AIN.UA researched how the private investments of young people have changed over the past few years, the reasons for those changes, and why we should save for our future pensions right now.

When and why do the youth start to invest?

According to the AIN.UA survey, which had 82 participants, most people begin investing at the age of 21-25 (34.6%) and 26-35 (34.6%). People younger than 20 and older than 40 are less likely to make investments (5% each).

Over the past ten years, based on my experience, many more young people started thinking about investing,

Halyna Trytiak, a Financial Advisor, said AIN.UA.

She noted that people continue to invest or only begin to invest even though Ukraine has not experienced stability in recent years.

“Under stresses and risks, we tend to care about our future. People started saving more during the pandemic and are now considering investing. Generally, we think less about resources during stable periods, and more likely, we would think of security at unstable times,

Trytiak explained.

The respondents had different opinions regarding the influence of the full-scale war on investments:

• 31% stated the full-scale war had no influence on their intentions to invest;
• 26% admitted that war negatively influenced their wish to invest. About a fifth of them see no perspectives in investing in Ukraine;
• 20% answered that the full-scale war positively impacted their intentions to invest, and one-third of them made the first investments in their life.

Where do young people invest?

The most popular investing goals, according to AIN.UA survey, are:

Cryptocurrencies

Compared to the previous investor generation focused on real estate and deposits, the current youth prefers to invest in stocks and cryptocurrencies, the founder of the Simeinyi Budzhet, a financial literacy project, and a partner at iPlan.ua, Lyubomyr Ostapiv, emphasized.

So, the respondents recalled low entry threshold, accessibility, and high profitability as the main advantages of cryptocurrency investments.

Cryptocurrencies seemed to be the fastest and easiest way to multiply your capital,

said a survey participant, Roman, a QA Engineer.

He started investing in cryptocurrencies in 2021 after mining Ethereum for two months. His first $1,000 was invested in diverse coins: ETC, Solana, XRP, Luna, Matic, and Ada. He spent another almost $4,000 on a mining farm.

Roman continues investing in cryptocurrencies, while many of his contemporaries find it only a backup option.

Speaking of cryptocurrencies as an asset, it becomes more attractive when increasing value. When it decreases, all the hype also disappears. So I wouldn’t say many investors regularly go in and out,

Halyna Trytiak summarized.

She calls cryptocurrencies one of the riskiest assets with the lowest substantial base and asks to pay attention to such high-risk investments.

Despite all their popularity, Ukrainians don’t show a general trend to save in cryptocurrencies. Only 13% of the survey participants prefer this kind of saving. Most Ukrainians, 93.9%, prefer the US Dollar, 53.7%, the Euro, and 41.5%, the Hryvnia.

Stocks

The second most popular investment target of AIN.UA readers is company stocks. It is a long-term saving plan, Lyubomyr Ostapiv stated.

Ukrainians invest more in foreign companies because of apparently lower risks. That interest in foreign stocks has been stable for a few years already.

Clients are mostly interested in Eurobonds of Ukraine or blue chips — Apple, Microsoft, Tesla, etc.,

said Yevheniia Hryshchenko, Deputy Director at ICU Group, in an interview for Minfin.

In early 2022, foreign securities grew popular in Ukraine since people could purchase them via mobile banking apps. However, the trade volume decreased with the beginning of the Russian full-scale invasion when Ukrainian regulatory bodies temporarily paused the trade.

First, there were transaction amount limits: Ukrainians could transfer not more than UAH 100,000 a month to foreign broker accounts. In May 2022, the regulator entirely forbade external transactions to buy securities, stocks, and bonds and pay broker fees.

In August 2022, the National Securities and Stock Market Commission lifted most equity and commodity market transaction restrictions.

“The equity and commodity markets worked manually during the first five months of the full-scale war. The regulator monitored and analyzed the results of each permitted transaction. It would be nonsense in a peaceful life, but the war brought new circumstances. Thanks to that individual approach and conservative politics, we have managed to overcome panic, save assets, and avoid defaults for several securities,” 

A PHP Engineer, Mykyta, started investing in stocks of foreign companies even before the full-scale war. He had to choose a broker available in Ukraine. “There were Interactive Brokers. There was also Freedom Finance Ukraine, which, however, had Russian roots and was already fucked up at that moment.

About Freedom Finance Ukraine

Freedom Finance Ukraine is a company owned by a stockbroker, Timur Turlov, who holds Russian citizenship. Sanctions were imposed on the company in 2023. According to the EP, the total value of the assets blocked on the company’s accounts—shares and bonds of more than 280 issuers—is UAH 3.5 billion.

I chose Interactive Brokers for their protected complicated registration process, equity protection up to $500,000, and access to many tools.”

Mykyta invested mainly in US-based companies over NYSE and NASDAQ. Initially, he traded via Exchange Traded Fund (ETF) and later purchased separate stocks.

I have invested in SCHD, AAPL, COIN, Alphabet Inc. (GOOGL). At that time, the shares of Apple cost me much less. And now they are at the peak level [$208.14 on June 25, 2024 — edit.]. In addition, I invest in dividend funds and buy stocks on hype, which means the most spoken and growing securities at the time. In January, it was CoinList. The most recent one is Nvidia. Or I can invest in some perspective area, for example, related to AI. In general, my portfolio contains preferably technology companies,

said Ruslan Mahomedov, the Director of the Commission, about lifting restrictions.

With the beginning of the full-scale invasion, Mykyta stopped to invest for some time and had to sell most of his portfolio. Later, he resumed his trading activity and almost caught up with the volume he had before. Now, he invests in stocks and cryptocurrencies, plans to invest in real estate and not rely on known domains anymore.

Domestic government bonds

As of April 2024, nearly 178,000 Ukrainians invest in the domestic government bond (DGB) market, 90% of which are military bonds, according to the National Bank of Ukraine’s statement for AIN.UA.

For Tetiana, who works in the digital advertisement industry, an investment in bonds was the second in her life. Before this, she invested in her boyfriend’s company once.

I decided for the bonds to help our army quickly and conveniently, via monobank, and most safely, as it could be during a war,

she explained.

Her motivation to invest was to help the Armed Forces of Ukraine. “My boyfriend, for instance, had invested all his savings in military bonds even though he could purchase stocks of foreign companies. However, risks were not a case here,” Tetiana added.

The ROI of bonds decreases due to increasing inflation and interest rates, Halyna Trytiak explained. However, the existing ROI is high enough to cover the inflation and UAH to USD exchange devaluation. A low entry threshold is a pro. You can start investing with only ₴1,000.

Experts recommend looking at corporate bonds as an alternative. For example, NovaPay and !FEST Coffee Mission, a part of !FEST Holding, issued their corporate bonds. The NovaPay bonds are available via its app.

The bonds of !FEST Coffee Mission are fixed to the US Dollar — it’s an innovation in the Ukrainian market,

said the founder of the Simeinyi Budzhet financial literacy social project and a partner at iPlan.ua, Lyubomyr Ostapiv.

Halyna Trytiak emphasized that the corporate bond market in Ukraine develops because Ukrainians willingly purchase bonds to support businesses they like.

Why do pension investments become more and more popular among young people?

17% of the respondents indicated their concerns about pensions as a reason to invest.

The government can guarantee only minimum social welfare (in 2024, it’s ₴2,361 — edit.). But for more, you must work as long as possible. The First Deputy Minister for Social Policy, Darina Marchak, stated this in a live stream at Espreso.TV in June 2024.

According to her, the demographic situation in Ukraine is critical: one taxpayer works to pay pension one pensioner. “And this situation will highly likely get worse,” the Deputy Minister for Social Policy added.

It is due to the war-related negative migration, the low birth rate that decreased even more during the full-scale Russian invasion, and high early mortality because of warfare.

“Ukraine must be an active longevity nation. We must be interested in and work as long as we can and retire when we feel no physical capacity to work,” thinks Darina Marchak.

Lyubomyr Ostapiv recommends officially working employees to think about long-term pension investments. He noted that people ideally should save for 20 to 30 years. Compound interest, a result of an accumulation from a principal sum and previously accumulated interest, would work better for such a long-term deposit.

Non-state pension funds

The experts advise non-state pension funds (NPF) to invest in private pensions. It is a long-term investment. You can conduct a contract with the fund for several years and pay contributions to your own pension account.

There are traditional risks connected with NPFs: How reliable an NPF is and whether it can offer a ROI more than the inflation rate,

Oleksandr Panchenko, an Advisor of the National Securities and Stock Market Commission Director, said in his commentary for AIN.UA.

He recommends paying attention to how long a fund operates, what its partners are, if they are well-known, etc.

Then, compare the ROI for past years with inflation rates. “If a fund could overcome inflation in a long-term perspective (over ten years in a row), it is worth your attention. There are such funds in Ukraine, and usually, the more assets the fund has, the better the numbers,” Panchenko summarized.

There are 63 officially registered non-state funds in Ukraine, and 58 are active nowadays. After January 1, 2024, non-state pension funds lose the status of financial entities and become organizations under finance service regulations.

Here are the largest Ukrainian NPFs by assets:

• OTP Pension (since 2009) — ₴550 m, 64,000 members;
• Privatfund (since 2004) — ₴428 m, 51,000 members;
• Ukreximbank Fund (since 2005) — ₴394.4 m, 6,000 members;
• Emeryt Ukraine (since 2006) — ₴278 m, 70,000 members.

An alternative can be bank deposits (a possible contra is taxed income) and pension life insurance, Panchenko added.

After planning long-term investing, Roman began investing in MetLife — one of the largest global providers of insurance, annuities, and employee benefit programs, represented in Ukraine with the MetLife PJSC — in his 25.

“I have a 50-year agreement,” Roman explained. “I pay one thousand Hryvnia monthly, plus inflation. So, my recurrent payments will increase with time. The total investment should be around UAH 500,000, which will become ₴1.2 million in 50 years.”

Other international life insurance companies also work in Ukraine: UNIQA, GRAWE, or PZU.

The pension system of Ukraine. The context

The pension system reform started in Ukraine in 2003 with the passing of two bills: “On Compulsory State Pension Insurance” and “On Non-State Pension Provision.” It aimed a shift to a three-level system.

1. Tier 1 is based on solidarity and subsidizing principles. The current pensioners are paid with companies’ and employees’ Pension Fund contributions. Working people’s contributions should also pay the next generations of pensioners.
2. Tier 2 represents an accumulation system of compulsory insurance. The contributions are invested on the contributor’s behalf. The amount of contribution shall not exceed 7% of salary. Retirement savings can be inherited.
3. Tier 3 is voluntary contributions to non-governmental pension funds. The pension fund creates an account on a member’s behalf and accumulates contributions from the individual, their employer, or the member’s family.

Ukraine has a mixed pension system today, where Tier 1 and Tier 3 are functioning. The second level had to pass in 2009, but it is still not working. The draft law “On Compulsory Accumulative Pension Provision,” according to which there should be compulsory accumulative pensions, has not been adopted by the Ukrainian Parliament yet and has remained there since 2021.

In 2023, Prime Minister Denys Shmyhal of Ukraine announced a pension reform that should make solidarity pensions not less than 30% of the average salary of an employee during his life, plus a cumulative component, that Tier 2 component, possible.

The Advisor of the National Securities and Stock Market Commission Director, Oleksandr Panchenko, believes that the launch of Level 2 this year is plausible.

He underlined it should not be about fast paying of contributions. Ideally, it would be a topic for the time after the victory in the ongoing war, stabilization of the economy, and at least two years of building the required infrastructure.

We have been speaking about the launch of the 3-level pension system for 20 years. The longer it takes, the fewer citizens make pension savings, and the lower pensions — solidary and cumulative — they get in the future,

A faster de-shadowing of the labor market can be a benefit of an accumulative pension.

“An accumulative pension is formed from pension contributions and income from their investment. The higher the pension contributions, the higher the pension payable,” explains Oleksandr Panchenko. “Pension contributions are paid from the official salary. If it is low, contributions will be negligible.”

He adds that the accumulation reform will encourage people to get officially employed rather than receive salaries “in envelopes” because their pensions will depend on the amount of official payments.

Even if there were no absent Tier 2 and no demographic crisis, the Ukrainian pension system would still have many problems. Debts for pension recalculation are one of them. State’s debt under court decisions has grown to UAH 66 billion, Darina Marchak said on the Chronicles of Economy podcast.

The debt is related to court cases of ex-military and law enforcement officers. They are subject to special pension legislation that links their pension payments to the current amount of remunerations or salaries of active military and law enforcement officers. The debts also apply to payments to Chornobyl victims.

Other challenges include a possible sharp increase in the number of pensioners. Currently, the Constitutional Court is considering a case on the legality of raising the seniority requirements for retirement for specific categories of citizens. It is a reform adopted in 2017 by the government of then-Prime Minister Volodymyr Groysman. The Verkhovna Rada increased the retirement age: For example, if a person does not have enough work experience at 60, they must work another 3-5 years to qualify for a pension higher than the minimum. De facto, this government decision was equal to a retirement age increase.

If the retirement age requirements amended in 2017 are ruled unconstitutional (and the process is still ongoing), the number of pensioners in Ukraine could increase by tens or hundreds of thousands. Economic Pravda, citing calculations by the Ministry of Social Policy, notes that additional spending on pensions could reach UAH 10.5 billion a year.

Financial literacy of young people

According to the study “Financial Literacy, Financial Inclusion, and Financial Well-Being in Ukraine in 2021,” financial literacy in Ukraine has improved in past years.

Ukrainians aged 25-34 and 30-59 are the most financially literate. The least literate are young people aged 18-19 and over 60.

There is no correlation between gender and awareness: Ukrainian men and women are equally knowledgeable in financial matters (12.3 and 12.2 points, respectively). At the same time, there is a connection between the level of financial literacy and education: The higher the level of education, the higher the financial literacy score. In the AIN.UA survey, almost 95% of young investors reported having a university degree.

Ukrainians are more likely to develop financial literacy by themselves, as the older generation did not teach them how to invest wisely.

According to financial consultant Halyna Trytiak, this is due, in part, to the negative financial experience of the parents of modern youth.

For example, in the 90s, many Ukrainians lost money on the so-called “savings books.” Because of this, parents taught children not to trust financial institutions. Today, under capitalism, the playing field has completely changed, and behavior has not adapted. Still, some people dramatically distrust banks,”

the expert believes.

“All I knew about finances was that “you have to have something behind your soul.” As my grandfather says, you have to save for a rainy day,” Roman, a survey participant, answers the question about financial literacy in the family. Before investing, he worked overtime at several jobs for a long time because he knew he had to use every opportunity to make money.

Another participant, Mykyta, has almost the same situation. “My family had no rules of financial literacy at all, and even saving money was difficult,” he says.

In general, the country’s economic stability also influences the level of financial literacy, Halyna Trytiak emphasizes.

Since independence, we have not had long-term stability in the financial sector for more than five years in a row,” she explains. “Regular devaluation of the Hryvnia, inflation, revolutions, and the full-scale war affect the sense of security and the ability to plan for the long term, for example, for 10-20 years,

Even before the full-scale invasion, according to the study “Financial Literacy, Financial Inclusion, and Financial Well-Being in Ukraine in 2021,” Ukrainians focused more on short-term plans and spending than saving. However, almost 47% of young people surveyed by AIN.UA are ready to invest long-term — for five years or more.

The trend of spreading financial literacy is positive, says financial expert Halyna Trytiak: “Nowadays, young people actively engage in personal financial literacy and teach their children to do the same. There are also financial literacy courses for children and teenagers. Over time, this will ensure positive results.”

Investment tips

Consider your own goals and planning, and only then consider investment prospects. “The correct sequence is to determine your financial goals, whether they are short- or long-term, and what level of risk you are willing to take,” says Tritiak. “If the goal is short-term, up to a year, and you are planning a long-term investment, for example, five years or more, then you should decide whether it is appropriate at this stage.

Analyze investment opportunities: the entry threshold and conditions, the possible investment amount, and taxation conditions for residents or non-residents.

Consider agricultural land as a long-term investment. “Ukraine has great prospects in the agricultural sector. It is both an option that generates passive income and an asset that can grow in value in the future,” Trytiak says. However, she adds that one should take into account the entry threshold: for agricultural land, it is several hundred thousand hryvnias.

Pay attention to public investment based on the REIT (Real Estate Investment Trust) model.

It should be noted that NIX Solutions refused to provide data for the AIN.Capital research this time. Astound Commerce and Grid Dynamics also did not give any figures. For comparison purposes, we used the data from both their LinkedIn pages and their websites.

In general, the study showed that the trend of reducing team sizes in Ukraine continued at the end of the first half of 2023. 

Companies are continuing to scale up but mostly not in Ukraine anymore. The reason is partly because of the move of Ukrainian specialists outside the country and partly due to the focus on business development abroad.

Although the top three remain unchanged, the study shows that the full-scale war that Russia has been waging against Ukraine for the last one and a half years is continuing to affect the IT industry. Also, more conservative investment by clients in new projects amid the threat of a global economic recession is affecting the number of job openings.

Despite the overall decline in the trend of expanding Ukrainian teams, the top 20 companies have not stopped hiring new specialists. At the time of writing, GlobalLogic Ukraine had the most openings — 163. All companies are mainly looking for engineers. SoftServe in Ukraine has 122 job openings, which the company plans to fill from its internal reserve. Among the most popular areas are .NET, Business Analyst, Java, WebUI.

In general, as of the first half of 2023, the rankings participants observe the “optimization” of personnel by customers. At the same time, as you can see from the chart, a significant drop in the number of employees is being avoided. The surveyed companies explain that this is due to the diversification of client portfolios.

