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What Makes Ukraine a Prime Location for Software Outsourcing Services?

A thriving software powerhouse has emerged on the global map of IT outsourcing destinations.

August 29, 2019

6 mins read

A thriving software powerhouse has emerged on the global map of IT outsourcing destinations

The tech industry has taken off in a big way in Ukraine and is now booming. The country’s intellectual potential and moderate labor rates couldn’t go unnoticed by thousands of global tech businesses looking for trusted software services companies to cover their engineering needs. That’s no wonder because almost every outsourcing company in Ukraine gives them wide opportunities to streamline the delivery processes.

According to the 2019 A.T. Kearney Global Services Location Index, Ukraine ranks among the 20 most favorable locations for IT outsourcing and continues to strengthen its position as a hotbed of tech talent and innovation. The report’s findings speak for themselves.

Ukrainian IT outsourcing companies consistently demonstrate fast growth and prove they have what it takes to become major players on the global stage.

What makes Ukraine one of the best countries to outsource software development to and why are the world’s leading tech giants so taken with Ukraine’s IT potential? Let’s take a deep dive!

1. Less cost, more value

All too often, software development outsourcing is taken as getting less quality for less money. But does that go for Ukraine too? Research by Staff.com reveals that outsourcing to Ukraine can cut a project’s cost in half compared to developing with market leaders. This creates lucrative opportunities for Western companies to build and scale their businesses and beat the competition without spending a fortune.

Let’s talk numbers. The average salary of a senior Java developer in Ukraine is roughly $40,000 per year. That’s a little bit higher than in Asia but lower than in neighboring Central European countries. By contrast, a programmer with equal expertise would cost an average of $99,284 a year in the US. If you plan to optimize costs by outsourcing software development, Ukraine is a good choice. It gives companies access to an extensive pool of world-class engineering talent while offering significant cost benefits.

Locating core development functions in Ukraine also enables outsourcing buyers to sidestep a number of overhead expenses that would otherwise make project costs skyrocket. Fairly low tax rates and significant infrastructure savings make developing custom software solutions in Ukraine much more affordable than maintaining an in-house software development team.

Average salaries of software engineers by country
What Makes Ukraine a Prime Location for Software Outsourcing Services?

2. Ukraine’s brainpower

Quick fact: 18 Ukrainian custom software development companies were listed in The Global Outsourcing 100 by IAOP in 2018.

Number of Ukraine IT outsourcing companies in Global Outsourcing Top 100
What Makes Ukraine a Prime Location for Software Outsourcing Services?

The phenomenal rise of Ukraine outsourcing potential is in large part explained by the country’s deep tech talent pool. Today, there are as many as 150,000 software engineers and around 300,000 other professionals working in IT. With this sizable labor force, the country could be the answer to the worldwide shortage of IT talent. All in all, Ukraine ranks fourth in the world by number of IT specialists after the United States, India, and Russia.

Technical literacy of the Ukrainian population
What Makes Ukraine a Prime Location for Software Outsourcing Services?

3. Academic legacy and a fresh start

Ukraine is a nation of outstanding tech prowess powered by decades of scientific and technological heritage. The country’s engineers have been behind some of the world’s most remarkable inventions and achievements, including the first satellite launches and manned space missions. You can imagine how much intellectual capability a country should have to produce aerospace and rocket scientists.

Ukraine’s strong scientific schools have laid the groundwork for the huge boost that the IT industry has received. In response to market conditions, Ukrainian universities have switched to computer sciences and are now churning out top-quality programmers. An estimated 36,000 annual graduates from 402 universities nationwide receive degrees in technology, engineering, and science according to the Ministry of Education and Science of Ukraine. Over 15,000 graduates with IT-related technical skills join the tech talent pool each year.

In addition, some of the top software development companies set up their own schools and courses for anyone who wants to get quality hands-on training in the latest software development technologies including AI, data science, and IoT. Thus, Ukraine outsourcing capacity is constantly growing.

Judging from LinkedIn profiles, Ukrainian software engineers specialize in Java, C, C#, JavaScript, PHP, .NET, and many more languages. In fact, the labor market offers expertise in every in-demand programming language and technology. You can find excellent service providers for full lifecycle development, quality assurance, UI/UX design, and other tasks.

Ukraine also boasts one of the largest and most dynamic IT communities in Eastern Europe. The country’s tech minds can enjoy a variety of events and meetups: ODSC Ukraine, IT Arena, DevFest Ukraine, iForum, ITEM, and the AI & Big Data Conference, to name a few.

4. Speaking the same language

Naturally, one of the key selling points in outsourcing is the ability of a vendor to communicate in English. If the tech lead is the single soul on the team who can speak English, it’s a good idea to opt for another offshore software company. Otherwise, communication challenges may ruin the project.

For IT outsourcing, Ukraine is a reasonable choice regarding communication. This is the country with decent English language proficiency. The percentage of software engineers who can speak fluent English has reached 46.8%, and 36.3% of tech workers have an intermediate level of English. These numbers continue to grow, erasing language barriers and getting everyone on the same page.

5. Convenient time zone and location

What adds points to Ukraine IT outsourcing companies is that the country is only a time zone or two away from Western European countries. So for an EU client, working with a Ukrainian nearshore software company means having practically the same business hours and the opportunity for prompt communication on urgent issues.

Even between the US and Ukraine, the time difference is much more manageable than it is between the US and India, Russia, or China. A three business hour overlap with the US (EST) – as well as the common practice of rolled-back shifts for even more shared hours – conveniently accommodates team meetings, syncs, and demos.

Time zone overlap
What Makes Ukraine a Prime Location for Software Outsourcing Services?

Ukraine’s proximity to major European capitals makes it even more attractive for IT outsourcing. Ukraine is only two hours by air for EU clients to visit their remote teams. Moreover, since the European Union approved Ukraine’s visa-free travel regime, many international airlines have launched direct flights from Lviv and Kyiv to Europe and the US. This has made it possible for both software development outsourcing companies and their clients to arrange regular on-site trips for in-person communication.

What Makes Ukraine a Prime Location for Software Outsourcing Services?

6. European mindset and cultural bonds

Cultural compatibility is another key factor when selecting the right destination for outsourcing software development. Ukraine is a strongly European-oriented country that shares fundamental Western values. Ukrainians understand the Western business culture and their working style is similar to that in Western Europe and North America. They go deep into their tasks, try to find the most reasonable solution, and are always ready to take an extra step to deliver great services and products.

Unlike Asian countries with dozens of paid holidays celebrated by multiple ethnic and religious groups, there are only eleven official public holidays in Ukraine. This is also in contrast to other Eastern European countries that have at least 13 paid public holidays (the Czech Republic, Poland, Romania, Hungary) or as many as 19 in Bulgaria.

Welcome to Ukraine

Ukraine has seen its IT sector grow by double digits recently. More and more companies around the world are coming to trust the quality of software outsourcing services they find in long-term partnerships with Ukrainian custom software development companies.

Given the country’s booming tech ecosystem, strong educational background, and solid engineering expertise, Ukraine is set to become one of the world’s biggest – if not the biggest – outsourcing destinations.

“Just Lviv It”!

This is how Intellias home city’s upbeat slogan goes. And if you’re looking for an outsourcing company in Ukraine, Lviv should definitely be on your radar. Its vibrant technology scene, thriving culture, and inviting atmosphere make it a leading tech hub and a perfect place to do business.

Lviv’s technology scene
What Makes Ukraine a Prime Location for Software Outsourcing Services?


Should you have any questions on the outsourcing prospects that Ukraine has to offer, contact us to get firsthand insights and find the right fit for your business.

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