The outsourcing sector in Ukraine

The outsourcing sector in Ukraine

Ukraine is the second-largest country in Europe, next to Russia. It’s also the world’s next IT outsourcing destination second to India, according to Shen.

The country is optimal for conducting businesses, not just outsourcing and offshoring. With Ukraine’s proximity to cities like London, Dublin, Lisbon, and other central business districts, the country provides an amazing opportunity for its neighbors.

Mostly known for its IT and software development industry, outsourcing companies in Ukraine also provide back-office support, lead generation, and more. But we’ll get into that later. Just keep in mind that the country’s outsourcing sector is booming right now—foreign investors have never been this excited.

Legalities of outsourcing in Ukraine

Because the idea of “outsourcing” in Ukrainian law is undefined, it can only be governed by reference to certain legal standards. Similarly, the legal sector defines economic interaction through implementing these changes, as well as the fact that everyone has the right to engage in law-abiding business operations.

That being said, outsourcing as a general is a legal practice of offloading responsibilities and roles to experts outside of your organization. This means that you’re acquiring external help from partners. The practice has since been embedded in every corner of the international trade and workforce.

Nearshoring to Ukraine

Some companies prefer nearshoring to onshore outsourcing or offshoring. Nearshoring has all the benefits of offshoring but with fewer risks and hassle, especially if the partner company is particular to timezone differences.

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Nearshoring refers to delegating tasks, roles, and responsibilities to external partners, usually based in neighboring countries. That being said, nearshoring is a practice that branched from offshoring—the only difference is the location.

As part of the European Union, Ukraine stabilizes the continent’s and its own economy by providing external support from domestic and foreign companies. Apart from the outsourcing industry, Ukraine is known for its thriving software development sector too.

Nearshoring to Ukraine
Nearshoring to Ukraine

Services you can outsource in Ukraine

As briefly mentioned above, Ukraine can be considered as one of the prolific outsourcing countries in Europe. Aside from the cheaper labor and high-quality services, the majority of the labor force have degrees and certifications to back up their experiences.

Most companies, if not all, are keen to have employees with degrees and certificates, as these proved that they can work towards a goal over a period of the prescribed time.

IT outsourcing

With tech companies popping left and right, it’s not hard to find a suitable IT outsourcing partner for you. These IT agencies usually provide technical support, helpdesk, and remote troubleshooting amongst other things.

As most people are familiar with, India holds the first place in the IT outsourcing sector. With their high efficiency rate and low labor costs, most organizations choose to outsource their IT department and their helpdesk over to Indian BPOs. After all, most IT professionals in the South Asian country are college degree holders, if not pursuing graduate studies.

Call center outsourcing

Contrary to widespread belief, a call center agency is not the same as BPO companies. As the name suggests, call centers are a contact hub wherein their primary delegations are voice campaigns.

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Ukraine is a developing country with most of its locals speak English. Companies who choose to outsource their call center campaigns usually lean towards the places where English speakers have a mild or neutral accent.

Lead generation

Every sales and marketing department needs strong lead generation support. Without any leads or prospects, sales specialists won’t have any clients to talk to, no deals to close. And without any deals to close, it’s hard for a company to get its revenue flow.

When outsourcing your lead generation tactics, make sure that you’re getting the best possible service. Lead generation is more than just getting names off of contact sheets though—lead gen specialists have to work hard to ensure that their prospects are valid.

Whether they validate them over the phone or through email, these experts have to deliver names and contacts that will guarantee a closed sale.

Telemarketing

Since telemarketing’s rise in the noughties, Ukrainian telemarketing businesses have ramped up. From doing cold calls, they now prioritize active and warm leads. With this method, they have a higher rate of conversions as opposed to cold calling.

Back-office outsourcing

From data encoding to analyzing report sheets, back office work is a well-rounded support role. Every front desk transaction, every client-facing agenda goes through them. Back-office roles are often outsourced to partner agencies to cut costs.

Web and app development

As briefly mentioned in this article, web and app development is one of Ukraine’s most prolific industries when it comes to outsourcing. Web development is the process of planning and executing a variety of static and dynamic pages to create an immersive website experience.

On the other hand, app development is the process of designing and launching a native mobile app for phone and tablet users.

Services you can outsource in Ukraine
Services you can outsource in Ukraine

Why companies outsource in Ukraine

Before diving into the specifics of reasons why companies choose to outsource in Ukraine, let’s get some stats to help us out.

With a market value of $4.5 billion, Information technology is now the country’s third-largest sector. In addition, outsourcing programs employ 60% of local degree-holding professionals. The Ukrainian IT market is growing at a rate of around 26% per year, and it’s bound to see more growth in the future.

If and when compared to the professionals in the US or the rest of Europe, Ukrainians have slightly lower rates. As opposed to, say $100 per hour, Ukrainian specialists would work for the rate of $30 to $60 per hour. That’s already a good chunk out of a company’s budget when it comes to employee acquisition.

Cost-effectivity

To continue what has been discussed above, cost-effectiveness is one of the well-known reasons why companies around the world outsource. Why hire in-house and risk more expenses when you could hire from outsourcing agencies and save money? 

The practice of outsourcing allows and promotes growth and flexibility inside the company. All without the extra overhead expenses.

Time zone differences

Unlike in some cities and countries in Asia and Australia, Ukraine somewhat operates closer to the preferred business hours of US-based companies. If your open hours are between the US standard time, consider outsourcing your responsibilities to your European colleagues.

If the math is done right, you can extend your office hours as much as two hours past others, making your business easily accessible.

Workforce diversity

When you have an extremely diverse workforce backing up your company, no issue is too severe. No problem will be too big to solve. Experts hailing from different countries and backgrounds will bring fresh perspectives and a new set of eyes to every project.

Nearshoring possibility 

Europe is considerably closer to North and South American based companies. 

Fatmir Hyseni of Business2Community wrote, “For example, a UK company looking to hire a nearshore outsourcing vendor might look to Europe, where there is minimal time zone difference and a high chance that the outsourced workers will have at least some grasp of English. In most cases, there will be a lot of overlap between customer and vendor in terms of laws, standard business practises, language, and so on.” 

How many US companies outsource to Ukraine

Specific and valid sources of which US companies outsource to Ukraine, Philippines, or India are hard to come by. That being said, we’ve compiled a list of well-known brands that are known to outsource and offshore their business processes to other countries.

  • Intel
  • Apple
  • Microsoft
  • Deutsche Bank
  • Nokia
  • Plarium
  • Playtika
  • Reuters
  • Wix
  • Bosch
  • eBay 
  • IBM
  • Del

As per the list, most of them are SaaS companies and tech conglomerates. This is not news, not to organizations who have been in the outsourcing industry. Ukraine reigns and holds the second position, just after India, for the IT outsourcing giants.

With their literacy rate of 99.7% and their English proficiency of ranking #49 in the world and #29 in Europe, most foreign investors will choose to partake in their business.

Why companies outsource in Ukraine
Why companies outsource in Ukraine

Offshoring to Europe

According to Deloitte’s 2016 Global Outsourcing Survey, 65 percent of companies outsource to Europe. Central and Eastern Europe (CEE) provides a labor pool which is both affordable and highly skilled. Every country in CEE thrives on the in-demand skills of software development and IT, from Ukraine to Russia to the Baltic republics.

Offshoring to Europe has been a normal practice since organizations had made international connections. Another reason why companies actively choose Europe as an outsourcing or offshoring hub is the cultural differences, or the lack thereof. Most, if not all, Europeans can speak English, whether it’s Americanized or not.

Utilizing this, most businesses can now offer multilingual services and support—such as chat and text-based campaigns, call and voice programs, IT helpdesk and more. Having such a diverse support team will lead the organization to have the trust of their non-native and non-English speaking audiences.

Europe is, no doubt, one of the leading clusters of nations in the Western Hemisphere. And like its American counterparts, both local and international companies will be on the lookout for the next best outsourcing and offshoring destination.

That being said, doing research will always be part of the work—good thing that we already cut it out for you. Outsource Accelerator is the Philippines’ leading marketplace aggregator for all things outsourcing and offshoring. We listed the top 40 BPO companies both in Europe and in Ukraine. The data gathered is based purely on their impact on each of their designated sectors.

Want to minimize the search to a specific European city? Here’s a guide for London-based BPO companies instead.

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