As of January 1, 2023, the amount of taxes and fees to the consolidated budget of Ukraine paid by the IT business reaches UAH 32.2 billion, which is UAH 4.4 billion and 16% more than the last year. At the same time, the number of individual entrepreneurs who are taxpayers has also increased.

Thanks to maintaining growth rates, an active IT business supports the economy as well as the Armed Forces of Ukraine, creates new jobs during the war, implements humanitarian initiatives, and thus contributes to the victory.

“The figure of more than seven billion dollars from the export of computer services is also unique as it is the largest one in the entire history of the existence of the Ukrainian IT industry, which was achieved precisely during the war,”

Kostiantyn Vasiuk, executive director of the IT Ukraine Association, noted.

In August 2022, IT Ukraine published the data which showed that since the beginning of the full-scale invasion, more than 50% of the surveyed IT companies did not relocate and switched to remote work. The companies noted such factors among the reasons not to relocate: the inability of male IT specialists to leave the country, the desire of IT companies to pay taxes in Ukraine, the reluctance of most of the team to move, and the higher costs of doing business outside of Ukraine.

In the latest ranking, we considered only the size of companies in Ukraine, while international offices were not taken into account. However, it should also be noted that many employees from Ukrainian representative offices are currently working in foreign ones, which affects the number of specialists in local teams.

With the full-scale invasion, companies also focused on opening new offices abroad. Ukrainians might also work there. For example, GlobalLogic has opened a development center in Mexico, ELEKS has an office in Croatia, Sigma Software has an office in Prague, and Intellias has opened a representative office in Spain and Portugal. Most outsourcers have relocated to Poland, with N-iX, Grid Dynamics, GlobalLogic, and ELEKS opening offices there. Turkey and Latin American countries share second place.

In addition, in 2022, the companies established offices in western Ukraine. Thus, the most popular cities are Lviv (Luxoft), Ivano-Frankivsk (Luxoft, N-iX), Chernivtsi (Luxoft, Sigma Software), Uzhhorod (almost all those who have not yet had one). And Uzhhorod itself was included in the list of major IT hubs. 

It should be noted that NIX Solutions, which in 2021 ranked fifth with a team of 3,693 people, refused to participate in this year’s AIN.Capital survey. For comparison, we used the data from the July 2022 rating of the largest companies in Ukraine compiled by DOU. Astound Commerce, which last year reported 976 local team members, also did not provide its figures.

Ranking of outsourcing and service IT companies by the number of employees

Overall, as can be seen from the ranking, the situation in Ukraine has had a significant impact on the listed companies. The top five companies recorded either a decrease in the number of employees or a stable number of employees, such as Luxoft. As reported to AIN.Capital by EPAM, which had 15% fewer specialists in its Ukrainian staff in November compared to December last year, more than a quarter of those who left the country at the beginning of the war have already returned. Nevertheless, a certain number of them see their immediate future abroad:

“Compared to the previous year, the number of specialists cooperating with ERAM has decreased. However, there is a reasonable explanation for this. After all, several thousand of our specialists left Ukraine to escape the war. More than a quarter of them have already returned home, but some see their immediate future in other countries. After completing the permitted 90-day stay in Europe, we have observed active relocation processes within the company for several months. Thanks to a large number of EPAM offices worldwide, specialists can work in the countries of their choice and receive support from the company and local peers. Currently, the relocation is the key reason for the change in the size of the Ukrainian team.”

According to SoftServe, 2,000 people have relocated abroad. Some of them have returned, but a significant number of people remain there and are being legalized in other SoftServe locations. In this case, they cease to be employees of SoftServe Ukraine.

“There is also the phenomenon of staff turnover, which is natural for the company this year, but due to the slower pace of hiring and the number of vacancies on the market, the number of employees does not level off as quickly. In addition, we do have some optimization going on, but it is not of a pronounced widespread nature. We maintain a talent pool sufficient to launch new projects and open new vacancies quickly. Most of them are focused on the internal pool, but we also open vacancies for external staffing. We are actively working to attract new customers and projects in Ukraine,” added Anastasia Frolova, Country Manager Ukraine, SoftServe.

Ciklum also noted that many Ukrainian specialists have left and switched to local contracts in the delivery centers of Poland and Bulgaria. The Ukrainian office of the latter employs 2,800 people, which is 14% less than last year.  

Number of specialists in top 3 IT companies

Although half of the companies did not show an increase in employees, the other ten reported an increase in their Ukrainian teams. Among them are Intellias with an increase of 11% (54.5% last year), N-iX with +10% (42.3%), and Grid Dynamics with an increase of 21% (24.9%). At the same time, Avenga (formerly CoreValue) reported 727 specialists, which is 107% more than last year. 

As Avenga explained to AIN.Capital, the company’s growth is mainly driven by the M&A program and the company’s presence in other countries. In addition, the offices in Ukraine operate in a self-sufficient manner, regardless of power outages. Thus, according to Avenga, clients receive services, and the team has the opportunity to work.

“We are establishing our presence not only in Europe, but also in South America (the recent merger with the Argentine company IncluIT gave us an increase of 800 people. Before that, the integration with Perfectial increased the Ukrainian team by 500 specialists. We also have good growth in existing customers, even during the war we did not lose any of them. Analyzing the last three years, which were quite difficult for the world, we did not have mass layoffs, salary cuts, or other drastic measures; our attrition was on average 15-18% when the market had already reached 30%,” said Marta Romaniak, Managing Director at Avenga.

It is a good sign that all the companies in the ranking continue to hire specialists. Although growth is not as rapid as it was a year ago, the availability of vacancies may indicate a step-by-step recovery of the industry. For example, SoftServe plans to hire additional 764 specialists globally in the near future, with 239 vacancies open in Ukraine. At the same time, EPAM notes that there is no massive hiring at the moment, and the need for specialists is mainly covered by the company’s internal talents. In November 2022, they were mainly looking for niche specialists, such as Performance Analyst, Microsoft Dynamics, Salesforce, Big Data, Python, etc.

Number of specialists & number of vacancies

Grid Dynamics has the most vacancies in Ukraine among the top twenty. In 2022, the company closed its offices in Russia and focused on scaling in Europe. As of December, it has about 1,600 specialists in Ukraine and plans to hire another 300 in the near future. GlobalLogic is also relatively active in hiring, with 279 vacancies open at the time of the survey. In their comment, the company noted that they are looking for specialists in various areas, including C++, .NET, Manual QA, Automation QA, Embedded QA, C/Embedded, Machine Learning, and Linux Kernel.

• The job market of 2022 is officially an employer’s market. By the end of 2022, the number of candidates searching for a job (actively and passively) has reached a record mark of 77,000. This is because of a huge number of junior candidates’ and switchers joining the job market. The share of “newbies” in IT has grown from 25% in 2021 to 29% in 2022, the research shows.
• At the same time, the number of job applications increased almost 3 times (2.4 million vs 806,000 in 2021). The market is upside down in comparison to the situation in 2021. 2022 will be to a great degree dominated by employers’ demand. In September itself, a new absolute high was seen — 268,000 job applications in a month.
• On the other side, recruiters published 168,000 unique vacancies, 10% less than in 2021. The plunge in monthly publications is more dramatic: from 34,500 in January 2022 to 16,000 in November.

• The share of vacancies with no requirement for specific experience fell from 5.3% to 3.9%. The share of new jobs for the top specialists increased from 13 to 20%. Among the top categories, the number of new jobs is down for most specializations except C++ and Node.js. 

• Almost 12,800 candidates were reportedly hired in Djinni, which is 13% less than last year. For the first time in 10 years, there are fewer hires in 2022 than the year before. Specialists with 5+ years of experience, meanwhile, are the most in demand. Their share in hires is about 35%.
• The median salary of hired candidates increased this year for almost all segments, especially for experienced tech professionals. For newcomers and candidates without experience, the median remains at a modest $500.

• At the beginning of the full-scale war, the share of fully remote positions increased from 27% to 55%, but in December it shrank to 48%. The ‘candidate can choose’ option started to gain popularity after attacks on Ukraine’s energy infrastructure in October. Companies equipped their offices with generators and Starlinks so that employees can work during blackouts. Office jobs also increased from 5 to 7% in December. 
• There is also another trend in the Ukrainian tech job market. Since the start of the full-scale invasion, companies from outside Ukraine offered to Ukrainians the option of relocation. Gradually, this opportunity exhausted itself: in October, there were only 10% of relocation options available, and in December — 12%. The most popular country for relocation remains Poland, the same as a year before. 

Ukrainian M&As in 2022 in numbers

According to InVenture estimates, the volume of announced and completed M&A transactions in Ukraine, including corporate transactions and venture transactions in the technology sector, amounted to $305 million in 2022 (the actual size is assumed to be somewhat higher, but not exceeding $400 million).

• Compared to 2021, the total volume of M&A transactions decreased by 9 times: from $2.7 billion to $0.3 billion.
• The number of M&A transactions worth more than $1 million also decreased by over 2 times: from 120 transactions in 2021 to 54 transactions in 2022 (with 21 transactions in January-February 2022).

The only sector in the venture industry that still holds on relative stability in wartime is the Ukrainian IT sector. The amount of venture capital deals and acquisitions of IT companies reached $278 million, which is more than 90% of the total volume of M&A transactions in Ukraine.

The biggest M&A and VC deals made in Ukraine in 2022 include:

• AirSlate (PDFfiller) — $51,5 million from UiPath Ventures in June.
• Preply — $50 million from Owl Ventures and more in July.
• Apostera — $50 million from Harman International Industries Inc. in February.
• Augmented Pixels — $25 million from Qualcomm in January.
• Digitally Inspired — $20 million from Intellias in September.
• Spin Technology — $16 million from Blueprint Equity and more in August.
• Helsi — $10 million from PJSC Kyivstar in August.
• Fintech Farm — $7.5 million from Flyer One Ventures and more in January.

Forecasts for 2023

According to InVenture, a revival of the M&A market in 2023 is unlikely. In any case, it will fully depend on the situation at the frontline and have at least a year’s time lag after the end of the war. Although, most likely, deals in the IT sector and the venture industry will continue to take place.

Key takeaways from the survey:

• Founder salaries are higher in more advanced ecosystems, with the UK out in front.
• There’s a big gender pay gap in super early-stage startups — but it’s there throughout.
• The number of co-founders is the single biggest diluter of equity.
• Fintech continues to be the stand-out, in terms of how much founders get paid.

Founders’ salaries by stage and funding:

• On average, bootstrapped and pre-seed founder salaries are around €50,000. By Series B the amount reaches almost €150,000. Straying very far above these salaries can be a red flag for investors, particularly in the earliest stages.

• For companies that have raised up to €1 million, the average founder salary is below €50,000. However, once a company has accumulated over €50 million, founder salaries are around €155,000 on average.

Salaries by location and industry:

• At pre-seed and seed stages, location has little to no impact on salary. But from Series A onwards, it’s all about the UK, where founders make almost €70,000 more than founders in any other region. While the lowest salaries are in the Baltics and CEE, these countries generally have a lower cost of living.

• When it comes to industry-specifics, salaries at Pre-Seed and Seed stages don’t really differ too much from industry to industry. But after reaching Series A rounds, it’s fintech founders who take home the most, earning an average of €160,000.

Gendered pay gap:

• There is a significant pay gap at the seed stage, with female founders taking home €15,000 less than their male counterparts. On average, early-stage female founders who raised €1–3 million earn about 25–30% less than male founders. This gap grows even more with higher funding, only starting to level out above the €50 million mark.

The number of co-founders tends to dilute the salary:

• The biggest equity diluter is how many co-founders you bring along. Choosing who and how many people to work with on the idea is a fundamental decision for the early-stage founders that affects their pay throughout the startup’s growth.

About Creandum

Creandum is a Swedish early-stage venture capital firm backing the companies of tomorrow. The firm has backed Europe’s most successful tech companies including Spotify, iZettle, Depop, Klarna, KRY, Epidemic Sound, and Small Giant Games. 

The state of the market after the start of the full-scale war

Almost all respondents note that the war had clearly negative impact on the possibility of doing business in the country. Most startup leaders rate the current situation as bad. 12% of the surveyed companies closed their operations after the Russian invasion.

The reasons for the startups in Ukraine to close are diverse: there are 4 most common reasons that lead to stopping business or limiting it. 

• For about 33% of startups, the reason for the shutdown was the drop in sales of products and services on the Ukrainian market. 
• In the case of approximately 25% of the respondents, it was due to the impossibility of going abroad (which in their case was necessary to continue the activity) and the loss of capital. This would have allowed the company to maintain its financial liquidity.

Out of the 27 companies whose representatives claimed to be participating in military actions, 56% had one of their employees participating in the defense of Ukraine. As a result, more than 20% of the companies whose employees take part in the war have as many as two people fighting at the front.

Plans to move after the end of the war

Almost half of the surveyed enterprises are located in Kyiv. Lviv, Kharkiv, and Vinnytsia regions are also important places on the startup map of Ukraine.

There are problems with Ukrainian startup operations, which are reflected in the markets far outside the country and are an obstacle for all entities that cooperate with them or buy their services and products. At the same time, for some of the analyzed companies, the fact of having to work for foreign clients and cooperation with them is a chance to survive in a very difficult economic, political, and social situation in the country.

Among the respondents who answered the question about their plans to move their startups after the victory of Ukraine, the largest percentage indicated that they plan to return to the Ukrainian market or stay in it (43%). Almost 1/3 of the sample consists of people who want to move their company to the European Union market, less often (only 5%) — to the US. Some companies completing the survey were already outside Ukraine (16%).

Declining focus on early-stage startups

According to FIRSTPICK’s data, startups in Lithuania, Latvia, and Estonia attracted €1.603 billion in investment this year, compared to €1.894 billion in 2021. A total of 124 deals registered until 1 December 2022 took place in the Baltic States compared to 190 deals last year.

“The total amount of investments in the Baltics in 2021 and 2022 differs by only €291 million, so it would be unfair to say that this year has been much worse for startups. However, some of the large investments in 2022 result from last year’s work, and the total investment amount does not fully reflect the recessionary sentiment that has emerged this year. The lack of investment in early-stage startups is also noticeable. This is evident from the fact that the value of investments has changed only slightly while there have been far fewer deals,”

Jonė Vaitulevičiūtė, managing partner at FIRSTPICK, says.

Number of deals per country 2022

• In Estonia, €1.295 billion has been invested this year (€1.03 billion in 2021). This equals 81% of the investment raised by Baltic startups.
• In Lithuania investments reached €241 million (€419 million in 2021) or 15%.
• In Latvia a total of €67 million or 4% was invested.

Estonia’s leadership is also reflected in the number of deals — 70 deals were made this year in Estonia, which is twice as much as in Lithuania (31) and triple the number in Latvia (23).

The most invested sectors included transport, software, and fintech. Estonian company Bolt dominated the sector funding raising its €628 million round in January 2022.

Main players this year

There is a growing interest of foreign investors in Baltic startups this year. Foreign funds are responsible for more than 90% of the value of all investments in the region’s startups.

The most active investors in the region in 2022, with three deals each, are:

• Lighthouse Ventures,
• Icebreaker,
• and Superhero Capital.

Three new unicorns emerged in the region:

• Nord Security, a Lithuania cybersecurity startup.
• Glia, an Estonian digital customer service.
• Veriff, an Estonian identity verification service.

Six tier-1 funds invested in the Baltics in 2022 — Accel, Burda Principal Investments, Tiger Global, Atomico, Target Global, and Index Ventures.

What to expect in 2023?

As the pace of investment slows down, startups and investors are starting to worry about the year ahead. According to FIRSTPICK, there will be money for investment in the region, but companies must be willing to operate much more efficiently.

“Baltic startups are special for several reasons that will help sustain growth. First of all, startups in our region are characterized by the efficient use of capital. And investment in such startups will continue. The new investment cycles of local funds should also provide a sense of security. Obviously, foreign funds will be more cautious, so only the best teams can expect their investments, mostly in the seed and later stages,”

Vaitulevičiūtė concludes.

About FIRSTPICK

FIRSTPICK is an early stage venture capital fund backing the best tech founders across the Baltics. The firm’s team members have backed over 100 founders to date. It is a generalist fund with loose focus on impact technologies and broad fintech. The fund’s initial ticket is €50,000 — €200,000. Apart from investments and acceleration programs, it also provides equity-free grants for idea stage startups.

• At the same time, the total export of Ukrainian IT services decreased by 10.8%
• compared to the corresponding period last year. Negative trends are also observed in the IT sector, with negative indicators prevailing for the second month in a row.
• According to the NBU, compared to September, the export turnover of IT services decreased by 7.4% in October. This means that the industry received $43 million less ($535 million).
• Compared to last year, in October the turnover was 16% lower than during the same period in 2021.
• Meanwhile, due to a certain reduction in other export services, IT services still make up a significant part of the export structure — 43.8%. This is 5.7% more than last year.

“When we were working on our IT Research Resilience study, we predicted
different scenarios for the export revenue of the IT industry: from an optimistic $8.5 billion to a pessimistic $7.2-7.5 billion. Following the current dynamics, we see that, unfortunately, we are moving towards $7.1 billion. By the end of the year, we will continue to see a decline in the export of IT services, in particular, due to Russia’s strikes on the critical infrastructure of Ukraine and problems with energy supply,”

says Stepan Veselovskyi, CEO, Lviv IT Cluster.

Why is it important?

Compared to last year, the export of IT services still increased. However, due to full-scale war, strikes on critical infrastructure, and blackouts, even IT services, which had continued to grow until the last moment, began to give ground.

