The tech talent shortage is gradually becoming a global problem. According to a 2022 CIO survey by KPMG, the tech shortage issue is the number 1 problem among tech leads. This is especially noticeable when the company faces the process of digital technologies adoption. However, the modern tech world makes it easy to hire a web development team from outside the country where your business or startup is based.
There is a wide range of locations to find an offshore development team. If we compare the offshore software development rates by country, we see that Asia and Eastern Europe offer the lowest rates. However, such low rates don’t negatively impact work quality because the cost of living in these regions is also lower.
This article talks about offshore software development in Ukraine, an Eastern European country with huge potential to become a global leader in IT outsourcing. We will also give some helpful tips on the best ways to build an offshore development team in Ukraine.
Ukraine Software Outsourcing: Facts and Statistics
Ukraine is one of the best countries to outsource software development, and here’s why:
- The country features over 5,000 IT companies with more than 200,000 qualified software engineers, and this number is predicted to grow through 2025. That is because around 16,000 IT talents graduate from Ukrainian technology universities yearly and continue their working path in such big IT cities as Kyiv, Lviv, Kherson, and Dnipro.
- In 2017, the Global Sourcing Association (GSA) named Ukraine the “Outsourcing Destination of the Year“.
- In 2020, according to BRDO, Ukrainian IT export increased by 20%, achieving a record USD 5 billion.
- In 2022, according to the National Bank of Ukraine, IT exports reached USD 3.74 billion for the first half of the year. It was almost 23% bigger compared to the same time the previous year, which is especially incredible in times of full-scale war and the beginning of the global crisis.
- Ukraine is featured in Gartner’s top 30 countries for offshore services and other rating and review platforms for B2B service providers, such as SkillValue and Clutch.co.
- Ukrainian software engineers are recognized by SkillValue as among the world’s best, with an average score index of 91.26%.
- Ukraine is centrally-located; thus, an easy-to-get-to European destination. Before the war, more and more flights were heading to Ukraine’s major cities.
- As of 2017, Ukrainians could travel throughout the EU without a visa. That made it easier for Ukrainian offshore developers to meet with partners and clients across Europe. However, today Ukraininan male mobility is limited due to full-scale war.
- Software giants such as Microsoft and IBM established R&D centers in Ukraine in 2003 and 2006, respectively.
- In 2021, the Ukrainian IT industry showed the most growth in Finance, eCommerce, and Enterprise software development.
- Ukraine is ranked third worldwide in the number of cert shows the most growthified IT specialists.
- According to Coursera’s 2022 report, Ukraine is in the top 25 for Data Science expertise.
- The average cost of software-developer services in Ukraine ranges from $30 to $60 per hour. Building an offshore development team in Ukraine is much less expensive than in the United States— without affecting the quality of the code. Therefore, IT businesses in the US prefer outsourcing to Ukraine because it is hard to find such a perfect price/quality ratio locally—the USA is one of Ukraine’s largest R&D partners.
Ukrainian Developers: Tech Skills and Soft Skills
Ukrainian developers are extremely innovative, tech-savvy, and always eager to learn about new technologies on the market. As a result, numerous country-wide tech events, hackathons, meetups, and conferences such as the iForum took place in major Ukrainian cities—almost daily. Additionally, Ukraine is famous for its educational initiatives, courses, and boot camps in the software development domain—many of which are suitable for newcomers. So, it is not surprising that the Ukrainian IT market is full of brilliant tech talent. By the way, It is also worth noting that Ukraine is home to many successful global startups and software products, including Grammarly, Depositphotos, Petcube, and Preply.
According to a DOU survey, the largest portal for software developers in Ukraine, the country’s most popular programming languages as of February 2022 are:
Python making the Top 5 is a positive trend because it proves that Ukrainian developers are geared toward the growing popularity of machine learning and data science—technologies for the future.
As for soft skills, Ukrainians have room for improvement regarding communication, strategic thinking, and project management. However, they are quickly adopting western values, growing more fluent in English, and fine-tuning critical thinking and problem-solving skills to help them create and design innovative software solutions while improving current products. Additionally, tech talents in Ukraine are open-minded, honest, and trustworthy. Outsourcing companies in Ukraine are more likely to establish long-term business relationships with their partners in Europe and the US.
