Ukraine’s IT outsourcing in 2021: the industry changes alongside Covid
In 2021, IT outsourcing in Ukraine achieved excellent results: foreign companies began to compete for developers showing global results. That gave rise to the beginning of the constructive dialogue between the government and the technology industry. Over the past few years, shifts have already taken place, and bureaucratic costs are gradually disappearing. We'll talk about IT development trends and why Ukraine remains attractive to investors even during a pandemic in this article.
Ukraine is a promising country for the IT industry. It’s favorable for developing a startup ecosystem while taking 29th place in the StartupBlink rating. Of course, the country's investment attractiveness and business activity depend on various conditions, one of which is resilience to the Covid-19 pandemic.
Hundreds of millions of people worldwide have felt the effects of isolation, quarantine, and economic change. That has had a significant impact on the work environment: the hybrid workplace model has become more stable and popular with many employers. We believe that communication and synergy within the team are paramount to the business and may now be more critical than ever. Anyway, prosperity is possible where the most comfortable conditions for development are created: the tax system, the number of talented IT specialists, geographic location, and cultural characteristics.
Short Ukrainian industry overview
Today in Ukraine, there are about 212 547 private entrepreneurs who work in the IT field. Due to the pandemic, the growth rate has dropped slightly and is about 16% over the last year (compared to 20-22% in 2018 -2020). Interestingly, the country is included in the list with specialists who started writing code between 5 and 10! So the potential of early education indicates the development of technological innovation and the growth of the IT-sphere at the global level.
Ukrainian developers also show excellent value for money. That resulted in increasing competition between contracting companies for the local talent dramatically. Many tend to consider Asia as the primary source of outsourcing personnel, but in this case, their cheapness is comparable to the subsequent results that don’t coincide with expectations.
In 2019, Ukraine took 20th place in the ranking of outsourcing companies - the number of vacancies is about 5047 per month (according to 2019 statistics). If we’re talking about a large project, then it makes sense to take care of suitable personnel in advance. Anyway, junior or middle specialists can be found at any time.
What attracts European and American companies to hire Ukrainians?
Availability and low cost of personnel
The demand for Ukrainian developers has grown to such an extent that they most often receive several job offers. However, the customer will have to spend an average of about $ 36 000 per annum and $ 35-60 per hour, which seems to be a significant difference compared to the United States (e.g., a specialist earns an average of $ 54 495 per year).
Cultural traits
The friendliness and efficiency distinguish the European mentality of Ukrainians - they’re very adaptable in a team and assimilate in other countries with entirely different cultures. In addition, these people are exceptionally entrepreneurial and disciplined but very ambitious.
Geographical proximity
Undoubtedly, the geographical location of Ukraine in the very heart of Europe has a great advantage for future employers. There is an excellent interchange of transport routes and a high level of English proficiency.
Favorable ecosystem for startups
The high quality of developers is the reason for the prosperity of many world companies born in Ukraine. Take the same Ahrefs, Grammarly, SendPulse, Gitlab - they’re unicorns that have scaled globally and become popular tools without which any business cannot be imagined.
There are 462 startups in the country, for which the state authorities are trying in every possible way to provide more comfortable living conditions. The same Diia City bill, which we’ve already written about here, implies significant shifts in the dialogue between the government and the IT industry.
Covid and its impact on the industry
The pandemic unambiguously changed the work model for the next few years. Some employers implemented a hybrid workplace, some practiced a 4-day work week, and some found it profitable to open offices in different countries. However, the lack of office schedules led to three main problems - personal control, access to information, and social isolation. Their solution lies in the correct work of team leads and agreements between employees and employers.
The information technology landscape is also changing. E.g., the closure of live translations and cinemas has boosted the virtual experience economy. Today, this is a trend that will dominate for at least another decade.
The online shopping mode also blew up the market - the share of Ukraine amounted to 25.8% and continues to grow. Consumers now have to shop in real-time directly from streaming video. Live streaming will become standard practice to generate new revenue flows and drive global sales.
With AI development, people get used to working with virtual assistants, which should also continue after the crisis subsides. However, don’t forget about telemedicine - virtual consultations are becoming the norm and have several undeniable advantages, which are destined to remain for the next few years.
But what to expect shortly isn’t an easy question. The expected growth of the industry of 20-25% is hardly worth waiting for - the numbers will be more modest. But, it must still have a positive meaning. A business with a diversified client portfolio will be relatively stable during this period.
Conclusions
The global crisis has significantly affected all spheres of life for billions of people - lifestyle, work, communication have become part of the personality of every employee and employer. It took a lot of effort on both sides to establish adequate labor productivity - discipline and hard work became the key to success, and flexibility made it possible to stay afloat. So today, the IT infrastructure of Ukraine makes it easy to switch to remote operations without significant loss of efficiency. At the same time, industry specialists have become even more valuable - due to inexpensive living in the country, labor costs are low, but the results make you proud!
Photo credit: Elena Mozhvilo via unsplash.com
Joerg Stimmer
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To gain a more profound understanding the University of Bamberg (Germany) is conducting this global study, which is 100% neutral and solely evaluated by the University: https://bit.ly/OutsourcingStudy.