It is partly caused by the unwillingness of some clients to work with an unstable country, where work deadlines often depend on Russian shelling and sudden blackouts. However, Ukrainian companies are already working on creating virtually autonomous offices to ensure the possibility of normal work, as well as creating a map of places with light and Internet for individual specialists.

The survey, The country at war: The voice of Ukrainian Start-ups, is aimed at understanding the impact of the Russian invasion on the startup scene in Ukraine and at defining the most suitable tools to support Ukrainian startups.

AIN.Capital picked the most important findings from the survey. You can find the full report here.

Key findings

• Despite the ongoing war, Ukrainian startups have demonstrated resilience and entrepreneurs continue to operate their businesses, remaining committed to their success even in these dire circumstances.
• Some Ukrainian startups have relocated but the vast majority have kept at least a part of their operations or teams in Ukraine. Also, those startups that have not relocated are not planning on doing so at the moment. And more than half continue to operate exclusively from Ukraine.
• More than one in ten startup employees has had to leave their respective firms since the beginning of Russia’s invasion. Not all startups, however, have experienced team reduction. More than four in ten startups have not felt any change.
• Nine out of ten startups confirm they need financial support to continue operations and/or expand. But there is a small percentage saying they do not require any assistance.
• Whether they need financial support or not, more than half of the startups surveyed say they expect to expand their operations in the short-term. Every fourth startup says it will maintain the status quo. Only four percent of startups believe their operations might be reduced.

• Ukraine remains the key market for 60 percent of the country’s startups, followed by the European market (EU and EEA; 46.4 percent) and North America (United States 34.3 percent, Canada (9.3 percent). Every fifth Ukrainian startup considers the global market as their main target.

Finances

• The financial state of Ukrainian startups is considered to be unstable, with almost half having a run rate of one to three months. It is worth mentioning that 1.7 percent of all startups say that they cannot continue their activities in the current circumstances – even looking just one month forward.
• The difference between teams which relocated and those that didn’t can be clearly seen, when the startups try to forecast their financial stability more than a year from now. 13 percent of relocated teams say that they will manage going forward, while for non-relocated startups that figure reaches just 3.2 percent.
• Therefore, it’s no surprise that nine out of 10 startups indicate that they require financial support. However, only one in five say that they have already received support. Just 1.4 percent of respondents stated that they did not need any support to continue their operations.

How to save Ukrainian startups

Despite the adverse conditions created by the war, alike the whole of Ukraine, the country’s tech sector is showing remarkable resilience. The tech sector in Ukraine is now one of the driving forces of the sustainable Ukrainian economy, and will be one of the main pillars of post-war economic recovery and growth. As for now, the livelihoods of 300,000 people depend on the tech sector staying afloat.

A quarter of respondents indicated that they have got new contacts to help retain and grow their business during the war, while 35.7 percent are searching for new contacts in the respondent field. Similarly, 15.8 percent of startups indicated that they received support from value chain partners (“partnerships”; mainly in the form of non-financial support in product improvement, development or distribution). Almost half of startups are still looking for such partnerships.

One of the untraditional ways in which respondents received support is participation in events (conferences and pitch days, accelerator summits). Meanwhile, 3.6 percent of respondents stated that they require help with human resource management to continue their operations, while some teams are waiting for their colleagues to return to work after the end of military service or volunteering.

Overall, Ukrainian startups have demonstrated strong resilience during wartime: a recent Forbes survey suggests that less than four percent of more than 250 startups — 19 in the portfolios of the most active VC players — have significantly reduced turnover. The 10 largest venture capital firms reported that among 245 startups in their portfolios, none have so far terminated their operations.

To understand the full picture of the future of technologies for the next few years, Inna Soloviova, CEO & Founder of Integrity Vision IT company, has analyzed different sources — reports, articles, podcasts, and interviews of famous international analytical centers. World experts from Gartner, Deloitte, Forrester, Boston Consulting Group, and Statista came to the same conclusion regarding the six main technological trends. As for the Ukrainian scenario, some of these trends will be particularly relevant due to the challenges that the war has brought us.

The main technological trends that global analysts predict

1. Automation

(Expert forecasts from Gartner, Forrester, Boston Consulting Group, McKinsey & Company, and Deloitte)

Gartner analysts say that companies will automate as much as possible of their business and IT processes and train employees in new technologies. A new business approach will appear — automation fabric. It will allow to simplify the management of automated processes, build the work of hybrid teams with people and mechanisms based on artificial intelligence, and increase the efficiency of this cooperation. Forrester researchers say that the changes this technology will bring to the companies will cause their accelerated development.

Deloitte calls automation “the key to business improvement.” It saves human resources and gives the chance to concentrate on more important tasks. Thanks to it, businesses can increase their efficiency and improve customer service. Boston Consulting Group analysts emphasize that IT service companies searching for a “growth engine” should look closely at the combination of robotic process automation, cybersecurity, and cloud solutions.

2. Innovative cloud technologies

(Expert forecasts from Gartner, Forrester, Boston Consulting Group, McKinsey & Company)

Cloud platforms allow you to create new and flexible application architectures and use modern programming languages. Cloud technologies make it possible to implement innovations faster, quickly make changes in the conditions of distributed teams and significantly reduce costs for the purchase of physical equipment. Gartner analysts predict that by 2025 cloud platforms will be the basis for more than 95% of new digital products.

3. Artificial Intelligence

(Expert forecasts from Gartner, Forrester, Boston Consulting Group, McKinsey & Company)

Companies are constantly working to improve the future for their employees, customers, and the products and services they create. So artificial intelligence is predicted to have a central place in this future. According to Forrester expert, one in five organizations will double their investments in artificial intelligence, and machine learning (ML) will be used in many new industries.

4. Cybersecurity

(Expert forecasts from Gartner, Statista, Boston Consulting Group, Deloitte)

Corporate cybersecurity services will be more loaded by cyberattacks that are difficult to detect because the methods of cybercriminals become increasingly sophisticated. Statista researchers say that to combat modern cyberattacks, companies need to increase investment in AI-based cyber systems.

Deloitte also emphasizes that the combination of cybersecurity and artificial intelligence will allow it more quickly to respond and predict cyberattacks. Companies that have already implemented such technologies say that it’s the artificial intelligence in the system that has helped to reduce resource consumption for identifying threats and fighting them.

Also, a new approach to the protection of information data will become popular. It is a cybersecurity mesh — an architecture that combines the forces of all the company’s security services to strengthen overall protection. Gartner says that the Cybersecurity mesh will be able to protect the necessary assets, quickly and reliably check identification data, compliance with policies in the cloud and non-cloud environments. By 2024, companies that implement network cybersecurity will be able to reduce their financial losses from threats by up to 90%.

5. Metaverse

(Expert forecasts from Statista, Boston Consulting Group, McKinsey & Company)

BCG experts advise technology companies to decide whether to enter the metaverse market in the near future and tell them exactly how to do it. According to some estimates, by 2030 the value of the metaverse ecosystem will reach $1 trillion. “It is too early to say which technologies and platforms will dominate. But it’s not too early for tech companies to join the metaverse ecosystem. This is an opportunity for them to participate in the formation of future standards,” says the BCG expert.

6. Quantum technologies

(Expert forecasts from Harvard Business Review, McKinsey & Company, Deloitte experts)

In the next ten years, quantum technologies will change the way of computing, sensor systems, and communications — say the researchers of Deloitte. These technologies will probably dominate the digital landscape after a decade or more.

What technologies will be relevant in Ukraine?

With the beginning of a full-scale war, many companies faced lots of problems — a change of location, problems with logistics, a lack of resources and specialists, more cyberattacks, loss of important corporate data, and unstable operation of the IT infrastructure. All this only emphasized the relevance and perspective of some global trends in the Ukrainian market.

• Automation of business processes

Many companies lost a significant number of their employees: some of them went to fight on the front lines, some – left the country, and some employees were fired because of the impossibility to pay salaries. Those companies that set up automation before the war managed to better withstand the hard times and quickly reconfigure processes in new conditions.

Fine-tuned processes, their optimization, and automation, monitoring of execution, and control of efficiency — it is very important for a business that works in war conditions to maintain management and optimize its costs. Moreover, companies that have such systems now will be able to scale and grow much faster during the reedifying of Ukraine. First, the pandemic, and now the war in our country showed how important automation tools are because they provide significant flexibility and manageability of business. Therefore, investments in such technologies will increase and quickly pay off.

• Cybersecurity

In addition to missile and artillery attacks, the Russians are also fighting against Ukraine in the IT environment. During the war, the number of cyberattacks tripled — Russian hackers are trying to gain access to the corporate and personal data of Ukrainians and damage the infrastructure of state and private enterprises. Any organization or business is at risk, not only large companies. Most often, hackers attack government institutions, banks, financial organizations, online stores, IT companies, and factories. Businesses must be ready to face these challenges and ensure maximum protection of data from enemy attacks.

• Cloud technologies

Due to war, many companies and institutions faced a sea of problems related to the performance of the IT infrastructure: physical destruction, problems with the electricity, and the inability to access data centers. Most organizations evacuated their data centers to safer places in the west of the country or abroad. New realities forced many to decide on partial or full transfer of data to cloud environments. Because the cloud makes it possible to save all data and business processes, and continue the stable operation of the company even during the war. We can confidently say data migration services and deployment of backups in cloud environments will be relevant in Ukraine in the coming years, as well as the development of a backup alternative platform based on cloud infrastructure.

The trends of the Ukrainian market are quite difficult to predict because our country lives in war. But the implementation of these technologies will definitely help to increase business resilience and reduce the negative impact of unpredictable scenarios.

The challenges brought by the war forced Ukrainian companies to build strong armor in the form of a competitive advantage on the global market. No one European business has hardened itself the way our companies are doing now. And this stability is already appreciated by the global industry. Despite the war, Western partners cooperate with Ukrainian businesses and are ready to invest in it.

Written by Inna Soloviova, CEO & Founder of Integrity Vision IT company

The Warsaw-based matchmaking platform for startups and investors, Vestbee, has prepared the CEE startups funding report for Q1 of 2022. AIN.Capital shares key points.

• During the first quarter of 2022, a total of 233 funding rounds were closed (only 170 are fully disclosed in terms of amount, month, participating investors, and company details):
  • In January, the startups collectively reached more than €1 billion in funding over 63 rounds,
  • €350 million over 62 rounds in February,
  • €250 million over 43 rounds in March.
• The total amount of financing raised in Q1 2022 reached €1.6 billion. It is €0.6 billion more than in Q4 of 2021.

• Among the countries to have received the majority of funding are:
  • Poland — closed 98 rounds with a total of €250 million in funding,
  • Estonia — closed 36 rounds with €920 million,
  • Romania — closed 16 rounds with €160 million.
• Despite the war, Ukrainian entrepreneurs have managed to rank fourth with 13 financing rounds closed in Q1 2022.
• The biggest investment rounds belong to:
  • €628M in Series F raised by Bolt, an Estonian transportation and food delivery service.
  • €120M in Series D closed by ICEYE, a Finnish spacetech developing and operating radar imaging satellites.
  • €110M in Series D secured by ProductBoard, a Czech product management system.
  • €89M in Series B raised by Payhawk, a Bulgarian financial company.
  • €89M in Series C secured by Veriff, an Estonian online identity verification company.
• Among the most active investors were Startup Wise Guys, Early Game Ventures, Karma Ventures, Presto Ventures, and Specialist VC (United Angels VC). Followed by Credo Ventures, Vitosha Venture Partners, Inovo Venture Partners, Accel, and Earlybird Venture Capital.
• During Q1 2022, the most appreciated industries were: e-commerce, FinTech, Data & Analytics, AI, SaaS, Advertising, and Big Data. The previous leader — Healthcare fell out of the top priorities this year.

More about the Baltic startup scene performance in the first four months of 2022 you can read in a report AIN.Capital published earlier:

• Most of the data for the report has been collected before the war. But the study also includes a few slides about how the war affected this market.
• The volume of deals in the VC and PE (private equity) markets in 2021 exceeded $832 million, which is more than 45% year-over-year growth.

According to the report, three companies with Ukrainian roots raised 58% of 2021 funding:

• Early-stage deals (Seed and Series A) exceeded $240 million a year.
• There was also significant activity in the M&A segment during the year: more than 28 exits from product and service IT companies.
• The study also noted that more and more Ukrainian businesses became unicorns: Grammarly, People.ai, GitHub, Bitfury.
• The most active investors in the Ukrainian market were the following funds:

• The report also mentioned the significant development of the Ukrainian aerospace industry and military technologies.

You can also see editions of Dealbooks for previous years:

According to the Meta report, there has been a surge of attempts to hack the accounts by Ghostwriter, a hacker group funded by the Belarusian government.

Meta also noted Ghostwriter activity in February 2022. After that, the company stated that the group had tried to hack “dozens” more accounts, although it “had only been successful in a handful of cases.” If successful, the hackers had been able to publish fake videos, further sharing of which had been blocked by Meta.

“Since our last public update [dated February 27], this group has attempted to hack into the Facebook accounts of dozens of Ukrainian military personnel. In a handful of cases, they posted videos calling on the Army to surrender as if these posts were coming from the legitimate account owners. We blocked these videos from being shared,” Meta says.

The spreading of false surrender announcements has already been a tactic of hackers who took over television networks in Ukraine and published false messages about Ukraine’s surrender into the chyrons of live broadcast news. Although such statements can be quickly disproved, experts suggest that their purpose is to undermine Ukrainians’ trust in media.

Besides hacking the military personnel, Meta’s latest report describes other threats. Thus, the company tells that a group linked to the Belarusian KGB tried to organize a protest against the Polish government in Warsaw. The event and the account that created it were removed.

“Since the start of the Russian invasion of Ukraine, our teams have been on high alert to detect and disrupt threats and platform abuse, including attempts to come back by networks we removed before,” representatives of Meta say.

Read more details about the hackers’ activity of Russia and Belarus against Ukraine full Meta’s Adversarial Threat Report.

The pharmaceutical business has chosen a different strategy. Large companies, one by one, started announcing that they would leave the Russian market, but with one condition in place: they are to continue supplying essential medicines to the market, because civilian people need them. 

A study of their activities showed that the statements of pharmaceutical companies do not correspond to reality – they continue to sell everything they can on the Russian market – their entire range of products. After all, no one will check which medicines are publicly available, and without which “ordinary people” will not survive.

But we did. We checked.

The material below is the result of work of the large number of specialists in the pharmaceutical industry, which was initiated by Taras Potichnyi, VP of Expansion at Liki24. A group of pharmacists and doctors have figured out which medicines, produced by international companies, continue to be sold on the territory of Russian Federation. AIN.Capital is publishing the results of the research and explains how the giant international pharmaceutical business continues to work on the Russian market through pure deception, successfully avoiding major reputational losses.

30 Seconds Summary

• The pharmaceutical business, under the social pressure and fear of sanctions, has made a statement that it’s leaving the russian market. But at the same time, it will continue distributing “vital medicines that have no substitutes.”
• The list of essential medicines is determined by the WHO. Not every single company separately.
• A large study of russian pharma market has shown that about 90% of drugs on the market are either not irreplaceable, or being produced at local factories. For example, Bayer continues to sell “Aspirin”, although the Russian Federation has its own local manufacturer – Dalchimpharm and its drug “Acetylsalicylic acid”. The drugs are based on a same active substance – acetylsalicylic acid.
• International companies continue to cling to the Russian Federation for financial reasons – the size of its market is above $25 billion, with hundreds of millions of dollars invested in marketing and distribution on top of this. Leaving the Russian Federation even for a while means losing leading positions for many international players.

Who determines which medicines are vital?

Since 1977, every 2 years, the World Health Organization (WHO) has been publishing an exclusive list of essential medicines to meet the most important needs in the health system of all countries of the world.

There is such a list for 2021, this is its 22nd edition. You can get acquainted with it here.

The WHO is the most authoritative health organization worldwide. Its conclusions and provisions are considered to be a source of truth among scientists everywhere around the world. There is no reason not to trust them.

What about the Russian market?

About 2,800 active ingredients​​¹ and 20,000 medicinal products² are registered in the Russian Federation (for example, Ibuprom is made on the basis of the active ingredient called Ibuprofen). A significant part of them is not vital, the vast majority of the latter is produced on the territory of the Russian Federation, satisfying the needs of the local population. How was it defined?

The team of experts investigated the Russian market and did the analysis against the latest WHO regulations. As a result, the document ‘WHO essential meds production in russia’ was created, which analyzes in detail the capacities of the Russian Federation for the production of vital medicines compared to their import.

In short, there is a total of 6937 medicines defined, which contain 666 active ingredients, including those:

• produced and imported to the Russian Federation – 361 (54%);
• not produced or imported into the territory of the Russian Federation – 174 (26%);
• produced, but not imported into the Russian Federation – 44 (7%);
• imported, but not produced in the Russian Federation – 87 (13%).

What does it mean?

From the WHO List, only 13% of active ingredients are indispensable (not produced, but only imported) for the Russian Federation. Of all the registered active ingredients, this is about 3%.

Thus, the justification, being made by pharmaceutical companies for their actions to continue the supply of medicines to the territory of the Russian Federation to provide vital medicines, is not true.

Specific examples

Let’s take a look at a few specific examples of how large international companies are acting in a way that is inconsistent with their public statements.

1. Active ingredient – Loperamide.

Johnson & Johnson supplies a medicine called Imodium to the Russian market. And it does not stop supplying it, although the local market has its own manufacturer – FP Obolenskoye with the drug “Diara”

2. Active ingredient – Acetylsalicylic acid.

Bayer has been investing in the world-famous Aspirin brand for many years and continues to supply it to the Russian market. At the same time, the local market has its own manufacturer – Dalchimpharm and its drug “Acetylsalicylic acid”.

