Developer Salary in Ukraine: Most Demanded Specialists

Outsourcing and offshoring are very attractive for US and EU companies that are seeking new ways to beat the local talent shortage and cut down costs. Consequently, they bump on the option to hire developers in Ukraine, and the question about software engineer salary in Ukraine arises. Eastern European developers have proven themselves as great specialists and valuable business asset.

In Ukraine, developer salary varies due to different factors. In the article, we’ll provide comprehensive data about software developer salary in Ukraine, define how much it would cost to hire the most popular specialists, and the final engagement cost. Moreover, we’ll dedicate part of the research to justify the cost and explore why Ukrainian developers are considered among the best in the world, even outside of the outsourcing industry.  

List of the Content

• Why businesses consider Ukraine to be among the top IT outsourcing destinations
• Dedicated development teams and the developers’ cost in Ukraine
• How to classify software engineers and other staff for this research
• Ukraine IT industry geography
• Ukraine developer salary
• How is the Ukrainian developer hourly rate formed?
• Conclusion

WHY BUSINESSES CONSIDER UKRAINE TO BE AMONG THE TOP IT OUTSOURCING DESTINATIONS

Nowadays, lots of companies take advantage of working with outsourcing software development teams to deliver products cost-efficiently and faster. Ukraine, defined as the Top UK Offshoring Destination by the Global Sourcing Association (GSA), is not an exception.

Industry Size

Starting from 2015 IT industry in Ukraine is showing an impressive 20% average growth year after year. This means that Western companies are proactively investing money in development centers and are buying outsourcing services in Ukraine more and more. According to Ukraine IT Association, outsourcing service export grew to USD 4.5 billion, which is not the limit as it is expected to reach USD 8.4 billion by 2025.

PwC predicts that the outsourcing industry in Ukraine will hit USD 8.4 billion sizes by 2025

Workforce

In 2018, industry polls indicated that Ukraine has over 116 000 IT specialists; 60% of them are developers, and the rest are QA, PM, BA, designers, and business professionals that together make Ukraine’s IT industry work.

But the survey’s data is not always the most representative one. There is another study by Infoshare.pl that is considered to reflect the situation on the market better. According to the research methodology, the machine learning algorithms collected and processed a lot of data about the StackOverflow users (like their IP and MAC addresses), which defined the developers’ tech stack and level of engagement, and what is the most important location. According to this study, there are 166 thousand active developers’ community members in Ukraine.

Ukraine has the second-largest population of IT professionals in Central and Eastern Europe

It gives valuable insights that allow us to know the number of IT specialists in each Central and Eastern European country. We can compare the number of software developers in Ukraine with other top IT outsourcing countries such as Poland and Romania. As we can see, Ukraine is the second top IT population, which means that it has a deep hiring pool, and clients are very likely to easily staff development teams for their projects in Ukraine.

Another data by DOU indicated that the number of IT specialists, on average, is growing by 10-15% annually. In pair with the overall industry growth, this is a very good sign and means that the country won’t experience a shortage of qualified engineers in the foreseen future, even considering constantly increasing demand.

DEDICATED DEVELOPMENT TEAMS AND THE DEVELOPERS’ COST IN UKRAINE

As a rule, American and European-based companies hire dedicated development teams in Ukraine from outsourcing providers instead of hiring separate developers there. A dedicated team is the outsourcing model in which the client gets full control over contractors’ engineers. They work basically as the in-house staff, reporting directly to the client and accepting tasks from them. In this case, outsourcing companies, like Existek, are responsible for providing candidates for hiring, office and related expenses, human resource management, equipment, code review, employee benefits, and developers’ skills improvement.

This collaboration model is used for a number of reasons, but mainly because hiring developers in an unknown location is related to some risks. On the opposite, dedicated teams provide clients with significant advantages because service providers are taking care of everything required to make work as comfortable as possible for both offshore staff and their clients.

It is by far the most popular way of working with software developers in Ukraine, leveraged by companies in the US and Western Europe.

