I think you will agree with me when I say:

It’s REALLY hard to choose an app development team in Ukraine.

Especially when you are based 7,000 km away. 

Or is it?

Well, it turns out that if you know the unique aspects of the Ukrainian IT market, you can dramatically simplify the selection process.

But, where do you get true insider information you can trust? The answer is clear:

right here in this article. 

Buckle your seat belt and put your smartphone on “do not disturb” mode. In today’s post, I’m going to tell you all that you need to know about the Ukraine IT outsourcing market. With this information, you will be able to easily find the right development team out of over a thousand Ukrainian software development companies.

This article contains only true facts, fresh data (year 2018), and insider information you can trust.


We are going to talk about:

→ an in-depth overview of Ukraine IT outsourcing

→ major development locations within Ukraine

→ the average salary of Ukrainian developers and tools to monitor it 

→ portrait of an average Ukrainian developer

key insights & unique aspects of software development agencies in Ukraine

→ outsourcing rates and service lines of software development in Ukraine

→ key reasons to outsource software development to Ukraine



General Overview of Ukrainian IT Outsourcing

Ukraine was announced as the number one Offshoring Destination of 2017 by the Global Sourcing Association UK. GSA is the industry association and professional body for the global sourcing industry and home of the Global Sourcing Standard.

Ukraine is considered to be one of the top outsourcing destinations. Ukraine’s IT outsourcing market is mature enough to meet even the highest demands for quality set by international competition. Compared to other regions of the world, Ukrainian software agencies provide their services at a competitive price. That creates a huge appetite among those who are looking for high-quality service at a reasonable price.

There are over 1,000 IT companies in Ukraine trusted by brands like Boeing, Nike, Adidas, McDonald’s, etc. Ukrainian mobile and web app development companies are recognized by leading B2B research and review platforms such as Clutch, GoodFirms, etc.

Just think about the market size.

In 2018, there were 160,000 IT professionals in the Ukrainian IT market. Among them were:

  • 70,000 Developers
  • 34,000 Quality Assurance Engineers
  • 31,000 Project Managers
  • 23,000 Designers

The major IT outsourcing destinations in Ukraine are Kyiv, Dnipro, Kharkiv, Lviv, Odessa. More than 40% of the market is fulfilled by Kyiv, which can be seen in the large accumulation of IT companies there.  Development agencies tend to settle in Kyiv because of the large number of universities. A great opportunity for hiring great talent, isn’t it?   

There are about 700 higher educational establishments in Ukraine. According to the World Economic Forum, Ukraine ranks 10–12th in the world in terms of higher education coverage; it is received by 79% of people aged 20 to 26 years. The State Statistics Service reports that in the 2017-2018 academic year, there were 1,54 million students in Ukraine. The average number of IT graduates was about 36,000.

Eighty of the IT sector in Ukraine is male, and about 20% is female. Women are mostly engaged in sales, marketing, QA, or HR positions.


Ukraine IT Outsourcing

The Average Salary of Ukrainian Developers

If you want to get the most up-to-date information about the salaries of Ukraine developers, there are 2 great tools for you to consider.

  1. DOU Salary Calculation Tool, the largest community of developers in Ukraine
  2. Djinni, a marketplace for hiring developers from Ukraine, Russia, and Belarus

BUT

Before you start your own research, you should study the top 3 factors that significantly influence salaries. 

1. Location

There is a difference between what a PHP developer would earn in Kyiv and, let’s say, Dnipro.

Kyiv ranks as the location with the highest salaries in Ukraine. Thusly, the salaries of developers may sometimes be twice as large as in other regions, especially in smaller cities.

In the screenshots below, you can see that a designer in Kyiv would get paid three times as much as a designer in Zaporizhia.

developers_salaries_ukraine
Developers Salaries
developers_salaries_ukraine
Developers Salaries

2. Skills and specialization

Skills and the programming languages that developers specialize in also make a difference.

Let’s compare.

In June ‘18, the average salary of a RoR developer would be about USD 3,800, while the monthly reward for a Senior Python developer would be about USD 3,400.

*Some HR managers state that there is a deviation in the figures provided by Dou. Just as with any statistic, do not treat this data as 100% accurate.

developer_salary_ukraine
Developer Salary

3. Seniority

Seniority of developers is typically defined by:

  1. Skills
  2. Experience
  3. Ability to work on complicated tasks
  4. Years in the industry

Don’t judge by age.