3. Active ingredient – Paracetamol.

The British company GSK (which was recently planned to be acquired by Pfizer for $68 billion) supplies Panadol GSK to the Russian market. It is not unique – the local manufacturer Velfarm makes its own medicine with the simple name “Paracetamol Velpharm”.

As you can see, American and European companies continue to supply the Russian market with drugs that are not unique or vitally needed. Almost all medicines have substitutes.

Why is this happening?

For decades, Pfizer, Bayer, GSK, and others have invested tens of millions of dollars in advertising and promoting their products. The companies were doing their best to ensure that the local Russian buyer would spend his money on their medicines instead of the local analogues. And the efforts are being rewarded. For example, Pfizer’s revenue from the Russian market makes 0.5% of the global one. In 2021, Pfizer’s global revenue amounted to $82 billion, which means $410 million came from the Russian Federation. Huge number, yet not the highest one. In March 2021, the German company Bayer earned 4.7 billion rubles or about $70 million on the Russian market. It is not surprising that Germany is so slow with saying goodbye to the Russian market.

We managed to identify the volume of the Russian pharmaceutical market for 2020. Its volume is 2 trillion rubles, or $28 billion according to the exchange rate of 2021, when the study was compiled. European and American companies earning billions there are reluctant to leave the market, especially after many years of huge investments in business and marketing.

That is why they are ready to turn a blind eye to everything that the Russian army does in Ukraine in exchange for income from the Russian market.

How was the study conducted?

The basis comes from the 22nd WHO Indicative List of Essential Medicines 2021 (List) (columns A, B, C in the Document). Link to the List: https://www.who.int/publications/i/item/WHO-MHP-HPS-EML-2021.02

• The document is structured by groups and subgroups of medicines
• The document also takes into account the medicines provided for in the List, which are therapeutic alternatives⁴ of the main ones⁵*
• Specific, regional and some other subgroups have been removed from the list:

** Medicines and vaccines for the treatment and prevention of tropical diseases (e.g. malaria)

**Certain blood products (platelets, red blood cells, whole blood)

**Chlorine disinfectants

**Mineral solutions for rehydration

**Solutions for peritoneal dialysis

**Some multivitamins

• Additionally, duplicate names of medicines from those categories where they appear repeatedly in the List, have been removed.
• Columns D and E have been supplemented with data according to the State Register of Medicines of Russia as of 03/28/22, namely:

**the total number of medicinal products registered in the Russian Federation with the corresponding active ingredient (column E)
** the total number of medicinal products registered in the Russian Federation with the corresponding active ingredient and manufactured in Russia (column D), except for cases when the drug only passes final quality control in Russia or is only packaged in Russia.

*In upcoming versions, medicinal products in the Document will be divided into essential and those belonging to their therapeutic alternative. Such a distribution will make it possible to show that an even smaller number of medicines are indispensable for Russia.

(1) Active ingredient (active pharmaceutical ingredient) – any substance or mixture of substances used in the manufacture of a medicinal product and exerting a therapeutic effect. Each active ingredient has a unique name that is recommended and approved by WHO – an international non-proprietary name (for example, dexamethasone, azithromycin, bisoprolol, etc.)

(2) Medicinal product (drugs, drugs, medicaments) – an active substance or a mixture of substances in a form convenient for use (tablets, ointments, injection solutions, etc.) used for the prevention, diagnosis and treatment of diseases (for example, panadol , citramon, aspirin). Each drug containing the same active ingredient has its own unique trade name for each specific manufacturer (for example, diclofenac sodium – diclak, voltaren, dicloberl, etc.)

(3) Essential drugs – see main drugs

(4) Therapeutic alternative to essential drugs – medicines from different manufacturers that have a therapeutic effect and safety profile similar to the main drugs and are interchangeable with each other and with the main drugs

(5) Essential drugs are life-saving drugs that should meet the needs of the majority of the population for the prevention, diagnosis and treatment of the most common infectious, chronic and surgical diseases.

Study: There were polled 803 visitors to AIN.UA. They answered closed-ended questions online and showed their positions in the open-ended ones. Following are the results of the survey.

• According to the results, 69.7% of the respondents stay in Ukraine and don’t plan to leave.
• Only 22.3% of them left Ukraine after the start of the full-fledged war. However, only 8% of the respondents planned to relocate.

• For 61.5%, the decision to move is directly connected with military activity. At the same time, 30% of participants wanted to leave earlier, and the war only supported their decisions.
• 8.5% of those who left were relocated with the help of their employers. It’s worth mentioning that some Ukrainian companies ensured the relocation of their employees with families to European countries.

• During the martial law and general mobilization in Ukraine, there are restrictions for men from 18 to 60 years old to leave the country. According to our poll, 58% of the participants would stay in Ukraine if they could. Only 42% of male respondents want to leave.

• Among the most popular countries for relocation are Poland (18.1%), Germany (11.9%), Spain (11.6%), and others (39.9%).
• The least popular countries are Moldova, Slovakia, Estonia, Romania, and Bulgaria.

• 59.8% of respondents said they would return to Ukraine after the war.
• 26.6% could not give an exact answer.
• 13.6% decided to stay abroad forever.

Some of them shared their stories with us:

“I left during the first hours after the war started, together with my family. At that moment, men might leave the country. I am going to go back to help rebuild our country.”

“We planned our journey because of my employment at a foreign company. But the war happened a few days before we completed all the paperwork needed to leave, so we missed our chance to go through before the borders were closed. So now we must wait. But the worst thing is that I can lose my job because there is no remote work option. I think it is a kind of discrimination to forbid only men to leave the country. I am the only person in our family who generates income, not de jure but de facto. After the end of this war, I want to leave forever because I always wanted to move to a place where citizens and community values are at a higher level than here.”

“I believe that it is necessary to work out some conditions for men to leave and support the country economically. It could be mandatory monthly payments. But giving a choice to men on how they can defend their country is the right thing to do.”

“I have not left although I wanted it. My employer offered me to go to Poland, but we couldn’t leave after the border was closed for men. So we moved from Kharkiv to Chernivtsi. After the end of the war, I don’t want to leave if I will survive. However, if there will be a good job opportunity, I could try.”

I have a document that gives me the right to leave the country right now. Besides, I have a place to go. But I’m staying here because it is my country.

“I am an IT entrepreneur, a co-founder of a startup. At the beginning of the war, we left Kyiv for Lviv, stopped working on the startup, and focused on developing a shelter for refugees. But right after the end of the war and the opening of the borders, we will migrate to the United States or Canada because we realize that it will be very difficult or even impossible to attract investments to Ukraine in the next year. And we only have one chance before we run out of money. By the way, I am from Donetsk, and in 2014, I was forced to migrate to Kyiv.”

The list below includes only export-oriented companies or so-called outsourcers. We didn’t consider product companies in purpose, although it is a large industry at the moment. AIN.Capital also didn’t include big Ukrainian R&D offices of international product companies in the rankings even though this part of the IT industry grew up as well. For example, EVOPlay would belong to TOP 5 if we unified the rankings: it already hired more specialists than Ciklum — over 3,500 people.

For this rankings, AIN.Capital surveyed the largest companies to get actual figures for 2021. Then, we compared it with the rankings of DOU for winter 2021. We considered only local companies, excluding offices of international companies. That’s why, for instance, SoftServe, with total personnel of over 12,500 people, has a 1,000 less number on the list. The only company that refused to give figures was Grid Dynamics. In the first half of 2021, they reported about 1,000 workers, but according to the summer DOU rankings, this number is 1,249 specialists. There was no news about discharges at Grid Dynamics, so we used precisely that number in our study.

The list confirms that the hierarchy of Ukrainian outsourcing companies hasn’t changed — EPAM, SoftServe, GlobalLogic, Luxoft, and Ciklum. Only SoftServe is 100% Ukrainian; the rest are international or subsidiaries of big holdings. However, you can freely buy shares of EPAM, GlobalLogic (Hitachi), and Luxoft (DXC Technology) on stock exchanges and become their stakeholders. If we were making a general list, 5th place would be taken by EVOPlay with its 3,500+ employees in Ukraine: it has grown by 1,404 persons over the year.

To imagine this growth, you may simply compare the following: TOP 5 companies had in winter 2020 about 27,000 specialists altogether. Today the TOP 2 companies have the same number of employees, and five leaders grew to 40,000. It means 50% growth.

Most importantly, all companies plan to continue to grow. That means they have thousands of open positions right now. For example, SoftServe states that it plans to grow by another 4,000 people in Ukraine and globally in 2022. NIX plans to hire 2,000 people in a year. Currently, there are over a thousand job openings at EPAM, SoftServe, and GlobalLogic.

An important thing here is that Ukrainian companies have started their expansion in new regions. In 2021, the Ukraine-largest outsourcer — EPAM — announced opening a branch in Odesa and offices in Kherson and Khmelnytsky. Four new locations have been reported by SoftServe. Intellias also planned to open an office in Dnipro, its 6th R&D office in Ukraine.

Along with new locations, companies are making plans to increase the number of employees. If some representatives of Ukrainian IT announce their intentions to attract hundreds of additional specialists, then the top 5 largest companies talk about thousands of new team members. In 2022, most of them plan to continue their strategy of entering new regions of Ukraine.

The IT industry in Ukraine enjoys dynamic growth, and the pandemic just accelerated this process. According to the IT Ukraine study, the export revenue for 2021 was $6.8 billion, compared to $5 billion in the previous year, and nobody forecast growth of over 20%. And it continues: IT businesses hire more specialists, get more clients, and attract them to Ukraine. For example, the French fintech Qonto creates a team in Ukraine supported by local WeSoftYou.

The biggest obstacle here is, without doubt, the politics of our Eastern neighbor country. The escalation of the situation with Russia leads to planning for the case of war instead of strategic development planning. Even a small potential risk of that results in changed decisions of customers that tend to outsource their projects in other countries than in Ukraine.

But things like the overheated market and different legal initiatives from the government are much less critical and easier to solve for the industry.

You can find professionals to expand your teams by posting job openings on Recruitika. It’s easy and absolutely free. Or look for new employees in the Candidates section, where new resumes are posted daily.

How the structure of the tech industry has changed

• Since 2015, the number of companies in Lviv has constantly been growing — over the past six years, their number increased by 328. Today 511 IT companies are operating in Lviv.
• About half of them employ more than 250 employees.
• During the last six years, the number of IT professionals has grown from 13,000 to 30,000.
• The average age of Lviv’s IT specialists is about 29 years.
• The share of technical specialists is 76%, non-technical — 24%.
• Among respondents, 92% are from Lviv, and 48% have moved from other regions or countries.
• In the past six years, the median monthly salary of tech professionals in Lviv has increased from $1,500 to $2,102. About 80% of respondents said their income is now higher compared to 2020.

The main economic indicators

• The survey results show that the share of the IT industry in Lviv’s gross domestic product (GRP) was 20% over the last six years.
• The IT industry turnover is growing every year: from $280 million in 2015 to $895 million in 2020.
• The overall economic impact has doubled in the last five years, from $734 million in 2015 to $1.4 billion in 2020.
• The IT industry has created 73,000 jobs, and each IT professional generates about three more jobs.
• The total tax revenue from the IT industry in Lviv from 2015 to 2020 was over 2 billion UAH.
• The single tax revenue from the IT industry represented 38% of the total Lviv tax revenue in 2020.

How COVID-19 affects Lviv’s IT industry

• Among the respondents, 63% of companies are positive about engaging new employees and customers in 2020.
• The survey shows the following attitude towards vaccination: 76% of the surveyed have a positive attitude toward COVID-19 vaccination, only 5% — against the vaccination, and 67% of respondents have been fully vaccinated. The most popular vaccine among the respondents is CoronaVac (33%), in second place is Covishield / AstraZeneca (26%), and third is Pfizer (23%).
• Forty-seven percent of those surveyed had been exposed to COVID-19.
• Thirty-seven percent of the respondents plan to return to work completely from the office.

There are 70 companies in Ivano-Frankivsk that employ over 2,600 people

• Half of Ivano-Frankivsk’s tech professionals work for companies that have offices in Lviv.
• The median salary in Ivano-Frankivsk is $1,339.
• Twenty-eight percent of specialists are young people who have been working in the industry for about a year.
• A quarter of the respondents have been working in the IT industry for 1-3 years.
• And another quarter have been working for 3-6 years.

Why do we need this? Such studies help businesses to know the labor market better. The salary surveys allow specialists at both sides of the recruiting process to evaluate their expectations more fairly, without cognitive distortions.

How was the study conducted? The editors of AIN.UA conducted an anonymous survey. There were over 4,000 participants. By analyzing their results, we calculated salary medians of those interviewed and classified them into four categories:

1. Business: CEO · COO · GM/Admin director · Product Manager · Project Manager · Product Owner · Scrum Master · Producer · Marketing Manager · Affiliate · SEO · ASO · PPC · PR · SMM · Sales Manager · Business Developer · Analyst · Data Analyst · Business Analyst · Data Science · Researcher · Support/Call center;
2. Development: Software Engineer · DevOps/Unix Admin · QA Engineer · UI/UX Designer · Cyber Security · DBA · Sys.Admin;
3. Content: Writer · 2D/3D Artist · Graphic designer · Sound designer · Video designer;
4. Special & Administration: HR · Recruiter · Finance Manager/Accountant · Lawyer · M&A specialist · Scout · Fundraiser.

After getting and analyzing the answers, we created detailed infographics about how the rate depends on the expertise, knowledge, and carrier for each position mentioned in the survey. The calculation includes the fixed part of salary in USD after taxes.

Portrait of respondents

The Fall 2021 Salary Survey had 4,176 specialists participating. Most of them are men (78.1%). Out of those, 41.6% work in the field of Software Engineering. As in the previous year, the most popular industry among women is marketing (21% of female participants). The median participant age is 31 years.

Salary medians

Business

Product Owners, Game Designers, and Data Scientists have the highest median salary among Senior-level business professionals. According to the survey, it is $4,000 what is much higher than last year. The most vital start position is a Business Analyst with the $1,100 median salary at the Junior–level position.

The median salary of a Junior Marketing Manager increased to $800. SMM managers earn significantly less than other marketing positions at all three seniority levels. The numbers also confirmed that Junior and Middle SEO and PPC specialists who have had almost similar incomes are still equal. But on average, Senior SEO professionals earn 25% more in all cities of Ukraine. In Kyiv, the median of Senior-level SEO and PPC is the same.

The highest salary in the marketing field — $5,600 — belongs to the Marketing Manager. And the highest income named by SEO is $5,000.

The salary median of Junior Sales Managers has increased a bit compared to the previous report: from $567 to $600. But the Senior-level median has not changed — $1,500, although the maximum Sales Manager salary mentioned was $5,000. It is worth remembering that most sales managers have a fixed rate included in the calculations. But they also get bonuses and premiums more often, and we will recur to it further.

Check out job openings for Product / Project manager, Producer, Marketing Manager, SEO, Affiliate, PPC, PR, Analyst, Sales / BizDev, Support / Call Center

The median pay of Support/Call center workers is the same — $800. However, those who use English earn almost double as much as Ukrainian or Russian-speaking employees. Even more, the salary median of English-speaking professionals grew by one-third, and now it is equal to $1,600.

C-level

The highest salary among C-level specialiis much more common at large is much more common at large, successful companies). The GM median income is $6,300. While CEOs (at very young startups and big corporations), it is $4,750. The CTO’s median is a bit higher — $5,000. By the way, the medians of GM, CEO, CMO, and CPO have remarkably increased, and the CTO median has not changed.

For example, the median salary of the CMO is $2,800. It is less than the medians of the CPO ($3,500) and COO ($3,700). In total, the R&D companies have the highest C-level median ($8,000) and retailers the lowest — $1,000. It can be explained by an increased number of small businesses in retail. This time, the median of C-level respondents from product and outsourcing companies is $5,000.

There were only 16% women among the C-level participants. Their median income is $3,100 or 38% less than by men.

In addition, 29% of interviewed CEO/COO/GM/Admin directors worked in product businesses. One-fourth of the survey participants were developers, 13% and 10% worked in Marketing and Sales correspondingly before they got to C-level.

Check out the job openings for CTO / Architect, CEO / COO / CMO / CPO / CIO and the collection ?C-Level

Special & Administration

The salary medians of Junior HR and Recruiters decreased to $550, but in the case of Senior-level, it increased from $1,500 to $2,175. The medians for all Senior-levels (HR, HR Generalist, Recruiter) are similar: between $2,000 and $2,250. Product companies offer higher salaries for recruiters and HRs than outsourcing businesses.

Big-sized companies also pay HRs and recruiters more than small enterprises. For example, the salary median in companies with 1,500+ employees is $1,400, and it is two times more than in the case of companies with 21-50 people. Most of the Junior Recruiters who participated in the survey are from small companies, while Junior Recruiters who work for large businesses comprised only 10%.

Check out the vacancies for HR / Recruiter, Legal, Accountant

Financial and account managers have medians at the Junior and Middle levels increased to $678 and $1,000 correspondingly. However, the Senior-level median has not significantly increased compared to the last year. The work with international financial issues gives much more than the business only in the Ukrainian market: $2,200 and $635.

The lawyers have a similar situation. Those who work with both Ukrainian and international legal issues earn more ($2,600) than the local Ukrainian specialists ($1,200). In general, there is a positive trend concerning the lawyer salary medians, especially in the case of Junior Lawyers — $700 (instead of $350 in the last year).