Dedicated Development Teams Give:

• Quick hiring – Providers have a pool of internal staff and a wide list of people who can be quickly hired for the project.
• Control – Unlike the classic outsourcing time & material model, dedicated developers can be managed directly by the client. Hence, this is the perfect approach for those who can’t find enough software engineers locally and want to manage outsourced developers like regular employees.
• Reliability – Working with a team of separate freelancers can be tough. With a dedicated resources model, the client is dealing with a company that cares about overall service satisfaction level, and it’s a good name. For example, if some of the developers will leave the team, the company will do its best to offer a replacement as soon as possible and make sure that the project is on its track. This is not the case when a freelancer is leaving the team.
• Convenience – When you hire dedicated developers, all you have to worry about is ensuring they have work to do. The routine, such as office expenses, vacations, medical insurance, and team building, is taken care of by the outsourcing company.

When searching for information about software developer salary Ukraine, people often want to know what will be the final cost. We have shown the actual salaries above, and here you’ll find the information about the average cost which you can expect to get from the outsourcing companies.

How the Actual Cost of In-House Staff is Calculated

The actual annual cost of hiring software developers anywhere in the world is not just the sum of 12 salaries in a row. The hidden costs can be as much as 50% of the overall expenses. For the in-house employee, you should also take into account the cost of office, wages of employees who manage and don’t produce any code, vacations, training, and the standard for software companies’ employee benefits such as medical insurance, etc.

For instance, if you hire a middle front-end developer in London with solid React skills – you can expect to pay a wage somewhere between £160 – £180 per day, £3500 per month, and £43 200 annually. But will it be the final cost for you? Definitely no.

For this, we introduce the Total Cost of Engagement (TCE). It can vary in different countries, but the situation is that it definitely should be considered separately from the developer’s salary, and most companies are doing just that. TCE includes the hourly rate, taxes (such as the National Insurance tax in the UK – about 12%), retirement plans, training, vacations, employee benefits, healthcare, office (space, electricity, internet, food, and so on), managers, equipment and various things depending on your company policy.

Out of that, for the given example with the React developer salary above, we can do the following sample calculations: £3500 salary + 12% tax + £800 for office space in London per one employee, £700 – various employee benefits to attract people. As a result, the approximate TCE will be £5420. The TCE will be £5420/m instead of £3500/m, which is 54% higher. This is without mentioning management staff salaries and expenses, hiring expenses which can be as high as two developer’s salaries, the issue with team idle time when you don’t have work for people but have to pay them, and many others. The costs in this example are an estimation and depend on where you rent an office, which tax category you have as an employer, and which advantages you provide to your employees, so please, consider them just as estimated figures used for a practical demonstration.

Altogether, in Ukraine, developer salary might be quite affordable, but over that, consider the TCE. 

Example of the total cost of a middle developer in London: £5420

The Actual Cost of Outsourcing

Outsourcing companies provide clients with the final monthly cost, and you can expect you won’t pay more than is mentioned in the agreement. Yes, those service providers are still paying for offices, equipment, employee benefits, and taxes in their location, but all of those are way cheaper there and are already at the price that is listed in the agreement. So don’t worry about any hidden costs. Regarding the Total Cost of Engagement, it is important to mention that you still pay the in-house managers overseeing software developers in Ukraine. Also, it is worth including the travel costs to the offshore location. Those two budget items can add 10-15% to the overall cost of outsourcing, but heavily depending on how many managers you have, how often they travel, etc.

Example of the total cost of a middle developer in Ukraine: £3685

Rates For Software Development in Ukraine

The data here is based on the anonymous survey received from 18 outsourcing companies in different Ukrainian cities. It is provided to give readers a general idea of what they can expect.

The Average Cost of Hiring Developers From Outsourcing Companies

HOW TO CLASSIFY SOFTWARE ENGINEERS AND OTHER STAFF FOR THIS RESEARCH

It is commonly accepted that wages are depending on the employee’s total years of experience as they are the most reliable indicator of soft and hard skills. In Ukraine, developer salary is not an exception. For sure, for each new job application, technical skills and the ability to work in a team are confirmed by technical tasks, portfolio, and a few interviews.

Historically, developers are divided into a few grades:

• Junior – 1-3 years of experience
• Middle – 2-5 years of experience
• Senior – 5+ years of experience
• Software architect – 7+ years of experience

For this study, we’ll take the first three, as they are the main subject for outsourcing services, and architects’ wages are too vague and depend on special arrangements with an employer. Software companies, including Ukrainian ones, regularly conduct merit ratings to check developers’ skills once they have been working long enough to get to the next seniority level.

