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Top 5 Benefits of Outsourcing Software Development Ukraine

The article was originally published on Ascendix Tech's blog

For the last 10 years, Ukraine has become one of the leading outsourcing software development centers for dozens of countries around the world.

What’s more, Ascendix has outsourced IT services to India, Mexico, Argentina, and China having different experiences with both positive and negative outcomes.

After a while, we have received a message from a Ukraine-based IT services provider inviting us to give them a try and consider Ukraine as a great offshore dev location.

This way, we had settled a new office in Ukraine 5 years ago and since then we’ve been growing our team with over 150 employees in 2021.

Due to the fact that this topic was vital for our business and it’s still essential for lots of startups and companies around the world, we want to share 5 objective reasons and benefits of outsourcing software development Ukraine without using rose-tinted glasses.

Hope you’ll enjoy reading this post and share your feedback in the comments.

IT market in Ukraine: 2021 Overview

We want to NOTE that most statistics and analysis data was taken from an in-depth report ‘Ukraine: The Home of Great Devs. 2021 Tech Market Report’ prepared by Beetroot and other sources.

Let’s start with the quick 5 facts about Ukraine as a prosperous IT services market cluster.

Ukraine IT Services Market: 5 Quick Facts

  1. > 200,000 active tech professionals with over 36,000 tech graduates were spotted in 2021.
  2. Over 35% of the active IT labor force have 5-10 years of technial background while 14.2% of tech professionals provide 10 years of working experience.
  3. According to PwC forecast, the Ukrainian IT services market volume is projected to reach $8.4 bln by 2025 along with 243,000 IT professionals.
  4. The United States (>50%), Great Britain (~30%), and Western European countries are among the top clients of the Ukrainian IT services market.
  5. Over 85% of Ukrainian tech specialists have at least an intermediate English level while >30% of them show Advanced (C1) English proficiency level.

Quick facts on outsourcing software development Ukraine

Ukraine as a progressive R&D center in Europe

The investment-attractive nature of the Ukrainian tech cluster has drawn attention and motivated many entrepreneurs, startups, and companies to give it a try and establish new R&D centers in Ukraine.

Let’s the best known and popular companies having their R&D offices in Ukraine:

  • Gameloft
  • Huawei
  • Upwork
  • Oracle
  • Google
  • Plarium
  • Grammarly
  • Siemens
  • Samsung 
  • eBay
  • And others.

Top R&D Centers in Ukraine

Top Investment-Intensive Tech Startups from Ukraine

Aside from outsourcing, Ukraine has also become a great and competitive IT product-based center with dozens of startups and companies that have greatly succeeded in the world arena with millions of investments.

Among the most prosperous companies, we should mention the following ones:

  • GitLab with $268M raised investments in 2019
  • Grammarly with over $90M round of funding in 2019
  • People.ai with $60M of raised funds
  • Restream (a collaboration between Vinnytsya, Ukraine, and Austin, USA) with $50M of investments raised during the first 2020 round
  • Reface raising $5.5M in 2020.

Top Ukrainian-Based Tech Startups 2021

How many hours ahead is Ukraine?

One of the core reasons of becoming an investment-attractive location for outsourcing software development is the suitable timing difference for most European locations and even the Americas compared to other competitors of Ukraine.

In terms of the Western European countries, they mostly have from 1 to 4 hours difference which allows collaborating efficiently for 4-7 business hours.

Considering North American countries, the companies usually have 6h time zone difference which allows using 2 hours on average for performing strategic discussions, project progress updates, and even cross-development team interactions.

This means that Ukraine app developers work on projects while the US clients fall asleep and still stay active while Americans wake up in the morning.

Competitive Ukraine outsourcing rates in 2021

According to Beetroot’s report, the average Middle Software Developer's monthly salary in Ukraine is about $3770. 

As a comparison, US middle technical specialists get paid $86,523/year which means $7210 per month.

So, if you hire software developers Ukraine, you approximately save up to $3440 per month in average compared to nearshoring resources in the US.

Top 5 Benefits of Outsourcing Software Development Ukraine

#1 Large talent pool of >200,000 tech specialists

As mentioned earlier, the number of tech specialists has exceeded 200,000 in 2021 along with 36,000 tech graduates per year.

In turn, Ukraine could have provided only 130,000 tech specialists in 2017 with only 23,000 IT graduates that year.

Below you can see the results of StackOverflow Developer Survey 2021 with the ranking showing the top programming languages and tools preferred by Ukrainian professional developers.

StackOverflow Developer Survey 2021

Below you can see the detailed percent-based chart of technologies mostly used by Ukraine tech community.

Programming Languages by Ukrainian Developers

What does this all mean to your business?

Put it simply, the current Ukrainian IT market growth rates allow to ensure that there are no potential warnings and risks even considering COVID-19 and unstable political environment in the nearest future.

#2 The quality meets the price

The fact that Ukraine provides a growing number of IT specialists and reasonable developer rates transforms into a high price-quality relationship. It allows Ukrainian software development companies to compete with many European and US technology providers.

So, the average Ukraine outsourcing rates are $25-$50 while US companies charge $55-$85 providing the same technical background.

Moreover, Ukraine offers more cost-efficient rates compared to Poland, Belarus, and Czech Republic that make the list of the top East European IT services providers.