The median of Senior M&A and Fundraising went down to $2,300, and for Middle increased to $1,484. It is a fun fact that the maximum salary of all survey participants in that category was $7,000. This person participated in 40 due deals per year, while other specialists said they have participated in 6 due deals on average. In addition, two-thirds of respondents stated they get bonuses for their primary job. Another third has additional income from freelance and part jobs.

The Kyiv salary median of Special & Administration is 38% higher than the national salary median. However, the salary in Kharkiv is 10% higher than in Kyiv.

Content

In the Content field appeared a new leader: now Senior Video designer has the highest median — $2,650. The leader of the previous report, 2D/3D Artist, has lost not so much. The Senior-level median is $2,550. For Junior 2D/3D Artists, the salary median decreased by 40%, and now it is equal to $600. Junior Writers have the same median. But in the case of experienced Writers, it has grown to $1,250 at the Senior-level.

Based on the information collected during the survey, specialists with at least two years of experience can pretend to get Middle-level jobs. The average work experience of Middle-level specialists is four and a half years. To be promoted to the Senior-level, they need to work at least 3.5 years more.

Check out the job opportunities for Copywriter, Artist 2D / 3D, Designer UI / UX

Development

The most popular programming language is JavaScript; it is used by 24.4% of the interviewed professionals. The second popular is PHP (15.9%), and the third is Java (12.8%). Finally, C# got fourth place. JavaScript is also the most popular second language. TypeScript and SQL are following it.

Job openings for developers using JavaScript, C / C++, Java, Python, Ruby, Kotlin, Swift and frameworks Node.js, React Native, Angular, Vue.js, .NET, Laravel, Yii2

There is no secret that after summer 2021, the developer salaries have increased. According to the survey, the highest median is by Ruby Engineers — $4,225. Java, Python, and TypeScript Engineers also have high pay — the median is $4,000.

The highest median among Middle Developers belongs to Kotlin developers — $3,300. PHP and Unity languages demonstrate the lowest median for the Senior-level. The salaries of programmers who use Swift got lowered at all seniority levels compared to the last year.

Here are the medians for several languages depending on used libraries and frameworks:

• C# developers on .NET — $4,000, and Unity — $2,775.
• JavaScript programmers who work with Angular.js earn $3,200 on average, and in the case of React.js — $4,450.
• PHP on Laravel ($3,475) brings 30% less than PHP on Symfony ($5,000).
• Salaries of specialists with Python on Django and Python on Flask became merely equal — $4,750 и $4,250 respectively.

The survey confirmed that the programmer salaries do change depending on their roles. So the highest median for the Senior-level is by the Embedded developers – $4,500. The difference between seniority levels for Front-end and Back-end developers is low. The Full Stack developer median is a bit higher — $4,300 at the Senior-level. There is a big gap between the System Developer on the Team Lead position and other developers on that position. The Team Lead System Developer median is $5,700; the closest comparable median has Team Lead Mobile Developer — $5,050.

Job openings for Back-End, Front-End, Full-Stack developers

The gap in salaries between the Ukrainian cities is shortening. Now the Kyiv developers earn $4,000. The foreign programmers have the same median salaries. In Odesa, the median is about to achieve the Kyiv level — $3,900. You can see the medians over $3,000 in the half of Ukrainian cities: for example, Dnipro ($3,550), Ivano-Frankivsk ($3,400), Lviv ($3,760), Chernivtsi ($3,500), and Kyiv suburbs Boryspil and Brovary ($3,200).

In other regional capitals, the salary median is not lower than $2,000. According to our calculations, the weakest medians are Lutsk ($2,000), Kherson ($2,220), and Khmelnytskyi ($2,200).

There is a remarkable growth in QA salaries. So, the general median in that field is $2,240. Senior Automation QA — $4,000, Senior General QA — $2,950, and Manual QA — $3,000. We can confirm the observation that a QA who uses programming languages (with a median of $2,525) earns 30% more than testers without that kind of knowledge (with a median of $1,800).

One-fourth of the interviewed testers do QA Automation, and half of them do manual testing.The most popular language among QAs is Java (16.3%), and the second popular is JavaScript (13.7%). The share of QAs who don’t use any programming languages is 46.5%.

System Administrators earn less than their colleagues. E.g., a Senior System Administrator earns $1,400 on average. At the same time, the salary median of Senior DevOps is $4,000 what is comparable with the Senior Back-end programmer income.

Middle and Senior UI/UX Designers earn 15% more than 2D/3D Artists. Compared to the previous salary report, Senior UI/UX Designers got a raise of the same 15%.

Check out the openings for QA / QC, QA Automation, Manual QA

Freelancers

2% of the respondents said that they are full-time freelancers. To calculate salary medians by profession, we multiplied the hourly rate by the number of working hours per month and got medians.

Freelancers work 120 to 160 hours a month. The exact numbers were in the 2020 report. One hundred sixty hours was the most common answer.

In this category, most professionals work in the Software Development and Marketing fields. The salary median of the first is $2,250. In the Marketing field, it is $900. It’s fun to know that the most successful freelancers are UI/UX Designers ($2,700) who work 90 hours a month on average. On the other hand, Data Analysts make a bit less — $2,640. The SMM managers have the lowest median. By working 50 hours a month on average, freelancers earn $816 in social media.

Check out the jobs for freelancers in the Remote collection

Other observations

Bonuses and options

5% of the respondents confirmed they have options and shares. 46% of them have C-level jobs; 19% are Team leads. Another survey of AIN.UA says that the employees often get options from startups and starting from the first year of work. Although it is not a prevalent practice in Ukraine, most of the respondents choose options instead of bonuses.

Speaking of bonuses, they are traditional for Sales Managers and Fundraisers. The highest bonus median is by C-level specialists — $2,000, then sales managers $1,000, lawyers $800 (30% of them confirmed having bonuses), and fundraisers $750.

The extras are rare for developers and QAs, and the median is about $200-$300.

Salaries by English proficiency level

Compared to the previous survey, the English level has not grown. Although about 34% of the interviewed has the Upper-Intermediate English proficiency level, only 8% have fluent English.

According to the study, knowing English (at least at the Intermediate level) helps techies receive a higher salary. A Junior with English gets an additional $100-$150. The difference for a Middle developer is significantly higher: the Upper-Intermediate level ensures a double income compared to those with Elementary English.

For non-technical jobs, English is crucial for Juniors. If you are fluent in English, you can start with the median of $1,000, and if not, then only $450.

Now let’s compare the correlation between English knowledge and salary in different professions.

• On average, a Senior HR with Pre-Intermediate English earns $1,200 (like a less experienced Middle HR with Upper-Intermediate). The median for Senior HRs with Advanced or Fluent English is $2,850 and $3,000 respectively.
• Almost the same picture you can see in Marketing. Junior Marketing Manager with Pre-Intermediate can have $475 and with Upper-Intermediate $740.
• A Senior developer with fluent English can expect a median salary of $5,250. Without knowing the foreign language, even an experienced programmer cannot jump over $3,700.

Salaries by industry

29% of the respondents work in e-commerce. The second place belongs to FinTech. Last year, GameDev was in third place, and now it lost its position against HealthTech, Gambling & Betting, and DataTech industries.

After analyzing the answers, we could determine a tiny difference in the salary medians based on the industry that can feel only the Senior-level technical professions. For example, the Senior QA median in GameDev is $2,325. And in FinTech and e-commerce, it is $3,500. The Senior Software Developer median in e-commerce is $4,050. The same specialists who work in Game Development can get $4,875.

Salaries by education

The Ivan Franko National University of Lviv graduates get the highest salaries among technical professionals based on the received data. The Senior-level technical specialists (Software Engineer, QA, DevOps, UI/UX Designer, Cyber Security, DBA, SysAdmin) is $4,700. Speaking of non-technical jobs, the Igor Sikorsky Kyiv Polytechnic Institute graduates have the highest income ($3,000 at the Senior-level).

The best-paid Junior specialists have graduated from the Taras Shevchenko National University of Kyiv with a median of $1,100 for technical jobs. The leaders by non-technical salary medians among Juniors are graduates of Taras Shevchenko National University of Kyiv and V.N. Karazin Kharkiv National University.

The lack of higher education impacted only the Junior level of technical professions: the salary median is $600 (the lowest median among technicians). Such inequity disappears with higher seniority.

Check out job openings for graduates or people starting an IT career in the No Experience in IT and Junior Friendly collections

Salaries by company size

Our previous salary survey showed that the remuneration depends on the company’s size. In general, the bigger the company is, the higher the salary. Our new survey also partly confirmed that trend. So we can be sure by saying that the C-level salaries depend on the company’s size.

Check out vacancies at Ukrainian startups in the Startup collection

But we also can provide you with some exceptions. For example, the Junior QAs have similar incomes working for businesses of different sizes. The most common medians are $640-$665 and $875. But it is not growing with the company’s size; it’s chaotic and can go up and down. For Software Developers, the median grows to 501-800 employees. For more extensive personnel, it gets even lower a bit. A similar picture is usual for Junior Sales Managers: their rate grows to 201-500 employees, and then it noticeable falls.

Salaries by company type

Product and Outsource have almost identical salary medians for technical professions. But in the case of Senior-level non-technical positions, the Outsource wins. The highest median for technical occupations is in the R&D offices ($4,950), and the lowest is in tech departments of non-technology businesses ($1,800). The lowest median for Junior-level non-tech jobs is provided by retailers ($500).

It confirms the previous survey. Unfortunately, we must admit that non-technical specialists of specialized agencies have the minimum income. Therefore, although the salaries for Juniors have increased, the Seniors still have the lowest income compared to other company’s types — $1,500.

Check out the job openings of Ukrainian product companies in the Product collection

By conducting the extensive anonymous salary survey, the team of AIN.UA contributes to a more transparent labor market. Business representatives can now learn the compensations, and specialists can evaluate income by over ten criteria. Moreover, the study aims to determine a suggested salary for most of our openings on recruitika.com, where you can find over 7,000 technical and non-technical jobs.

According to Payoneer’s data, the average income of IT businesses from foreign clients rose by 29% for the year, the total enrollment — by 34%, the press service of Payoneer told AIN.UA.

By level of monthly income

• Kharkiv companies earned the most in January-June 2021 — their average monthly income was $1,570.
• Lviv came in second place with an average of $1,480 per month during the first half of 2021.
• The average income of IT companies in Odesa and Kyiv is almost the same, with a difference of 1% — $1,390 and $1,370 per month, respectively.
• At the bottom of the list of the largest Ukrainian cities is Dnipro. The average monthly income of IT business in this city is $1,340 — 2% less than in the capital.

Income growth for the year

At the same time, the highest growth of average income for the year is in Kyiv — 41% (from the first half of 2020 to the first half of 2021). Odesa is in second place, where local companies’ earnings grew by more than a third — by 36%. Kharkiv companies showed a 29% income growth. And Lviv and Dnipro close the top five cities — plus 21% and 20% respectively.

Over the two years of the pandemic, the IT industry in Kharkiv has grown by 29%, and its total sales in 2021 are expected to amount to $1.5 billion, ensuring a 53% growth compared to 2019.

Kharkiv vastly outnumbers the country’s other IT locations in terms of IT companies and IT specialists, second only to the capital. As far as the concentration of IT professionals is concerned, Kharkiv is just as strong as Kyiv.

Over 95% of IT industry sales are exports of IT solutions and IT products to the markets of the USA (78%), European Union countries (15%), and Israel.

Some of the major industries in which Kharkiv companies have been offering their IT services for the last two years include healthcare, e-commerce, education, insurance, and retail. Kharkiv IT companies are traditionally just as strong in developing services for media, entertainment, gaming, banking, fintech, telecom, logistics, and manufacturing industries.

In recent years, the IT industry has become a leader not only in terms of foreign exchange earnings but also in terms of the volume of taxes it generates.

Based on KPMG’s estimates, the volume of all taxes received by the country on account of the Kharkiv IT industry will reach almost 12 billion hryvnias in 2021, and this number will grow up to 16 billion by 2026, according to the baseline forecast. The event put an increased focus on the Diia City project and its implementation.

An average IT professional’s compensation in Kharkiv is an equivalent of $2,260.

Every IT specialist creates 3.5 workplaces. So, the powerful IT community in the Kharkiv region alone enables an additional 160,000 people to secure full-time jobs in different industries, from building residential and office spaces to providing domestic services to maintaining shops, schools, and kindergartens.

Currently, over 50% of the IT specialists are still working remotely, as lack of office spaces becomes a problem once again. The report data suggests that only 10% of category А and В office spaces are vacant, and by 2026, the IT industry might need an additional 200 thousand square meters of office space. 

The full report can be viewed by clicking here.

Research: AIN.UA readers anonymously answered closed- and open-ended questions. The poll involved 275 people. The results of the survey are below.

As the results of the poll show, the easing of quarantine restrictions caused by the coronavirus pandemic has resulted in the majority of employers in Ukraine returning employees to their offices.

• 32.7% of the respondents said that their employers have partially returned employees to the offices.
• 21.8% of the employers plan to do so. At the same time, 19.6% have completely switched to the office mode.
• 25.8% do not plan to return to the pre-quarantine format.

• Interestingly, 44.4% of the respondents are ready to give up part of their earnings to continue working from home.
• 28.3% of them would be ready to relinquish 5% of their income, and 18.3% of respondents would be willing to give up 10%.

• In addition to or instead of pay cuts, employees are ready to give up other benefits offered by their companies. For the sake of working from home, 59.2% of the respondents will sacrifice additional benefits (for example, health insurance, training courses, etc.)
• 5.3% would give up bonuses, 3.9% would give up days off, and 3.3% of the respondents would sacrifice vacation time.

Is remote working important to you and why?

“The workday is more efficient — there isn’t any hanging out with colleagues in the office that take up time, you can work longer and not worry about the time spent commuting. Also, I worry about my health.”

“The most suitable for me is the hybrid work model — working from home one or two days per week. I am ready to give up bonuses for such a format, but maybe I can do it because they are not available for me now.”

“It makes no sense to give up anything since I do the same amount of work, and my presence in the office does not affect productivity (even if it does, then negatively — productivity decreases due to distractions). The remote format works well — an employer gets an employee who is on time and does not depend on the situation on the roads; no need to organize the workplace, pay for electricity and Internet, no need to order water/tea, coffee, and snacks; When working from home, employees are less sick, since they interact less within the limited office space.”

“It gives more freedom, especially if you have a certain amount of work and can decide on your own when and at what time to do it.”

“Remote working is important because it saves time you usually spend getting to the office. In my case, it is 2.5 hours a day — 1.5 hours of which I can spend on work and an hour for personal needs. However, it is important to travel to the office at least once a week for team building.”

“I like to alternate between working from home and the office. Going to the office helps me stay in touch with my colleagues and learn about important company news. Remote working allows me to better focus on important tasks and get more done in a day than working in the office.”

At the same time, according to a survey conducted by the job search portal Jooble, 71.3% of employers are ready to consider the transition to a 4-day workweek as an experiment.

Attitudes of employers toward the shortened week

According to Jooble’s survey that involved 345 Ukrainian employers and was conducted between June 8 and July 8, 2021, the majority of respondents, namely 52.5%, believe it is realistic to introduce a 4-day workweek in Ukraine, while 47.5% do not agree with this idea.

However, many employers, 71.3%, would be willing to consider moving to a 4-day workweek at their company as an experiment. It’s about restructuring internal processes so that the product or service the business provides remains available to customers without change.

When asked about experimenting with schedule changes, 28.5% stated they are not willing to experiment with them. Among the key reasons for that are: this work format is not suitable for a company’s operations, it might reduce company revenues, it could slow down various processes within the company, or it might reduce control over employees’ work.

Prospects for companies and attitudes toward changing salaries

Among the possible prospects for companies to move to a 4-day workweek, most respondents, 72%, said it would give more freedom for employees to deal with personal issues. Furthermore, employers noted that it would help reduce companies’ office costs.

Eighty-seven point eight percent of employers surveyed by Jooble said they are ready to keep their employees’ salaries unchanged after reducing working hours, and 12.2% believe that it is logical to reduce them.

Salaries

The income range for business managers is as follows:

Hired CEOs have the highest salaries, starting from $4,200, with a median salary of $7,000. Founders who act as CEOs have the same figures. Country Managers and General Managers have the highest median salary ($7,875).

Age and gender ratio

Twelve female CEOs participated in the survey. Their median income is 40% lower than that of men.

The majority of the survey participants are between 30 and 39 years old. CEOs who are over 35 years old make 60% higher income on the median than their colleagues who are 30 to 34 years old.

The majority of respondents (62%) work in Ukrainian product companies. 18% and 14% of the respondents work as outsourcers and outsuffers at companies based in the US and Europe.

The product companies and outsourcing companies have the same median pay level of $7,000. From the 75th percentile onwards, there is a difference in income in favor of the CEOs of product companies.

There are also the following two trends on the market: the older the company and the larger the number of employees, the higher the salary of the C-level managers. For example, at companies that have been operating for 10-20 years, the median salary for a business manager is $8,250.

At large companies employing 201 to 800 people, C-level manager’s salaries are significantly higher than those of colleagues at smaller companies – starting from $5,275, with s median of $11,600.

Motivation and demotivation factors for CEOs

The results of the survey show that 44% of respondents are completely satisfied with their remuneration. Salary level ranks third among motivation factors. Freedom of decision-making is in the first place (69%) and professional growth – in second place (56%).

Notably, the salary level is fifth in the list of the demotivation factors. The top four demotivating factors are lack of professional growth and freedom in decision-making, lack of work-life balance and professional growth, and incompetent management.

