Outsourcing to Ukraine

Outsourcing is not the new kid on the block. Throughout history, people have hired specialists from other countries to accomplish various tasks because a) it’s cost-efficient, b) it’s convenient, and c) well, why not? According to the Coding Sans’ report, more than 50% of IT-related professionals have outsourced development services at least once in their lifetime. More than half of those respondents said they were happy with the outsourcing business model. If you are planning to dive into the world of outsourcing and want to be among the happy squad, consider Ukraine as your next IT outsourcing destination.

1. Global Recognition

The IT sphere is skyrocketing in Ukraine, and has already cemented a solid reputation on the global market. We composed research on outsourcing in Ukraine and provided lots of useful findings. Exporting $4 billion worth of IT services in 2018, Ukrainian companies and startups cooperate with tons of tech giants, including Google, Microsoft, and Samsung. The Good Country Index placed Ukraine at the top of the list in terms of science and technology development. Ukraine ranks as the #1 Eastern European country for IT outsourcing and one of the top 3 countries with qualified tech specialists. Numerous leading companies, including Samsung, Google, ABBY, Microsoft, Siemens, etc. opt for choosing Ukrainian services in the sphere of IT.

Digging deeper into global tech ratings, Ukraine occupies 32nd places in the latest global innovation capacity review. Having 21st rank in terms of IT specialists proportion per population, Ukraine outruns its outsourcing competitors, including Poland, India, and Mexico. To be more specific, there are approximately 192 thousand IT specialists in Ukraine as of 2019, which is 20% greater than in 2018. The number of developers is expected to grow even further, attracting new talents to the industry every day.

2. Education

The path to global recognition in the IT sector is paved with profound education and qualified tech specialists. And while quantity is not always the best metric for measuring tech potential, 23K engineering graduates in Ukraine is an impressive figure. There is a strong educational tradition in Ukraine, supported by several globally-recognized technical universities. For instance, “Ihor Sikorsky Polytech Institute,” is named after the famous Ukrainian aviation pioneer, aircraft designer, and helicopter inventor — Ihor Sikorsky. Having more than 4000 tech graduates per year, this university is among the world’s top 1000 universities and belongs to category B, which means educating specialists of exceptionally high levels.

Apart from higher education institutes, the Ukrainian tech sphere witnesses a considerable boost in alternative educational models. Short-term, practical courses and tech schools offer students solid opportunities to quickly learn the basics of the profession and begin their IT path. Beetroot also has its own tech school, Beetroot Academy, which grew from a local initiative into a well-developed network of schools in Ukraine and Sweden. This alternative approach to education results in well-prepared, knowledgeable specialists, ready to invest their skills straight off the bat.

3. Tech Community

With almost 200, 000 tech specialists, Ukraine has a diverse and distributed community of developers. More than 20 Ukrainian cities have created their own IT clusters, boosting the tech sphere with the synergy of local companies. Alongside clusters and communities, the sphere of tech events is also growing. One of the most successful tech events in Ukraine, iForum, began as a small gathering in 2008. However, ten years later — in 2018 — it gathered 12 000 participants and has no intention of slowing down. Since 2016, the number of women in tech has grown by 7% and continues to increase, making the Ukrainian IT industry more gender-balanced. Traditionally, the greatest number of developers — about 67% — has been concentrated in big cities like Ukraine’s capital Kyiv or the western city of Lviv. However, currently, there is a growing tendency for equal talent distribution in mid-sized cities. For instance, in recent years, Beetroot has opened several IT schools in Ivano-Frankivsk and Vinnytsia, partially contributing to the development of tech communities outside of large IT hubs.

4. Salaries and Rates

Tech specialists’ salaries and hourly rates depend on many factors, including their seniority, experience, programming language, and even geographical location within the country. Looking at the most typical salary distribution, a junior Java developer gets about $700, a middle one — $2000, and a senior developer — about $3500. As for an hourly rate, Ukrainian specialists receive around $25–40 per hour, which is average in a global context. To compare, developers in India make about $15–30 per hour, and in Poland — $60–70. Another benefit in terms of salaries is that the Ukrainian taxation system is rather favorable for IT professionals. The majority of them work as private entrepreneurs, only paying a 5% tax.