According to PayScale, the average monthly salary of a software developer in Poland is approximately $4,540. In turn, the same tech specialist in Ukraine gets paid $2,260 per month based on Indeed’s data.

Median IT Salary by Seniority Level

These numbers mean that outsourcing software development Ukraine is a great opportunity to save funds thus accessing a large talent pool with a solid technical background and high final quality of delivery.

#3 Strong English proficiency level 

Efficient and roadblock-free communication is among the top priorities for software development providers and companies to deliver fast, high-quality, and result-oriented technology solutions.

If you experience miscommunication issues and other challenges while performing calls and meetings with a technology provider, it will most likely negatively influence the project deadlines and final product quality.

In terms of software development outsourcing Ukraine, you can be sure of being roughly on the same page with 85% of development teams according to The Portrait of IT Specialist 2020 report by Dou.ua.

Product and Project Managers, Business Analysts, Solution Architects, and Team/Technical Leads are among the key tech positions that perform advanced English proficiency levels.

Senior PMs are the best communicators as the majority of them have Advanced+ English level.

English proficiency level by tech specialists | Ascendix Tech

This benefit allows you to make sure that most Ukraine app developers will get your project requirements in the right way and provide alternative technology solutions (if needed) without wasting your time and nerves.

#4 Suitable geolocation and time zone difference

As we’ve already stated, Ukraine is 1-3h ahead of most European countries that makes it possible to share at least 7 business hours for collaboration.

For example, a company from London has only 2 shared business hours with an outsourcing software development team based in Vietnam and only 1h with the Philippines.

In contrast, Ukraine provides 7 out 9 shared business hours for the UK and 8 out of 9 for most other European companies.

Interestingly, the Ukrainian geographical location allows us to be the #1 nearshoring option for CEE countries.

What’s more, Ukrainian airlines offer (depending on COVID-19 restrictions) daily direct flights to most European locations that take only 2-3 hours from Kyiv to Lisbon, for example.

For example, you can greatly save funds on tickets by purchasing Ryanair and Wizzair low-cost fly tickets that offer two-way direct flights from London, Berlin, Vienna, and other cities for $20-$60 per ticket.

Besides, 81 European and US countries don’t need to be issued a visa for visiting Ukraine and approximately 50 other countries just need to share online their residents’ online passports to visit Ukraine for a short period of time.

This all means that a convenient location and suitable time zone difference feature the list of the core reasons many startups and companies outsource development Ukraine.

#5 Rapid Annual Growth of IT Industry Ukraine

We’ve shared the current Ukrainian IT services market growth rates, but now we want to discuss more in-depth statistics, so you get a better understanding.

So, during the last 5 years, Ukraine has significantly grown and invested in increasing the volume of IT services export.

Let’s review these 5 years in greater detail:

5-Year Ukrainian IT Services Market Overview
Year Number of tech specialists Market value, billions
2016 153,000 $1,98
2017 172,000 $2,49
2018 184,000 $3,2
2019 192,000 $4,17
2020 205,000 $5,03
2025 (estimated) 242,000 $8,4

Has COVID-19 impacted the Ukrainian IT services export?

The pandemic influenced the IT industry in Ukraine only positively as software development provides flexible remote opportunities.

In witness whereof, we want to show the Ukrainian IT job market dynamics from Jan 2020 to Jan 2021 according to the DOU report (one of the top IT blogs and communities in Ukraine).

NOTE: below you can see the accumulated number of tech vacancies by month.

Ukraine IT Job Market Dynamics 2020-2021 | Ascendix Tech

As you can see, the Ukrainian IT jobs market has shown a solid decrease from Jan to Apr 2020 due to multiple factors like winter holidays, an upcoming pandemic, etc.

However, the Ukrainian IT market has returned to its previous positions in July 2020 and since then we can only spot a significant increase with a short pause for winter holidays in Dec 2020.

Surprisingly, Ukraine has performed an all-time record in terms of the number of tech-related vacancies in Jan 2021 with the number of over 8,132 positions.

Moreover, the recent years have been featured as the most investment-intensive period for the Ukrainian IT market.

Specifically, GitLab, Restream, Reface, Grammarly, People.ai, and other tech startups have accumulated totally over $500 million since 2019.

Ultimately, why outsourcing software development Ukraine is a progressive and profitable choice for multiple companies?

So, why outsource to Ukraine:

  • Decrease labor costs through cost-efficient rates
  • Approach an enormous talent pool with over 200,000 tech specialists
  • Get high-quality delivery with strong technical background
  • Dodge plenty of legal restrictions
  • Work within a convenient time zone
  • Benefit from minimal cultural differences.

Benefits of IT Outsourcing to Ukraine | Ascendix Tech

Conclusion

We hope our brief list of reasons and benefits of outsourcing software development Ukraine will become in handy for you while considering IT outsourcing and choosing an ideal offshore dev location.

Always study the pros and cons carefully to make a well-considered decision as it will influence the final product quality, development costs, and future success of your business idea.

If you’re interested in getting more detailed information on outsourcing software development Ukraine with infographics, numbers, charts, and tables, check the full blog article Top 5 Benefits of Outsourcing Software Development Ukraine.

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