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5 questions you might have about IT outsourcing in Ukraine

Still not sure if Ukraine is a good outsourcing destination? We've answered the most frequently asked questions we get from our clients.

Written by Jarek Górny

The IT industry in Ukraine started to grow rapidly ca. 20 years ago, and now, being the biggest exporter of IT services in Europe, is hotter than ever. An excellent quality-price ratio makes it one of the best outsourcing destinations in the world. Nevertheless, while deciding on moving any operations abroad, you want to be absolutely sure about it. We will try to get rid of your uncertainties in the below article or at least answer the most frequently asked questions that we get from our prospective clients.

1. Why is it such a bargain to work with Ukrainian IT specialists?

Ukraine is one of the poorest countries in Europe — although the salaries increased by over 70% in the last five years, it’s still just USD 3.12 net per hour. One could think it’s OK because everything is cheaper in Ukraine… but it’s not.

According to the calculations of the International Monetary Fund, GDP per capita (according to purchasing power parity) in Ukraine accounts for just 9,800 USD. To understand how small this amount is, let’s check other European countries: in Germany, it’s USD 53,570, in Poland USD 33,890 and Romania USD 28,000.

Having in mind the average remuneration, let’s have look at the salaries in IT. The average salary of a Middle Developer is about $1,500. For Senior positions, the salary accounts for ca. $2,500–3,500. You can do the math — IT people in Ukraine earn many times more than the average hourly rate, and with such money, you can make a decent living, even in a relatively expensive Kyiv. That’s why the IT job market in Ukraine is so hot and, as a consequence, competitive. It’s just extremely beneficial to work in the Ukrainian IT sector right now.

2. Is the quality of Ukrainian IT workforce good enough?

When something seems too cheap, people get suspicious about the quality and it’s completely normal. At this point, we’d like you to ask you a tricky question: what companies like Uber, Wix, Ubisoft, Magento, Paymentwall, Jooble, Grammarly, Preply or Mobalytics have in common? Take your time, you can do it 😉

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They are all tech firms that have development teams in Kyiv (the last 4 were also founded there). And there’s many, many more.

According to the 2019 edition of The State of European Tech report by Atomico, there are almost 200,000 professional developers in Ukraine, which is the 8th place in Europe. A different study, CEE Software Development Report, says that there are 150 universities in Ukraine and 23k students with a technical diploma graduate from them each year. 83% of IT professionals in Ukraine have tertiary education and 56% of them attended either programming or other closely related courses.

The quality of work is subjective and quite hard to measure, but the above numbers and big names just speak for themselves.

3. Is Ukrainian IT market stable?

ICT market is one of the most dynamic branches of the Ukrainian economy. Its value increases by 20% per year on average, and in 2018 it reached the level of USD 3.6 billion, which corresponded to 3.34% of the country’s GDP. Ukraine is already the largest exporter of IT services in Europe, and it’s expected to reinforce its position. According to a report by UNIT.city, it will reach $5.4 billion in 2020 and $8.4 billion in 2025.

The ecosystem doesn’t get behind the industry. More than 20 Ukrainian cities have established their own IT-clusters. The largest are located in Kyiv, Lviv, and Kharkiv. 1,000+ events related to startups, tech and investments take place every year.

The sector is also receiving significant investments. In 2017, the above-mentioned startup Grammarly, which developed AI writing enhancement software, was sold to US investors for USD 110 million.

4. Do Ukrainian IT specialists speak English?

Although Ukraine is the third last European country in the EF Language Proficiency Index, most of the people with higher education can speak English pretty well. About 80% of IT Specialists based in Ukraine speak English on at least intermediate level; 45% are either fluent or can sustain a conversation on an advanced/upper intermediate level of English. It’s also important to keep in mind, that very often it’s the Account Manager, who you’re in touch with and not necessarily the developer him- or herself.

5. What’s the mentality of Ukrainian people?

Language is not everything, it’s also the cultural differences that matter. Instead of confirming or busting stereotypes here, let’s see the actual research on the Ukrainian mentality.

We chose some of the takeaways from the Hofstede’s 6-D Model© analysis about Ukrainians that we find particularly pertinent to the nature of the IT business:

• relationships are extremely important — it’s usually “us” instead of “me”,

• Ukrainians are rather modest at their workplaces and tend to understate their achievements and competences,

• context and background information are crucial,

• at the beginning of the relationship, Ukrainians might seem quite formal and distant, however, formality is usually a sign of respect,

• they show strong perseverance in achieving results.

Similarly to the last point that concerned language proficiency, let’s not forget that in many cases you will be in touch with your Account Manager only — such people have usually outstanding communication skills, so cultural differences don’t matter that much.

Do you still have doubts about outsourcing in Ukraine? We will gladly answer your questions! If you think you might need some help with putting together a tech team or just want to hand over the entire project, we’re there for you. Our Bunch is based in Kyiv, Warsaw (where the company is registered) and Berlin. Reach out to us at hello@bunch.consulting if you have a project in mind and we will prepare a rough estimate for you.

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