It may be that you come across a pretty young genius that is 20 years old and working as a Software Architect. This is because 80% of  Ukrainian developers are between 20 and 35 years of age. Nevertheless, there is a common scale for defining the seniority level of developers.

  • Junior developer – up to 2 years of experience
  • Middle developer – 2-5 years of experience
  • Senior developers – 5+ years of experience
seniority
Seniority of Developers

Outsourcing Rates for Software Development in Ukraine

I have analyzed the Top IT Outsourcing Companies 2018 according to Clutch and compared their average hourly rates.

Sixty-five percent of Ukrainian IT outsourcing companies charge between USD 25-49 an hour for development services, and 20% charge between USD 50-99 an hour. These figures comprise the majority of the market, while those companies with hourly rates above USD 150/hr are mostly consulting agencies in the IT niche.

rates
Hourly Rates


Service Line Provided by Ukrainian Software Development Vendors

To identify the most popular service lines provided by Ukrainian IT outsourcing firms, I have analyzed the Top IT Outsourcing Companies of 2018. There were 168 companies on the list. The Clutch classification of service was used as the basis.

services-line
Service Line

Curious findings.

The choice of companies is quite wide, which makes it possible for you to choose based on various criteria, including personal factors.   

The majority of software development companies offer custom development, which means that your project would be developed on a turn-key basis tailored to fit the unique aspects of your business.

The expertise of Ukrainian app development teams is large, so it’s obvious that Ukraine is the right place to outsource the development of your mobile and web app.  

You should know that…

There are several peculiarities of the service lines provided by companies. See below. 

  • Ukraine is well-known for hosting R&D centers for hi-tech companies in the USA, Europe, and other regions.
  • The industry focus is quite large: business services, financial services, healthcare, e-commerce, lifestyle, entertainment, etc.
  • The majority of companies offer full-cycle development of apps from scratch. This includes Business Analysis, IT Strategy Consulting, UX/UI Design, Front-end Development, Back-end Development, QA, Project Management, Support, and Maintenance. If you happen to work with an agency like this, you will have little to worry about, as they will deliver a full solution. There are also a few companies that specialize only in app management and support.
  • As a rule, UX/UI design is included in the package of web and mobile app development agencies. However, there are studios that only focus on design and do not offer development.
  • Even though the majority of companies are focused on the development of custom mobile and web apps from scratch, there is a significant amount that specialize in app modernization for the enterprise sector. 
  • The majority of companies that deal with mobile app development also offer web development. This means that if you need a landing page or web-based module for your app, they should be able to provide a solution. On the contrary, not all web development agencies also offer mobile development. This means that if you decide to supplement your web-based project with an app, chances are you will have to find a different team which can cost extra time and effort. In this case, the tech stack used for the web back-end development by different agencies may significantly complicate your search. Let’s say that if a company developed a mobile app with the back-end built on Ruby on Rails, in order to supplement the app with a website you would need to find a web agency that also uses RoR for the back-end.
  • Some of web agencies that specialize only in web development and web design will also offer SEO services, but this is more of an exception to the rules. There are plenty of SEO-studies on the Ukrainian market to choose from.
  • Other exceptions to the rules are mobile app development companies that offer marketing services at the same time.
  • Many, but not yet all, the companies consult and are able to help you with your business strategy. The companies that provide consulting services have higher rates for that reason.
  • There are companies with a broad specialization that can build an app for almost any sphere, while there are some with more of a niche specialization. Thusly, you can find agencies that only do web design but won’t be able to also create the design for your iOS app.
  • While the majority of companies have their own in-house teams, a few offer Team Augmentation and Outstaffing Services.
  • The highest hourly rates (USD150 – 199 / hr) are charged for ERP Consulting and SI, Other IT Consulting and SI charges. The average hourly rate for consulting services in this niche varies between USD 100 – 149 / hr.

Size of Ukrainian IT Companies

The average IT development company in Ukraine has 10-49 employees. There are not that many big companies. However, for just a few companies, the number of employees is over 1,000.  

chart
Company Size


Client Focus of Top Ukrainian IT Companies

Ukrainian IT companies tend to work with different business sizes, however, the focus is on small and midmarket. Only 6.7% operate in the enterprise segment.

The dominant locations are:

  • USA
  • Europe
  • UK
  • Australia
client-focus
Client Focus


Portrait of a Ukrainian Developer

I have created a portrait of a Ukrainian developer so that you can imagine the sort of person who might be programming your app.

