Ukraine IT Outsourcing: Market Insights & How to Choose the Right Team for You

Huge tech giants like Samsung, IBM, Hitachi, Boeing, Skype, eBay, PayPal also use Ukraine IT outsourcing destination.
This is not surprising.

Ukraine has a huge talent pool, a growing number of IT companies, and a solid educational basis. This is why IT outsourcing in Ukraine is a booming direction.

If you are also thinking about outsourcing software development to Ukraine, this guide will cover everything you may need to know. You’ll discover:

• Details on IT companies in Ukraine: size, rates, status
• Current state of Ukrainian technological development: tech stack, specialists, expertise
• Overview on software developer salaries in Ukraine
• Changes in the Ukrainian IT market in 2021
• Total number of software outsourcing companies

Let’s start our journey to IT outsourcing in Ukraine!

Key Info & Top Company to Outsource IT in Ukraine

The Ukrainian IT market in 2021 is on the rise, as even just the top 50 IT companies have opened more than 7,000 new positions. If you are considering IT outsourcing in Ukraine, you might be interested in the following numbers:

1. There are 11,932 software development companies in Ukraine that employ over 183k developers.
2. The top 25 Ukrainian companies now hire, on average, 42.5 technical specialists.
3. The top 5 Ukrainian IT companies give work to 26,601 technical specialists with an average rate of $40 - $50 per hour.
4. Software development in Ukraine includes the widest range of tech stacks and specializations from mobile app development to Big Data testing.
5. Ukrainian developers have tremendous experience in creating solutions for the telecom, travel, finance, health, and retail industries.
6. Many Ukrainian IT companies have been providing outsourcing services for more than ten years.
7. The top 25 IT companies have increased their personnel four times during this period, and can boast a well-established cooperation process, partner loyalty, and high-level standards of communication.

Ukraine IT Outsourcing: Market Overview in Numbers

Despite all of these facts, choosing a company for IT outsourcing in Ukraine may be troublesome because of the vast choice of variants. If you want to hire an IT outsourcing team quickly and securely, pay attention to MLSDev.

MLSDev is Your Ukrainian IT Outsourcing Company

MLSDev has strong expertise in web and mobile development and provides offshore software development services in a range of industries. We have created products for healthcare, eCommerce, FinTech, social networking, streaming platforms, and more.

In 11+ years on the market, the MLSDev team has completed over 200 projects and is proud to boast a 97% customer retention rate.

MLSDev specialists have strong expertise in a wide range of technologies, and they love to work here - the 33-month average employee retention rate proves that.

The products created by MLSDev, a software development company include:

• Instant needs delivery project- Gopuff - now a growing service in the USA, present in 650+ locations, with 400+ fulfillment centers.
• mHealth product Idana - app helping thousands of users in Germany, compliant with the IEC 62304 standard used in software for medical devices.
• Solution for McDonald's Baltics - app that increased customer loyalty and revenue streams

These are just to name a few.

MLSDev Project Portfolio (Gopuff, Idana, McDonald's)

Why Should You Consider Software Development in Ukraine: 12 Vivid Benefits

By the end of 2020, the IT industry had gone through a considerable rise. More and more businesses are now focused on Ukraine as an IT outsourcing hotspot.

The coronavirus crisis and mounting demand for new solutions in healthcare tech, FinTech, retail, and telecom made investors pay more attention to outsourcing software development to Ukraine.

Reasons Why Companies Outsource

If you are also considering IT outsourcing in Ukraine, below you can find benefits of hiring Ukrainian programmers.

1. Great price-quality ratio

Average salaries per specialty are the best indicator for understanding whether outsourcing is financially worthy.

If you are seeking information about Ukraine as an IT outsourcing destination, the following list of the average salaries in Ukraine for programmers, business analysts, QA engineering specialists might be helpful:

Please note: The table indicates the average salaries of middle and senior positions, but the real prices may differ depending on the level of a specialist, skills niche, technology, etc.

As of 2021, here is an illustration of the medium salaries for IT industry employees from the highest to lowest:

Average Salaries in Ukraine in the IT Industry, winter 2021

2. Strong skill-set of Ukrainian developers

Want to learn more about Ukraine as an IT outsourcing destination? Then you might be curious about the skill-set of the developers you will meet here.

According to a HackerRank rating of programming skills, Ukraine takes the 11th position in the world in the category “Which country has the best developers?”

