Suppose you're planning to launch or develop a startup, or if you're already running a small to medium-sized business, you might be considering the idea of hiring a remote team from overseas.
You might have heard good things about development teams in Ukraine, but you still have some considerable reservations. Let's dot the I's and cross the T's on reasons for cooperating with outsourcing teams in Ukraine.
By the way, we have a podcast episode on 10 things to know before hiring.
Ukraine has become an IT outsourcing powerhouse, exporting a staggering $7.3 billion worth of services annually, which accounts for around 4% of the country's GDP, as revealed by the IT Ukraine Association and The National Bank of Ukraine in 2022. This growth is driven by a vast pool of skilled professionals, increasing yearly. As of 2021, there were 285,000 IT experts in Ukraine, with more being added each year, as more than 20,000 bachelor’s and master's degree graduates are produced annually by the country's universities.
Ukraine's IT talent has caught the attention of international companies like Apple, Uber, and Snapchat. And it's not just the big names. Over 100 Fortune 500 companies, including Amazon and Microsoft, work with Ukrainian developers for their technical proficiency in software engineering, web development, and IT services.
Estimates suggest that Ukraine is home to an impressive range of 3,000 to 5,000 IT firms. The Tech Ecosystem Overview provided by the government identifies 1,142 product-based companies and 858 service providers in the country.
These companies offer a wide array of solutions, encompassing everything from nanotechnology and blockchain to artificial intelligence and video game development. Significantly, the International Association of Outsourcing Professionals has recognized 18 Ukrainian companies in its top 100 list of global outsourcing firms.
Additionally, Ukraine holds the position of being the second most significant market for IT outsourcing in Central and Eastern Europe.
Ukrainian IT professionals bring more than just a large workforce to the table. They're recognized for their proficiency in a broad spectrum of coding languages, including those that are widely-used as well as more niche ones.
This is demonstrated by the rankings from the annual DOU.ua survey, which illustrates the variety of programming languages utilized in their work.
The DOU.ua survey also provides insights into the age, experience, and qualification levels of Ukrainian IT specialists:
The most prominent centers for IT in Ukraine include cities such as Kyiv, Kharkiv, Lviv, Dnipro, and Odesa.
When you go for outsourcing, you're in pursuit of an optimal blend of cost-effectiveness and quality. It should present a more economical option than employing local developers, without a drop in standards.
Let’s begin with the world IT Outsourcing regions’ hourly prices on a large scale.
As previously highlighted, Ukraine holds the position as the second-largest provider of software development services in Eastern Europe. It is recognized for its competitive pricing structures without compromising the expertise of its software developers. Typically, a software developer from Ukraine would charge between $35 to $55 per hour, starkly contrasting the substantial $100 - $180 hourly rate of US-based developers.
Compared to Western Europe, outsourcing IT projects to Ukraine becomes more economical. To put it in perspective, UK-based developers charge between $60 to $100 per hour, while those in Germany invoice at rates ranging from $55 to $85 per hour.
Even little research reveals that the quality of work and level of expertise between Ukrainian and American IT specialists isn't markedly different. However, the notable distinction lies in Ukraine's significantly lower average IT specialists' salary, which is more than half of its American counterpart.
When comparing in-house teams to outsourcing, the differences are clear:
Aside from cost efficiency and technical expertise, a company's location and time zone are essential factors to consider when outsourcing IT projects. Establishing seamless communication can be challenging when working with a partner on the other side of the world.
Ukraine's geographic location is 7-8 hours ahead of numerous regions in the US. This may seem like an obstacle, but Linkup Studio has been operating in the market for over a decade, with most of our clients residing in those time zones. They often express our team's flexibility and ease of collaboration.
The time difference for our Western European clientele is a modest 1-2 hours behind Ukraine. This slight variation has minimal impact on interactions with our software developers, ensuring a smooth working relationship.
How do we bridge the gap between Linkup Studio’s main office in Lviv and our partners across Europe, the Middle East, and the United States?
We prioritize scheduling meetings during hours that overlap for all teams involved, facilitating effective communication. We utilize various collaboration tools, including Slack, Trello, etc., to streamline our workflows and keep everyone on the same page. Additionally, our team is committed to maintaining clear and open communication. We ensure that tasks, deadlines, and expectations are explicitly outlined and prioritized to avoid potential misunderstandings or delays.