Building an Offshore Development Team in Ukraine in 2022
So, you have decided to hire a web development team from Ukraine and collaborate with them on a remote or semi-remote basis. The next step after making this important decision should be identifying potential problems and challenges—to be forewarned and forearmed. We will outline a few possible issues and explain how outsourcing companies and developers are working on solving them.
Challenges of Offshore Development Teams in Ukraine
Corruption. Unfortunately, corruption is one of the biggest problems that can hamper Ukraine’s outsourcing and local businesses. Corruption in Ukraine roots back to the times of the Soviet Union and numerous financial crises that devastated the country, and it still remains in some state institutions. However, Ukraine is currently recovering from those hard times, and the new government is making efforts to fight corruption. For example, in 2014, the country established the National Anti-Corruption Bureau (NABU). In 2016, the Prozorro (Transparent) e-procurement system was launched. Additionally, now all civil servants must declare their income electronically. The Ukrainian government has started implementing blockchain technologies for more efficient anti-corruption measures. In 2022, even after 24th February, the process didn’t stop. Due to assigning a new director of SAPO, the anticorruption steps were moved forward faster.
Political situation. The ongoing war may scare-off customers who have developers from Ukraine, but the IT sector has shown stability and even growth. Most IT companies had relocated their teams to western Ukraine or abroad before the war began and so have continued to work efficiently. Moreover, the IT sector is one of the few industries that is still operating efficiently, and that’s why developers are more motivated than ever before to produce high-quality work, support their country, and provide for their families.
Lack of support for investors. For many years, the business climate in Ukraine has not been very favorable for foreign investment. However, since 2014, the country has started improving business conditions to attract investors. As a part of the government’s Strategic Action Plan 2019-23, organizations such as UkraineInvest, Government Commissioner for Investments, and Business Ombudsman Council were established. As a result, investments in Ukrainian IT companies over the past five years have grown to $630 million. It is also worth noting that it is expected that the country will be rebuilt in the post-war period at the expense of foreign investments, including in the IT sphere.
Offshore Development Team in Ukraine: Hiring Options in 2022
There is a wide variety of options for hiring a dedicated software development team in Ukraine. However, it is important that you carefully consider those options and any possible risks that they may entail before making a final decision. The following are some of the best ways to hire software developers in Ukraine.
Software Development Agencies
Partnering with local software development agencies is the most traditional way of finding and hiring an offshore development team in Ukraine. Many offshore development agencies in Ukraine also offer collaboration on an outstaffing basis, which means more flexibility and control over the project and its scope. Collaboration with a local software development agency or outstaffing company typically involves the following stages:
- Contacting a local company representative to study customer requirements. The customer describes the project, sets the deadlines, and specifies the skill set needed to complete the project successfully.
- The local company searches the available talent pools for suitable candidates.
- The talent acquisition specialist at the local agency interviews the shortlisted candidates and then schedules interviews for the customer.
- The customer interviews the candidates.
- The customer hires the best-qualified candidates.
The local software development agency provides the hired developers with the proper working conditions and benefits, such as an office, equipment, medical insurance, and vacation time. Depending on the project, either the customer or the local company in Ukraine provides the project manager.
Pros: Reliability. A dedicated software development team works together in one place and in the same country. The local company handles all management issues.
Cons: Lack of flexibility–any changes to the project must be approved by the agency. For example, it is almost impossible to change the technology stack in the middle of the project. Besides, the services of a software development agency may be expensive, as they include the back office handling expenses.
Local Recruiters in Ukraine
Clients can collaborate with a Ukrainian recruiter who will find the best offshore development team in Ukraine for a project. A local recruiter has a large base of tech talents available and can act as an intermediary between the client and the developers. The workflow is typical as follows:
- Share your project requirements with the recruiter.
- The recruiter checks their curated talent pool for available developers.
- The recruiter schedules interviews with the shortlisted candidates.
- The customer interviews the candidates.
- The customer hires the best-suited candidates.
Pros: Clients get access to a large talent pool of experienced offshore software developers. Clients save time searching for candidates.
Cons: It may take a long time to recruit a dedicated team of software developers in Ukraine, sometimes even up to 6–8 weeks, depending on the number of engineers needed and their technology stack. In addition, the Ukrainian software development market is highly competitive, meaning that the developers may receive many offers—so they may not respond to all of them.