As well, Ukraine is ranked fourth for skills in mathematics among programmers, takes the fourth place again for the knowledge of distributed systems, and is the world leader in the domain of security.

Ukrainian software outsourcing was ranked highly by a number of the world’s associations. In 2017, Ukraine became the top world offshoring destination of the year, according to the Global Sourcing Organization.

If you consider Ukraine IT outsourcing for your projects, the following data might also be interesting:

Seventeen Ukrainian companies were listed in the top 2019 Global Outsourcing 100 by IAOP.

As well, 33 Ukranian companies were listed as ‘fast growing’ on the Inc.5000 index.

These are just a few indicators of the growing positions of Ukrainian IT outsourcing on the global market.

3. A great number of specialists

It's worth mentioning that the world’s most prominent tech companies choose Ukraine for IT outsourcing due to its big workforce market.

The number of highly skilled specialists in informational technology in Ukraine has been steadily growing since 2011. The IT market has faced considerable changes over the last 10 years:

1. The top 5 IT companies in Ukraine tripled their number of employees from 9,000 in 2011 to 30,000 in 2021 (Dou.ua).
2. The top 25 biggest IT companies increased the total number of workers four times: from 15,100 in 2011 to 59,100 in 2021 (Dou.ua).

Growing Number of IT Specialists in Ukraine, 2015-2020E (by N-iX)

The workforce market situation at the beginning of 2020 was quite difficult due to the coronavirus crisis. Many companies worldwide had to cut expenses and restructure, resulting in the reduction of new hires and of the workforce in general.

In the hardest time, the first half of 2020, the Ukrainian market resisted the crisis, which was one of the most substantial benefits to chose Ukraine for IT outsourcing:

• The biggest Ukrainian IT company, Epam, continued hiring new employees, maintaining 12% growth (Dou.ua).
• Eleven of the top 50 IT companies in Ukraine opened new offices in 2020 (Dou.ua).

However, in the second half of the last year, the largest IT outsourcing companies in Ukraine experienced record growth:

• The top 50 IT companies hired 7,930, which is 11.6% growth.
• Companies employed 76k specialists; since 2017, this figure has doubled and reached 43,200 workers.

4. Great tech basis

If you are considering Ukraine for IT outsourcing, you can find a specialist in any IT domain: from Objective C, Kotlin, and Scala developers for a mobile application, to a Big Data tester for a project in advanced technologies.

**Here’s the list of specialties that can be found in Ukraine:**

1. Mobile app development

Mobile development is represented by specialists in Swift, Kotlin, Dart, JavaScript, C#, Java, and TypeScript.

Distribution of Technologies Used for Mobile Development among Ukrainian IT Specialists, 2021

2. Back-end development

If you select Ukraine for IT outsourcing for your back-end project, you can find professionals in a wide range of programming languages: Java, C#, PHP, Python, JavaScript, Ruby, Go, TypeScript, Scala, C++, Kotlin, 1C, Elixir, Apex, PL-SQL, Clojure, T-SQL, Erlang, and Groovy.

Distribution of Technologies Used for Back-end Development Among Ukrainian IT Specialists, 2021

3. Front-end development

Ukraine and its IT outsourcing potential can fully cover the need for expertise on the front end. The most popular technologies for front-end development are JavaScript and TypeScript. Other technologies include Java, C#, PHP, Python, Clojure, Ruby, and Dart.

Distribution of Technologies Used for Front-end Development Among Ukrainian IT Specialists, 2021

4. Full-stack software development

Ukrainian full-stack developers are experienced in JavaScript, C#, Python, TypeScript, PHP, Java, Ruby, Apex, and Elixir.

Distribution of Technologies Used for Full-stack Development Among Ukrainian IT Specialists, 2021

5. Data processing

If you seek expertise in data processing in Ukraine, the IT outsourcing market will offer specialists in Python, T-SQL, Scala, R, PL-SQL, Java, C++, 1C, PHP, C#, JavaScript, SAS, and Delphi.

Distribution of Technologies Used for Data Processing Among Ukrainian IT Specialists, 2021

6. Internet of things technology

Companies seeking expertise in Ukraine for IT outsourcing in the domain of IoT can find numerous experts in C, C++, Python, JavaScript, C#, Scala, TypeScript, Kotlin, MatLab, and Rust.