Effective communication is crucial for a successful collaboration, and the English language skills of software developers play a significant role in this regard. Ukraine boasts a moderate level of English proficiency among its population. As per the English Proficiency Index, around 85% of professionals in the software development sector possess at least intermediate English language skills. Generally, Ukrainian developers have a strong proficiency in English, which is a non-negotiable requirement for IT.
Additionally, there's a noticeable relationship between a developer's experience and their English language proficiency. Data from the Ukrainian digital community of programmers, DOU, reveals that over 60% of senior developers are upper-intermediate or advanced English speakers.
Contrary to common perceptions, the Ukrainian tech industry is not as rigid or inflexible as it might seem. Over the years, through close collaborations with European and American companies, a more open, adaptable Western work culture has also taken root here.
A key factor contributing to this cultural shift is the influx of Western entrepreneurs who have either started or grown their businesses in Ukraine. This influence has shaped the local IT workforce, aligning them with Western business practices. Therefore, you can expect a less formal and more communicative approach when you engage with IT outsourcing companies in Ukraine and Linkup Studio in particular.
Ukrainians are committed to delivering high-quality products, meeting deadlines, and being highly adaptable to circumstances.
It's no secret that the ongoing conflict is a primary concern when considering IT outsourcing in Ukraine. In the current global recession, it's natural for founders and business stakeholders to evaluate their risks thoroughly.
Looking outside the moral implications of supporting a nation defending its human rights and sovereignty, investing in outsourcing to a country mired in conflict seems risky.
However, it's important to note that the conflict has only significantly impacted one IT hub, the Kharkiv region, which represents about 15% of the Ukrainian industry. This means that the remaining 85% of regions continue to operate effectively and stably.
Based on the report "War’s Impact On Ukraine’s IT Industry" published by the gathered Ukrainian IT Cluster:
85% of companies restored activity fully or almost fully.
The IT sector in Ukraine is among the few industries that have swiftly rebounded and actively contributed to war-time initiatives, thereby assisting the Ukrainian Army in its efforts toward victory.
Here's a chart illustrating the monthly contributions made by IT companies. If these companies were struggling, they wouldn't be able to offer such support.
96% of companies state that they financially support the wartime projects that bring Ukraine closer to victory.
A significant 78% of CEOs in the IT sector have declared their companies as "healthy". This term covers a wide range of aspects, including business operations, financial metrics, team morale, and involvement in socially responsible activities.
Given the evidence, it's clear that while the war has indeed touched the IT sector, the industry has demonstrated resilience and recovery. Therefore, Ukraine has reliable and robust partners with whom one can collaborate without fear of investment loss.
Linkup Studio has been helping businesses around the globe create top-notch, award-winning products for the past decade. We've partnered with over 150 clients from the US, Canada, Europe, and the Middle East markets. Despite the ongoing conflict, we managed to grow our team to over 100 professionals last year.
At Linkup Studio, we have a 4.9 rating on Clutch and a perfect 5-star score on Goodfirms. Our commitment to quality has been recognized with top-tier awards in the industry, such as the Red Dot, UX Design Awards, and 'App of the Day.' It's all about delivering outcomes that truly make a difference for our clients.
Our team serves as a product-driven, end-to-end technology and development partner in crafting our clients' products. We delve into understanding our client's culture and business vision, enhancing it with our extensive practical experience.
Highlights of our collaborations at Linkup Studio include the Reverso platform, which saw a threefold increase in revenue following a comprehensive redesign. We also played a significant role in developing the Impactive platform, which became an influential tool in Joe Biden's successful presidential campaign. Furthermore, we've developed innovative products like Alleo and CLASHD.
For more of our case studies, click here.
Ukraine proves to be a dependable outsourcing hub where outstanding quality aligns with reasonable pricing. Here, you'll find highly-skilled IT specialists and enjoy seamless communication, reliable partnerships, and gratifying outcomes.
Our CEO and Chief Sales Officer have recorded a podcast episode for you on how to choose the right partnership.
Linkup Studio is a trusted IT outsourcing partner to clients worldwide. Our team is based in the secure western region of Ukraine, far removed from conflict areas. When partnering with us, you experience all the benefits of working with Ukrainian professionals. We stand ready to transform your concepts into successful products.
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