October 5, 2020
June 25, 2020

Why Is Now The Best Time To Set up A Development Team in Ukraine


Every manager or founder has witnessed a hiring process at one point or another. If you've worked on a startup or software development team, chances are you've interviewed candidates before. Ask any recruiter or hiring manager, what's their single most time-consuming and challenging task, most would tell you it's hiring senior development talent. How to hire software developers is the topic of thousands of articles, management, and HR conference lectures and consultations. 

Why is it so hard to hire talented software developers?

According to the US Bureau of Labor Statistics, seven in ten STEM occupations have their roots in informatics and computer science, with software developers being the most significant cohort. Software developer roles are projected to grow 21% between 2019 and 2028. That's 21% compared to an average of 5% for jobs in any other labor market. 21% Translated into 284,000 new software development jobs in the US alone. There aren't enough talented developers to fill those roles, so many companies will not be able to secure real engineering talent. 


Source


The Gap Between Talent Supply and Demand is About to Widen

COVID-19 make hiring harder, more expensive and riskiers. Now, the new move to suspend H-1B visas for hundreds of thousands of foreign workers in the US will widen a trillion-dollar IT talent shortage even further. Business leaders will face new challenges recruiting engineering talent, and the salaries for skilled IT workers will inevitably climb as well.

According to the NYTimes, "the move is fiercely opposed by business leaders, who say it will block their ability to recruit critically needed workers from countries overseas." Tech executives state that the visa restrictions will hurt the US's ability to compete within the IT industry, which is a massive driver of economic growth. Tech companies will now be looking to move their development offices offshore in order to hire and retain tech talent. 

Britta Glennon, an assistant professor at the Wharton School of Business at the University of Pennsylvania wrote a paper examining the impact of H-1B visa restrictions on tech companies decisions to open development offices offshore.

“First, do restrictions on H-1B visas result in increased high-skilled foreign affiliate employment? Second, how does any impact differ across firms, industries, and countries? Finally, do these restrictions also affect the location of innovative activity?”

Based on her analysis, Glennon came to conclusion that H-1B restrictions lead companies to outsource. The study found that technology companies are the most likely to engage in outsourcing because they spend most heavily on research and development.

Here is the key finding:

“Foreign affiliate employment increased as a direct response to increasingly stringent restrictions on H-1B visas. This effect is driven on the extensive and intensive side; firms were more likely to open new foreign affiliates abroad in response, and employment increased at existing foreign affiliates. The effect is strongest among R&D-intensive firms in industries where services could more easily be offshored.”

Glennon also found that moving high-skilled foreign nationals out of the country reduces innovation inside the United States.

“The results also suggest that in addition to affecting the location of skilled employment, restrictive immigration policies affect the location of innovation, and of course the associated positive externalities,” notes Glennon. “Skilled immigrants have been shown to have outsized impacts on innovation in the home country through spillovers.”


How Do you Outsource Your Software Development

Outsourcing software development involves partnering with a IT company in a country with a lower cost of living and high quality services to handle your company's development work. Most US companies outsource to Eastern Europe or India. However, often times rather than outsourcing to a third party service companies chose to recruit and hire engineers and set up their own development hub in the outsourcing country.

Outsource to a third party or set up your own development hub? 

The benefits of setting up your own development hub are numerous and include your ability to pick the talent you work with, train them under your company's practices and onboard them as full time members of your team. This is also more cost effective, as you are hiring people for local salaries rather than paying your third party partner "agency rates" for development projects.


Why Outsource to Ukraine

Ukraine is arguably the best location for both setting up a development hub and hiring remote engineering teams. With over 90,000 developers and more than 1000 software companies based in Ukraine, the abundance of talent and experience provides software quality that rivals that of Silicon Valley.

To make it easier for you to evaluate whether Ukraine's IT market is a great fit for your project we've created an IT Salary Dashboard with roles, salary rangers and active candidate CVs.

We created this dashboard overview of the Ukrainian IT talent market. This page lets you know what roles you can fill with Ukrainian talent and how much it will cost you to hire these individuals. Want to compare how much you can save by building in Ukraine vs. Israel, US, UK or Europe. Estimate your costs using our calculator.