Distribution of Technologies Used for IoT Among Ukrainian IT Specialists, 2021

5. Growing number of tech specialists

Aside from the present pool of talent, the Ukrainian technology market can expect solid reinforcement in the coming years.

In Ukraine, there are 82 universities offering diplomas in software engineering and computer sciences. In 2020, they received over 127,000 admission applications, according to Dou.ua.

Another advantage of choosing Ukraine for IT outsourcing is the high level of expectations from high-school graduates.

The highest graduate exam mark in Ukraine is 200. Four of the highest-ranked universities only accept applications with an average grade of a minimum of 170 or higher.

This all means that Ukrainian outsourcing companies and other businesses wishing to hire developers in Ukraine can hope for a huge number of talented newcomers in the next 5 years.

6. Wide range of software companies

A wide variety of IT companies in Ukraine can cover all the needs in software development.

Software Companies Map of Ukrainian IT Outsourcing Market

Numerous foreign companies partner with Ukraine for IT outsourcing. These include PayPal, eBay, Boeing, Bosch, and Skype.

Recently, the technology company Hitachi announced its plans to buy one of the Ukrainian IT companies.

As you can see, the world's biggest tech companies choose Ukraine as an IT outsourcing partner, yet the number of companies headquartered in Ukraine is stunning as well.

According to Dou.ua, Ukraine’s leading HR resource, we have:

• 12 companies with over 1,500 employees
• 10 companies that have 800-1,500 employees
• over 70 companies with 200-800 employees
• 117 companies with 86-200 employees

The overall number of IT companies as of 2020 (including startups) was 11,932.

7. Strong startup & tech community

If you are considering Ukraine for IT outsourcing, you should know more about the promising startup community producing numerous world-famous product ideas.

For example, Grammarly, the world’s number one AI-powered service for document proofreading and editing, was created by Ukrainian web developers. Their start-up now has offices in San-Francisco, New York, and Kyiv.

Other examples include:

1. GitLab - analogy to GitHub with private repositories for free plans. The code was created by Ukrainian programmers Dmytro Zaporozhets and Valeriy Sizov. Now the system is used by more than 100,000 companies worldwide, including IBM, Sony, NASA, CERN, Alibaba, Invincea, O'Reilly Media, and Leibniz-Rechenzentrum. After round D investment, its value topped one billion, which let it move to unicorn status.
2. Looksery - image editing tool acquired by Snap Inc. for $150 million.
3. CleanMyMac - software for macOS optimization.
4. TechNovator - the world’s first wireless energy transfer technology, allows users to charge up to 5 mobile phones wirelessly, without energy loss, and in a healthy range of frequencies.

As well, if you browse information about Ukraine as an IT outsourcing spot, you may find many articles about the creativity of Ukrainian startups. The top interesting ideas include:

• Petcube - a device letting pet-owners engage with their cats and dogs remotely
• Senstone - a speech-to-text necklace for instant notes on-the-go
• Joylook - a modern vintage camera for instant images created from recycled materials
• SolarGaps - tool is a unique mechanism that helps find stolen bikes.

The bright and talented tech community in Ukraine has been gaining more and more attention in recent years.

In 2020, the investment in Ukrainian-launched startups reached a record high of $571 million. This is more than ten times higher compared to 2014, with 50 million USD dollars of investment. This indicates that more investors are trusting Ukraine as an IT outsourcing partner.

8. No language barrier

Successful communication is a key factor in the development of IT outsourcing in Ukraine.

Fortunately, based on the IT Industry in Ukraine, 2019 Market Report, 82% of Ukrainian developers have an intermediate level of language skills in English.

34% of these developers boast upper-intermediate language skills, and 13% of Ukraine programmers have an advanced level of English. International partners admire Ukraine and its IT outsourcing companies for the high-quality of services and high standards for business communication.

English Proficiency of Ukrainian IT Outsourcing Professionals

9. Compatibility in culture

Ukraine has strong historic and cultural ties with Western countries. If you want to visit Ukraine to learn about IT outsourcing possibilities, it’s not difficult, as the country is situated within a one- or two-hour flight to major European business centers.

The proximity in culture, religion, and common values make communication with Ukrainian businesses simple and transparent, which is a must for successful project handling.

10. Favourable business climate

In recent years, Ukraine has gone through considerable changes that have made the country more attractive for IT outsourcing.

