21/08/2022 5 min read

What’s going on in Ukrainian IT now?

Before the full-scale war, the Ukrainian IT industry has been developing at an incredible pace

In 2021 it grew by 36% from USD 5 billion to USD 6.8 billion in exports according to the Ukrainian IT report. The number of IT specialists also grew – from 244 to 285 thousand. Ukraine’s office of foreign affairs reported that 100 out of the Fortune 500 companies outsourced to Ukraine.

Throughout the COVID years, the industry export has doubled. After a short pause of despair in 2020 tech investors started to invest in 2021, and by the start of the full-scale war, the industry reached an all-time peak by means of the volume of export, financial income and the number of specialists involved.

What changed?


Relocations and brain drain risks

Since russia’s hostilities in Ukraine started long ago before a full-scale war and due to the COVID experience, most of the companies had crisis plans which involved the relocation of employees from the hot spots. Some moved employees in advance, others were engaged in the relocation of the team already during the war.

According to IT Research Resilience, between 50,000 and 57,000 IT specialists left Ukraine since February, 24. And approximately 7,000 joined the Armed Forces of Ukraine. Currently, the approximate number of IT specialists in Ukraine reaches 228,000 people. Around 46% of them relocated to relatively safe western regions of Ukraine.

How will these numbers change when the Ukrainian government lifts the travel ban for men of military age? There is a brain drain risk, yet a recent study by the Lviv IT Cluster showed that at least 57% of IT professionals are confident in the decision to live and work in Ukraine. Beyond the values ​​and ideals, the decision to stay or leave is influenced by the standard of living. For an average IT specialist, life in Ukraine is much more comfortable than in Europe due to lower taxes and higher wages.


The export volume growth and governmental support

According to the National Bank of Ukraine, the export volume of IT services for the first half of 2022 is $3.74 billion. This is 23% more than in the same period of the previous year. Moreover, the IT business pays taxes in advance, which is rare in Ukraine, especially during the crisis.

Since the IT industry is one of the few industries that continue to fill the state budget, the Ukrainian Government shows some support. For instance, there is an official procedure which helps to preserve the most valuable employees from military service. It took time to evolve the mechanics, and now the procedure works fine and it looks like it will even work faster since it is to be digitalized soon.

Another effort to support the industry that comes from the Ministry of Digital Transformation is IT Generation, an educational program aimed to help Ukrainians who, since the beginning of the war, lost the opportunity to earn money in those specialities where they worked before, to acquire a new profession in IT. That’s a pilot project, funded by Binance and USAID. Lots of local IT companies have launched similar educational programmes to acquire new talents. We do so for years and years now at the Kultprosvet school.


Job force market

The COVID crisis boosted the IT market all over the globe. Since export is the main domain for Ukrainian IT, the demand for software engineers went high, as well as the salaries range. The wages continuously grew throughout the year and got the highest rank in February.


Since the beginning of the war, the number of vacancies in Ukraine has decreased. As well as the number of those who received offers from employers. The fall affects all categories of specialists, but the salary ranges have not changed much so far.

As before the war, most of the current vacancies are aimed for experienced specialists – the market still needs seniors and, it feels like does not want juniors at all. In our opinion, this is an oversight. Despite the crisis we believe that long-term projects usually benefit from nurturing juniors.

However, the demand for IT specialists is recovering. Now the Ukrainian IT business has a unique opportunity for growth. First, due to the fact that many companies left russia and belarus. Secondly, thanks to the support of Ukraine around the world. However, it should be taken into account that stability and the opportunity to physically meet with Ukrainian specialists abroad are important for foreign clients.

To sum up

The Ukrainian IT industry shows resilience in the face of full-scale war and even manages to grow. In a month after the start of the war, 95% of companies returned to the pre-war rhythm and volume of work. The job market gained a healthy balance after the COVID boom, and the recruiting process is now way healthier. We at Kultprosvet have hired over 20 engineers since the war started, and engaged in new projects with our long-term partners as well as the new ones. Our partners showed great support and appreciation for efficient work and fast delivery despite the crisis.

War crisis in Ukraine affected the whole world. The investment boom has calmed down, the industry is returning to a normal state, the recruitment process is stabilising. The forecasts for the development of the IT industry depend on when and how the war will end. As I’m writing this blogpost the Armed Forces of Ukraine are showing great results with a newly delivered artillery weapons, therefore there is a hope and there will be a day…

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