Over the last decade, Ukraine has become one of the most attractive countries for IT outsourcing in the world. Among other practical reasons to start outsourcing 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.
5 Reasons to Choose Outsourcing to Ukraine
The use of resources is the basis for successful outsourcing work in the world. Ukraine now is a leading country among the executing countries, which receive orders from Europe and the USA. The country consistently maintains its top place in the Top 25 of the Global Services Location Index. Therefore, when deciding on outsourcing, companies are often guided by the main reasons and advantages. Let’s check them out!
Thousands of certified IT professionals
When planning to outsource web development in Ukraine or outsource some work to another company, you may be concerned about the staff’s qualification. However, the quality of higher technical education in Ukraine is recognized worldwide and produces the best technicians in Eastern Europe. That is why it is considered to be one of the best benefits of outsourcing to Ukraine: there is a lot of IT talent 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 has the second place after the USA in the Most Master-Level Certified Nation contest.Leading world papers recognize Ukraine software outsourcing prospects. “IT outsourcing to Ukraine is one of the perennial growth hope stories for the country, drawing its inspiration from the Soviet tradition of science teaching, and the country’s plethora of science institutes that used to churn out rocket scientists. Under market conditions, the schools 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 and outsourcing development to Ukraine 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%), Dnipro (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 and Ukraine web development outsource.
Competitive prices and advanced conditions
One of the major reasons for outsourcing to Ukraine, especially by the US and EU companies, is saving money. You might save up to 60% of your expenses if you choose Ukraine for outsourcing. 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 development teams offer a bewildering array of various services. An average software company is well equipped and can easily do the following when you outsource IT to Ukraine:
- Provide relevant databases of available candidates;
- Recruit, test, and interview the staff according to your requirements;
- Keep their skills up-to-date;
- Secure customer 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.
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. This is also the main difference between Ukrainians and Asians from India or the Philippines — perfect command of English and the same culture.
One out of four Ukrainian programmers gets hired by a local company. The rest are working for foreigners. So why outsource to Ukraine? 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.
No visa, 3 hours, and you are talking with your development team
The time difference in 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 regimes 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 of the TechMagic company, commented: “As I know, recruiters need up to 4 months to hire an IT specialist 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.”
TechMagic, an IT outsource company from Lviv, joined Top European App Developers 2015 list.
Constantly impressive IT market growth
As DOU reports, IT business will contribute 3% of Ukrainian GDP by the end of 2015 and rise to 6% by 2020. For comparison, it was only 0.8% in 2012. According to the Ukrainian government reports, the Ukrainian IT market’s average annual growth is 40%. In 2015, it will generate $5 billion. According to the World Bank estimates, the Ukrainian outsourcing industry is in 5th place globally.
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.
The Ukrainian outsourced dedicated teams have become firmly integrated into international business. As a result of the global financial crisis, outsourcing has become increasingly important in attracting human resources and the high-tech industry (IT). Outsourcing to Ukraine continues to gain traction, transforming the way we do business in the global marketplace, both locally and globally, while maintaining a strong growth position over the past decades. Not only does it help prove the countries' expertise in the global market, but also set higher standards and adopt global best practices locally.
Considering the maturity and saturation of the Ukrainian IT market, companies increase their competitiveness by gaining access to the broad pool of professional resources with a significant reduction in their expenses while still keeping the task performance high. Let’s also not forget about the cultural aspect and European mentality of the Ukrainian IT experts, which makes Ukraine a more popular country in terms of IT outsourcing compared to the Asian and European countries. The local startups and businesses professionally specialize in the field of IT services and tasks and provide various models of cooperation that can fit any budget and needs.
As the local companies that provide IT services get access to the existing business process, individual systems and infrastructure of external companies, it is important to show the reliability in the increasing market presence. The Ukrainian IT companies proved to have the highest standards of security and data protection. The TechMagic company knows how to work with all the above processes, providing the best of expertise. The company provides the regulatory stability of implementing the tasks, continuous education of the workforce, mobility, adoption of necessary solutions, secureness, and more.
If you have any questions regarding IT outsourcing to Ukraine, you can contact us, and we will connect you with local professionals! Whatever project or idea you have, be sure to get a professional consultation on your issue and cherry-picked engineers to complete the task.