If you’re building a mobile app, you need to hire a mobile app developer or two, if you want your app to work for both Android and iOS and don’t want to work with a progressive web app.  You're going to need a web designer who can take care of UX/UI, a front end developer, a quality assurance tester, a server/backend developer and a project manager with a strong technical background. 

For an AI/Machine learning project you’ll definitely need a data analyst and machine learning engineer. If it’s a new game you’re building you need a C++ or Java developer. 

If you’re not sure who you need on your team for your specific project type, you can use our team building blocks cost calculator. All you need to do is answer 3 questions about your project to see the most important roles you need to hire for and get a monthly cost estimate for running that team here in Ukraine. 


Here's an example of one of your estimates


Hiring Ukrainian Talent Lowers Your Costs By At Least 30%  

An overabundance of exceptionally skilled IT workers, coupled with a lack of IT infrastructure and capital, means lower prices. Look at the dashboard to see how much lower these rates are than Europe, Israel, UK, or US talent. Ukraine's tax rate for private entrepreneurs under the simplified tax Regime is as little as 5%. Lower costs of living mean lower salaries. This means you can hire full teams, instead of just one or two developers, which cuts your development time, which in turn saves you money. 


Silicon Valley Level of Quality

Ukraine has an abundance of specialists, which makes competition fierce for jobs, which for you means a rich selection of only the most qualified, exceptional talent. 

Ukraine's abundance of talent thrives in IT hubs, and the highly active community means developers are highly passionate about what they do, which in turn improves their skillset. They are pursuing projects outside of their main jobs, and are highly capable of managing themselves, their time and productivity levels run high. 

The lack of VC infrastructure but the abundance of highly skilled laborers means quality is equivalent to what you find in silicon valley but three times cheaper because of lack of capital. 

Hiring Ukrainian talent saves you the headache of recruiting.

We vet all our talents; you tell us what you need, we'll get you the best Ukraine has to offer. No headache. 

No risk for you, the candidate provides a 30 day trial of work with you before you pay us anything so you can be sure you're getting the right person for the job. Fear of making expensive bad hires - gone. 


If it doesn't work out, we'll replace your hire for free. 


How It Works 

The Ukraine IT Salary Overview provides context cards for each role across five core IT divisions. 

  • Development 
  • Engineering 
  • Design 
  • Management
  • Cybersecurity 
An Example of The Detailed C# Developer Card

Each context card includes a graph that provides the salary range for a given IT specialist as well as the salary rate average. Clicking on each context card reveals additional features. 

By clicking on any of the role context cards, you can see an expanded role description, complete with skillset and requirements that role entails. Below you can see the CVs of active candidates with the specific skills for the role. 

Clicking on the card takes you to a dedicated role page that illustrates. 

  • the responsibilities assumed in this role 
  • the requirements and technical skills you should look for in candidates across different levels of experience.
  • The levels of expertise include Juniors, Midlevel specialists, and Seniors.
  • the projects that will require a candidate with this skill set on the team For example, if you are interested in hiring a C++ developer, you'll find six types of projects that require talent experienced working in this language.

Or let's say you're looking at hiring a Senior Java Engineer. There are roughly 27,700 Java developers in Ukraine. Java is one of the most in-demand and popular programming languages among Ukrainian developers. Almost 20% of Ukrainian developers specialize in Java. 

Among others, Samsung, Google, and Microsoft have set up their development hubs in Ukraine to outsource Java-based software development to Ukrainian engineers. 

In Ukraine, a senior java engineer will earn an annual salary of $33,000 on average. To put this cost in perspective, hiring a senior java developer in the United States will cost you an average of $101688 and hire that same senior java developer in Israel. It will cost $69,555. 

Conclusion 

The demand for Ukrainian IT talent is increasing, intensified by the need to transition development teams to remote setups due to health concerns and implications of the pandemic. While it may be tricky to find specific information on certain IT roles, we wanted to make sure this dashboard served as your natural point of reference when assessing a candidate's potential and determining an appropriate offer for their services. 

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