Ukraine: IT Offshoring Rates and Resource Availability
Some recent data published by the Ukrainian Hi-Tech Initiative provides an interesting snapshot of what you should expect to pay for software development resources in Ukraine:
Average Market Rates (maximum – minimum): $42 (max) – $14 (min)
Average Market Rates: $25-$26
Project Manager: $34
Senior Developer: $29
Middle Developer: $25
Junior Developer: $20
QA Tester: $22
Application Architect: $36
Business System Analyst: $37
Source: “Exploring Ukraine. IT Outsourcing Industry”, Ukrainian Hi-Tech Initiative, 2012.
Those of you who have done offshore work in India will find that these rates are pretty similar to Indian rates. You might find a company in India that will quote you a price a couple of dollars less per hour than these rates, but if it’s much less than that I’d run away, quickly! So Ukraine is fairly competitive with India, the largest offshore IT destination, in terms of price.
I have some comparisons of the typical rates in various Central and Eastern European (C&EE) countries*, but they are from 2010. The data for 2012 isn’t available yet. The 2010 rates are a little bit dated, so I don’t think we should use those rates on an absolute basis, but I think it’s reasonable to use 2010 data to compare the relative costs for software developers in those countries: Relative Costs of C&EE Countries vs. Ukraine (Ukraine = 1)**
Czech Rep.: 1.24
**My calculations, based on data from Central & Eastern European Outsourcing Association Report, 2010, using a blended average of various positions and levels
So Ukraine is among the least expensive countries for software development talent, beaten only slightly by Belarus and Bulgaria. Other C&EE countries cost more money-some significantly more.
So what about your prospects for finding the talent you need in these places? There’s no point in going somewhere cheap where you can’t get the resources you need. If that worked, then maybe you’d go and develop software somewhere like Congo (which has the lowest GDP per capita in the world). One way to look at this is at a macro level: How many people are employed in the IT sector in these countries? And in particular, how many are involved in IT outsourcing?
Number of Employees in IT Outsourcing
Czech Rep.: 7,800
1 year growth in IT Outsourcing Staff
Czech Rep.: 500
Source: Central & Eastern European Outsourcing Association Report, 2010*
Here, we can see that Ukraine has more developers Business in Ukraine engaged in IT outsourcing than any other country in C&EE, and the growth each year, mainly due to Universities pumping out new grads that are hired by the industry, is also highest in Ukraine. (Romania and Belarus are also interesting by this measure, and actually these are smaller countries than Ukraine in terms of population, so there is a good “density” of developers in those countries, although the absolute number of developers is smaller than in Ukraine). And, actually, there are more developers than this in all of these countries, since these figures don’t include staff in companies not focused on IT outsourcing. For example, previously I managed a captive 50-person group in Ukraine for a US company, but our staff would not have been included in such statistics.