Why Are Outsourcing Development Rates Different in Ukraine?

Offshore and nearshore software development has many benefits over an in-house development team, such as access to a vast pool of talent and the latest technologies and practices. Cost reduction is typically achieved due to the gap between offshore developer rates across the globe and the elimination of hiring, training, and retention costs and taxes. Because software developers’ rates vary in the same country, you may save even more.

If you’re interested in outsourcing software development, Ukraine might be a surprisingly optimal choice. Below, we list some of the country’s attractions and explain reasons for development outsourcing rates differing within any country. This info may help you find the best price/quality ratio with outsource partners.

Reasons for Offshore Developer Rates Variations

Factors that impact prices for programming services within any country include:

City/region of the country

As a rule, salaries in big cities are often higher than in smaller ones. Among major cities, the capital city tends to be more expensive. Consequently, outsourcing rates may differ significantly even between towns short distances from one another.

Type of technology

Trends in technology-salary dependence emerge in Silicon Valley but eventually affect the whole world. Among the highest-paid are full-stack web developers who build for the cloud and work with ReactJS or Redis and front-end web developers with expertise in React. iOS mobile developers specializing in Objective C still seem to be more expensive than their Swift peers, not to mention Android developers.

Programming skill level

Custom software development rates range depending on both the specialist’s programming language skill set and years of experience. The higher the level, the greater the price. Although junior programmers usually can do most of the required coding, a custom system may require advanced software engineers to supervise the work, design system architectures, or perform more complicated tasks. Along with the estimated number of hours, the level of the staff needed for a project influences its low-to-high cost estimate.  

Make sure you consider the outsourced companies’ experience with the technologies that your project requires, e.g., web vs. mobile app development, as well as previous projects in your sphere of interest. If an eligible candidate is pricier than less experienced competitors, think of the cost as an investment in success: the development team’s expertise will help reduce the development time and ensure a high-quality product.

Why Ukraine?

An increasing number of enterprises consider Eastern Europe for outsourcing their software development needs or opening offices there. Four countries in the region are among the top 20 in the offshore location attractiveness index. Russia and Ukraine rank 23rd and 24th respectively.

Eastern Europe’s market offers diverse, proficient programmers and teams at competitive costs. The outsourcing rates are generally higher than in India or other low-cost destinations yet lower or comparable to Latin American ones. Outsourcing development in the region is especially attractive for Western European businesses due to lower travel costs, favorable time zone (GMT+2), and similar cultural background. The 7-hour time difference with the American East Coast provides more convenient shared working hours as compared to South Asia.

Ukraine shares all the advantages of Eastern Europe as an outsourcing region, including the intellectual property protection found in most of the developed countries. In addition:

• Ukraine has one of the 50 most innovative economies in the world and is home to 100+ research and development centers for global tech giants.

• Compared to neighboring Poland, Belarus, and the Czech Republic, Ukraine offers more competitive outsourcing rates paired with a larger talent pool.

• The number of tech workers in Ukraine is actually the 4th in the world after the United States, India, and Russia. Ukraine’s schools of higher learning produce over 36,000 tech graduates annually. Professionals are additionally trained by IT companies. Junior software developers are mainly students around 21 years of age with some two years of experience. Midlevel devs have 2-5 years, and most of the seniors (5+ years of experience) are still young as well.

• Over 80% of local IT professionals have an intermediate or higher level of English proficiency. For leading software engineers, project managers, and client support, it’s 100%. Many can speak other European languages.

• Regarding work ethics, Ukrainian tech workers are open to new challenges and are inclined to be more personally involved in the development projects. Most customers find them to be loyal, dedicated, and eager to understand the customer’s business needs.

• Stiff competition among software development companies and developers in Ukraine’s labor market has resulted in the provision of high-quality IT services at fair prices.

• Ukraine’s government has taken measures to secure reasonable IT outsourcing rates, including prevention of double taxation in outsourcing.

• Outsourcing development to Ukraine is usually concluded through a third party which hires the IT professionals and manages all the legal issues for them.

• Ukrainian IT companies mostly turn to the USA, European Union, and Australia for business, and often have either management or representatives there. With visa-free travel, ties between the European community and Ukraine will be growing stronger.

• Customers from the EU and the US can work with Ukrainian contractors in the EU legal field, invoice everything via email, and easily pay from any location over the Internet.

It's no wonder that Ukraine is currently ranked as one of the top outsourcing destinations by the Global Sourcing Association UK and other sources.

Ukraine’s Developer Rates and Other Figures

Сurrently, the Ukrainian market comprises around 105,000 IT specialists and 2,600 IT companies. Over one thousand outsourcing vendors offer virtually any kind of service: mobile, web, and desktop development, UI/UX design, quality assurance, dedicated development team building, R&D services, IT consulting, and full-stack solutions.

Selecting the perfect programmer or team in Ukraine's huge pool of IT talent can be challenging. Luckily, tons of useful data are available on jobs.dou.ua. GoodFirms provides a list of best Ukrainian software development companies based on each one’s past projects, designing skills, competence, verified client reviews, total experience in the industry, and market penetration.

Ukraine’s capital Kyiv (Kiev) naturally has the greatest number of developers (up to 40%), followed by Kharkiv (in the east of the country) and Lviv in the west. Surprisingly, the number of best companies based in Kyiv is not prevailing; Lviv is mentioned nearly as frequently. Other biggest IT hubs are Odessa (a southern seaport) and Dnipro, which sits closer to the center of the country. While the big towns have hundreds of firms, smaller regional centers like Vinnytsya or Zaporizhia are home to dozens working on both custom software development and offshore / nearshore outsourcing.

According to both GoodFirms and Clutch, another great resource, top Ukrainian custom software development companies offer the average hourly rate ranging within $25–49. The highest salaries are mostly in the capital. The rates are similar in Odessa and a bit lower in Lviv and Kharkiv. Wages in Dnipro are often comparable to the latter, but generally are the lowest among the big cities.

Some of the most accessible technologies in Ukraine are Java, .NET (C#), JavaScript, PHP, and Python. The country ranks the 1st globally in the number of Unity3D game developers and 2nd when it comes to Magento and Scala. Java developers are allegedly the highest-paid (which is a global trend). Depending on location, the average monthly salaries of junior programmers, for example, currently range from $570 (Lviv) to $880 (Odessa). 

Salary levels depend on technology and geographical factors, but experience plays the most significant part. For instance, in Dnipro, a senior PHP programmer earns over tenfold more than an average junior ($2,600/month against $250 respectively).

Wrapping It Up

The search for a good development team with specific skills may be complicated and time-consuming. For outsourcing, you have to evaluate not only offshore developer rates in multiple countries but also consider the variations within each country of choice.

Like everywhere, the tech stacks and location influence the prices in Ukraine. The hardcore backend technologies, such as Java and C#/.NET, are more expensive than PHP or JS. Almost everything is more expensive in the capital. However, the experience of software developers seems to be the most important factor. As a result, a junior PHP programmer in Lviv can cost you as little as $200/month while senior Java developers’ salaries in Kyiv are ranging around $3,500.

The beauty of outsourcing solutions is in the ability to find a great, highly experienced senior developer for the money you might otherwise pay for a novice’s work domestically. Ukraine provides excellent opportunities for secure outsourcing with high-quality product development and no limitations to communication.

Located at the heart of the country, Onix has been performing complex outsourcing development services for 18 years, including custom software development and full-time dedicated teams working with a variety of technologies, UI/UX design, AR/VR and games, and much more. Contact us if you wish to start a mutually beneficial partnership in Ukraine!