.

Leading world papers recognize Ukrainian prospects. “IT outsourcing is one of the perennial growth hope stories for Ukraine, drawing its inspiration from the Soviet tradition of science teaching, and the country’s plethora of science institutes that used to churn out rocket scientist. Under market conditions, the school have switched to producing programmers – an estimated 16,000 new IT specialists graduate each year”, - Financial Times reports.

According to DOU (Ukrainian web resource devoted to IT topics) research, there are around 90,000 developers in Ukraine and their number is increasing by 20% each year. The total number of people involved in IT services is about 220,000 people. There are about 4,000 IT companies in Ukraine and 85% of them are small or middle-sized (up to 80 specialists). 86% of IT specialists work in the five biggest cities of Ukraine: Kyiv (46.6%), Kharkiv (16.2%), Lviv (9.9%), Dnipropetrovsk (7.9%), and Odesa (5.5%). In 2013, Ukraine took the first place among Central European countries in the largest number of staff employed in IT.

2. Competitive prices and advanced conditions

One of the major reasons why companies from the US and EU outsource to Ukraine is saving money. You might save up to 60% of your expenses outsourcing to Ukraine. The income taxes in Ukraine are lower. Ukrainian developers are paying 4% tax of their income. This government tax plan will go on until 2023.

Also, according to this year Elance-oDesk company notes, the hourly rate (including taxes, operational expenses etc.) of developer’s is $38.8 in the US, $38.9 in Sweden, $39.6 in Germany, $35.8 in the UK, $28.7 in Poland, $26.1 in Russia and only $24.5 in Ukraine. Maybe India might offer lower project costs, but the quality of Ukrainian development is much higher.

At the same time, Ukrainian developer teams offer a bewildering array of various services. An average software company is well equipped and can easily do the following:

  • provide relevant databases of available candidates;
  • recruit, test, and interview the staff according to your requirements;
  • keep their skills up-to-date;
  • secure customers data;
  • deal legal and tax issues;
  • hire team leaders to manage the project;
  • give you the ability to provide real-time talks with your “virtual office” in Ukraine etc.

Global players like Samsung, Siemens and Abbyy have their R&D centers in Ukraine.

3. Common Western values

Ukrainians are Europeans sharing the Western way of life, values and business approach. That is why Western customers find it easy to communicate with Ukrainian developers. Also, this is the main difference between Ukrainians and Asians from India or Philippines—pefect command of English and same culture.

One out of four Ukrainian programmers gets hired by a local company. The rest are working for foreigners. Ukrainian IT specialists are managing such tasks like web and mobile development, support, testing, and design – everything you need to complete your project. The absolute majority are fluent in English, German, and Russian.

The biggest part of customers are from Europe (67.7%) and North America or Australia (56.7%). Every year Ukrainian IT companies increase the complexity of IT projects, which promotes the active and professional growth of Ukrainian IT specialists and their skills.

Ukrainians admit common values with other Europeans: beliefs in honesty and modesty, hard work and good education, strong family and open-minded fellowship.

4. No visa, 3 hours and you are talking with your developer’s team

The time difference Ukraine with the Western European countries is just 1-2 hours so it takes up to 3 hours to get to any Ukrainian city from Europe by plane. There are airports in all major Ukrainian cities and visa-free regime for citizens of EU, US and Canada. Many Ukrainians worked in the EU countries and the USA including manager’s positions.

Lidiya Dats, Co-Founder at TechMagic company commented:

“As I know, recruiters need up to 4 months to hire an IT specialists in the US and Western European countries. In Ukraine, a recruiter needs up to 2 months. It is crucial for IT business not only to save money but also to save time and fit the terms and conditions.”

Recently TechMagic, an IT outsource company from Lviv, joined Top European App Developers 2015 list.

5. Constantly impressive IT market growth

As DOU reports, IT business will contribute 3% of Ukrainian GDP by the end of 2015 and will rise up to 6% by 2020. For comparison, it was only 0.8% in 2012. According to the Ukrainian government reports, the average annual growth of the Ukrainian IT market is 40%. In 2015, it will generate $5 billion. According to the World Bank estimates, Ukrainian outsourcing industry is on the 5th place in the world.

IT outsourcing is the most booming and well-developed sector of the Ukrainian economy. According to Bloomberg’s 2015 list of Top 50 Most Innovative Countries, Ukraine holds the 33rd place (it was 49th in 2014). Global companies like Microsoft, Motorola, TDK, Skype, Deutsche Bank, Kodak, Oracle, UBS Bank, Apple Inc., Avid, Bosch, eBay, Dell, and IBM have already chosen Ukraine as the ideal country for IT outsourcing.

Techmagic - Good&Co case study