Ukrainian IT industry in the times of war and economic collapse

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April 28, 2015

Vladimir Zheleznyak

DOU.ua (Ukrainian social network for IT professionals)

Translated from Russian by Kristina Rus




KR:


Ukraine has a great potential for knowledge based economy as it shares the same Soviet tradition of education with Russia. But for lack of opportunities this potential has manifested in Ukraine producing the top hackers in the world. The current crisis also resulted in further brain drain of specialists fleeing to the West creating more challenges for local businesses in having to adapt and train the entry-level work force, only to loose it again to the West, once it reaches a decent skill level.





The nearest future of Ukrainian IT industry 

Vladimir Zheleznyak — is a Ukrainian programmer, manager, co-founder of the project “Psychology in IT”. Have seen a lot of crises, beginning with the collapse of the dotcoms.

What’s happening

I noticed two trends.

1. Seniors start their engines [move abroad] much more frequently than a couple of years ago. The reasons are clear: instability, fear of war or forced mobilization. As a result there is a shortage of qualified professionals.

2. The masses are studying to become a Junior [IT specialists]. Dollar salaries fell for the non-IT  workforce, employment is harder to come by. For example — the salary of electrical engineer in Kharkov used to be about $1000 [per month], now – $400. Previously a top non-IT specialist after transferring to the entry level position in the IT industry had to take a large cut in income, but now can retains the same income level, but gain greater future opportunities.

— Do you have a programmer friend? — C++ or Java? — Doesn’t matter, even PHP will do, it’s for marriage.

Most go into QA, although there is a surplus of Junior QA on the market, and this path is already closed. For beginners I suggest to start in layout (HTML + CSS -> Bootstrap -> JavaScript -> Angular 2).

The prospects of those who leave

Programmers

It’s relatively easy to move to Western countries for programmers. Therefore, those techies who want to move out, are boosting their technical skills and English. Interestingly, some of them will then come back to us as customers, owners of start-ups and directors.

Those who are focused on departure are easy to spot – they will be talking about the deteriorating situation is here, and the benefits of living abroad. This behavior may be an important marker for managers.

Managers

Managers are not at all welcome in the US. They have enough of their own with much better English and understanding of local realities. Therefore, for ordinary PM wanting to leave, the easiest way is to upgrade technical skills. Or to go with the team, understanding personal risks. For example, during the last crisis managers were actively laid off.

The prospects of those who stay

Some businesses are minimizing risks, by relocating employees and/or preparing an emergency evacuation plan. In outsourcing the flow of orders has decreased, but the outflow of Seniors balances supply and demand. In the product business only outflow of seniors is evident [no drop in orders].

For business owners, unlike developers, it is much harder to move to another country. The path to “invest $1 million to get a visa” is available only to large business owners [hence large business gets out – KR]. For small business owners a more realistic way is to upgrade programming skills and to be hired as an employee abroad [there goes the small business too -KR].

So if there is no big war, business will remain here.

What should  employers and managers do?

– Retain experts. By the way, the salary ceiling for Seniors in outsourcing has not yet been reached, but very close. As one customer said, “For +20% I’ll hire someone with the same skills, but he will have perfect English, live in my timezone and walk to my office”. So to retain them with money will not be easy.

– Work out the risks of loosing leading experts. And at the same time — situations when a business has to plug multiple projects with the same people;

– Training the current Juniors. It turns out that the role of mentors will be performed by the Middles. Are they ready for this? Hardly, and this also should be considered.

As far as programmers and QA, those Seniors who are planning to stay will end up in an interesting situation. On the one hand, there is less work, but there is also less competition. On the other hand, further significant wage growth is only possible at product firms. But there is a sense of self-esteem in terms of skills and income. But a question remains in the back of their minds: “To leave or to wait?

Business remains, the managers remain, Seniors are leaving. The Middles envy them. But there is a surplus of Juniors and pre-Juniors, and we need to be prepared to work more with them. At the same time keeping in mind that they have their stereotypes and habits from prior fields of work.

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