Quality and low cost are the main reasons why outsourcing software development companies choose Ukraine to search for engineering talent. The $2 billion dollar industry enjoys double-digit yearly growth.
Not all technology professionals, however, choose to work for either an offshore or local software development business. A vast number of information technology freelancers exist, 52,000 of whom are registered on Elance-oDesk, the world’s biggest marketplace where clients meet professionals. Ukrainian programmers, quality assurance specialists and other technical freelancers make a combined $60 million a year, Stephane Kasriel, Elance-oDesk product and engineering senior vice president told the Kyiv Post.
The company values the Ukrainian market for the quality of available specialists and because a quarter of its core engineering team, or about 85 people, is based in the country. Kasriel, who came to Kyiv to talk to his team and participate in the IDCEE conference on Oct. 9, said that “many of the best engineers – both in my team (at Elance-oDesk) and on the marketplace – are Ukrainians.”
The best choice
Ukrainian IT freelancers globally earn less only than their counterparts in India, the U.S. and the Philippines. When taking into account the nation’s population of 45 million, “it’s disproportionately larger than it could be otherwise,” said Kasriel. The reason behind this is the combination of strong engineering talent and soft skills that Ukrainians possess.
“Our clients tend to be in the U.S. and the UK, so from a time zone standpoint it works better (with Ukraine) than with India or China,” he said. “It’s easier for people to collaborate. People here are also much more of Western-European type of culture.”
Recent Elance-oDesk statistics show that Ukrainian freelancers are most often hired by clients in the U.S., UK, Australia, Canada, and Germany, while their average hourly rate is $21.68 – $2 more than in 2013.
Kasriel also noted that despite the turmoil that Ukraine found itself over the past year, freelancers’ earnings and productivity weren’t affected.
“We haven’t seen any impact from the war in Ukraine,” Kasriel told the Kyiv Post. “We have been following it very closely…A few of (our team members) lived in Crimea, some of them moved outside the country. But in terms of business, nothing changed, Ukraine is growing the same as it did before.”
Entrepreneur school
The proliferation of tech-oriented freelancers is good for the whole local IT community because it helps them become entrepreneurs – Silicon Valley startups more frequently look for team members on freelance marketplaces.
“A typical client for Elance-oDesk is a relatively early stage company. We’re trying to make sure they stay with us as they grow, that’s how we end up having really big enterprise clients,” Kasriel said.
A similar opinion was voiced after the U.T.Gem conference in San Francisco in September by Igor Shoifot, chairman of Ukrainian Happy Farm incubator and the U.S. representative of TMT Investments venture fund. Talking to the Kyiv Post, Shoifot said that more and more local startups find tech professionals for their teams in Ukraine.
Their work for startups is very different from outsourcing software development, Kasriel emphasized. It’s a key point made in his recently released e-book “Hire Fast & Build Things”.
“People have a lot of misconceptions, like oDesk is outsourcing, and outsourcing is bad,” he said. “If you treat it (freelancing) like outsourcing, it’s going to be a failure. Outsourcing is something you do with what isn’t your core competency. But if you’re a product company, a startup, and you’re going to outsource your development, that doesn’t make sense.”
Freelancers in startups – especially in the U.S. – are usually treated as team members. They gain invaluable experience in working on an innovative product, which is often difficult to have with Ukrainian companies.
“(Freelancers) are completely part of the core team (at Elance-oDesk),” Kasriel said. “They’re integrated within every discussion we have, they can set strategy as much as engineers locally, and it’s really not an in-sourcing versus outsourcing discussion, it’s purely a discussion of a global team that works together.”
In August, the company started looking for a dedicated country manager in Ukraine, however, no official hiring announcement has been made.
Andrii Degeler is the Kyiv Post’s information technology reporting fellow. Degeler has been covering the IT business in Ukraine and internationally since 2009. His fellowship is sponsored by AVentures Capital, Ciklum, FISON and SoftServe. He can be reached on Twitter (@shlema) or [email protected].
