The state of software development outsourcing in Ukraine in 2018

Software development outsourcing in Ukraine in 2018

It’s 2018, and it looks like there’s never been a better time for Ukrainian software development companies. In January 2018, Ukraine’s software outsourcing industry reached $3.6 billion, demonstrating a 20% year-over-year growth. Today, the export of software development services constitutes the third most profitable sector in Ukrainian economy.

It’s not just export volumes, though. In 2018, Ukraine has more skilled software engineers and globally-acclaimed development shops than ever. So if you’re planning to hire remote software developers or a development team, this post will detail the state of Ukrainian talent pool in 2018.

How many software developers are there in Ukraine?

Based on the data from IT Ukraine, the country’s talent pool comprises of 116,000 professionals. The same source forecasts a 110% increase of Ukraine’s programmer population by 2025.

Another source StackOverflow quotes an even higher figure of 204,855 programmers. This number represents the findings of a research of active StackOverflow users from Ukraine. For their research, StackOverflow trained an AI to select the accounts whose owners are likely to program often. Note that this selection includes both software development professionals and students.

Skills of Ukrainian developers according to programming ratings

Okay, 116K–205K programmers constitutes a huge talent pool, but how good are these specialists? India, in comparison, has over 2.75 million software engineers, but the stereotype of the “bad coder” makes this figure worthless. Is the average Ukrainian developer any better? One way to answer this question is by looking at global programmer charts and ratings.

SkillValue world ranking 2018

The skills assessment resource SkillValue ranks Ukraine the 8th among the world’s top countries with the best programmers compared to #34 for India. The average score index for Ukrainian programmers is 91.26%. Commenting on their ranking system, SkillValue mentions that all countries within the 1–20 range make for excellent destinations for outsourcing software development.

SkillValue world chart of top programming countries

TopCoder Country Ranking (2018)

The TopCoder chart tracks programmers’ activity in the last 180 days, which makes for a regularly-updated rating system. As of July 2018, Ukraine is on the 6th position in the TopCoder chart.

TopCoder chart of countries with the best programmers

HackerRank Programming Olympics (2016)

Ukraine came 11th in the 2016’s HackerRank Programming Olympics. The country also leads the chart in the Security category and occupies the 4th position in Mathematics and Distributed Systems.

HackerRank Programming Olympics Chart

Ukraine’s outsourcing potential according to global rankings

When it comes to companies specializing in software outsourcing, Ukraine really takes the global lead. This year’s Global Outsourcing 100 list includes 18 Ukraine-based software development companies. Out of these 18, six are international vendors with offices in Ukraine, and 12 are Ukrainian-founded. Still, even if you count only these 12 companies, Ukraine has more software development firms on the Global Outsourcing 100 than any other country.

There are other outsourcing ratings and rankings that featured Ukraine in the past few years:

Who outsources to Ukraine?

Ukraine houses R&D centers of Oracle, Samsung, Huawei, and IBM. In addition, brands like Skype, Microsoft, LG, and Qualcomm outsourced the development of their products to Ukrainian software engineering teams. Other examples of brands outsourcing software development to Ukraine include BBC, BuzzFeed, Reuters, Deutsche Bank, Harley-Davidson, and Guinness.

Experience and seniority of Ukrainian software developers

DOU, a media resource that covers the Ukrainian IT industry, has recently published a study profiling local software developers. Based on a survey of 8638 people, the study sheds some light on the Ukrainian talent pool. In particular, DOU offers a detailed coverage of Ukrainian developers’ experience and seniority.

Experience: years spent in software development

One of the survey findings is that ~43% of respondents have 3–10 years of experience in the field.

Experience (Years spent in software development) Percentage of respondents
less than 1 year 13%
1–2 years 25%
3–5 years 27%
6–10 years 16%
more than 10 years 13%

Among the respondents with less than 1 year of commercial experience, 33% specialize in front-end development. About 30% of software testers have 3–5 years of experience. Over 40% of system administrators have more than 10 years of experience.