Profile of a top manager

The research involved 294 C-level executives, including 188 male and 106 female CEOs, CMOs, CFOs, HRDs, CTOs, and COOs. The income gap between male and female executives was 40%. The median salary of men is $6,550, while the median salary of women is $3,900. The same trend was observed last year.

The majority of respondents are between 30 and 39 years old. According to the survey, the older a top manager is, the higher their compensation is. Executive managers aged 40 to 44 have the highest median salary of $7,000. It is noteworthy that respondents over 45 years old have lower median compensation than their younger colleagues, but the average figure among respondents is $8,108.

Industries

Most survey participants work in the FinTech and Banking industries – with a median salary of $6,000, E-commerce – $5,500, and Digital – $5,750. These industries have maintained the highest pay levels for three years in a row.

There are also the following two trends on the market: the older the company and the larger the number of employees, the higher the compensation of top managers. For example, companies that have been operating for more than 20 years have a median salary of top managers of $6,250.

The research data show that small companies (up to 20 employees) have the same high level of compensation as big companies (up to 200 employees) with a median salary of $5,000. Analysts identify two reasons – in young companies the decision on the amount of remuneration is usually made situationally by a founder or CEO. Often they entice experienced top managers by the level of remuneration.

Over the last year, their number increased by 29,111 people (16%).

The most popular KVED (type of economic activity) among IT-PEs remains 62.01 Computer Programming – this code is listed as the main type of activity for 143,549 people. During the year, 19,500 people registered this code as their type of economic activity.

The second and third most popular KVEDs are 62.02 Computer consultancy activities and 63.11 Data processing activities with 30.6 and 25.9 thousand IT specialists, respectively.

The largest number of IT-PEs is in Kyiv and Kyiv region. The top 5 regions are traditionally Kharkiv, Lviv, Dnipropetrovsk, and Odesa.

AIN.UA has picked the most interesting insights.

Key figures and facts in the Ukrainian Tech Market Overview 2021

• Ukraine enters 2021 with a 20% IT Services market growth rate and over 200,000 tech specialists to meet the increasing global demand for software engineers. About 85% of tech professionals have at least an intermediate English proficiency level.
• According to various sources, there are between 3,000 and 5,000 IT companies in Ukraine. The government’s Tech Ecosystem Overview lists 1,142 product companies and 858 service vendors in Ukraine. Over 92% of Ukraine’s tech businesses have switched to remote work just a few weeks after the government enforced a strict quarantine.
• 2019 marked the largest funding rounds in the history of the Ukrainian IT sector. Gitlab, owned by an entrepreneur from Kharkiv, raised $268 million, topping the most massive investments for 2019. Grammarly has closed a $90 million round of funding the same year. People.ai, the predictive sales startup, raised $60 million. The Restream startup, founded in Vinnytsia and incorporated in Austin, USA, has raised $50 million during the Series A round in 2020. Among other Ukrainian startups that have been drawing the global tech scene’s eyes in recent years are Reface (raised $5.5M in 2020) and Looksery (acquired by Snap Inc. for $150M in 2015.)

• The 2020 Global Outsourcing 100, published by The International Association of Outsourcing Professionals, includes 13 Ukrainian companies and eight companies with Ukraine offices. 68 Ukrainian tech companies made it to the 2020 Clutch Top 1000 list, representing only the top 1% of all B2B enterprises in the Clutch catalog.
• According to Clutch.co, the prime spheres Ukrainian IT vendors work in are eCommerce, Enterprise, and Finance.

Main Target Markets

According to the Better Regulation Delivery Office (BRDO) report, the export of IT services in 2020 increased by 20.4% against the previous year, totaling $5.03 billion. The tech sector’s growth contrasts with the overall decrease of Ukraine’s goods and services export of 4.6% in 2020. IT is the most exported service in Ukraine, with a share of 8.3% in the country’s $60.4 billion export of goods and services. 

The main clients of Ukrainian vendors remain the United States and Western Europe, including Great Britain and European Union countries. While different sources provide diverse statistics, it is clear that the USA remains Ukraine’s largest R&D partner (45% of research companies).

The EU is the second-largest market, with the UK, Germany, Netherlands, and Sweden as primary consumers. According to the Almega report, the digital skill shortage in Sweden is about to reach 70,000 by 2022. Therefore, the demand for Ukraine’s IT from Nordic countries is growing too, with Sweden and Denmark taking the lead.

More than 100 Fortune 500 companies have chosen Ukrainian IT services. Ukraine is home to more than 100 R&D centers owned by or working with global companies, including Google, Samsung, Siemens, and Huawei. Many of them have significantly expanded the number of employees or/and opened new offices.

Tech Talent Pool Overview: skills, salaries and more

• According to the Ukrainian Tech Market Overview, the vast majority of tech talent and companies concentrate in Kyiv, Kharkiv, Lviv, and Odesa. Different surveys conducted in 2018-2019 years show that 67% of IT specialists live in Kyiv, Kharkiv, and Lviv, and half of all Ukrainian tech companies are registered in Kyiv. Among the most actively developing midsize tech cities are Ivano-Frankivsk, Poltava, Vinnytsia, Zhytomyr, and Kremenchuk.

• JavaScript is the number-one programming language in the Ukrainian development community. Over 18% of software engineers use it as primary in 2020, and more than 41% named it their additional programming language. 2020 was the first year when JavaScript has outrun Java. The latter has been experiencing negative dynamics in the last three years, which corresponds to the worldwide trend.
• Except for JavaScript, the languages that have shown a significant growth rate in recent years include Python (34% growth since 2017), TypeScript (55% growth since 2018), and Kotlin (67% growth since 2018).
• When it comes to frameworks and libraries in use, React.js, Node.js, and Angular.js are the top three in the popularity chart. .Net and Spring are the closest pursuers.

• According to the Ukrainian Tech Market Overview, in 2020, the average software developer salary in Ukraine fluctuated between $780/mo at an entry-level and $4,000/mo at a senior level. A mid-career developer typically earns from $1,500 to $2,600 per month, which amounts to 18K-33K USD annually.
• The average monthly salary of a senior software engineer in Ukraine is $4,000, with this number rising to $4,550 and $5,600+ for the Tech/Team Lead and System Architect roles, respectively.

In terms of hourly developer rates, Ukrainian outsourcing companies typically charge around $25-$40. For comparison, the average outsourcing rates in neighboring Poland and the Czech Republic are $40-$56 per hour and $34-$53 per hour correspondingly.

• With the median monthly salary of $4,000, senior back-end developers are the highest paid in 2020. The lowest-paid position is Junior Front-End Coder; this specialty’s median salary rate is $730/mo.
• The most in-demand IT professionals in Ukraine are front-end experts followed by QA, PHP, and .Net developers — their share in the overall number of DOU openings is 35%.
• Regarding the salary-programming language correlation, Scala developers earn the most ($4,770/mo median salary). Simultaneously, the lowest-paid competency is 1C, with the median salary just under $1,700 per month.
• C developers are the highest-paid among the Junior specialists, with the median salary in this category reaching $1,200/mo.
• Developers with less than a year of experience earn around $600 per month. In contrast, the median monthly salary of tech specialists with 10+ years of experience exceeds the $4,200 mark. After the first year of working on one or several software development projects, a programmer will likely get a salary increase of 35-40%. Mature specialists with a professional background of 10 years or more usually receive a lower yearly increase of 5-6%.

The majority of IT professionals (82%) in Ukraine are content with their salary. The level of compensation satisfaction is higher among senior specialists. Over 40% of system architects and tech leads mark their satisfaction level as fully content. Most dissatisfied with their salary are system administrators, support officers, Junior QA, Junior developers, designers, and marketing specialists, making about 18% of respondents in the DOU.UA survey.

Most IT specialists in Ukraine are happy with their work: over 18% find their current projects enjoyable, almost 40% see their work interesting. About one-third of professionals consider their routine rather interesting than not.

What’s next in the Ukrainian Tech Market?

Ukrainian IT is skyrocketing despite epidemical and political woes. According to the Ukrainian Tech Market Overview, the tech sector has become a significant contributor to the country’s economy as the 3rd largest exporter of Ukrainian services.

The export volume of the IT Services market has increased by 157% in five years, while the talent pool has expanded by 34% for the same period. According to the PwC forecast, the IT industry’s market size will reach $8.4 bn worth of export and 242,000 tech specialists by 2025.

Diia City, a free economic zone for creative economy representatives that the Ministry of Digital Transformation is working on, offers high prospects to investors. Eventually, it will enable domestic and foreign tech companies to open businesses and R&D centers in Ukraine under simplified procedures, to operate according to the English Law, and pay 10% of distributed profit tax. The project is expected to double the tech market’s size to $11.8 billion and the number of jobs to 450,000.

You can find the full report here.

Portrait of Ukrainian game dev

The majority of the surveyed game developers are men (70% vs. 29%). 41% of them are middle and senior-level specialists:

The majority of respondents work in Kyiv, and many are also employed in Lviv and Kharkiv:

The majority of respondents chose to work in the game development industry because they are passionate about computer games:

Working conditions and salaries

Depending on the specialization, the respondents have different types of employment. Artists, for example, equally work from the office or remotely, whereas top managers prefer to work in an office.

Over 55% of the respondents said that, in general, they were satisfied with the conditions of work (but there are shortcomings). 29.4% are more than satisfied, 13.4% of respondents are not completely satisfied with the conditions, and 1.5% are completely dissatisfied.

Top employers

The survey participants indicated that factors such as project, salary, and team were very important to them:

The respondents mentioned salary (24.7%), completion of a project (22.04%), and lack of opportunities (19.76%) as the most frequent reasons for leaving the company.

If to consider median salaries in the industry, the actual earnings and expectations of professionals correlate as follows:

According to the participants’ responses, the ranking of the top employers looks as follows:

• Annual revenue growth in Ukraine, Poland, Romania, and Belarus slowed from 20-25% to 10-15% amid the pandemic but began to grow rapidly in the fourth quarter.
• The revenue of 5 CEE players out of the 50 largest IТ service companies exceeded $100 million, 6 others exceeded the mark of $200 million. Among the companies with offices in Ukraine are Epam, Luxoft, GlobalLogic, and SoftServe.

• The total volume of IT exports generated by Ukraine, Poland, Romania, and Belarus is over $18 billion.
• The total number of IT professionals in the region is over 660,000.
• The annual number of tech graduates is more than 60,000 people.
• Number of mergers and acquisitions in 2015-2020 – 137; in 2020 – 29.

Among the major deals for 2020-2021 in Ukraine are:

• Sigma Software acquired the Kharkiv-based outsourcing company IdeaSoft. According to AIN.UA, the transaction amounted to $1.5 million.
• The US company Cprime acquired the Ukrainian Archer Software. According to experts, 100% of the company could be valued at $5-8 million.
• SARS Capital invested in the outsourcing company S-PRO.
• Grid Dynamics acquired the technology company Daxx.
• IT company Ciklum raised strategic investments from the technology investment platform Recognize Partners.

What is its purpose? Such studies help businesses navigate the labor market. And for specialists, they make the salary market more transparent and allow them to assess themselves objectively without cognitive distortions.

How was the study conducted? The editorial team of AIN.UA conducted the anonymous survey among more than three thousand respondents. We calculated the respondents’ median salaries and grouped them into four categories: Business, Development, Content, and Special & Administration. Each category comprises the following groups of professions:

1. CEO · COO · GM/Admin director · Product Manager · Project Manager · Product Owner · Scrum Master · Producer · Marketing Manager · Affiliate · SEO · ASO · PPC · PR · SMM · Sales Manager · Business Developer · Analyst · Data Analyst · Business Analyst · Data Science · Researcher · Support/Call center;
2. Software Engineer · DevOps/Unix Admin · QA Engineer · UI/UX Designer · Cyber Security · DBA · Sys.Admin;
3. Writer · 2D/3D Artist · Graphic designer · Sound designer · Video designer;
4. HR · Recruiter · Finance Manager/Accountant · Lawyer · M&A specialist · Scout · Fundraiser.

Next, we analyzed how the remuneration changes depending on expertise, knowledge, and work history and shared our conclusions on each position. Finally, we compared our results with DOU, Serpstat, and Indigo salary surveys to get the most objective and weighted result. It is important to note that the calculations were carried out on a fixed part of salary in USD after taxes.

Portrait of responders

In total, 3,116 respondents took part in the first AIN.UA salary survey. Most of them are men, mainly employed in the field of Software Engineer (39%). The most popular profession among women is Marketing Manager (24.2%). The median age is 30 years.

Median salaries 

Business

Product Owners and Product Managers (no matter how different they are in various companies 🙂 get the highest median salary among business professionals. According to the survey, it amounts to $2,500.

The median salary of a Junior Marketing Manager is $535. Nonetheless, marketers with more than five years of experience earn three times the amount. Interestingly enough, the salary for this position in Kharkiv is higher than in Kyiv, $1,450 and $1,200, respectively. Business Analyst has the same tendency with $2,000 in Kyiv against $2,800 in Kharkiv.

The median remuneration of Affiliate and PPC is at the same level with $1,225. SEO earns 10-15% less with a median salary of $1,000. Be that as it may, the maximum salary among respondents employed in these professions is: SEO – $5,100, PPC – $3,500, and Affiliate – $4,000. It should be noted that SEO, PPC, and Affiliate contain two large niche flows: specialists working in high-risk niches – their conditions exceed the median; and those who work in all other niches – their conditions are inferior to the median.

Check out job openings for Product / Project manager, Producer, Marketing Manager, SEO, Affiliate, PPC, PR, Analyst, Sales / BizDev, Support / Call Center

Support/Call center has the lowest median amounting to $800. It is particularly remarkable that among specialists in the field, those for whom the primary language of service is English earn more – $1,200. It is twice what their counterparts operating in Ukrainian and/or Russian are getting.

C-level

According to the survey, General Manager and CTO are the highest-paying jobs. With a median salary of $5,000, they surpass the median of CEO at $4,000. It is due to the fact that GM is a position in an established company and CEO – both in very small startups, significantly inferior to GM, and in large established companies, significantly surpassing GM. But while in the case of GM most of the responses are centered around the median, CEOs’ responses range from strongly inferior to highly superior to the median. Product companies pay $500 more than outsourcing companies for this position.

The lowest median salary has a CMO with $2,300. It is inferior to CPO with $3,400 and CIO with $3,000. However, these specialists earn more in product companies – $3,700. At the same time, in some outsourcing companies, salaries are 20% lower.

Remarkably, a quarter of all CEO/COO/GM/Admin director respondents were previously employed in the Product area. Software Development accounted for 20% of all respondents, Marketing – 17%.

See jobs for CTO / Architect, CEO / COO / CMO / CPO / CIO or the C-Level collection

Special & Administration

Among HR/Recruiter specialists, HR Generalist has the highest median of $1,400. The median salary of Recruiter and HR is $1,000. Meanwhile, employees of product companies earn more. It is also interesting that HR earnings in Kyiv are 30% higher than that of Recruiter. It is probably due to the fact that 30% of a recruiter’s salary are bonuses.

Practicing both Ukrainian and international law, a lawyer can make more than what they would make if they practiced only one of the two. Such specialists’ median salary is $2,260 (only Ukrainian – $900, only international – $1,800).

Check out openings for HR / Recruiter, Legal, Accountant

The same is true for financial managers and accountants. Handling international finances, you can earn $2,050 while managing both international and Ukrainian finances can get you $2,000. At the same time, specialists working only in the Ukrainian segment receive less, with a median salary amounting to $620.

Among M&A and Fundraising, specialists with 3-4 years of work experience receive more. Simultaneously, for Junior specialists, the median salary is $700, and for Senior – $2,800. The median salary of Middle professionals is on par with the lawyers and amounts to $1,100. The highest remuneration among the respondents of this category is $5,000.

It should be noted that the salaries of Special & Administration in Kyiv are 15-25% higher than in other cities of Ukraine.

Content

Of all the respondents working in the content field, 2D/3D Artist, a profession endemic to the game development industry, earn the most. Their median remuneration amounts to $1,500. At the same time, the figure is relevant for both outsourcing and product companies. A writer has the smallest median of $735, but with 4+ work experience, you can count on a salary of $1,300.

Interestingly, Middle Graphic Designer earns 30% less than Middle UI / UX Designer (median of $1,000 versus $1,450, respectively). The gap between the Senior level in the same professions is twofold.

Check out openings for Copywriter, Artist 2D / 3D, Designer UI / UX

Development

The survey has shown that JavaScript is the most popular programming language. It is used by 26% of the surveyed specialists. PHP is in second place with 15.2% followed by C# with 11.6%. Together with TypeScript and Python they form the top 5 additional languages for those for whom they are not the primary programming languages.

Check out jobs for developers in JavaScript, C / C++, Java, Python, Ruby, Kotlin, Swift and frameworks Node.js, React Native, Angular, Vue.js, .NET, Laravel, Yii2

According to the survey, Java Engineer has the highest median at $3,700. Ruby, Python, and Swift Engineer also receive high salaries, with a median of $3,500. At the same time, in the Senior category, Unity developers earn the least with $2,500. C Engineers have the lowest median salary regardless of the level in the company – $1,650.

• Interestingly enough, C# on .NET specialists get on average $200 more than C# on Unity specialists with a median of $2,700 versus $2,500, respectively.
• There is a noticeable difference between JavaScript on Angular.js ($2,500) and JavaScript on React.js ($3,025).
• PHP on Symfony specialists ($3,800) get three times of what PHP on Laravel ($2,650) specialists get.
• The salary of Python on Django specialists is higher than of Python on Flask specialists with a median of $3,200 versus $1,250.

Depending on the role, Arhitect JavaScript Engineer has the highest salary of $6,000. At the same time, the median salary of Arhitect Java Engineer is $5,800. Junior Front-end specialists have the lowest median, amounting to $700.

See openings for Back-End, Front-End, Full-Stack developers

In terms of cities, IT specialists from Lviv get the highest salaries with median salary amounting to $3,500, Kyiv ($3,200), Kharkiv ($2,925), Ivano-Frankivsk ($2,500), Ternopil ($2,350) and Odesa ($2,000). At the same time, the median salary of a developer working outside Ukraine is $3,565.

Interestingly enough, the median of Java Engineer in Lviv is comparable and even exceeds the Kyiv median with $4,080 against $4,000, respectively. A significant difference is seen between JavaScript Engineers in the capital ($2,500) and Dnipro ($3,200). Moreover, in Lviv, the median of the latter is $3,500.

Among testers, Java is the most popular language. It is used by 17% of specialists in the field. At the same time, 44% do not work with programming languages at all.

Automation QA specialists have the highest salary at $2,675. General QA specialist’s median is almost twice as high as that of Manual QA specialists with $2,600 versus $1,400, respectively. Interestingly, a tester who uses languages is paid 30% more. On the other hand, a QA specialist working on Python earns 10% less than the one working on Java and JavaScript.

Check out jobs for QA / QC, QA Automation, Manual QA

QA specialists with 3+ work experience earn on average $2,000. In turn, the remuneration of testers in Kyiv is higher than in other cities of Ukraine.

Freelancers

Among the readers surveyed, 5% were freelancers. In order to calculate the median salaries by profession, we multiplied the rate per hour by the number of working hours per month for each of them and deduced the medians.

The analysis showed that most often freelancers work from 120 to 160 hours per month. Most of the respondents in the sample are engaged in SEO and Marketing. The median salaries of these specialists were $1,600 and $1,000, respectively. At the same time, freelance developers earn the most. For example, the median salary of Fullstack PHP developers with 3+ years of experience is $2,100. Overall, Software Engineer’s median is $2,400. Data Analysts get the same level of salary.

Writers have the lowest median salary. Working an average of 80 hours per month, freelancers earn $550.

Check out jobs available for freelancers in the Remote collection

Other observations

Bonuses and options

Only 1% of the surveyed specialists are owners of the company’s stock options. Those who own them are predominantly C-level specialists, less often – Team leaders. Earlier, AIN.UA already conducted a survey on the topic, according to which options are more often issued in startups, starting from the first year of operation. Even though this practice is not common in Ukraine, most respondents would still prefer options over cash bonuses.

In terms of bonuses, HR, Marketing Managers, and Sales Managers receive them most often. Despite this, the highest median at the C-level is $1,500, followed by sales – $600. Interestingly, large companies are more likely to give employees a bonus. Thus, 36% of respondents working in teams of 1,500+ people receive bonuses regularly.

Salaries based on English proficiency

Among all respondents, more than 34% speak English at the Upper-Intermediate level. At the same time, Software Engineers most often know the language at the Intermediate level. Remarkably, only 8% of respondents are fluent in English.

Knowledge of English significantly affects the salary. The study has shown that having an Intermediate level and above in non-technical professions helps earn at least $200-300 more. For example, a marketing manager’s median salary with Elementary English is $650 versus $1,800 with Advanced English. HRs with Pre-Intermediate get 15% lower remuneration than colleagues with Upper-Intermediate.

For developers, English affects salaries starting at the Middle level. The salary gap of Software Engineers with Elementary and Advanced English is a mere $25-35. On the other hand, the Middle Software Engineer’s median remuneration with the Upper Intermediate level is $2,500 versus $1,500 with the Pre-Intermediate. The gap is even more significant for Senior Developers with Pre-Intermediate and Advanced and amounts to $1,500.

Among testers, the highest median salary of Automation QA specialist with the Advanced level is $3,200, and the lowest for Manual QA specialist with Pre-Intermediate is $600.

Salaries by industry

A quarter of the respondents who completed the survey are employed in the E-commerce industry. At the same time, without C-level, Product Managers with work experience of 4+ years have the highest median salary in the industry at $2,300. Among FinTech representatives, Software Engineers earn the most with $3,000.

Arguably, the industry does not affect the amount of remuneration. For example, FinTech developers are paid on par with their counterparts at GameDev. The same applies to non-technical professions.

Salaries by university

The survey has shown that graduates of Kyiv Polytechnic Institute get the highest salaries. The median remuneration of technical professionals (Software Engineer, QA, DevOps, UI/UX Designer, Cyber Security, DBA, Sys.Admin) at the Senior level is $4,300. At the same time, among the Juniors, graduates of the Taras Shevchenko National University of Kyiv get the highest salaries. Remarkably, the remuneration of respondents without higher education is equivalent to the remuneration of their counterparts holding a degree.

Among non-technical professions, graduates of Kyiv Polytechnic Institute also have the highest salaries. Graduates of the Kharkiv National University of Radioelectronics have the lowest median salary.

Check out the positions relevant for university graduates or those, who want to start a career in the IT industry: No experience in IT and Junior Friendly

Salaries by company size

The size of remuneration also depends on the size of the company. In general, the larger the company, the higher the salary of its employees. However, there are exceptions. For example, a Junior QA Engineer in a company with up to 20 employees gets more than when a team has 100 to 200 people. The same tends to be true for Junior UI/UX Designers whose median salary in a company with 50-100 employees is higher.

Check out openings at Ukrainian startups in the ⭐Startup collection

Salaries by company type

In general, salaries in product and outsourcing companies are somewhat at the same level. It is true for both technical and non-technical professions. Senior Software Engineers at a product company have the highest median of $4,200. Specialists working for specialized agencies get the lowest salaries. In particular, a Junior Developer’s median salary is $450, while a beginner marketer’s median salary is $400.

Take a look at openings at Ukrainian product companies in the ?Product collection

AIN.UA · DOU · Indigo

In this section, we have compared our median salaries across some professions with other industry reports. In particular, with the latest reports from the Ukrainian community of DOU developers (a survey among developers/testers/other professionals), a salary survey of the Indigo recruitment agency (a survey among Product Roles/Project Managers/CMOs), as well as the AdTech report of the Netpeak Group.

It makes it possible to obtain more weighted and accurate data and analyze in detail the salaries of Ukrainian professionals in terms of positions and specializations.

By conducting a sizeable anonymous salary survey, the AIN.UA team helps create a more transparent labor market. Based on its results, business representatives can navigate the salary issue, and specialists can assess their remuneration level across more than ten criteria. The study also aims to determine the ‘suggested salary’ for most positions in our recruitika.com section, which already contains more than 1,200 offers for technical and non-technical professions

Dynamics of growth of audiences of social media:

The Ukrainian Facebook ad-reachable audience now totals 22 million.

Ukrainian users are googling Facebook less and less, but the authors of the research attribute this to the fact that most already have the application:

The compilers of the research report that over the past six months, the number of Facebook-users has decreased in six regional centers, but social media continues to grow in smaller cities.

Facebook is more popular than Instagram in almost all regions.

The highest Instagram penetration is in Kyiv region (51%), Odesa region (42%) and Dnipropetrovsk region (41%). The lowest – in Kirovohrad region (25%):

Instagram is ahead of Facebook among Ukrainian users of 29 years old and younger.

Among the 18-23 age group, the penetration rate can be higher than 100% (because young users may have several accounts).

Femail users continue to make the most of Facebook’s Ukrainian audience.

Most Ukrainian users visit Facebook via their mobile phones. Only 600,000 users access the social media from desktops, and 11.55 million only via mobile devices (and this number is up slightly compared to last July).

As it turned out, 26% of Ukrainians were disappointed with their experience during last year’s sales, and this is one of the highest figures worldwide. In 2020, an average Ukrainian plans to spend on sales 3,800 UAH ($139), a Polander – $247, and an American – $476.

The Ukrainians showed the highest interest in Black Friday and Cyber Monday in 2018. In the past 2019, the activity of Internet users was not the highest. But, in 2020, the pandemic and unstable situation in the labor market and the economy can reduce consumer buying activity.

In 2019, during Black Friday sales in Ukraine, the number of transactions was 691 percent higher than the annual average, and the Cyber Monday activity of buyers compared to the ordinary day was more by 197 percent.

Change in sales day by day

• The biggest activity was noted on Friday: this day accounted for 24 percent of all transactions in the period from November 25 to December 2.
• Monday after Black Frida had the smallest number of sales during the analyzed period.
• In total, 9 percent of all annual sales took place during the eight days of sales.

Ukrainians among the most dissatisfied shoppers with Black Friday

One-third of Ukrainians, who took part in autumn sales, were satisfied, and 40 percent were rather satisfied. However, 21 percent are rather dissatisfied, and 5 percent are dissatisfied – and this is one of the highest indicators of dissatisfaction by countries. More dissatisfied shoppers are only in Argentina and South Africa.

What disappointed customers the most?

• Among people who negatively evaluated the sales, 59 percent indicated that the discounts were not large enough.
• The next most popular reason for dissatisfaction (53%) was the lack of discounts on the goods of interest.
• 35 percent noted that the discounted products were sold out too quickly.
• And 10 percent of dissatisfied people said that discount codes did not work.

What do people buy on Black Friday and Cyber Monday?

Statistics of search queries can tell a lot about Ukrainian buyers. Black Friday and Cyber Monday are associated primarily with discounts on electronics. However, in Ukraine, young mothers actively participate in sales. During November sales, the demand for goods for children is growing most of all – 47 percent compared to the average annual figure. A similar increase is typical for buyers from Australia, Portugal, Poland, Romania, Spain, and Russia.

How much are Ukrainians ready to spend on sales?

The survey conducted among residents of 44 countries shows that Ukrainians are ready for relatively low spendings. We are ready to spend approximately 3,800 UAH ($139) during sales. Residents of South Africa ($130) and Hungary ($145) are ready to spend a similar amount.

The largest part of the sales is planned to be spent by residents of the USA ($476), Switzerland ($454), and England ($430). The most modest purchases will be made in Pakistan ($62) and Nigeria ($67).

All statistical data comes from Google Trends, Google Keyword Planner, and Picodi.com, a global discount platform operating since 2010, which created CyberMonday.Global, a site dedicated to Cyber Monday sales. The survey conducted in September 2020 among 19 thousand respondents from 44 countries were also used in the report. For currency conversion, was used the average exchange rate from Google Finance.

The research. In total, 2,512 people participated in the poll. They answered the close-ended questions asked by AIN.UA concerning changes in salaries.

Changes in the fixed salary

• According to 56.1% of respondents, the coronavirus crisis did not affect the fixed salary or remuneration of employees.
• 9.4% of employees have a quarter reduction in fixed salaries, while 9.3% completely lost their income.
• 8.4% of respondents began to earn by 50% less, and 3.2% of the respondents managed to retain only one-fourth of their previous salary. 
• 4.7% of respondents faced with a slight pay cut (10%). There are also cases of income reduction by 5% and less.
• Some employees were put on unpaid leave for an unknown period. However, a small percentage of respondents stated about such cases.
• There are a few cases of an increase in salary and income. In particular, this is due to a reduction in the number of working companies and competition.
• Delays in payments are quite common.

Some companies have used alternative methods. There are cases when companies have set new tasks to employees, have tied the salary to a dollar rate, or paid just percent from sales. Employees claim that this is the way to cut wages.

As the quarantine has been extended, the financial situation of businesses is getting worse. While in the first month of the quarantine, companies cut employees’ salaries, now they make decisions on staff cuts and layoffs.

How did the variable pay change?

The variable pay includes bonuses, benefits packages, and other additional payments. The poll also showed what happened to the planned pay rises and how companies supported their employees.

• 58.6% of respondents did not feel the impact of the crisis. The number of additional payments to salaries remained unchanged.
• For 17.5% of respondents, the total income became lower as the employer cut or canceled the reward program.
• 13% of respondents will receive less than the promised pay rise, and some were denied the previously planned raise. Companies are also cutting benefits packages.

Some companies have paid a one-time bonus or reduced the load, as support. There are cases where part of the benefits package has started to be paid out with cash.

Outsourcing and product companies: who was more affected by the crisis

In total, about 1% of the Ukrainian IT market answered the questions. The impact of the coronavirus crisis on salaries was described by employees of product companies (43.1%), outsourcing and outstaffing companies (15.7%). The research showed that the crisis affected the developers less, as according to 71.9% of respondents. It is noteworthy that layoffs in product companies have more affected women.

The quarantine had the worst effect on designers. Almost 40% of respondents polled about layoffs and cut salaries in half. Women were more affected – in 30% of cases, employers cut their employees, while the number of men amounts only 12%. The same trend is observed in sales.

The respondents’ replies suggest that most tech market participants are preparing for a drop in demand and planning to optimize their business. Not everyone will be able to avoid such unpopular measures as layoffs and salary cuts.

Respondents

Mainly, the respondents of the survey were medium-sized outsourcing companies (with less than 100 employees) and international product companies. Large outsourcing companies and Ukrainian product companies account for the remaining third.

After the quarantine was announced, most of the office teams began working remotely: almost 80% of the respondents transferred all their staff to telework. Just 3% continue working from the office.

Anti-crisis measures

• 51.6% do not announce new job openings,
• 45.2% cut office rent expenses,
• 38.7% save on team development (training, team building),
• 35.5% plan to save on salaries,
• 22.6% save on marketing,
• 9.3% work as usual, not yet decided on their action plan and would navigate the situation as it develops.

Among other measures are transitioning to online training, sales intensification, and even the strengthening of the team with new skilled professionals.

Layoffs, dismissals, salaries

Most of the companies do not plan to part with their teams. Just 15% intend to reduce staff.

Moreover, the majority of companies (72%) do not consider the option to put their employees on unpaid leave. Such measures will be taken just by 12% of the respondents.

Pay cuts

More than half of the interviewed companies are not going to reduce their employees’ salaries. On the other hand, 22% of the respondents said they would cut staff remuneration. A further 25% took a wait-and-see approach.

Besides, 3% of the respondents said they would reconsider their employees’ salaries set in foreign currency, against the backdrop of its appreciation.

Customer attrition and drops in income

The new situation pushes companies to revise their terms of business. It turns out that almost half of the companies will negotiate new terms, for example concerning discounts and other fees.

Companies are forced to give up many projects, including those related to IT services. Most of the respondents either have already lost some customers or predict this.

The situation in sales is similar: the majority of the companies either already acknowledge or anticipate a downturn.

The company has analyzed job searches in the U.S., Europe, and Ukraine, and concluded that the number of available job offerings has declined, but not drastically. The activity of job seekers themselves, though, has dropped significantly.

The world

Businesses respond to the pandemic with staff cuts, unpaid leaves for personnel, and salary reductions. Global prospects appear bleak: the International Labor Organization estimates that the COVID-19 pandemic can raise the number of unemployed people by almost 25 million worldwide.

However, as shown by Jooble’s job search statistics, the actual dismissal rate is below the expected level. Instead, the interest in job search from candidates has decreased by 50%, and that is just for the last three weeks.

There is a clear correlation between the decisions of different countries’ governments on the introduction of strong quarantine measures and the decline of the vacancy search activity.

On the other hand, while the number of available job offerings (that is, vacancies available on a particular calendar day) does not stay the same in most European countries and the USA, it declines slower than candidates’ job search activity.

It means that people stop seeking jobs faster than companies dismiss employees and reduce workforce.

The largest numbers of available job openings are in the British and Canadian markets – in the fields of project management, software development, business development, and accounting. In Italy, Spain, and Germany, the demand for salespersons and support agents, mechanics, drivers, warehouse workers, and administrators is very high.

There are also some changes in how people look for jobs during the quarantine. For example, in Spain, instead of the request “cleaning,” people type in “hospital cleaning.” In Italy, the request “child care” gave way to searches for delivery jobs, and in the UK, “medicine delivery driver” grew to be the second most popular search input.

Another trend is moving online. In addition to traditional online tutoring and freelancing, people now seek opportunities to transfer any skills from offline to teleworking. This is how requests like “online fashion stylist” or “personal online coach” appeared. Candidates are willing to do almost any work online to find a source of income during these hard times.

Ukraine

Whom employers look for

Compared to the same period in 2019, the number of job openings in wholesale and retail trade has risen by 58%. Most of these job openings were posted before the quarantine imposition but remain available, nevertheless. Now, if comparing February and March of 2020, the analysts have noticed no serious changes in this segment.

As against February, in March there appeared noticeably more vacancies from companies which offer transportation and delivery services. The number of job ads in this sphere has increased by 13%. Couriers and drivers have become in high demand recently.

Popular requests

People keep searching for jobs during the quarantine. Candidates try to predict the labor market needs. For example, according to Jooble, the number of requests “taxi driver” increased by 22% between February and March.

People have come to seek delivery jobs more. During March, the number of searches for this kind of work from candidates rose by 91%.

Popular job offers

During the quarantine, the job offers with most views and responses have been:

• courier,
• call center operator,
• translator, copywriter,
• driver,
• taxi driver.

Last year the selection was completely different:

• long-haul truck driver,
• factory handyman,
• administrator.

Which searches became less popular

March has seen the number of security guard job queries decrease by 25%.

People have also searched less for sales manager jobs. The searches for this vacancy dropped by 23%, as against February.

People have become less interested in working in Poland. During March the number of queries in this segment declined by 21%.

Demand for remote work

Ukrainians have begun to actively seek remote jobs. The number of telework search queries has soared by 240%.

The most popular queries from candidates as of March were:

• tester,
• recruiter,
• call center operator,
• SMM manager,
• accountant,
• translator.

Small business and service industry

In 2019, the foodservice market volume in Ukraine counted approximately 50,000 places. Most of them could not reorient themselves to delivery or takeaway.