As for the technology classification, Java, .NET, Ruby, Python, and PHP are the most often outsourced backend technologies since they are often used for enterprise projects and software products. As a result, the biggest number of remote development teams are focused on them.

We will consider UI/ UX software engineer salary in Ukraine and the front-end Ukrainian developer hourly rate. 

UKRAINE IT INDUSTRY GEOGRAPHY

When speaking about the Ukraine software developer salary, it is very important to understand that, like in any other country, Ukraine has a list of the main cities where the tech talents are concentrated. Each of them offers a different number of developers for hire, natural conditions, infrastructure, the cost of living, and, consequently, the Ukraine developer salary.

The majority of Ukrainian IT companies are located in 8 main cities

Kyiv – The Capital

First goes Kyiv – the capital of Ukraine. Almost 40% of all Ukrainian software developers and IT professionals are located there.

Having an office in the capital city has its advantages and disadvantages. It has the largest hiring pool in Ukraine since almost half of the software developers are living there, high pass international airport, etc. Conversely, it is the most expensive city to live in, with a cost of living index of 31.74. As for business, the cost of hiring developers there, providing them with all necessities such as employee benefits, medical insurance, and having an office there is more than two times higher when compared to other cities. Because of that, in Ukraine, developer salary is higher in Kyiv. According to the DOU salary survey, the average salary for developers in Kyiv is 15-20% higher.

Lviv

The second largest city with the most developed outsourcing industry is Lviv. Many consider this city as the IT center of Ukraine because almost all of the largest outsourcing companies in Ukraine and in the world originated in Lviv and later opened offices in Kyiv and other locations. This is an old European city, with its history and tourist sites. Lviv is a brand among both Ukrainian software developers and European clients due to its high standards of living and rich cultural life. Since it is a tourist city, living there is also quite expensive thus, salaries are almost the same as in Kyiv, 15-20% higher on average than in other Ukrainian cities.

Other Cities With Developed IT Industries: Kharkiv, Vinnytsia, Dnipro, Odesa

The following cities can be classified into one category as they are mostly similar when considering them for hiring software developers in Ukraine. They are smaller and more compact when compared to Kyiv and Lviv but have an almost identical set of infrastructure conditions as the bigger cities. For example, Kharkiv has a subway, and Vinnytsia has a nice airport with international flights available. In Ukraine, developer salary depends on the physical location, and all of those cities offer specialists at a 10-20% lower cost on average than both IT and state capitals. For example, Kharkiv has an even bigger number of developers than Lviv due to its historical orientation on university technical specialties. At the same time, a senior .NET developer with 5+ years of experience will earn $3725 monthly on average in Lviv, the same specialist would cost only $3300 on average in Kharkiv, while a Ukraine software developer salary in Vinnytsia will be close to $2700.

UKRAINE DEVELOPER SALARY

As you can see, the last example of .NET software engineer earnings shows that in Ukraine, developer salary varies from town to town. Moreover, the compensation varies from company to company. Because of that, giving the engineers’ salary data that will be accurate in any city and any separate case – is nearly impossible. For this study, we focused on providing you with the average data to give a general understanding of the software developer salary in Ukraine. The actual cost can be up to 20% higher or lower, depending on the set of conditions like the actual developer’s skillset, years of experience, location, the popularity of his technology stack, etc.

Now a few words about where the data is coming from. It is taken from the open survey by dou.ua. Everybody with a verified account (LinkedIn login etc.) can opt in the data about his or her compensation for work in the IT industry. DOU UA is de facto the central hub for the software developers’ community in Ukraine, with an estimated 1.1 million unique monthly visitors. This is by far the biggest web portal where IT professionals are looking for a job and discuss the latest industry news and technology trends. Ukrainian companies are hosting company profiles where they post corporate news, vacancies, etc. Any verified user can leave a review of the company on the corporate page. In the context of this study, we can call it an analog of Glassdoor oriented solely on the IT industry in Ukraine. As a software development company operating in the Ukrainian market, we can confirm that this data is accurate in most cases.

