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Pros and cons of outsourcing to Ukraine vs Belarus

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Pros and cons of outsourcing to Ukraine vs Belarus

With the growing demand in the IT game, many company owners are looking for better professionals and opportunities to cut the costs on the venture in the meantime. Recently, Eastern Europe has become the center of attention for big IT players to outsource their businesses. CEE countries are fighting for a chance to become leading platform for realization of the client’s prospects by showing high standards in creating and leading technology in correlation with providing final product in fast and cost effective way. In this research we are evaluating the IT market dynamics on an example of Ukraine versus Belarus to understand the pros and cons of outsourcing your IT projects.

UKRAINE IT MARKET DYNAMICS OVERVIEW

Ukraine situates on the periphery of business paths. If 10 years ago, Ukraine was not even marked on the map of global competition, today the information technology industry in the country became a gold mine deal. Popularity of outsourcing product development to Ukraine is growing exponentially, while more and more high-quality projects being released in this country constantly. Many of worldwide renowned IT companies, like Ciklum, SoftServe, Epam, Luxoft, GlobalLogic, Sigma, Magento, etc. have offices all over Ukraine that are easily satisfying their most demanding needs in project completion. Currently (October 2017), there are more than 3,500 open job positions in the IT sphere according to the DOU version.

Since 2007, Ukraine has been embracing high ranks in TOP 30 among best reliable locations for outsourcing. Ukraine enters the list of 10 countries among professional IT experts and rates higher than, for instance, Belarus. Almost the half of IT experts locates in Kiev, following by 17% in Kharkiv, while third place is held by Lviv. Plus, Ukraine takes fourth place on an international arena with the greatest number of IT employees.

BELARUS IT MARKET DYNAMICS OVERVIEW

Being 11th largest city in Europe, Minsk, the capital of Belarus is the main technological cluster. Most populated IT professionals cities professionals are respectively Minsk, Gomel, and Brest. Currently, the IT products and services workforce counts around 34,000 specialists. Over the last decade the export of goods and services risen from 0,16% to 3,25%. The data shows that 90% of the country’s IT market is external or exported. In 2015, IT goods revenue in Belarus was 1 billion dollars. Google Code Jam ranked Belarus number 1 in 2003-2016.

PROS AND CONS: COMPARING UKRAINE VS. BELARUS

Geographical location, skilled professionals, powerful base for research, as well as attractive service pricing is among the most convincing advantages to vote for Ukraine. If we talk about the IT markets, Ukraine shows itself among the most developed ones in the Eastern Europe, but also shows great potential on an international level. Even though Ukraine is being the largest country in Europe with 120,000 IT market capacity in 2017, Belarus has also an impressive number of programmers and specialists in the field – around 30,000 – that are ready to jump on a project of any complexity.

According to Clutch.co (October 2017) there are 381 web and software development companies in Ukraine in comparison to 89 in Belarus.

Ukrainian and Belarusian developers are showing remarkable success in providing high end software development to the client. That also comes to being for the similar reason: both countries serve as perfect locations for maintaining various qualification courses, hackattons, hubs, certifications to prepare a powerful research base and skilled technology engineers. But we have to admit Ukrainian spirit to strive for new things and the eager to knowledge makes it easier to prepare specialists specifically for a project. According to LinkedIn, a wide specter of strong technology specialists from C/C+, Python, Java, .NET to WEB and mobile platform developers can be found.

Also, the communication issues are not a problem as well. Most of Ukrainian students learn international languages, like English starting their first grade, which enables them to understand freely the representatives from other countries. For those who do not have a sufficient level of English, most companies provide English courses paid by the companies, to help them develop and make their progress on the workplace easier. Effective communication with the clients while developing software is another factor that allows project completion faster and better.

Furthermore, Ukraine prepares around 30,000 students annually to work as in the industry. It is one of the countries that have defined intellectual property rights to avoid legal issues in the sphere and avoid misunderstandings in order to keep both client and worker satisfied while providing a high quality product. Ukraine does not have an employer social tax, like Belarus. In Belarus, employer social tax is 34%; unless the company joins the Hi-Tech Park supported by the government and can get a tax exemption. It is a fact that 1,5% of Belarus GDP is generated by IT companies. There are 6 major technological universities that prepare a solid base for work in the IT segment, supplying yearly around 3,000 specialists.

The political situation and dictatorship of Lukashenko often scares the investors away from Belarus. On one hand, strong governmental support of the segment impacts the development, on the other hand tight relations with Russia come across the decision to deal with Belarus on a business level at this point. Despite Ukraine’s economic crisis due to warfare, the country has still been able to go up in numbers by 25%, mainly because of outsourced projects.

The time difference is a negative side of outsourcing cooperation with both Belarus and Ukraine, especially with the clients from Canada or the US. However, many employees are ready to work flexible hours to get the job done in a timely manner.

However, with the software development boom and the need for more skilled and serious employees is growing with accelerating speed. For example, in Ukraine in 2017, monthly salary of an IT developer in Ukraine was in average $1500-2000. Belarus depicts higher rates for IT services with an average of $2000-2500. Due to exponentially increasing demand by the business owners, the professionals tend to increase the payment for services. Despite this fact, Ukraine is still among the least paid countries in Europe, Junior professional asks about 500$ per month and Senior Engineer developer’s salary ranges up to 3000$ depending on the technology.

It is obvious why Ukraine is the number one choice for IT outsourcing projects for many large companies. Location, access to smart and creative specialists, strong knowledge and research base, as well as immense potential for growth are the factors that put Ukraine upfront other European countries. If during the last decade the price tag was also one of the advantages for making a decision to outsource to Ukraine, now the situation has changed towards bigger salaries for services. Nonetheless, the price for IT services is still counted as one of the least expensive in the countries of Europe.

Note: This article was updated on October 6, 2017.

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2 Comments

  1. LordofHack
    January 31, 2015 at 2:38 am

    Well, I think the price increase and the fact that talking to someone is not a good thing about outsourcing to Ukraine. Sometimes you can work around the differences, especially if the work is good.

    Reply »
  2. Jerry Notpit
    September 9, 2014 at 7:34 pm

    It is interesting to see the increase in salaries in Ukraine which means an increase in cost. Although that is an consideration you need to factor in the quality of work and the ease of communication with different reason. I was pleased when I saw that you do a complete review of the project before starting so that both parties are in agreement of what needs to be done. That in itself prevents a lot of problems.

    Reply »

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