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Outsourcing to Ukraine: reasons and benefits

Business and Management

10 minutes read

Oversees companies opt to outsource to Ukraine for a number of compelling reasons. Not everyone knows, but many big corporations like Boeing, Apple, Google, Microsoft, Oracle, and others rely on software development companies in Ukraine because of price and talent pool. Despite the cloud of war hanging over us, our resilient workforce keeps innovating amid the challenges and still lures a steady stream of international businesses thirsting for knowledge on skills in software development. If you are looking to hire an outsourcing company to develop your product or feature, read this article till the end and decide if this option is for you.

Why you should consider Ukraine as an IT outsourcing destination for your project?

recently Ukraine has been gaining a lot of popularity for being one of the best outsourcing destinations in Europe. According to Statista’s estimates, in 2021, Ukraine’s IT sector surged by 36%, elevating exports from $5 billion to $6.9 billion while witnessing a workforce growth from 244,000 to 285,000 professionals. Consequently, over the last three years, the industry doubled its export figures and saw a 50% increase in its specialist count.  By 2022, the Ukrainian IT services industry exceeded a seven-billion-dollar mark in export revenue, marking an approximate $400 million uptick from the preceding year. On the infographics below you can trace how these metrics changed throughout the years.

Value of IT services exported from Ukraine from 2017 to 2022

Unfortunately, these dynamics went down due to the full-scale invasion of Russia in 2023, but our software development industry is still recognized as one of the most progressive in the world.

Reasons why should outsource to Ukraine

  • Solid reputation around the world. IT outsourcing in Ukraine is very popular, and many Ukrainian developers are working on outsourcing now and achieving numerous positive feedback and awards. Ukrainian developers ranked 1st by the Central and Eastern European Association (CEEOA), Outsourcing Journal, and Colliers International. Most of the developers have higher university degrees in Engineering and Mathematics, which increases their value and skill set. In addition to all the pros, a vast majority have a high level of English intermediate or upper-intermediate is widely spread among Ukrainian developers. 
  • Adjustable to crises. The 2020 year was a real challenge for each of us, every aspect of people’s lives changed after Covid-19 emerged. At the same time, as we know, hard times create strong people who create good times. Ukrainian developers properly handled all the challenges, decently organized remote work, aligned working processes, and continued to work on ongoing projects. Now, in 2023, after the Russian invasion of Ukraine, Ukrainian developers prove their strength, problem-solving, and determination to their work again. Companies who hire outsource development in Ukraine for startups now have evidence that even during the virus spread or ongoing war in the country, they will continue to work and meet all the deadlines.
  • Affordable pricing options. Hiring Ukrainian developers for startups always means the best ratio of quality price. While most Western European countries and the US developers’ rates can reach 100$ per hour, Ukrainian developers’ rate starts from 25$ to 60$ per hour, which means huge savings and great potential and quality work. 
  • A wide pool of specialists. With more than approximately 200.000 IT specialists, 160.000 of them are software developers. In Ukraine, you can find any specialist you need with a fair rate and essential skills.  
  • Extensive techstack. The most popular programming languages among Ukrainian software developers are Java, JavaScript, Python, C++, C#, and PHP. Also, Ukrainian developers use such languages as Typescript, Swift, Kotun, Ruby, Go, and Scala. Pretty impressive list, which means that when you hire developers in Ukraine, you are not limited to a small list of programming languages.
  • You help Ukraine fight the Russian aggression. On the 24th of February, most cities of Ukraine woke up to the sound of an explosion. Without declaring war Russia attacked Ukraine from the east, Crimea, and Belarus territory. Ukrainian citizens need a job as never before to maintain the country’s economy, pay taxes, and support our armed forces. In that case, hiring Ukrainian developers for a startup means you help Ukrainian citizens fight in this cruel war. 

Reasons why should outsource to Ukraine

Outsourcing VS in-house team 

There is a constant debate over which team is better: in-house or outsourcing. People tend to choose in-house because it’s cheaper and will be more controlled. However, this argument is overly simplistic. Both options are great depending on what your current development situation is and what goals you defined. We offer you to look at the table that compares these two types of teams.

Outsourcing VS in-house team

As you see, these two teams are very different in their approach and ultimately output. You can train your team to compensate for the weaknesses it has compared to outsourcing. It also has consequences though.

Training for the existing developers means investing in the skills of your staff in the long run. It’s nice to keep up the strength of your company culture and be able to do knowledge-sharing. However, it will take time and might be more costly to retain an experienced staff. Steep skills are hard to learn in-house too. This option is the best when aiming at steady team growth or far-reaching results.

On the flip side, outsourcing brings in quick expertise and can save costs. It is flexible, so it can fit immediate needs or fill the gaps where projects require specialized abilities. However, remote communication difficulties and misalignment issues concerning project objectives can appear. This is great for quick-fix projects or urgent ones needing diverse skills. 

Ukraine VS. other outsourcing destinations (based on rates)

Now let’s assess the Ukraine IT outsourcing market from a global perspective to see how it differs from other countries and regions:

  • USA & UK. These regions are known for their high outsourcing rates due to their strong economies and high living standards. The cost of labor and operational expenses is notably higher compared to many other destinations, making outsourcing to these regions more expensive. For instance, Ukraine outsourcing rates show US rates that go up to $100 per hour, while Ukrainian programmers charge $60 on average. Ukraine also has simple taxes and cheaper office space. Outsourcing to Ukraine saves companies more than half of the expenses of American companies.
  • Western Europe. Similar to the USA and UK, Western European countries such as Germany, France, and the Nordics maintain high outsourcing rates due to their economic stability and relatively elevated living standards.  For example, On average, developers in Germany receive an annual salary of $60,000. While providing quality services, the rates in these regions remain on the higher end compared to global averages. 
  • Eastern Europe. Ukraine, alongside countries like Poland, Romania, and Bulgaria, offers competitive rates for outsourcing. These nations provide a skilled workforce at rates significantly lower than those in Western Europe while ensuring quality and expertise in various fields such as IT, engineering, and customer support. According to Gartner, Ukraine tops the CEE region for value. Compared to neighbors like Poland, Bulgaria and Moldova, Ukraine offers better rates and more talent for businesses.
  • Asia. Asian countries like India, the Philippines, and Vietnam have been key players in the outsourcing industry due to considerably lower labor costs. However, potential challenges such as time zone differences, language barriers, and cultural differences may impact seamless collaboration, especially for businesses operating primarily in European markets.