Below you’ll find the actual data about the average Ukraine developer salary:

C#/ .NET Ukraine Developer Salary

• Junior Developer – $860/m
• Middle Developer – $2425/m
• Senior Developer – $3713/m

Java Ukraine Developer Salary

• Junior Developer – $1200/m
• Middle Developer – $2563/m
• Senior Developer – $3725/m

Ruby Ukraine Developer Salary

• Junior Developer – $908/m
• Middle Developer – $2400/m
• Senior Developer – $3713/m

PHP Ukraine Developer Salary

• Junior Developer – $913/m
• Middle Developer – $2168/m
• Senior Developer – $3894/m

Python Ukraine Developer Salary

• Junior Developer – $950/m
• Middle Developer – $2168/m
• Senior Developer – $3400/m

Front-End Ukraine Developer Salary

• Junior Developer – $950/m
• Middle Developer – $2450/m
• Senior Developer – $3875/m

Project Manager Salary in Ukraine

• Junior Developer – $1575/m
• Middle Developer – $2450/m
• Senior Developer – $2875/m

QA Specialist Salary in Ukraine

• Junior Developer – $800/m
• Middle Developer – $1975/m
• Senior Developer – $2513/m

HOW IS THE UKRAINIAN DEVELOPER HOURLY RATE FORMED?

The cost of development in Ukraine is not the cheapest one, but in Ukraine, developer salary on average is proportionate to programmers’ skills. It is a relatively inexpensive outsourcing destination but still can be twice as expensive as in countries like India and Pakistan. Yet, it is a bit lower than Mexico, Bulgaria, and China and significantly cheaper than Poland.

Companies hire higher-tier offshore developers and outsourcing providers for a number of reasons. Those reasons are the quality of work, the simplicity of collaboration, and communication. When you hire developers in Eastern and Central European countries such as Ukraine – you opt for a reasonable decrease in the development cost without sacrificing the quality.

Quality and Skills

First, let’s have a look at the data that shows the skills of software developers in Ukraine, as this is one of the most reliable indicators of the overall quality you can expect when hiring developers there.

In order to do that, we pooled the data from HackerRank Programming Olympics.

HackerRank Programming Olympics is a massive study conducted by HackerRank – a leading hiring platform for the developers’ skills test. Over 1000 companies are using those tests to check the developers’ ability to solve complex technical challenges in their hiring process. In 2016 HackerRank facilitated the results of almost 1.5 million developers’ tests to come up with the competitive ranking of each country. We used that rating to show how Ukrainian developers rank among outsourcing countries and countries that are historically considered the IT centers of the world.

HackerRank Programming Olympics

English Proficiency and Cultural Compatibility

Historically, Ukrainians have a Western mindset, which means that they are very open to communication, credible, and, what is most important, in the context of software development – aren’t afraid of taking responsibility. As an Eastern European country, Ukraine belongs to the low-context culture type heavily influenced by Western values and mass culture. The same cultural medium makes communication with Ukrainians extremely easy for people from the EU or the US, especially when compared to countries like India or China.

Another important factor for everyday collaboration is how developers and managers in Ukraine speak English.

According to the surveys, 79% of software developers in Ukraine have advanced, upper-intermediate, or at least an intermediate level of English. This means that you can easily talk about complex technical matters and system architecture, express your thoughts about the front-end design, and even discuss the latest movie release. Moreover, specialists like general managers, business analysts, and project managers usually have fluent English. Almost all of the companies in Ukraine encourage their employees to use their free language courses, so the situation with English proficiency is getting better each day.

79% of Ukrainian IT specialists have at least an Intermediate level of English

CONCLUSION

In Ukraine, developer salary depends on various factors such as location, technology, industry, and many others, just like in any other country. The key takeaway is that they still cost less than the same specialists in Poland or Bulgaria, while both their soft and hard skills are approximately on the same level according to various sources and tests. A combination of the low cost of living and expert technical level makes Ukrainian software developers well-worth investment for any software company around the globe. Especially if expertise and credibility are the qualities, you’re looking for in offshore staff.

Despite requiring higher salaries than developers in India, Pakistan, or the Philippines, they are capable of competing with the internal staff in the US or the EU in terms of both proficiency and cultural levels. Yet, the Ukraine developer salary is the most reasonably calculated compared to the other countries. You get the pleasure of working with European staff and about twice the lower cost at the same time.