There is a whole world behind the term “software development”. Literally, a whole world. According to Evans Data Corporation, in 2017 there were 22 million developers worldwide, and by 2022, this number will crawl up to 26 million developers. This equals the population of a very small planet; or the Chinese province of Gansu.
The ongoing automatization of society is strengthening our dependence on good code. From ginormous spaceships to applications that help you calculate how much money the tooth fairy should leave under your kid’s pillow, software development rules the roost these days.
What’s the biggest challenge in the software development industry?
The answer will differ depending on who you ask. According to a worldwide analysis by Coding Sans, the biggest challenge for developers is their limited capacity. They would like to be more efficient in time management, have more fingers to type, and get rid of Susan who keeps distracting them with her Coachella stories. But for 33.5% of managers and company owners, the biggest challenge is hiring talented developers. So, what’s the solution?
Let’s talk Ukraine
We can hear the muffled “why Ukraine?” sound from behind the screen. Firstly, we have built unique expertise and insights on the Ukrainian market for the past six years. It makes sense that we begin our narrative here. More importantly, Ukrainian developers are very good and the domestic software industry is growing. Let us walk you through this.
Ukraine business overview
According to The World Bank’s annual overview, Ukraine ranks 71 out of 190 countries in terms of ease of doing business. To compare, six years ago, in 2013, when we started to build the company, Ukraine ranked 137 out of 185 countries. Such an impressive leap has little to do with Beetroot in particular, though. During these years Ukraine simplified its procedures for trading across borders (rank 78 out of 190), went the extra mile to protect its investors (rank 72 out of 190), signed a visa-free regime with the European Union, established three anti-corruption institutions and launched a public e-procurement system called Prozorro that received the International Public Procurement Leader Award.
Ukrainian software development on the world stage
In 2018, Ukraine exported $4 billion worth of IT services. Numerous leading companies, including Samsung, Google, ABBY, Microsoft, Siemens, etc. opt for choosing Ukrainian services in the sphere of IT. More particularly:
- Ukraine is at 1st place out of 163 in the Good Country Index in terms of Science and Technology Contribution;
- Ukraine ranks top 3 of the world countries with certified IT professionals;
- It also ranked as the #1 Eastern European country for IT and software development outsourcing
52% of Coding Sans respondents claimed that they outsourced development services at least once. More to that, 51% of those with experience of working with outsourced talent, were satisfied with their work, and 10% — absolutely satisfied. To sum it up: people around the world use IT outsourcing a lot. Ukraine is good at IT outsourcing.
IT companies in Ukraine
Currently, there are more than 1000 IT companies in Ukraine and this number is growing. With the development of the sector, the diversity of the companies increases. Now, along with outsourcing software development companies, there are numerous product companies, IT consultancies, tech laboratories, R&D centers, and IT hubs. It’s a boiling pot, probably of the borsch-variety, of activity. With the increased volume of local companies also come to increased specialization and niche players. Navigating the growing outstaffing and outsourcing landscape isn’t necessarily easy, especially when many companies are simply cookie-cutter replications of the ones around them.
When it comes to innovative capacity, Ukraine is also doing well. Not as well as Silicon Valley, but still, progress is there. According to Bloomberg’s Innovation Index, Ukraine in one of the 50 most innovative countries in the world. In 2017 investments in Ukrainian startups reached $265 million. To compare, in 2013 Ukrainian startups received only $97 million of investments. And in some cases, multinational corporations do not just invest in, but also acquire Ukrainian startups.
Let’s take Ring as an example. This company develops hi-tech doorbells, with video recording, connection to smartphones and other stuff. The company was founded only two years ago with ten people on board. Recently, having grown to over 700 employees, the company was bought by Amazon for $1 billion dollars. And it’s not the only one. More than 100 Ukrainian research and development centers are owned by huge, international corporations.
Knowledge is power, we all know that. And in this case, knowledge of technical subjects is probably Ukraine’s superpower. Ukraine ranks #1 among European countries for its number of tech graduates. Ukrainian universities provide 16,000 qualified IT specialists and 130,000 general engineering specialists every year.
Software developers in Ukraine
If we start by looking at general numbers, we find that there are 184,000 IT specialists in Ukraine and that this number is expected to grow to 200,000 by 2020. To compare, neighboring Poland offers only 45,000 IT specialists. Something else to take note of, when it comes to Ukrainian software developers, is increasing gender equality. The absolute number of women in IT has grown by 7% since 2016. Now, let’s dive into more details.
The vast majority of specialists — 67% — live in major Ukrainian cities, like Kyiv, Kharkiv, and Lviv. However, in recent years we have discerned a tendency of specialists in mid-sized cities increasing. Moreover, it’s possible that Beetroot may have contributed to this increase by opening 13 IT academies throughout Ukraine. The overall distribution of Ukrainian software developers looks like this: 40% in Kyiv, 15% in Kharkiv, 12% in Lviv, 8% in Dnipro, 6% in Odesa, 3% in Vinnitsya, 2% in Zaporizhia, 1% in Ivano-Frankivsk, and 6% are working from outside of the country.
Experience and seniority
The ratio of senior to junior developers differs depending on the city. For instance, in big IT hubs, like Kyiv, the number of senior and junior developers is almost the same. But in smaller cities, there are usually more junior specialists and not so many experienced ones.
If talking about Ukraine in general, you will find that 26% of the pack are young specialists with one or two years of experience, 36% are middle specialists, who have been tackling IT projects for 3-5 years, and 19% are senior specialists, who have from 6 to 10 years of experience under their belts. 11% of developers have been around for more than 10 years.
In general, salaries depend on a developer’s seniority and language of programming. Senior system architects earn the highest salaries — approximately 5,000 USD per month. But this level is exceptional by Ukrainian standards. If talking about the most popular programming language, Java, the numbers are significantly lower. Junior Java developers get around 700 USD, middle developers receive 2,000 USD and seniors around 3,600 USD.
The average annual salary of a Ukrainian developer is 25,000 USD, considerably lower than the 47,000 USD in Finland or 92,000 in the US. If talking about hourly rates, Ukrainian developers receive around 25-40 USD. To compare, developers in India get 15-30 USD and in Poland — 60-70 USD.
Ukraine is located in Europe, therefore it has a minimal time difference from other European countries. For instance, the time difference from Stockholm is one hour, and from London — 2 hours. So, it is a convenient destination for nearshoring. Even if you are based out of New York, there is only a 7-hour time difference, and you should be able to pull off a daily stand-up with your team if you wish.
When it comes to hiring specialists from other countries, English language proficiency is one of the top client worries. It doesn’t take a rocket scientist to understand how important it is for a team to speak the same language. Ukrainian rocket scientists, sorry, IT specialists, are well aware of this requirement. According to DOU (a leading, local job portal) research, 67% of tech specialists have an Intermediate or Upper Intermediate level of English. Beyond that, there is a 12% group that stands out with an Advanced level of English.
According to the Coding Sans report, cultural fit is one of the most crucial hiring criteria, second only to the willingness to learn. Company owners want software developers not only to provide top-notch services but also to share cultural values and specificities. This point becomes even more important contexts of outsourcing. However, cultural traditions in Ukraine are often similar to the majority of European traditions. Holidays and days-off are almost the same, apart from Easter and Christmas, which take place a week or two later in Ukraine than in the rest of Europe. As for personal qualities, Beetroot clients often mention that Ukrainian developers are very straightforward direct and honest. They do not beat around the bush but instead get right to the point. You can read more about the specificities of working with distributed teams from Ukraine in our case studies.