In our previous article, we have already compared outsourcing destinations Ukraine vs India. Check it out to see a comprehensive review of the topic.

Let’s talk about your project?

Feel free to ask any additional questions you might have. Our experts will be glad to assist you.

Sales Manager
Anastasia Kosovan
Sales Manager

What risks could Ukrainian IT outsourcing entail and how to deal with them?

Even though Ukraine boasts high outsourcing rates, some challenges can arise if you decide to partner with our teams.

  • Geopolitical unrest. Continuing war with Russia can disrupt the business because of frequent blackouts or unstable network connections. This issue could be resolved through diversification of business operations with backup offices or teams in politically stable locations other than Ukraine. Also, investment in backup power supplies such as generators and cloud-based services helps enterprises carry on normally when disruptions manifest.
  • Communication barriers. Differences in the style of communication, culture, or remote teamwork approaches can result in the misalignment of project requirements. To reduce the risk, add bilingual managers or use translation tools allowing teams to communicate more clearly.
  • Cyber attacks. Ukraine, like any other country, stands the risk of cyber threats. Implementation of strict measures of having cybersecurity in place with regular audits and encryption protocols and strategies for data backups remain the best practice guaranteeing that sensitive information remains under protection from breaches.
  • Fluctuations in the talent pool. The availability of skilled resources may fluctuate due to either changes in market conditions or issues with retaining talent. When there is a need for quick and flexible service from skilled professionals, the strategic partnership maintained with more than one outsourcing vendor or a talent pipeline developed by the organization will help.
  • Logistical disruptions. External factors such as logistical problems affecting products’ transport or hindrances in the supply chain are instances that can lead to project delivery delays. Diversification of one’s suppliers, or logistics partners and also through holding buffer stocks is one of the better ways to service this kind of risk.
  • Legal and regulatory changes. Some changes in local laws or regulations may affect the contracts of outsourcing, or the operation as such. One must keep updated about legal news and ensure your contracts have flexibility clauses to fit changing regulations.

Practically all of the risks can be managed if you opt for a reputable Ukrainian outsourcing team. You need to be considerate and open to communication with our experts to be aware of challenges and learn how to mitigate them. Our team’s policy is transparency which means we don’t hide potential threats from our clients. Even more about it, we properly discuss all the details with you so you are fully informed about your decision.

How to choose a reliable software development outsourcing partner in Ukraine?

Catch some tips that will help you make a wise choice:

Tip 1: Evaluate the partner’s technical skills, industry-specific experience, and project portfolios. Look for evidence of successful projects in your domain, checking their proficiency in relevant technologies and methodologies.

Tip 2: Ensure effective communication by assessing their language proficiency and cultural understanding. Seek partners who share similar work ethics, fostering a smoother collaboration and minimizing misunderstandings.

Tip 3: Inquire about their cybersecurity measures, data protection protocols, and adherence to international security standards like ISO, GDPR, or HIPAA. Prioritize partners with robust security policies to safeguard your project’s confidentiality.

Tip 4: Confirm their ability to scale resources as per your project’s demands. A reliable partner should offer flexibility in team size and expertise, accommodating changes or additional requirements without compromising quality.

Tip 5: Research client testimonials, reviews, or case studies to gauge their reliability and client satisfaction levels. Directly contacting previous clients provides valuable insights into the partner’s work ethic, reliability, and project management skills.

How to choose a reliable software development outsourcing partner in Ukraine

ASD Team as a Ukrainian outsourcing partner

We are a Ukraine-based team with 15 years of experience in the field of travel and hospitality-related spheres. Advanced Software Development company offers clients an experienced team of specialists to work on your project complexly. That means our team covers all the needs of a client’s project from the very beginning to the deployment and support, in other words, end-to-end development. 

Sum it up

Summing up, we see hiring Ukrainian developers is not only an option to get high-quality specialists for lower wages. It is prospective and reliable workers who can find the most creative approaches to solve daunting tasks, work, and meet deadlines even under different circumstances. Most Ukrainian developers are highly educated with university degrees and have a high level of English and discipline. All these factors with lower salary rates make IT outsourcing in Ukraine very appealing for companies who want to create a team of professionals to develop their products with all the requirements met.

FAQs

Why do companies residing in the USA or UK hire Ukrainian developers over their local ones?

Companies opt for Ukrainian developers due to their:

  • Strong technical skills
  • Cost-effectiveness without compromising quality
  • Flexibility in team sizes and scalability
  • Cultural compatibility and good communication.
What software services can be outsourced to Ukraine?

Ukraine offers a range of outsourced software services including:

  • Custom software development
  • Web and mobile app development
  • Quality assurance and testing
  • UI/UX design
  • Cloud computing and DevOps
  • Data science and AI.
Do low rates for outsourcing services affect the quality of work provided by Ukrainian IT companies?

No, despite competitive rates, Ukrainian IT companies maintain high quality due to:

  • Skilled workforce
  • Focus on quality and adherence to international standards
  • Emphasis on efficiency and innovation in service delivery.

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