Another way to hire Ukrainian IT professionals is to search profiles on freelance portals. Here’s how it works:
- The customer registers with a freelance portal as an employer.
- The customer looks for freelancers in the following ways:
- searching through freelancer profiles that meet their requirements and skill set for a project and sending them invites,
- posting a job with a project description and having freelancers apply.
- The customer reviews job applications or responses to the invitations, schedules interviews with the applicants, and hires the most suitable candidate(s).
- The customer creates a job offer for the developer that has successfully passed the interview.
- The developer accepts the job offer.
- A contract is created, and the customer starts collaborating with the freelancer.
Freelance software developers in Ukraine typically work remotely—from home or from a coworking space. The customer must devote time to building the entire team from scratch. Additionally, team members can be from Ukraine or any other country.
Pros: Cost efficiency, access to a large talent pool, direct collaboration opportunities.
Cons: It may take time to find the best-suited developers to form a dedicated development team using freelance portals like Upwork. Because of the time commitment, this option is more suitable for smaller projects. It is also difficult to manage a team of freelancers that are scattered all over the world. Unfortunately, freelancers sometimes disappear or ghost a project without notice and without an explanation. This kind of unpredictability can negatively impact the entire project, especially when deadlines are tight.
Tech talent marketplaces connect their clients with the best software engineers from web development shops—companies that unite developers specializing in various technology stacks and work on several projects simultaneously. Founded in Ukraine, YouTeam is a marketplace for offshore software development teams from Ukraine and Latin America, which carefully picks the best tech talents for their clients from the world’s best web dev shops. Let’s see how this marketplace works in more detail.
YouTeam Marketplace of Offshore Software Development: How It Works
YouTeam collaborates with the software development teams from dev shops in Latin America and Eastern Europe and acts as an online marketplace for midsize businesses looking to hire tech talent. There are hundreds of curated teams and individual software developers across all technology stacks in our talent pool.
- Clients submit project details on the platform—filling out a short, 2-minute form.
- After the form is submitted, we start sourcing for the best-suited candidates for the project and will send out the first set of handpicked profiles within 48 hours. We are proud to offer the best full-stack, front-end, back-end, mobile, blockchain engineers as well as DevOps, Machine Learning specialists, and WordPress developers on our platform. Additionally, clients can search for QA and UX/UI design teams.
- Having narrowed down a suitable team of candidates by YouTeam Talent Advisors, the interviewing process by the client begins.
- After successful interviews, clients sign a contract and start working with the offshore development team via YouTeam.
- All payments to the dev shop go through the YouTeam’s secure account. At the end of each servicing period, clients have several business days to review the work. Any payments owed to developers are withheld until issues are resolved.
Why Choose YouTeam to Build Your Offshore Development Team?
YouTeam extends a range of competitive advantages to established businesses and startups looking for software developers in Ukraine and other countries, specifically:
Curated List of Best Offshore Development Companies
Each web or app development shop can only join YouTeam by invitation but then must go through our vetting process, which consists of the following stages:
- We search worldwide and select only the best web development agencies (vendors) based on factors such as work history, external ratings, experience, and track record.
- We schedule several calls with the vendor representatives. Also, we visit potential candidates to meet them and other team members personally, if possible.
- We analyze the legal, HR, and management documentation as well as the firm’s best practices to learn how top management treats their employees and to understand their product development process.
- Each software development engineer at the webshop undergoes several stages of screening, a process carried out by our partner vendors.
- The client interviews and assesses the developers and their skills with the help of dedicated YouTeam managers.
YouTeam does not accept any discrepancies between advertised skills and actual developer performance. In such a situation, the responsible vendor is permanently blocked from our platform. We then refund the client for the latest invoicing period.
Dedicated Software Development Team
Just because a software engineer registered with YouTeam works remotely does not mean that they’re a freelancer. They may work for the vendor agency you are contacting. That means that those developers hired through YouTeam will dedicate all of their time to the project. We only register upper-middle and senior developers on YouTeam, meaning they deliver work of exceptional quality. Finally, to help ensure the success of our Ukrainian developers and IT specialists from other countries, we put potential candidates through a strict pre-interview before introducing them to the customer.