According to Poster, approximately 2,500 restaurants and other places stopped working during the first two weeks of the quarantine, which counts 63 percent of all their clients. If to view this percentage from the perspective of the total number of cafes and restaurants in the country, it will show that approximately 30,000 places are not working now.

For the period from March 23 to March 29, sales of the food services in Ukraine are 73% lower than they were for a similar period before the quarantine.

The drop is shown not only in Kyiv (78%), but also in such administrative centers as Lviv (78%), Kharkiv (73%), Dnipro (65%), and Odesa (60%).

About 160,000 people have lost their jobs in the restaurant business. Among the Poster clients, more than 13,000 people got laid off.

Housing market declines

According to the Dobovo service, rental prices have fallen by about three times. For example, if a 25-square-meter apartment in Kyiv on the Baseina street, has previously been rented for ₴1,200 ($44) per day, now most of the rooms in Partner Guest House is given to the longtime rent for ₴7,000-8,000 ($255-295) per month.

Taxi industry

The number of orders in the Bond taxi service, working in Kyiv and Odesa, declined almost three times, according to the service founder Petro Obukhov. The prices do not change, but the 10% discount is included automatically because of the low number of cars available.

Judicial system

During the quarantine in Ukraine, about 5,000 court sessions were postponed. There is a legal option to conduct them online, but the mechanics for this are not prescribed.

Some cases are postponed for an indefinite period; others are offered to hear without the participation of the parties.

Unemployment increases   

According to the data by the Union of Ukrainian Entrepreneurs, 1/3 of business owners (mostly microbusinesses) report about 90-100% income decrease since the quarantine started. 50% of the staff of the same entrepreneurs got laid off.

The medium and small business owners report about a 25-50% income decrease in comparison to the pre-quarantine period. They fired 10-25% of their employees.

Big companies lose 10-25% of their income, predicting 25% of workers to be laid off till the end of the quarantine.

According to Work.ua, for two weeks, the number of job openings decreased by 1.8 times in general, and 2.5 times for newly-published positions for two weeks. The number of companies with available job positions showed a 25% decline.

Key facts

The total funding volume into the Ukrainian IT industry was record-breaking in 2019. For the first time, total investments surpassed a $0.5B mark, totaling $544 million.

More than 75% of this amount was raised as late-stage funding rounds by three companies:

• Grammarly – $1+ billion last round valuation ,
• GitLab – $2.5 billion valuation,
• People.ai – $0.5 billion.

The volume of deals in the early stages did not change compared to 2018. The total amount raised Seed and A Rounds funding accounts $44 million.

The Ukrainian product companies have made exits for a total of $478 million. Most of the exits are up to $100 million, while startups evaluated above this amount remain private companies.

Deals of 2019

The authors of the overview collected all public deals made in 2019 and ordered them by the sum raised. The result you can see in the following table:

They also separately showed the investments of software development companies. The amounts of deals are not disclosed.

Active investors

Most investments in Ukrainian startups were made by foreign investors at both seed and growth stages.

Currently, the public portfolio of Ukrainian investment firms for today looks as follows:

Top tech companies in Ukraine

AVentures Capital also selected the largest product companies with most international revenue and top e-commerce companies in Ukraine.

The report dated by February 14, 2020, shows that the export of IT services from Ukraine increased by 15%. Now it equals 16% of the export of all services, which brought $15.23B to the country.

In percentage terms, the export of IT services was distributed as follows:

• 79.2% ($1.92 billion) – export of computer services;
• 16.3% ($395.5 million) information services;
• 0.5% ($110.6 million) – export of telecommunications services.

The import amounted to $495.8 million. Computer services represent the largest part of imports – $275.3 million.

Priority 2 means “serious systemic problems in the area of IP protection and enforcement, causing significant harm to EU businesses, with no progress or only limited progress in addressing these concerns compared to the previous year.”

Main problems in Ukraine

• copyright piracy, especially online and satellite piracy,
• lack of an effective system for protecting patents and data in the pharmacological and plant protection business,
• problems with the functioning of the system of collective management of rights, which has a negative effect on the creative industry.

Besides, according to the EUIPO-OECD study on Trends in Trade in Counterfeit and Pirated Goods 2019, Ukraine remains one of the four main transit countries for counterfeit and pirated goods destined for the EU.

Online piracy remains a serious problem for our country. Current legislation in this area was called weak in the report. According to the authors, as a result, more and more new websites with pirated content are appearing in Ukraine.

The United States Trade Representative issued a similar report. The “priority countries” listed in the report may be subject to economic sanctions by the United States. The EU may also use the economic lever to improve the situation.

According to the research, in Kharkiv, there are almost 500 product and service tech companies, and the number of IT specialists exceeds 31,000 people.

The industry in the region has grown by 24% compared to last year. And in terms of money, it was evaluated at $962 million in 2018 (compared to 2017, this figure increased by 20%).

The main clients of Kharkiv IT businesses are companies from the USA and Europe.

The median income of IT specialists in Kharkiv is about $2,025, which is 6 times higher than the median income in the region.

In 2018, Kharkiv IT companies paid 6.4 billion UAH of taxes (last year, this figure was 5 billion UAH). 45% of these taxes went to the city treasurer. According to projections, under favorable conditions for the industry, these tax revenues will triple by 2025.

More than half of local companies are small businesses with fewer than 20 employees:

The participants of the research also mentioned the main reasons for moving to Kharkiv. The top reasons for moving to Kharkiv are quality education, growth opportunities, and developed infrastructure:

Under favorable market conditions, Kharkiv IT industry may reach almost $2 billion by 2025:

Ukrainians’ orders

• Ukraine entered the top 10 countries in terms of the total value of products bought on AliExpress in 2019. For the three quarters, Ukrposhta delivered more than 20 million items from China, most of them were from online stores.
• According to Ukrposhta, more than 30% of Chinese deliveries are products costing up to $2.
• The most popular categories are: “phones and accessories,” “electronics,” and “car accessories.”

Buyer’s profile

• Most often, the products on Chinese websites are ordered by Ukrainians aged 24-35 years. More than half of them are shopping on AliExpress via their smartphones.
• Products from AliExpress are in the highest demand among the residents of Kyiv, Dnipropetrovsk, and Kharkiv regions. 56% of the ordered Ukrainian parcels from China, Ukrposta delivered to these regions.

The results were published on the ACC website.

• 82% of respondents plan to expand their business in Ukraine in the next 5 years.
• 84% of respondents believe that the Ukrainian state authorities are committed to further opening Ukraine’s market to foreign investment in the coming 5 years.

Ukraine’s most attractive industries to invest in

• agriculture – 85%;
• IT – 73%;
• energy and renewables – 45%.

Ukraine’s most attractive characteristic for investors

• talents – 51%;
• low labor costs – 51%;
• access to the European market – 44%.

Biggest obstacles for business in Ukraine

• courts – 74%;
• tax authorities – 51%;
• law enforcement agencies – 48%.

Rule of Law is top of the list of areas that requires urgent improvement.

Andy Hunder, President of the American Chamber of Commerce in Ukraine

Also, in 2019 the number of those who see labor migration as an opportunity to get interesting experience has increased – they account for 27% compared to 18% in 2018.

• Respondents are ready to get additional education and learn the local language for this.
• There are fewer people who want to work outside their profession: 39% compared to 65% in 2018.
• And only 1 out of 100 respondents is not ready to make any compromises.

Where people want to go

The most attractive countries for relocation are Canada, the USA, and Germany.

19% of respondents would not mind working in neighboring countries (Poland, Slovakia, Hungary, Moldova, Czech Republic) and the UK, and 15% wouldn’t mind working in Spain.

The least attractive are the UAE, Portugal and the CIS countries. Only 6% of respondents would like to work in the first two, and CIS countries are of interest to only 3 out of 100 respondents.

One of the reasons for this increase is the increase in the number of smartphones. Now 22% of users go online exclusively from mobile devices. A smartphone in 2019 was the first and only device to exit online for a large share of new users. Almost the entire population of Ukraine under the age of 35 is Internet users.

The number of users

Internet penetration in the country as of September 2019 was measured at 71% (22.96 million users, i.e. those who claim to use the Internet once a month or more). 65% of the country’s population has Internet access at home (21 million people).

The quarterly growth dynamics of Internet penetration, starting in 2010, looks like this:

It should be borne in mind that until the third quarter of 2014, here are included data on the Crimea and the occupied territories.

Annual Internet penetration growth dynamics:

Portrait of a user

If we talk about a portrait of a Ukrainian Internet user, the largest age group of users is 25-34 years:

If you analyze the level of income and education of regular users, the following graph will be obtained:

Among the regular Internet users, the largest number are workers and specialists engaged in non-physical work:

60% of regular users are married or live with someone:

As for Internet access, for 66% of regular users, this is a mobile phone or smartphone. For another 40% – a home laptop, for 36% – a desktop, for 5% – a desktop at work, for 4% – a work laptop, for 1% – a computer at the place of study, another 1% – a computer in an Internet cafe, and for 1% – during visiting friends.

The study was conducted in August-September of 2019. Data was collected using interviews at the place of residence. 2,110 people were interviewed in total.

Size of the Ukrainian audience

In 2019, there were two significant changes in the size of the audience of Facebook and Instagram in the Ukrainian segment. After the number of users of both platforms peaked in February 2019, Facebook administration has massively deleted fake accounts. Then the number of users of Ukrainian Facebook decreased from 13 to 12 million, and Instagram – from 11 to 10.

However, as of September, the size of the audience had recovered.

• According to the agency, as of September 2019, the Ukrainian Facebook audience was 0.7% of the global audience. By the number of users, Ukraine was ranked 33^rd globally and 8^th in Europe.
• The Ukrainian audience is larger than the Russian audience (0.4% of the global audience), ranking only 42^nd in the world.
• Facebook penetration in Ukraine is 31%, which is lower than in EU countries (for comparison in the Czech Republic – 47%, France – 46%).
• As for Instagram – Ukraine is in the lead (26%), but is second to Russia (28%) and Turkey (48%).
• The key factor that determines the popularity of Facebook in Ukraine is the ban on Russian social networks. Without this step, the picture could be similar to the indicators of neighboring Belarus, which almost repeat the proportions of Russia (Facebook is used only by 6-7% of the population, Instagram – 26-28%).

Activity of Ukrainian users

Ukrainians became significantly more active users of Facebook during the first half of 2019. So, as of September 2019, on average, during one month, one user shared 2 posts, left 3 comments, and gave 17 likes. These indicators are higher than the world average.

Particular attention draws the high level of interaction of Ukrainians with advertising posts. In the span of half a year, they began clicking on them one and a half times more (18 in September against 13 at the beginning of the year). Here, the Ukrainian audience is also well ahead of the world (an average of 12 clicks).

Instagram for youth, Facebook for adults

Instagram is incredibly popular with young people – 99% of Ukrainians aged 18-24 have their profiles here. Every second (56%) citizen aged 25-35 are registered on Instagram and only a quarter (27%) of those aged 36-45.

The Ukrainian segment of Facebook is dominated by the female audience with over 61% or 7.6 million users. There are 4.9 million registered males, which is approximately 39%. The age of the majority of men and women registered is between 29 and 35.

Migration into mobile

Over the course of 2019, there has been an increasing trend among Facebook users to switch to mobile devices. More than 12.3 million users are already using this social network on their smartphones or tablet.

Market

There are 378 IT companies in Dnipro and the region. Almost 97% of the market accounts for small and medium-sized companies with up to 200 people. Moreover, every third developer works in a large company.

“Every fifth company has offices in other Ukrainian cities, every fourth – abroad.

The distribution by company type is as follows:

• 62.6% – service;
• 20.4% – product;
• 9.2% – start-ups;
• 4.2% – service and product;
• 3.4% – Global In-house Centers.

Developers

According to IT Dnipro Community, as of 2019, about 15,000 – 16,000 IT specialists work in Dnipro and the region. Among them, 72.8% are individual entrepreneurs, and 24.6% are full-time employees. Another 2.5% of specialists work in another form of employment.

The share of junior and senior specialists is approximately the same – 24% and 27% respectively. The largest share of middle developers is 45.1%. Another 3% are trainees.

Profile of a specialist

• Most of all in Dnipro and the region there are developers has Specialist or Master degree – 39% and 34%, respectively.
• The most popular educational specialty is “Information Technology”. About 39% of developers completed it.
• The most popular universities are Oles Honchar Dnipro National University (35.7%), Dnipro University of Technology (14.4%) and Dnipro National University of Railway Transport (6.9%).
• Half of the developers work in the industry from 3 to 10 years.

Taxes

Direct payments by the IT industry increased from 402.3 million UAH in 2016 to 631.2 million in 2018. Indirect taxes – from 550.4 million UAH to 934.1 million UAH.

According to the results of 2018, the turnover of the IT industry of Dnipro and the region amounted to $435- $452 million. According to IT Dnipro Community forecasts, this indicator will increase to $632 million – $1.09 billion in 2025.

Salaries

The average salary of an IT specialist in Dnipro and the region is $1,650. Revenues are distributed on average as follows:

• Trainee – $425;
• Junior – $627;
• Middle – $1,420;
• Senior – $2,435.

At the same time, project managers averagely earn $1,711, QA – $1,190, and other non-technical specialists – $986. The income of top managers – $2,570.

• The salary is reviewed once every six months or annually.
• Three out of four specialists save about 30% of their monthly salary.
• Every third developer is engaged in additional activities – freelance, development of his own project, teaching, etc.

Relocation

41% of developers consider moving to another country, 35% – to another Ukrainian city. 24% of specialists think of both options.

41% of junior specialists, 35% middle and 32% of senior developers think about moving to another city in Ukraine. The situation with relocating abroad is slightly different – 36% of junior developers, 45% of middle and 35% of senior are considering moving.

Among the popular Ukrainian destinations, there are Kyiv (70%) and Lviv (28%), foreign – the USA (30%), Germany (25%) and Canada (24%).

Education

There are 11 higher educational institutions and 35 colleges and technical schools which train IT-specialists in Dnipro and the region. The number of students of technical specialties in them is 13,900 people. By the end of the year, about 2250 developers from them will start working.

The most interesting market figures

• The most popular business model is SaaS (52%).
• Almost 77% of companies operate in b2b segments.
• 68.4% of R&D centers are located in Kyiv.
• Most of the companies’ revenue is generated by the Ukrainian market (39%). The US market is in second place (17%).

Labour market in Ukrainian MarTech and AdTech

• About 65% of companies have less than 40 employees.
• Approximately 25% of all specialists work in three companies: Depositphotos, Terrasoft, and MGID.

Ukrainian IT market in numbers

• ICT is the third largest exporter of services with a 20% share of total Ukrainian service exports.
• Ukrainian IT industry grows by about 26% year over year.
• There are about 4,000 IT companies operating on the market.
• There are about 1,600 IT service companies operating in Ukraine.
• The number of IT professionals surpassed 185,000 in 2018.
• According to experts’ projections, revenues in the IT industry will amount to $5 billion in 2019.

Human capital

According to experts’ projections, in 2019, the number of IT professionals in Ukraine will be about 200,000 people. Next year, the number of IT specialists will increase by 20,000.

Most of Ukrainian IT specialists live in Kyiv (68,500), Lviv (21,000), and Kharkiv (25,000).

Outsourcing

More than 60% of all the above-mentioned specialists are employed by IT outsourcing companies. At the same time, the number of startups (over 2,000 companies) and international R&D centers (over 100 companies) is growing.

Ukrainian outsourcers cooperate mainly with companies from the USA (81% of all service consumers). These can be both startups at the bootstrap stage and tech giants. Among the companies in an outsourcing portfolio of Ukrainians are isco, IBM, Atlassian, Travelport, OpenText, Fluke Corporation, etc.

Often, outsourcing teams that work for Western clients grow into full-fledged R&D centers for their clients.

Labor market

The IT labor market is growing rapidly.

• In 2018, the number of jobs posted on DOU has increased from 3,000 to 4,500 a month.
• The number of applications went up by 23% — from 270,000 to 330,000.
• The number of employers grew by 38% — from 2,400 to 3,300.
• The most in-demand IT specialists are Front-end, QA, and PHP, as these categories constitute 31% of all vacancies.

Ukrainian IT companies are actively increasing their staff and are opening offices in new locations. The most popular locations are Kyiv, Lviv, and Rivne.

At the same time, Ukrainian IT companies started working abroad and have been opening offices in Malaga, Berlin, Warsaw, Krakow, Toronto, Turin, London, Bucharest, Eindhoven, Chicago, etc.

Methodology

The study is based on data from over 100 sources. Among them are PwC, Gartner, CBInsights, StackOverflow, The World Bank, Bloomberg, A.T. Kerney, DOU, EBA, IT Ukraine Association and others.

Portrait of a candidate for relocation to Germany

• 76% of them have higher education.
• 70% are males.
• Most often, relocate in Germany is sought by Ukrainians aged 31-40 years, in the second place – 18-30 years old, and the group of candidates aged 41-50 years old is on the third place.
• Almost three-quarters of jobseekers with a higher education who would like to work in Germany are professionals with more than 6 years of experience, and 14% have from 3 to 6 years of experience.
• Only 12% of candidates wishing to relocate to Germany know the German language.

Professional field of candidates

• The most active in looking for employment in Germany in 2019 were IT specialists (30% of CVs)
• Relocation to Germany is also of interest to top managers and marketers (10% of each).

Salary expectations

• More than a third are ready to move to Germany for a salary of up to €1,000.
• 30% were interested in jobs with salaries up to €2,000.
• Only 4% of applicants want a salary of at least €5,000.