Growth in IT outsourcing in Eastern Europe continues to increase and Ukraine is still Eastern Europe’s best destination for outsourcing. Over the last 20 years, Ukraine’s information technology sector has grown and gained strength. Export of IT services has grown an average 15-25% annually over the last 10 years. The reasonable question is what part of the IT outsourcing pie is taken by the Ukrainian developers in Eastern Europe? If you are interested, then check-out the blog post below.
Despite the problems within the Ukrainian economy over the last years, the IT market has continued to grow. The quality of Ukraine’s math and science education and the amount of IT outsourcing projects form the main basis for the IT outsourcing growth. Multinational companies are finding that their branches in Ukraine are growing much faster than their branches in other countries.
According to a report from the IT recruitment service top$dev, Ukraine is keeping its leader status among Eastern European countries in the number of freelance IT developers, with Ukrainian freelances taking up and completing one-third of all the orders coming into this region in last year. Second and third place in terms of the share of orders are taken by Russia and Romania, respectively.
The share of orders completed by Russian freelancers has decreased by 15%, while the share of Ukrainian developers decreased by 8% last year. At the same time, Romanians completed 32% more orders over the last period, while Serbians completed 79% more.
|Country||Total Share of Orders, %||Growth 2014/2013, %|
Among other customers outside the competition, was the United States with 44% from the total volume of orders for Eastern Europe. The shares for developers with orders from the United Kingdom, Germany, Israel, and Switzerland have also increased significantly.
So what makes Ukraine and Eastern Europe so attractive for outsourcing projects?
- High skilled labor. Beginning with the former Soviet Union, Ukraine has always had a strong educational emphasis on math, engineering, and sciences. As a result, Ukraine has a highly skilled computer workforce at a much lower labor costs than, for example, in UK.
- Low hourly rate. In 2014, the highest rate for Eastern Europe was among developers from Estonia ($27 per hour). Ukrainians earned an average of $21.9 per hour that is much cheaper than the hourly rate in UK or US.
- Time zones. Eastern Ukraine covers a vast region with just a one hour time difference with Western Europe and just two hours with UK, making it easier to communicate within the main working hours.
- Cultural similarities. Many western companies believe that Eastern Europe has a cultural advantage over countries such as India or Pakistan, when it comes to outsourcing, because employees from these other countries ten to make a less process-driven approach to projects.
- Data protection. Eastern European countries are a good choice to work with, as most of these countries require an adherence to the Data Protection Act.
Do you know some other reasons why Eastern Europe and Ukraine are becoming more and more attractive to Western companies and their projects? Share with us in the comments.