IT Outsourcing to Ukraine in 2023: The General Country Overview

Ukraine is one of the Eastern European countries becoming increasingly popular among those looking for IT outsourcing services. Since 2017, the IT industry in Ukraine has exploded, with over 200,000 IT specialists currently working in the country. Additionally, the number of IT outsourcing companies in Ukraine is predicted to double by 2025. As a result, Ukraine is now the fourth-largest supplier of tech talent globally, with a corresponding growth in the number of outsourcing companies. In 2023, Ukraine is #1 out of 169 in The Good Country Index as of Science and Technology contribution.

Even during the year of full-scale war, Ukrainian IT sector still experienced an increase in revenue. As for 2022, Ukrainian IT export has brought around $7.3 billion, which is 5.85% more than the previous year. 

Due to fast digitalization, the pandemic influenced the growing number of IT specialists in Ukraine’s market. Many European companies found it efficient to outsource Ukrainian developers as they are highly qualified and experienced and can work within the same time zone.

Another case that has recently influenced the IT sector in Ukraine is the ongoing war. Although, many IT companies relocated their developers to Lviv (the safest city in western Ukraine) or abroad. Such steps helped keep the IT business stable so work could continue as before. Developers grew more motivated as the IT sector is among the few industries that help Ukraine’s economy. It has led the developers to work harder and much more efficiently.

Ukraine ranks 4th in the world for digital and technological expertise and IT outsourcing destinations in Central & Eastern Europe. It also ranks 14th in the IT Competitiveness Index, according to Emerging Europe Future of IT report 2022.

IT outsourcing in Ukraine nowadays offers a broad range of market solutions – from individual contract developers to development teams of hundreds of engineers, specialists, and QA professionals. Even to scale their development team, many companies are turning to Ukraine. Most developers in Ukraine have many years of experience working with tried-and-tested processes and using cutting-edge tech solutions and project management tools, and working within a supportive tech ecosystem.

Companies in Western Europe and North America, as well as Asia and Israel, need to be confident they’re working with skilled and experienced developers. Many companies have displayed their confidence, with globally-recognized brands augmenting IT teams in Ukraine and outsourcing more projects to IT companies in Ukraine.

Let’s take a closer look at why businesses globally are outsourcing IT needs and projects to software development companies in Ukraine and why IT outsourcing to Ukraine benefits so many companies worldwide.

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Benefits of outsourcing IT projects to Ukraine

Extensive tech talent

With 200,000 IT professionals—expected to reach 250,000—Ukraine is home to a large number of experienced coders and engineers. Companies seeking to hire developers with proficiency in a specific programming language or framework, who also possess knowledge of modern trends, will be delighted to discover the following as the most popular options:

Source: DOU

Within this Ukraine IT outsourcing talent pool, there are around 67,000 front-end specialists, which means Ukrainian developers are just as skilled as those anywhere else in the world when it comes to creating front-end web or mobile-based (think iOS or Android) interfaces and user experiences.

No language barrier concerns

Schools, colleges, and universities in Ukraine teach English. Therefore, the relatively high level of English eliminates any misunderstandings between the client and the Ukrainian developer.

Higher Education

Ukraine graduates 20,000 new IT and technical specialists every year. With 402 universities and colleges, many specializing in science and technology, it’s no surprise that Ukraine is among one of the countries with the most engineering, manufacturing, and construction graduates.

An attractive destination for tech companies

From startups to multinational mid-size companies, looking for IT services in Ukraine is an attractive and cost-effective opportunity. Additionally, it might be surprising to learn that Ukraine now attracts Fortune 500 companies that previously only outsourced to India and Israel. As a result, Ukraine is now home to over 110 R&D centers for multinational tech companies. Global giants operating in Ukraine include Microsoft, Samsung Electronics, Apple, Skype, IBM, Boeing, Ericsson, Siemens, and Oracle. These outsourcing operations have entered the IT market through mergers, joint-venture operations, or outsourcing IT to reliable third-party providers.

Tech community

Ukraine is home to a vibrant tech community. This is vital to a healthy IT and technology infrastructure. Not only are the majority of developers active in online communities, but Ukraine also hosts at least five major conferences throughout the year, including Agile Eastern Europe Conference, PyCon Ukraine, iForum, IT Arena, and DEV_Challenge. Software developers in Ukraine regularly attend IT events, conferences, and local meetups. The most prominent conference in the country attracts 7,000 developers, and many will also fly to conferences and events in Europe and the United States.

Cost-effectiveness

Ukraine’s IT outsourcing is cost-effective. Compared to Western Europe, the US, and Canada, where mid-level to senior developers can easily earn $110 an hour, developers in Ukraine are generally in the $45 to $65 per hour range. Overall, Ukraine’s outsourcing rates are not as cheap as other regions, such as parts of Asia, but factoring in language and cultural compatibility, Ukraine is proving itself as the smart and strategic choice for long-term IT outsourcing.

Strong work ethic

Over 110 global R&D centers are a positive indicator that developers in Ukraine are on a similar wavelength to companies and clients in Western Europe and the US. When it comes to outsourcing to Ukraine, employers can be confident in their work ethic and commitment to excellence. In Ukraine, facts and figures matter as much as personal and professional relationships, and developers in Ukraine get invested in their projects.

Ukraine’s software development companies typically are more focused on establishing long-term relationships with their partners in Europe and the US. There are countless examples of large companies that outsource software engineering to Ukraine for long periods. Providing feedback and challenging approaches whenever required when working with a developer directly instead of through an account manager means you avoid misunderstandings. This helps a project evolve and to come to completion more smoothly.

Positive and favorable business environment

In previous decades, Ukraine and many Eastern Bloc countries (Poland, Bulgaria, Moldova, Serbia, etc.) weren’t known for having the best environments for starting and growing businesses. However, in recent years, national and local Ukrainian legislators have implemented reforms that encourage entrepreneurs and Ukrainian companies to outsource IT. These reforms were starting to have a positive impact on the economy, although the ongoing full-scale war has declined theGDP rate for around 30%. However, even during such uncertain times, the Ukrainian IT sector continues to keep stable and even grow its volume to 3.74 billion dollars (23% more compared to the same period of the previous year).

The Strategic Action Plan of 2020 phased out over 450 outdated laws, making it easier for businesses and professionals to operate. This, in turn, has improved Ukraine’s position on the World Bank’s Ease of Doing Business rankings table. Personal tax rates have also been reduced, giving employers more of an incentive to recruit new staff, thereby giving them the ability to support a growing list of Western clients outsourcing in Ukraine.

A strong startup community

As mentioned above, starting a business in Ukraine is easier now than ever. As a result, over 38 transactions were done worth USD 278 million, and VCs and angel investors have witnessed steady growth ever since. Furthermore, a growing number of investments are being made by neighboring countries and even those further afield, including the UK, Germany, and the Netherlands. Due to the relocation of most businesses to Lviv, it is turning into a major tech hub, with numerous VC firms actively supporting the growth of startups in the IT sector. Some prominent startups include Jooble, DepositPhotos, Grammarly, GitLab, PetCube, Mobalytics, Preply, Attendify, MacPaw, CleanMyMac, Setapp, InvisibleCRM, Looksery, Readdle, and Skylum. These and others were founded in and are still based in Ukraine. Startups are a vital part of the developer community, and this is recognized as a positive for those outsourcing IT to Ukraine.

Strong tech and soft skills

Ukrainian developers have very strong skill sets in technology and problem-solving. Alongside the most popular coding language skills in Ukraine—Java (14.3%), C# (14.7%), JavaScript (18.8%), PHP (10.6%), and Python (11.2%)—developers in the country are also known for proficiency in other programming languages that clients increasingly need, including C++, Scala, Magento, Node.js, Python, ASP.NET, Ruby, Symfony, and there are thousands with Unity 3D skills. As for soft skills, Ukrainian developers are quickly adopting western values and rapidly improving their communication, strategic thinking, and project management skills (Agile/Waterfall methodologies).

There are numerous good reasons to trust Ukraine’s outsourcing software development companies. IT projects are delivered on budget and on time when outsourcing in Ukraine. Developers are hard-working, forward-thinking, and good communicators. Additionally, developers in Ukraine are innovative, coming up with solutions to difficult challenges.

Exploring Ukraine’s IT outsourcing industry 2023

Ukraine’s outsourcing market is an increasingly popular choice for development services. Whether a company needs a new app, to overhaul a legacy system, or to develop something from scratch in a cutting-edge space, such as 3D printing, AR/VR, or Blockchain, employers can be confident of finding the dedicated and experienced talent they need when working with Ukraine outsourcing IT companies.

In Ukraine, there are over 5,000 specialized software and engineering companies to find dedicated teams and app developers who can produce high-quality output. These companies benefit from the technology ecosystem and environment in Ukraine, including the universities, R&D centers, and developer and startup communities.

The main customers of Ukrainian software vendors are the United States and Western Europe, with the UK, Germany, the Netherlands, and Sweden being the primary consumers. One of the reasons why Western countries entrust software development to Ukrainians is the work ethic. Ukrainian software engineers are culturally close to the Western world: they rely on detailed planning and requirements, dive deep into a subject, and see the big picture to solve complex problems. Ukraine’s tech sector has also demonstrated remarkable wartime resilience, and the country’s ongoing digitalization is vital to Ukraine’s future as the number one destination for software development outsourcing.

How to choose a software development outsourcing partner in Ukraine

We have collected the most important factors to check when hiring an outsourcing company in Ukraine:

Cost-effectiveness and flexibility

Fixed-price outsourcing contracts are usually best suited for smaller projects with clearly defined requirements, while more complex projects may require flexible service fees and regular project reviews.

Range of skills and domain expertise

The software agency’s competencies should match your project’s unique requirements. For example, if you are looking for mobile app development services, an outsourcing company and its portfolio should demonstrate competence in mobile app languages (such as JavaScript, C++, and C#), user interface design, CRM integrations, and app store optimization (ASO).

Customer reviews

Check the software agency’s reviews on listings such as Clutch or G2. Even though agencies often ask their most loyal customers to rate them, having reviews is still a good signal, especially in the absence of other recommendations. If an agency has received some reviews, it means the development shop has found at least a few customers willing to invest their time in working with it.

Security policy

You should check if a Ukrainian outsourcing company complies with international security standards and adheres to contractual agreements on intellectual property transfer and data protection.

Outsourcing to Ukraine is a strategic and cost-effective approach to solving the IT challenges of your company, and YouTeam can help you find the best outsourcing partner. Fill in the information about the type of project and the team or engineer you want to hire, and we’ll get back to you soon. Meanwhile, you’ll be able to browse all available Ukrainian developers directly on our platform, add them to the shortlist, and contact our Team Advisor in the live chat. Your hiring challenge is made easier when you sign up for YouTeam.