Offshore Development Teams Ready to Start Immediately
You will not have to wait for months until your team is formed, as it may happen with other hiring options for Ukraine outsourcing. After you register with YouTeam and our advisor personally approves your account, we unlock access to the profiles of developers belonging to the ready-made teams from our curated web dev shops. All of these professionals are ready to start working on your project within two weeks maximum.
Flexible and Scalable Offshore Development Teams
Unlike traditional software development agencies that form the team only once, YouTeam offers a more flexible model that allows you to quickly scale the team. This is especially good for startups and growing businesses. With YouTeam, you can de-scale the team in the course of two weeks.
Getting a good engineer on board is always expensive. Developers from our talent pool are not an exception. Still, hiring Ukrainians through YouTeam is more cost-effective compared to local hiring for customers from North America and Western Europe. The main reason behind this is the different living costs in these countries.
YouTeam doesn’t request any payments or commitments from clients before they sign a contract with the engineers of their choice. This means you can try sourcing and interviewing YouTeam developers absolutely risk-free.
Assistance with Project Management
We at YouTeam can also help with project management. Our dedicated Customer success manager supports the organization and management of the project kick-off, ensures healthy cooperation between the dev shop and customers, helps with invoices and payments, and supports agreement changes if needed.
Offshore software development in Ukraine: FAQ
What are the risks of software development offshoring in Eastern Europe?
While tech companies from the United States, the United Kingdom, and Western Europe more often prefer outsourcing software development to Eastern Europe over Asia, there are still certain risks involved. For instance, clients from outside Eastern Europe may get confused with complicated taxation and money transfers. Sometimes they also have to deal with ambiguous billing methods set by the dev shops. The solution is to hire through a tech-talent marketplace, which will ensure that the outsourcing process runs smoothly.
How to set up an offshore development center in Ukraine in 2023?
An offshore software development center is a software company that is based in a country other than where it’s headquartered. Such centers typically function as an extension of the in-house development team. The process of establishing an offshore software development center in Ukraine from scratch may involve the seven steps described in detail in this article.
What is the mentality of people who work in the Ukrainian IT industry?
Ukrainian cities are increasingly adopting Western European values, spearheaded by the country’s tech hubs such as Lviv, Kyiv, Kharkiv, and Odesa. Ukrainian dev shops are more focused on establishing long-term relationships instead of trying to make a quick buck, which is proven by the countless examples of large companies that have been outsourcing software development to Ukraine for decades. In terms of the personalities of people employed in the tech sector in Ukraine, they are mainly down-to-earth and friendly. In this research about Ukrainian software developers in 2023, you can find even more insights on this topic.
The Bottom Line
To summarize, here’s what you need to know about building an offshore development team in Ukraine:
- Ukraine is among the best countries to outsource software development because of a large tech talent pool, high-quality work, and reasonable pricing. For example, the Global Sourcing Association (GSA) named Ukraine the “Outsourcing Destination of the Year” in 2017. With over 16,000 IT students graduating over the last few years and continuing to work in the industry, there is now an impressive pool of available talent. Additionally, Ukrainian developers have expertise in all technology stacks and are always ready to learn new technologies, data science in particular. With a dedicated offshore development team in Ukraine, you can outsource your projects and expand your business capacity while decreasing operational costs.
- If you decide to build an offshore development team in Ukraine, it is important to be aware of certain challenges, such as corruption or lack of support for startups and investors. However, the country has been actively working to fix those issues since 2014, and now we can see significant progress.
- There are several ways to hire software developers in Ukraine, such as collaboration with traditional software development agencies, freelance portals, local recruiters, and tech talent marketplaces. YouTeam offers a unique tech talent marketplace that gives its clients access to a large pool of programmers that are employed at carefully vetted web development shops on a full-time basis.
- Hiring developers through the YouTeam marketplace has a range of competitive advantages over the other available ways of Ukraine software outsourcing. YouTeam provides a curated list of highly-skilled programmers from the best dev shops. Unlike traditional outsourcing agencies, the developers are available for a project within two weeks. The developers dedicate their time to the client’s project but are quite flexible in terms of team scaling. Finally, each vendor shop that collaborates with YouTeam undergoes a strict, multi-stage vetting process.
Therefore, a tech talent marketplace is currently the most cost-efficient and reliable way to hire web, mobile, back-end, front-end, or full-stack software development teams from Ukraine and other leading outsourcing countries.
If you’re looking to hire developers, contact us—we would love to share our expertise.