The year 2024 posed significant challenges for the IT sector in Ukraine and globally. It brought both new opportunities for growth and serious tests for the industry. This article provides a brief overview of the current state of the IT market and key trends in Ukraine.
IT Services Export Volumes
According to the National Bank, the total monthly turnover in the IT sector remains above $500 million. However, analysts predict that IT companies’ revenues will decline by 4-6% compared to 2023. While Ukraine’s GDP grows, the IT sector’s share has decreased to 4.4%.
The decline in revenue is primarily due to a reduction in foreign clients, the migration of companies abroad, and the opening of offices in other countries.
Despite the decreased income, the Ukrainian IT sector remains one of the most profitable industries, accounting for 38% of the total service export volume, or $4.8 billion. Computer services are the second largest export after food products.
March 2024 was the most successful month, while August was the worst with $507 million, the lowest since the war began. Even in the best months, the growth rate is slower than the previous year.
Global Competition
The high quality and competitive pricing of Ukrainian IT companies were extremely attractive to international clients before the full-scale invasion of Ukraine by Russia. However, not all foreign clients are currently willing to take the risk of ordering IT services in Ukraine.
Another challenge is the restriction on the departure of conscription-age specialists and difficulties with relocation. This particularly affects professions where physical presence is mandatory, such as system engineers, hardware developers, and embedded engineers. Many companies address these issues by creating mixed teams involving foreign specialists.
No Shortage of Personnel
Last year, the IT industry did not face a shortage of personnel – the number of candidates exceeded the number of job vacancies on popular job search sites. Economic difficulties force many companies to optimize their teams, postpone large projects, and halt new hiring. These circumstances lead to high competition, making it difficult for junior specialists to access companies.
Salaries for IT specialists in Ukraine continue to show a downward trend in 2024. For example, the average salary for candidates with over 7 years of experience is now $4,500-$5,000 per month. For those with 5-6 years of experience, the median salary is typically around $3,500, with a decrease observed in the fourth quarter of this year.
Salaries for mid-level developers with 3-4 years of experience also fell to $2,350 by the end of the year. Those with only 2 years of experience in development maintain stable salary expectations of $1,000 to $2,000, and candidates without experience can still expect around $500 per month.
The most expensive hires, according to Djinni, are in the Java category – 88 candidates with salaries of $5,000 or more, which is slightly less than a third of all Java specialist hires. The highest proportion of hires with salaries of $5,000 or more are in CTO, team leader, and other managerial positions. Next is the Scala category, where 12 out of 15 candidates received salaries above $5,000.
The highest salaries in 2024 could be obtained by working in product IT companies while outsourcing firms offered the lowest rates.
Tax Changes
Discussions on changes in tax legislation, such as banning the simplified tax system for IT specialists, introducing a military tax for freelancers, and raising rates for Diia.City specialists have caused a significant stir among industry workers.
Leading IT industry associations, including Diia City Union and the Association IT Ukraine, protested against the increase in military tax, as it contradicts the government’s guarantee of stable tax conditions and could lead to a loss of trust among foreign partners. Changes in tax legislation may cause companies to exit the Diia.City legal framework, relocate IT businesses to other jurisdictions and reduce the competitiveness of Ukrainian IT companies.
According to the Law “On Stimulating the Development of the Digital Economy in Ukraine,” the state guaranteed the stability of conditions for the Diia.City regime for 25 years. However, such instability in tax policy may lead to an outflow of international investments and a decline in trust in the state among foreign partners. The year 2025 will show if this is indeed the case.
IT Business Trends in Ukraine in 2024
The global trend towards the development of artificial intelligence, big data, and cloud solutions is actively spreading in Ukraine as well.
Ukrainian companies are actively integrating AI solutions for automating business processes, analyzing large data volumes, and creating new products. Ukraine ranks second in the number of AI companies among Central and Eastern European countries.
Cybersecurity remains one of the main priorities, especially in the context of military threats. After massive cyber-attacks, the Ukrainian IT sector focused its efforts on developing solutions for threat monitoring, automating attack responses, and strengthening the defense of critical infrastructure.
Meanwhile, cloud computing and big data technologies are actively being integrated into business processes. Transitioning to cloud services allows companies to be more flexible, reduce costs, and ensure a high level of security. The implementation of cloud solutions stimulates the demand for DevOps specialists, as this field requires knowledge of cloud technologies.
Career Transition
Many IT specialists decided to change their professional sphere within the industry to better adapt to new market conditions. According to the summer survey by DOU, 24% of IT professionals have changed their specialty at least once in their lives. For example, among those who chose DevOps, 58% transitioned from other IT fields (system administrators, technical support, developers), making this direction one of the most popular for career changes. At the same time, DevOps engineers themselves change their specialization much less often – only 17% of respondents decided to switch to another IT profession. The most popular alternative career for them is the position of Software Engineer.
Summary
Despite all the difficulties and challenges, the Ukrainian IT market shows an incredible ability to adapt and find new ways to develop. The ability to quickly adapt and implement new technologies will be key for the development of the Ukrainian IT sector in 2025 and beyond.
The surplus of candidates compared to the number of vacancies is not a problem for the team at GLOBRECS | Global Recruitment Solutions. Our clients always have high demands on candidates, making the process of finding qualified, motivated professionals who share corporate values quite a challenging task. This is why we are optimistic about the new year 2025. Your success is still our main challenge and inspiration!
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