The Conflict in Ukraine is Changing the Tech Outsourcing Sector

por Katherine Casaccia    |    March 1, 2022    |      5 min read

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Aerial shot of Kiev, Ukraine

As one of the world’s largest providers of outsourced IT services, the Russian invasion of Ukraine has had a massive impact on the entire technological industry. IT providers, contractors, and developers across the globe have had to adapt to the ever-changing sanctions put in place, as well as damages made throughout the country.

Ukraine is a popular spot when it comes to outsourced IT services. A technological powerhouse, it houses more than 250,000 technologists working for both native and foreign companies. With its lower labor cost and strong technology education base, Ukraine has become a leader in technological outsourcing.

According to the IT Ukraine Association, the country’s IT industry increased by 36% to $6.8 billion in export sales in 2021, up from $5 billion in 2020. In addition, the sector has increased its specialists by more than 50% in the previous three years alone.

Due to its significant level of outsourcing, countless businesses are reeling from the effects of the war and its impact on Ukrainian workers. Many citizens have fled the country or find themselves without internet as they seek safety in shelters.

Ukraine has experienced many internet outages and communication blackouts, making it difficult for employees to continue working. These disruptions put many tech teams in jeopardy, as they must prioritize the safety of their developers during these unprecedented times.

Outsourcing Complications

Harsh attacks, internet outages, and more have led Ukrainian workers to put their safety before their workload – understandably. Though many companies may not have a physical presence in Ukraine, they’ve shifted their focus to helping their remote team members and ensuring their safety above all else.

Hila Klein, COO of freelance services marketplace Fiverr, with an office in Kyiv, spoke with Fast Company about the company’s Ukrainian developers and whether or not they’re still working. She notes, “To be honest, that is the least of our concerns at the moment. However, as most have already relocated, they can continue to work. Our overriding priority is that they are in a safe place and can take care of themselves and their families.”

Klein emphasizes that the situation is evolving rapidly, and many organizations are focusing on safety at this point in time. Some companies are looking to move workers elsewhere and target new outsourcing areas to mitigate their outsourcing complications. For example, last week, Wix.com Ltd. moved its workers to Poland and Turkey.

However, for companies that cannot physically move their remote workers, many have adopted an all-hands-on-deck approach, shifting responsibilities and looking for remote employees outside of Ukraine. Due to the hostile nature of the situation, organizations need to think about how they can continue to support their Ukrainian team members while collaborating internally to ensure all deadlines are still met.

Grammarly, one of the most popular Ukrainian-based tech companies, also spoke with Fast Company, sharing that they’re developing their contingency plans to keep their services running should the situation continue to escalate.

Senka Hadzimuratovic, Grammarly spokesperson, said their contingency plans include: “…securing backup communication methods and temporary transfer of business-critical responsibilities to team members outside of Ukraine to ensure our Ukraine-based team members can focus on the immediate safety of themselves and their families.”

Bottom line: At this time, it’s vital to support your Ukrainian team members, ensuring their safety and transferring responsibilities amongst your other developers, keeping the success of your organization in mind as you adjust.

Technological Risks

The internet outages mentioned above have led to a level of vulnerability throughout the tech industry – for those who focus on outsourced IT services and those who do not. Many Russian cyberattacks have targeted the Ukrainian government, but as the United States and other countries increase their support for Ukraine, they may experience an uptick in cybercrime as well.

What does this mean? Whether or not you outsource in Ukraine, it’s crucial to prioritize cybersecurity throughout your organization. Chances are, your tech team has access to a vast amount of sensitive data, so if you haven’t already, now is the time to remain vigilant as far as technological security is concerned.

Luckily, the Cybersecurity and Infrastructure Security Agency has compiled a catalog of free cybersecurity services and tools, detailed information about relevant attack strategies, and how to keep your organization safe.

Moving Forward

For those who focus on outsourced IT services, ensuring the safety of Ukrainian team members is, of course, top of mind. As the situation progresses, it’s also essential to think about filling any gaps you experience internally to protect your organization and its success. Should your Ukrainian team members be unable to work, consider outsourcing in additional European countries or Latin American countries.  

This invasion will continue to impact the tech industry as companies adapt to new changes and revisit how their team works together. For more information on outsourcing for your tech team, visit this page.

And for more on how you can help those in Ukraine, take a look at these suggestions.

Disclaimer: The information above is for awareness purposes. The situation in Ukraine is rapidly evolving, and the statistics provided here may change as time goes on.

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