Male. 

Since the percentage of females in the Ukrainian IT sector equals about 20% and women are mostly engaged in sales/ marketing/ QA/ HR positions, the developer would most likely be a man. My best guess as to his name is either Maksym, Oleksandr, or Dmytro as these are the most popular male names in Ukraine. Let’s say that his name is Dmytro and he is in his thirties.

Lives in Kyiv.

It is highly likely that Dmytro lives in one of the major IT cities. Let’s go with Kyiv. Why? Because this city hosts more than 40% of the Ukrainian development companies.

Highly Educated.

He has a higher education, work experience of about 3-5 years, and works for a company that has about 200 employees. Considering the average turnover rate in Ukraine, he has likely been working for this company for at least 2 years. Dmytro earns about USD 3,800 a month because he is an expert in Ruby on Rails. His work experience, along with this skill set, make him a Senior Developer. About 50% of developers in Ukraine are Middle or Senior, the rest are Juniors, Leads, or Software Architects.

Speaks English.

Dmytro is able to clearly communicate choices for the technical solution for your project because he is fluent in English. His level of English is either intermediate or upper-intermediate. This can be explained by the fact that the majority of the projects he worked on came from either the USA, UK, or Europe.

Flexible.

Dmytro works from the office just as about 70-80% of IT professionals do. His schedule is pretty flexible: he may come to work at about 10am and leave the office at 7pm. He often stays late and may work up to 60 hrs per week.

Top 5 Reasons to Outsource Software Development to Ukraine in 2019

1. Cost reduction  

According to the survey from Statistics Brain, 43% of US-based companies used outsourcing services and stated that the main reason was saving money.

USD 200 vs 25

Taking a closer look at the hourly rates of US tech companies, which may charge up to USD 200/hour, and compare those rates to what they charge for the same level of service in the Ukrainian IT outsourcing market – the reason is not hard to figure out. On average, Ukrainian app development companies charge USD 25-50 an hour. The information related to the hourly rates of specific companies can be easily checked out on Clutch, a leading directory of IT companies.

On the screen below, you can see the hourly rate of a well-known US app development company called Fueled. You can use the same resource to conduct your own research of IT companies and compare their prices.

fueled

2. Time-saving

To build an app, you will need to complete a great number of tasks, in particular:

  • shape the business strategy
  • conduct market and competitor analysis
  • identify your value proposition
  • specify the project concept
  • create UX/UI design
  • program the MVP
  • thoroughly test the app
  • submit the app to the app market

Even though this list is not necessarily complete, it’s obvious that in order to build an app, you will need to be fully dedicated to the project.

Just look how long…

the Apple App Store Review Guidelines list is.

Are you sure you want to spend time studying each item? One single mistake and your app could be declined. Besides, I bet you are a busy person whose time is precious.

3. Expert advice

The sphere of IT outsourcing in Ukraine has already settled down and stabilized compared to how it was 10 years ago. There are professional companies that deliver at a world-class level. These companies have been providing their services for over 10 years and are competitive on the global market. This is why one of the reasons to outsource to Ukraine is the ability to get professional assistance from experts.

4. Well-balanced team

Development of an app requires thorough work and the involvement of various experts:

  • Business Analysts
  • UX/UI Designers
  • Developers, etc.

With the app market being so overwhelmed with applications, it is not enough to just code an app. In order to build a successful project, you will need to cover your business concept from various angles.

Obviously, outsourcing various aspects to different service providers would require that more time and money be spent on the project in the long-term. It’s more efficient to find an app development team that can be a kind of umbrella and able provide an all-in-one solution for you.

Your time is too precious to waste on exploring the ‘wild west’ and going through multiple issues related to the management of app development teams. There are already companies in existence that have well-balanced teams to help you accelerate the process.

5. Risk mitigation

A professional software development agency knows all of the ins and outs of the app market and will therefore be able to help you avoid the risks related to the building of your app.

One of the main risks is releasing a product that no one needs, that won’t be competitive on the market, and that has no chance to turn into a successful digital business.

Professional software development companies are eager to share their experience, challenge you, and help you improve your business concept.

IT outsourcing in Ukraine is diverse and there are plenty of software development agencies which may somewhat complicate the search of proper vendors. bridgee was created to help make the selection process easier and provide the insider information about the market.

If you find this information useful, please share this article to help spread the true facts about the Ukrainian IT outsourcing market.

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1 Comment

  1. Oscar says:

    Very informative article

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