Commercial experience: number of previous companies

Based on the study from DOU, ~66% of Ukrainian software developers worked for 2–7 companies in the past. Only 2% of respondents worked for 8 or more employers.

How many companies have you worked for previously? Percentage of respondents
1 company 27%
2 companies 28%
3–4 companies 29%
5–7 companies 9%
8 or more companies 2%

Working with several teams and products is a good way to broaden one’s horizon. Engineers with 2 or more companies in their resume can often boast better soft skills and better overall understanding of software product development.

Seniority levels

Speaking of seniority, middle developers constitute the most populous demographic, followed by junior specialists. Still, companies in Ukraine get a healthy supply of tech leads and senior software engineers as well:

Seniority level Percentage
Junior 26%
Middle 36%
Senior 19%
Lead 11%

Most middle software developers featured in this report have 3–5 years of experience. In the meantime, senior developers have 6–10 years of experience in software engineering.

Top career specializations: development, QA, and management

As of 2018, software development is the career of choice for 52% of DOU respondents. QA comes a distant second with 14%, followed by management positions (6%).

Career specialization Percentage
Software developer 52%
Software tester 14%
Manager 6%

Basically, there are three to four developers for each tester, and project managers get to run teams of 9 people on average. Other popular roles include ops, system administration, UI and UX design, management, etc.

Top-15% programming languages popular among Ukrainian software developers

Another survey from DOU zooms in on the programming languages popular among Ukrainian programmers. Based on responses from 7361 people, Java, JavaScript, C#, PHP, and Python are the top-5 programming languages in Ukraine by market share. Other popular languages include C++, Swift, Ruby, Go, and Scala.

Top programming languages in Ukraine by number of developers
Top programming languages in Ukraine by market share

Ukrainian developers with trending tech stacks

Our own research conducted in the spring of 2018 goes deeper into the adoption of trending technologies among software engineers and development companies in Ukraine.

The table below reflects the LinkedIn accounts of software engineers specializing in mainstream technologies. Namely, we looked at React Native, React, Angular, Node, Java, C#, Ruby, as well as QA and UX.

Kyiv Kharkiv Odessa Lviv
React Native 214 152 57 103
Node.js 1603 882 385 743
Java 6853 3439 1535 2996
.NET 2769 1866 378 1650
Ruby 864 550 199 697
Angular.js 1348 928 276 775
React.js 1324 785 277 587
QA 7220 3915 1648 3780
UX 3840 1724 665 1123

Costs: how much does software development cost in Ukraine?

Pricing varies drastically across companies, which makes costs difficult to evaluate. Nevertheless, it’s still possible to quote averages and medians for a high-level picture. For instance, the table below features the median salaries of Ukrainian software developers as of December 2017.

Median salaries of Ukrainian software developers (as of December 2017)

Experience and role JavaScript Java Objective-C Swift Scala
1–2 years (Software engineer) $1400 $1800 $1200 $1700 $2250
3–5 years (Software engineer) $2200 $2300 $2260 $2450 $3400
6–10 years (Senior engineer) $3800 $4000 $3600 $3500 $4300
6–10 years (Tech lead) $4500 $4325 $3800 $4500 $5000

Note that this data comes from all types of Ukrainian companies. This includes outsourcing firms, local software product brands, small agencies, non-software businesses, etc. Besides, these figures exclude the costs charged by outsourcing firms on top of developer salaries (these can range from 10% to as much as 30%).

Average minimum and maximum rates of outsourcing companies in Ukraine

Another way to infer the cost of software development in Ukraine is by looking at average rates charged by development shops. This sort of information is available on Clutch.io. The average minimum rate of the top-20 custom software development companies featured on Clutch is $32.5. The average maximum rate of top-20 companies in Ukraine is $61.5.

O’Reilly Software Development Salary Survey (2016)

The Software Development Salary Survey conducted by O’Reilly in April 2016 still offers some insight into how Ukraine compares to other outsourcing destinations.

O’Reilly statistics on software developers' salaries

In our own experience, Ukrainian programmers cost ~40–50% of what our Bay-Area-based customers pay their in-house developers. This is true for seasoned engineers with proven commercial experience and excellent reviews from past clients.