5. Time Zones

When it comes to working with distributed teams, time differences are one of the main pain points. If your head office is located in Europe or the US, hiring a team in China or India would mean dealing with a significant time gap. In other words, your team will likely be half-awake during standups, which can affect the quality of communication. In Ukraine, time zones are not a problem. The country is located in Europe, so there is a one or two hour difference with most other European countries. Another benefit is that Ukraine has a visa-free travel regime with the EU, making your travels easy as pie.

6. IT Companies and Startups

With all the above-mentioned goodness, it’s not a big surprise that Ukraine has quite a few tech companies. More than 4000, actually. Among them are product companies, IT hubs, R&D centers, tech laboratories, and of course, startups. According to Bloomberg’s Innovation Index, Ukraine belongs to the top 50 countries in the world with the greatest innovative potential. In 2018, more than $290 million was invested in the Ukrainian startup ecosystem, cementing its future growth. As for outsourcing, the expected volume of exported IT services is forecasted to reach $8,4 billion in 2025. And today, there are plenty of reliable and experienced outsourcing partners on the market to choose from — Sigma, Ciklum, Luxoft, Intellias, and Beetroot. When it comes to choosing your outsourcing partner, you should consider several factors, including companies’ reliability, pricing, business models, and even corporate culture. Since there are many options to choose from, be sure to spend quality time analyzing the minor aspects of your potential outsourcing partner’s work in order to avoid any mismatches and conflicts in the future. After you’ve made your choice, consider the best cooperation model that can meet your needs without overstretching your budget. Generally, companies offer dedicated team models for long-term work, and project-based models for short-term cooperation.

Let’s Talk Beetroot

Founded in 2012, Beetroot provides top-notch software development services in a sustainable way. We have more than 450 IT consultants on board, working in both Ukraine and Sweden. Speaking of, the Swedish way of doing business combined with authentic Ukrainian culture, is what makes Beetroot stand out among the IT market. But that’s not all. Beetroot is a social enterprise, using commercial tools to become the most sustainably impactful tech company in Ukraine. We believe that companies should think of the footprint they leave in society. Therefore, we nurture the environment and mental health of our teams. We have many cooperation models, but our all-time favorites are the Dedicated Teams (more about this type of cooperation here) and Software Solutions’ models

Dedicated Teams

With the Dedicated Teams model, you receive a long-term strategic development capacity, which is devoted solely to your project. Beetroot takes care of all business processes, including search, selection, recruitment, onboarding, and support of the IT specialists, while you enjoy the extension of your in-house team and boosted tech capacity. An average team usually consists of 5 to 20 developers, but there is always room for exceptions. For instance, if you need a team consisting only of 1 developer, it’s possible. Using our broad network and complex recruitment techniques, our HR consultants are able to compose a ready-to-go team within 4–8 weeks.

Software Solutions

If you are not aiming for long-term cooperation and need project-based help, Solutions would be the best match for you. Using our on-site expertise and a broad network of software developers, we will help you build MVPs, WordPress websites, mobile applications, or whatever your project is going for. The process usually comprises four stages. The first one is called Discovery when you map out the project’s idea together with the team. The second one is the Production stage when the team creates the product using your specifications. The third one is called Testing, which speaks for itself — the team tests the solution and fixes the bugs. Finally, the fourth stage is called Delivery, when the product is ready to go live. Following these stages, Beetroot has accomplished numerous successful projects. Let’s have a look at them.

Case: Zwapgrid

Zwapgrid, a company that helps other companies build state-of-the-art integrations, reached out to Beetroot because of their growing workload. We created an 8-people dedicated team to support them, which continuously improved Zwapgrid’s performance. Alongside software development capacity, Zwapgrid enjoyed an excellent HR consultancy service and ongoing maintenance. As a result, the company increased their number of integrations, all with a fast and smooth delivery.

Case: Briteweb

Briteweb is a digital agency that specializes in branding and marketing solutions for non-profit organizations. They approached Beetroot to help with a flexible WordPress service, desiring to roll out more websites. We offered them the Time-and Resources working model to try, so they could change the number of developers and their working load depending on their current needs. Having three to five developers working full-time or on-demand, Briteweb sufficiently increased ticket-processing and delivery time while decreasing production costs.

Case: Life 4 Me

The digital communication platform, Life4Me, aims to create a better connection between patients and doctors. The 7-person Beetroot team developed a user-friendly and responsive application for iOS and Android. With the help of this app, patients can organize their timetable, track the intake of medications, ask for a doctor’s recommendation, and find nearby hospitals.

Check out our website to gain the most benefit from outsourcing in Ukraine through Beetroot.