Social Benefits of IT Outsourcing – Adding a Middle Class in the Ukrainian Society

Check our new article for our series of blog posts describing the social benefits of IT outsourcing in Ukraine with some real stories from inside our company. Today we’d like to understand how software outsourcing can be a stimulus to add a layer of middle class in a emerging society, specifically talking about Ukrainian IT specialists and their contribution to the country’s economy.

Unlike many industries that have experienced sharp regression during 2014-2015, Ukraine’s IT sector has increased in such important numbers as total workforce, numbers of jobs, and the number of IT educational programs.

According to the Ukraine High Tech Report 2015, the Ukrainian IT market, valued over $5 billion, is one of the most important industries in the economy; generates almost 4% of the Ukrainian GDP and is #3 in the Ukrainian export sector (in 2014 the export volume was $2.3 billion).

With 200,000 IT specialists forecast by 2020, the Ukrainian IT sector is becoming the basement of the middle class in Ukraine with salaries rates of some Western countries. According to the research by dou.ua, the number of total programmers working in the Ukrainian IT industry approached 90,000 specialists in 2015, which takes first place in Central and Eastern Europe for the number of IT specialists. For 2014 this number was around 75,000 specialists, so it has increased by 20%. In other words, each month more than one thousand specialists join the industry.

Talking about salaries for the Ukrainian IT specialists over the last couple of years, it’s important to mention that they are not decreasing or increasing, but still they are still much higher than the normal average salary in Ukraine.

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For example, let’s take the average salary for three IT jobs: QA specialist, Java middle developer and Frontend senior developer during 2014-2015. The average salary for QA was $1000-$1250; for Java middle developer – $1600-$1800; for Frontend senior developer – $3000. And the average salary in Ukraine, according to the website minfin.com.ua, as for December 2014 was $254 and as for December 2015 – $228. No doubt, that this is a huge difference.

Most importantly to the success of the middle class is that the number of IT jobs posting is increasing constantly. According to the research done by dou.ua, in September 2013 the number of jobs posted on their website was 900, and in September 2015 the number of jobs was 1500. So the number of job postings has increased by 60% and the number of applicants has increased by three times.

Just us sharing one or two personal story cannot show you the full scope of the importance of the growth of a middle class to countries like Ukraine or the impact that it has had to many individual lives. But to see examples of this, you need to look no further than Social media (Facebook, Twitter, Instagram) of some of Ukraine’s IT professionals. You will see pictures and postings of people enjoying the benefits of the middle class: going for road trips in their new family car, being able to finally move out of Mom’s and Dad’s house, buying first apartments, enjoying vacations abroad, eating out at restaurants, enjoying active entertainment (Skiing, Skydiving, biking), buying motorcycles, forming new hobbies. All of these activities and more, along with the sense of pride and joy that come along with them happened because of the benefits of outsourcing.

If you find this topic interesting, find other posts about benefits of IT outsourcing: