IT outsourcing continues to grow as more businesses realize it is becoming the competitive profitability standard. Within the next 10 years, outsourcing will continue to cut at least 40 percent of costs even with the growing demand for IT specialists, which significantly increases costs for developers.

The growing pool of Ukrainian IT specialists, low labor costs and WTO membership since 2008 make Ukraine a competitive and attractive destination that is soon to surpass popular destinations such as Ireland and Romania.

Ciklum, an innovative IT outsourcing company specializing in nearshore software development in Ukraine, sees three main factors influencing outsourcing costs and how they impact the real cost of having a software developer in Ukraine today.

Salary of the Developer

IT market trends influence Ukraine as much as everywhere else, so salaries for IT specialists are growing dynamically. Average salaries for mid-level software developers range from 1200-1400 euros per month.

However, Ukraine will lower the salary level with a BIG pool of IT specialists and annual add-on of 30,000 graduates. Ukraine will not become a EU member within five to seven years, so the level of prices and salaries will be at least 30 to 40 percent lower. Since Ukraine is not a part of the Schengen Zone, the movement of people to work abroad is small and fairly limited.

Communication

Due to different levels of communication, requirements and technical assignments are often lost in translation, which costs time and money.

However, Ukrainians are very similar to Europeans in their work approach. They have a good grasp of written and spoken English language, they express opinions and ideas instead of simply following orders and they take initiative.

Investment in People

An office space and workstation are not enough for modern outsourcing. Employees have to be motivated, which requires investment in their career growth, social activities, education and more.

Ciklum considers employees to be the main asset for an outsourcing company and clients. To protect and nurture this asset, outsourcing companies must provide:

- Professional development
- Performance evaluations and development interviews
- Social activities
- Competency and interest groups
- Knowledge sharing
- Project Manager education
- Training and workgroups
- Bonus systems and incentive tools

"Ukraine has proven to be an attractive outsourcing solution for EMEA and North American companies. Ciklum in particular has defied the economic downturn to add more than 36 employees last month alone," said Torben Majgaard, CEO of Ciklum. "Not only do we provide significant cost savings, but also a unique model that addresses technology, HR and administration to create a collaborative environment of productivity and profitability."