Types of software companies in Ukraine

The majority of software developers in Ukraine work for businesses of five types: outsourcing, outstaffing, product, and non-software companies, as well as startups. A relatively small portion (3%) of developers work as freelancers.

Types of software development companies in Ukraine: outsourcing, outstaffing, product, startup, non-software, freelancers

Where to outsource in Ukraine?

According to DOU, approximately 81% of Ukrainian software developers live across five cities: Kyiv (Kiev), Kharkiv, Lviv, Dnipro (former Dnipropetrovsk), and Odessa. Almost a half of these 81% reside in Kyiv, the country’s capital.

City Share of Ukrainian developers
Kyiv (Kiev) 40%
Kharkiv 15%
Lviv 12%
Dnipro (Dnipropetrovsk) 8%
Odessa 6%
Vinnytsia 3%
Zaporizhia 2%
Ivano-Frankivsk 1%

Generally speaking, larger developer population means faster hires. Developers from larger cities are also quicker to adopt new technologies. So if you’re looking for, say, Flutter developers in Ukraine, searching outside of Kiev, Kharkiv, Lviv, and, maybe, Odessa will make little sense. As of 2018, the same goes for pretty much anything AI-related.

At the same time, it’s not uncommon for companies to outsource simpler projects to dev shops in smaller towns. So if you need to build a corporate website or outsource manual QA, Dnipro, Vinnytsia, or Zaporizhia might prove to be great options.

Attrition rates, motivation, and working conditions

One impressive thing about Ukraine’s software sector is its low attrition rates. According to LinkedIn, American tech businesses faced record-breaking employee turnover rates of 13.2% in 2017. The number is even higher in Indian software development companies where attrition rate can reach 20–21%. In the meantime, the employee turnover stays low at 10% in Ukrainian companies in the IT sector.

Here are the stats from DOU that characterise working conditions and motivation of Ukrainian software developers.

Job enthusiasm and salary satisfaction

The charts below provide stats on survey respondents’ attitude towards their current job.

Job satisfaction rates of Ukrainian software developers

The same survey had a similar question on salary satisfaction:

Salary satisfaction rates among Ukrainian software developers

Working conditions

According to DOU, 80% of software developers in Ukraine work from offices, as opposed to working from home or a coworking spaces:

Working conditions: 80% of Ukrainian software developers work from an office

An overwhelming majority of software developers in Ukraine are happy with their working conditions:

Workplace satisfaction rates among Ukrainian software developers

What outsourcing company to choose in Ukraine?

A must-follow piece of advice when choosing an outsourcing company is to always do your homework. Reputable dev shops are always ready to provide you with case studies of their past projects and verifiable customer reviews. Whenever possible, take your time to study your potential partners’ background.

Clutch is another source of client reviews. The resource rates development shops, too, allowing you to choose from the best. And if you’re looking for a high-ranking custom software development company in Ukraine, AgileEngine is one of your top-10 options.

Why Choose AgileEngine?

We are a DC-based Inc 5000 business with remote development centers in Ukraine’s Kyiv, Kharkiv, and Odessa. We are among the top-10 Ukrainian development shops according to Clutch, and one of the best employment destinations for Ukrainian programmers according to DOU.

There are other reasons to choose us, as well:

  • Clutch named us the best custom software development firm in San Francisco. We’re also one of the top providers in DC and Bay Area.
  • Facebook featured our React Native app on the React Native Showcase.
  • Our portfolio includes the success stories with brands that you hear about every day.
  • Our developers are in Ukraine and Argentina. Working from these nearshore location allows us to connect American brands to the best global talent at 50–60% of the cost of a local hire.
  • We have more than a decade of experience in custom software development. We establish dedicated teams of software engineers for world-known media brands, global BI and commerce platforms, and Kickstarter success stories.

Our expertise covers mobile, UI, enterprise, and full-stack web development. Our software engineers are open-source contributors and thought leaders in their fields, and they love to prove themselves. So if you’d like to learn more, contact us and ask our manager about the risk-free trial.