How the War Changes Eastern Europe’s Outsourcing Market

We already know for a fact that the much unfortunate war that russia is currently waging on Ukraine has a major impact on the global market – market of services, market of finances, IT market, and pretty much all other fields. The big question stands – what happens to the Eastern Europe’s IT sector, one of the most actively developing areas as a whole and an immensely fruitful outsourcing destination in particular? 

Let’s figure it out.

General State of Things

What we are looking at right now is the steady decline of market activities and prospects across russia and belarus due to well-known sanctions taking place there. Which begs for a logical shift towards favorable European neighbors – Poland, Bulgaria, and, of course, Ukraine. Outsourcing to Eastern Europe accumulated over $100 billion in 2021 alone at a steady growth of $5-10 billion per year. 

The numbers are shifting pretty dynamically right now, but only in Ukraine there are more than 200,000 highly-qualified IT specialists helping to push the local outsourcing market to an estimated 3x growth in the nearest couple of years.

How Ukraine-Based Companies Cope

All in all, we can say with confidence that the Eastern European market sector isn’t going anywhere, but we are looking at some essential paradigm shifts and providers are even expanding in many aspects. The sector’s driving backbone right now is the assembly of Ukrainian and Ukraine-based companies that are demonstrating more than impressive operational results under the harshest of conditions. 

Thus, over 60 major Ukrainian companies surveyed claim to run somewhere at 90-95% of normal operational capacity while keeping workflows and performance quality as consistent as ever. And that’s amidst the chaos of war sweeping across cities where numerous IT provider headquarters are situated. 

Performance renewal

85-90% of employees in Ukrainian IT companies returned to their workplaces almost immediately once they found themselves and their relatives in safe conditions. Ultimately, what we are seeing right now is an almost complete stall of employee turnover while the workflow activity is spiking.

Workflow productivity

The major issue that stalls productivity in companies right now is the overwhelming mobility of specialists – people need to move a lot and switch working conditions everytime they do. The good thing is that most specialists have settled by now and companies experience a 30% productivity drop at the most.  

Volunteering initiatives

Ukrainian providers expressed the common tendency of actively helping people out, evacuating both staff members and other people in need alike. What’s interesting – the vast majority of employees remain in Ukraine, moving to safer locations in the central and western parts of the country, with only about 15-20% now working from Poland and other neighboring countries that received war refugees. 

Shifting Outsourcing Tendencies

We are not going to dive into details about the rapid fall of russian/belorussian IT market and minimization of profitable outsourcing opportunities there. It is important to note that the global attention is not only about the support for Ukraine – the Eastern European outsourcing environment remains a reliable source of high-quality solutions at affordable prices and nearly market-defining service. 

And the current situation only pushes the area forward. We may as well be looking at the up-and-coming advent of outsourcing to Eastern Europe in the long run. There are A LOT of savvy specialists that are more eager than ever to fulfill their duties and deliver the highest quality of work today – everybody’s really concerned with their working ambitions and where they are moving in general.