March 7, 2019
Outsourcing and offshoring are very attractive for US and EU companies who are seeking new ways to beat the local talents shortage and cut down the costs. Consequently, they bump on the option to hire developers in Ukraine and the question about software engineer salary in Ukraine arise. Eastern European developers have proven themselves as great specialists and valuable business asset.
In Ukraine, developer salary varies due to the various factors. In the article, we’ll provide comprehensive data about software engineer salary in Ukraine, define how much it would cost to hire the most popular specialists, and what will be the final engagement cost. Moreover, we’ll dedicate the part of the research to the justification of 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 top IT outsourcing destinations
- Dedicated development teams and the developers’ cost in Ukraine
- How we classify software engineers and other staff for this research
- Ukraine IT industry geography
- Ukraine developer salary
- How Ukrainian developer hourly rate is formed?
- In conclusion
WHY BUSINESSES CONSIDER UKRAINE TO BE AMONG TOP IT OUTSOURCING DESTINATIONS
Nowadays lots of companies take advantage of working with the outsourcing software development teams to deliver the products cost-efficiently and faster. Ukraine, which was defined as the Top UK’s Offshoring Destination by the Global Sourcing Association (GSA), is not an exception.
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 and that 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 size by 2025
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 who together make Ukraine IT industry work.
But the survey’s data is not always the most representative one. There is another study by Infoshare.pl that considered to reflect the situation on the market better. According to the research methodology, a whole lot of data about the StackOverflow users (like their IP and MAC addresses) were collected and processed by the machine learning algorithms which defined the developers’ tech stack, level of engagement, and what is most important, location. According to this study, there are 166 thousand of the 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 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 project in Ukraine.
Another data by DOU indicated that the number of IT specialists, on average, is growing by 10-15% each annually. In pair with the overall industry growth, this is a very good sign and means that the country won’t experience the 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 and they work basically as the in-house staff, reporting directly to the client and accepting tasks from him. In this case, the 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.
“Read our article about the dedicated development teams if you’d like to learn more about this model”
This collaboration model is used for a number of reasons, but mainly because hiring developers in an unknown location is related to some risks. In 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 developers in Ukraine leveraged by companies in the US and Western Europe.
Dedicated Development Teams Give:
- Quick hiring – Providers have some pool of internal staff and the vide list of people who can be quickly hired for the project.
- Control – unlike classic outsourcing time & material model, dedicated developers can be managed directly by the client so this is the perfect approach for those who can’t find enough software engineers locally and want to manage outsourced developers as if they were regular employees.
- Reliability – working with a team of separate freelancers can be tough. With a dedicated resources model client is dealing with the company which 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 the replacement as soon as possible and make sure that the project 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 to make sure that they have a work to do. The routine such as office expenses, vacations, medical insurance, team buildings is taking care of by outsourcing company.
When searching for information about software engineer salary in 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 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 apart of the developer’s salary and most of the companies are doing just that. TCE includes the hourly rate, taxes (such as 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 the 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 other. 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 that you won’t pay more than it is mentioned in the agreement. Yes, those service providers are still paying for offices, equipment, employees benefits, and taxes in their location, but all of those are way cheaper there and are already in the price that is listed in the agreement. So don’t worry about any hidden costs. In regards to the Total Cost of Engagement, it is important to mention that you still are paying to the in-house managers who oversee developers in Ukraine. Also, it is worth to include 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 the general idea of what they can expect.
The Average Cost of Hiring Developers From Outsourcing Companies
|TECHNOLOGY||LEVEL||HOURLY RATES||MONTHLY COST|
HOW WE 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 ability to work in a team are confirmed by technical tasks, portfolio, and few interviews.
Historically, developers are divided into 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 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 project and software products. As the result – the biggest number of remote development teams are focused on them.
We will consider UI/ UX software engineer salary in Ukraine as well as the front-end Ukrainian developer hourly rate.
UKRAINE IT INDUSTRY GEOGRAPHY
When speaking about software engineer salary in Ukraine 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, developers’ salaries.
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. In opposite, it is the most expensive city to live in with the cost of living index 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.
Second largest city with the most developed outsourcing industry – 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 the old European city, with its history and tourist sites. Lviv is a brand among both Ukrainian software developers and European clients due to the 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 Industry: Kharkiv, Vinnytsia, Dnipro, Odessa
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 Vinnytsa 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 that Lviv, due to historical orientation on the technical specialties in universities. 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 Ukrainian developer salary in Vinnytsa 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 engineer 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, 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 the 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 company operating on the Ukrainian market, we can confirm that this data is accurate in most cases.
Below you’ll find the actual data about the average developer salary in Ukraine:
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 Spicialist Salary In Ukraine
- Junior Developer – $800/m
- Middle Developer – $1975/m
- Senior Developer – $2513/m
HOW UKRAINIAN DEVELOPER HOURLY RATE IS 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 than 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 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 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 and TopCoder rating.
HackerRank Programming Olympics are the massive study conducted by the 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 for their hiring process. In 2016 HackerRank facilitate results of almost 1.5 million developers test 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 as the IT centers of the world.
HackerRank Programming Olympics
A second similar source of the data is the TopCoder County Ranking. TopCoder is one of the largest crowdsourcing platforms where you can find developers for your project. With almost one million unique monthly visitors it represents the vast range of IT specialists ready to be shaped into a team to work towards the common goals. In order to be listed on the platform, the developers should pass the test. Below you’ll see how developers in Ukraine are ranked among developers in other countries according to those test results.
TopCoder County Ranking
English Proficiency and Cultural Compatibility
Historically, Ukrainians have a western mindset, which means that they are very open to communication, credible, and what it is the most important in the context of software development – don’t afraid of taking responsibility. As the 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 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, 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 encourages its 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
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 are 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 the living and expert technical level is what 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, software engineer salary in Ukraine is the most reasonably calculated comparing to the other countries. You get the pleasure of working with European staff and about twice lower cost at the same time.
If you’re looking for the optimal way to hire a software development team in Ukraine – we can help you. Existek is a software development company oriented on providing the US and EU based companies with the dedicated development teams service since 2012. Just fill in the form at our contact page or start the chat in the chat widget to the right and we’ll provide you with a free consultation and a quote for your team in Ukraine.