IT Outsourcing

Ukraine Outsourcing Rates: the Best Cost-Value Proposition

In a world where offshore software development is quickly becoming the norm rather than the exception, finding the right outsourced development team looks like a daunting task. Today, IT services are a major export in countries from India to the Philippines. Despite so many new choices, the clear winner for many companies is the same. Ukraine outsourcing rates remain some of the lowest in the world, without sacrificing quality of work.

Why Ukrainian Developers

Aside from great offshore software development pricing, there are numerous reasons why Ukraine is one of the best countries to outsource software development.

High Proportion of English Speakers

Ukraine is a nation of many languages, a necessity of doing business with its European neighbors. Although Russian is the most commonly-spoken foreign language, English is a close second.

In the tech industry, English is nearly universal, with the vast majority of programmers, team leads, and marketing specialists having at least some proficiency in the language.

Highly Educated Population

Ukraine boasts over 400 universities that produce almost 40,000 graduates every year. Ukraine IT outsourcing is a clear path to success for young Ukrainians hoping to build a better life, and so computer science, engineering, and other STEM-related degrees are very popular. Over half of Ukrainians working in the IT industry hold a STEM degree of some type.

Track Record of Success

The success of software development in Ukraine makes it a self-sustaining industry, with more and more startups appearing every year. Many development teams are composed of seasoned veterans from the biggest names in global tech.

Corporations that have successfully leveraged Ukrainian talent for engineering, development, and R&D include Samsung, Magento, Skype, Google, Boeing, and more. Many employees of these development firms have gone on to found their own outsourcing operations, making their expertise available to companies of any size across the world. The Ukraine IT sector a $2.7bn USD market in 2015, expected to double by 2020.

Vast Talent Pool

IT is one of Ukraine’s largest exports, is not the largest. In 2015, the nation’s IT sector was estimated at $2.7bn USD, and is expected to double by 2020.

According to a report compiled by InfoShare and using Stack Overflow data, Ukraine is home to about 166,000 individual developers, comprising nearly 35% of the IT industry in all of Central and Eastern Europe. That number increases yearly as more young Ukrainians pursue careers in the field.

Participation in the Global Tech Community

The high concentration of tech workers makes Ukraine a top destination for conferences, trade shows, and summits in the industry. Dozens of such events are held each year, ranging from the very small (such JavaScript Frameworks Days held in March), to the gargantuan (iForum is held in April and attracts upwards of 6,000 participants each year).

The country is making its mark in events around the globe, as well. In 2018, the Consumer Electronics Show, the world’s largest trade event for consumer tech, debuted its Ukrainian Pavilion, showcasing 15 Ukrainian startups including Hushme and SolarGaps.

Governmental Support

Eager to encourage further growth of the IT sector, the Ukrainian government has added some tax incentives to the nation’s already-favorable tax environment. IT services like software development qualify for a VAT exemption, which was expanded in 2018 to include software sales to end users.

Like much of Eastern Europe, Ukraine’s corporate income tax is low at 18%, compared to the United States’ 35%, the United Kingdom’s 21%, and Israel’s 25%.

Low Cost of Business

Of course, most business decisions ultimately come down to the bottom line, and it’s here where Ukraine outsourcing rates show the clearest advantage over other countries.

Average Ukraine Developer Costs

Despite the high level of work, the high percentage of English-speakers, and the high success rate for projects, Ukrainian developers are a bargain by the standards of the Western world.

DOU, the largest trade association of Ukrainian tech companies, maintains a database of average salaries for developers. The numbers shown in their latest report drive home why Ukraine is such an appealing outsourcing destination for Western companies.

The recruitment sites Indeed and Glassdoor maintain similar resources for salaries in the US, and the difference is shocking. Comparing the numbers drives home why Ukraine is such an appealing outsourcing destination for Western companies.

Position Average monthly salary – Ukraine Average monthly salary – USA
Junior Software Engineer $600 $6755
Software Engineer $1700 $8215
Senior Software Engineer $3300 $8965
Technical Lead $3800 $8815
System Architect $4700 $10210
Project Manager $2100 $6735
QA Engineer $1200 $6485
DevOps Engineer $2200 $11530
Research Engineer $1500 $7260

Table 1. Average monthly salaries in Ukraine and the USA.

Figures shown reflect median monthly salary in USD across all of Ukraine and the United States, across developers of all experience levels.

Most global companies, after coming to an understanding of low Ukraine IT outsourcing rates, choose to contract with an established software development house rather than wrangling individual contractors. In Ukraine, these companies typically offer a complete package of software production, equally able to mesh with an in-house team or carry an entire project from inception to launch.

The best companies can offer clients support at every step of the process, from design to coding, project management, QA, and post-launch support. Many of them maintain robust marketing departments, helping clients ensure that their work reaches the broadest audience possible.

How to Get Started Outsourcing to Ukraine

There’s clearly a very strong case to be made for outsourcing software development to Ukraine. The country is a hotbed of tech talent, home to some of the greatest innovations in the last 10 years. At the same time, having software created in Ukraine is wonderfully inexpensive, making the country one of the best cost-value propositions in the industry.

If you’re hoping to leverage the talent and low cost of Ukrainian software developers to realize your own business goals, then the first step is research. Every project is unique, and what works for one may not be suited for another. Our comprehensive guide to Ukraine IT Outsourcing is a great place to start on your journey to supercharging your development strategy.

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