The positive developments include:

• Foundation of the High Anti-Corruption Court of Ukraine
• Automatic auto-refund system
• Introduction of the e-procurement system Prozorro
• Public access to property registers

These initiatives contribute greatly to the elimination of corruption and create favorable conditions for companies interested in Ukraine for IT outsourcing.

IT companies in Ukraine benefit from a very friendly taxation system.

Most Ukrainian software developers use the private entrepreneurship model, which has a set tax of 3% or 5% on income, which is one of the lowest in the world.

As well, in the last few years, Ukraine has been growing steadily in the World Bank’s ratings for ease of doing business. The country rose 48 positions in 7 years, and now stands in the 64th position worldwide. Generally, Ukraine and its IT outsourcing companies have been steadily showing an uptrend since 2012.

11. Convenient country location

Ukraine is located in the East of Europe and borders such world famous outsourcing destinations as Poland, Romania, and Belarus. This is one of the substantial benefits of choosing Ukraine for IT outsourcing.

Along with these countries, Ukraine has topped the Gardner ranking for offshore service locations in EMEA.

As well, most European, as well as American and Canadian, travelers can enter the country without a visa and stay for 180 days, which is extremely convenient for business travel.

Ukraine IT Outsourcing Market: Time Differences

In 2017, the Council of the European Union introduced visa-free travel for Ukrainian citizens. That was a substantial benefit for companies choosing Ukraine as an IT outsourcing partner, as it facilitated travel, boosted business relations, and had a further positive impact on infrastructure.

Thus, the air transportation between Europe and Ukraine has grown considerably with airway companies continuing to open new flight routes to and from Ukraine.

12. Multinational R&D centers

The leading tech companies in the world are eager to open research and development centers in Ukraine. The list includes big names like Sisco, Oracle, Samsung, Rakuten, and many more.

Currently, there are more than 100 R&D centers in Ukraine. The largest R&D partner collaborating with Ukraine for IT outsourcing is the United States, followed by the EU and Israel.

How to Find the Right Ukrainian Developers

Ukraine IT Outsourcing: 3-Step Process

1. Define your objectives

Your search for IT outsourcing companies will be simpler, if you know what you want to develop: a B2B solution, a mobile app, or software for an IoT device.

Many vendors that deal with IT outsourcing in Ukraine define their specializations in business and social media profiles, and you will be able to see which one matches your needs.

Next, you have to define what part of the project and tasks you want to hand over to an IT outsourcing firm – if it is a complete project or just a staff augmentation for one that is ongoing.

In the final step, you will have to create a request for information (RFI) or request for proposal (RFP) where you will ask a potential vendor for a cost and time estimate of your project.

2. Search for a necessary IT vendor

There are a coupe of traditional and well-tested ways to find a vendor for IT outsourcing in Ukraine:

Search Google for a company with the needed specialization. For an individual product, you don’t need an enterprise level corporation. Search for a middle size IT outsourcing company in the preferred locale. For example : “middle-sized app development companies in Ukraine.”

Go to business platforms like Upwork, Clutch, GoodFirms, etc.

Try reaching a company with C-level specialists on social media like LinkedIn and Facebook.

Ask for personal recommendations or visit an online or real-life networking event.There are numerous regular forums for people that are exploring Ukraine for IT outsourcing.

3. Shortlist the IT vendors

To choose the best IT outsource companies, use a list of questions that will navigate you to the right decision. This should include the following aspects while asking a list of the following questions:

• Background checks

1. How long has the company been operating on the market?
2. What is the company’s experience and have they completed similar projects?

• References

Getting references from a trusted source is one of the most important conditions if you are considering a company in Ukraine as an IT outsourcing partner. Therefore, the following questions will be helpful:

1. How many projects similar to yours has the company successfully completed?
2. Are there any references from former clients?

• Capabilities

1.What is the size of the company?
2. Can they provide any certifications proving the qualification of the employees?

• Culture

1. What languages do the employees use?
2. Are there any procedures in place regulating communication?

• Tools

1. What tools does the IT company use for tracking time and communication with each other?
2. What software development approaches do they adhere to?

• Legal

It is critical that the team or company that you choose in Ukraine for IT outsourcing can boast solid legal support.

1. Does the company stick to compliance regulations?
2. Do they work under NDAs or other similar agreements?

4. Finalize your Decision

As you run through these questions, you will find out if a selected candidate is the best fit for IT outsourcing in Ukraine.

Frequently Asked Questions: