Why Israeli Startups Use Software Development Services Offered by Ukraine

#Software Development
#High Tech
September 14, 2017 4 min read

‘How many developers are there in the world?’ This is what once puzzled London’s GitHub CEO, Chris Wanstrath, and inspired to deliver a great keynote about the upcoming big change in software development services. The approximate estimate is about 20-21 million. However, this figure can hardly cover all wannabes and hobbyists out there. With thousands of digital nomads scattered all over the world, you can’t help thinking about a surplus of programmers to be faced soon. Paradoxically, the 2016-2017 survey shared by ManpowerGroup says there’s a 40 percent shortage of employees globally with skilled IT staff being on the second place.

Nevertheless Israel has won a Startup Nation name, it belongs to the countries having difficulty filling IT job openings too. It often takes up to six months to find a senior engineer. No wonder that software development outsourcing in Israel has become the usual thing. Hiring talents in Ukraine is the most widespread solution. But what exactly makes Israeli companies choose Ukraine? Read on and get a clue.

Israeli Startups Use Software Development Services Offered by Ukraine

Common Hurdles Disrupting Israeli Startups

Diversity of hi-tech companies in Israel is jaw-dropping. There’s scarcely an idea that hasn’t been implemented yet. Anything from augmented reality platforms to show a 3D piece of furniture at consumer’s home to online DNA tests to trace back ancestry has already been realized.

The findings discovered by Tel Aviv’s IVC Research Center reveal that the number of active Israeli startups has increased much. In 2016 it amounted to more than 7,000 compared to 3,781 in 2006. The good thing about such a startup hype is that many of them proved to be really successful. In 2016, they raised a stunning $4.8 billion and still do their best to keep up the pace. No doubt, it’s good news for Israeli economy with 14 percent of income coming from tech industry. But there is a shortage of skilled staff providing software development services in Israel. And it is a huge problem which can’t be tackled at a glance.

The biggest hurdle is that Israel lacks graduates with scientific and maths degrees, which is why outsourcing software development services rendered by Ukraine, Norway, Canada or other countries often seems to be a good way out.

The government is about to take urgent actions. Teaching maths in classrooms is going to be done way more efficiently. Encouraging students to become well-qualified engineers is to be a number one priority. Even students coming from abroad will be involved. They will get more than 500 visas to study engineering in Israeli educational institutions and work in one of tech companies upon graduation. But granting visas to foreigners is not widely supported. It does make sense to improve skills and education of local students instead.

Another hindrance is tech giants. It’s extremely difficult for the startups to compete with such employers as Apple, Google, Microsoft, and Intel having their R&D offices in the heart of Israel and offering high salaries, bonuses, and other tempting perks.

IT recruiters do confess it’s hard for them to headhunt. Candidates delivering top-notch software development services in Israel are usually too picky. They choose to work in offices near their homes, pay much attention to social benefits, and tend to change their jobs in 20 months. No wonder that successful hires are well-rewarded. Referrals may get paid even $7,000. But is it worth the effort?


Outsourcing Software Development Services to Ukraine

The truth is Israeli companies choose to team up not only with Ukraine. Poland, Bulgaria and Lithuania are on the list too. Still, outsourcing software development services to Ukraine turns to be more beneficial. And here’s why.

Ukrainians have the same time zone, convenient location in the middle of Europe, speak good English and Russian, and don’t require visas. This simplifies communication a lot and allows sticking to a habitual working schedule. No delays in urgent bug fixes, system deployment or implementing new features. That’s why Israel-based startups do save time and money when partnering up with software development companies located in Ukraine. It’s priceless. This is one of the reasons why Wix.com has 120 people employed in Ukraine.

“They are in the same time zone, they have a good level of English and all are Russian speakers. Some of our people here are former Russians,” said Boaz Inbal, general manager of Wix’s development centers. “We have direct flights to both countries. It’s easy for us to collaborate and communicate.”

Another great argument in favor of outsourcing to Ukraine is a multitude of successfully implemented projects. Playtika, Wix, Plarium are among most famous Israeli companies with software development offices in Ukraine and can share their experience with others thinking of software development outsourcing in Israel.

As for cost-effectiveness, Ukraine is an absolute winner. Taxes paid in Israel are much higher than in Ukraine. Therefore, salaries earned by software engineers are lower too. The difference is tremendous. In Ukraine, Front End Developer’s salary ranges from $500 to $2,800 whereas in Israel it is somewhere between $3,500 and $7,200.


    Putting Ideas Into Action With Innovecs

    Outsourcing brings a lot of advantages. No payroll, taxes, office equipment expenses or other usual day-to-day routines.

    When picking a company that provides software outsourcing services, just take your time. One should be extremely attentive and curious. It’s crucial to consider every single detail: Date the company was founded, head staff it is run by, staff it employs, industries it works in, and projects it has launched.

    Innovecs is one of those outsourcing companies that has been serving clients throughout Europe and North America for a long time. It employs more than 300 IT talents, has a 5-year experience working on the market, and about 50 happy clients including Warner Brothers, Captify, and Flextronics.

    The company has big expertise in delivering software development services of any complexity for e-commerce, logistics, fintech, healthcare, and other industries. Native and hybrid apps, Blockchain, artificial intelligence and machine learning, animation and visual effects are just some of the technologies Innovecs team can deal with.

    Innovecs has offices in USA, Israel, Ukraine, UK, Germany, and Switzerland that can speed up communication with clients.

    The key thing that helps Innovecs stand out is an excellent retention of IT gurus and a quality control over software outsource services rendered. Hence, client’s achievements much depend on a team. Therefore, it should be strong and motivated. This is Innovecs’ strongest suit. Willing to get in touch with its team? No problem. Just make use of the contacts mentioned here.

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