Outsourcing to Ukraine: Prospects and Opportunities

by | Nov 18, 2020 | Business Feature

Our article will be useful for those who have not yet decided whether they need the services of an outsourcing company.

What Is Outsourcing?

There is no doubt you know this already, but the definition is still worth repeating. Outsourcing is the transfer of one or more tasks within your company to another company. The outsourcer will perform these tasks better, faster, and of course, cost you less than doing it on your own. What tasks can be transferred to an outsourcer? Almost anything: PR, marketing, sales, software development, customer support, accounting, HR, etc.

Here is a simple example of how outsourcing works. Say, you’re an American and you have a mobile game development company. You rent an office in Arizona, pay salaries to developers, managers, and salespeople. The business has just opened and customers come in and have many questions and complaints. You also need to hire a customer support team, paying $1800 to each representative, and to organize the workplace (to make sure everyone gets a table, chair, computer, headset, software, etc.). And if you outsource this work to Ukraine, you will pay only $1000 per person, without having to spend additional money on organization.

If you are located in Germany, and the outsourcing company is located in Ukraine, then an employee in Germany will be paid around 2300 EU, while an outsourced employee in Ukraine will cost $1000.

This is simple math. Of course, outsourcing for American and European companies is first of all a matter of cost reduction, all other advantages come as a pleasant bonus.

Outsourcing companies are mainly concentrated in Ukraine, the Philippines, and India. Almost all are registered  in America or Europe, but physically they are located in other countries. Why? Because if your company is registered in India and you violate the terms of the contract, your client will not have the desire to sue you in India according to Indian laws, and in other words, no one will risk working with you.

What Opportunities Does Outsourcing Give to an Existing Business or a Start-Up?

If the owner of a company plans development for 5 years in advance, they understand that it is reasonable to relegate some parts of the business to an outsourcer, whether it is an accountant, a lawyer, a developer, or even a system administrator on call. For startups with small initial capital, this makes it possible to save on many expenses. For example, you don’t need to buy a computer, a headset, and furniture for the office, you don’t need to pay rent for the office, you don’t need to hire employees. All costs must be tabulated and counted. Numbers work better than words to show real benefits.

Developers are the very first direction in outsourcing and the most popular one, followed by outsourcing accounting, lawyers, copywriting (content writing), and call centers.

What Is the Cost of Outsourcing?

Development companies often wonder what it would cost if they simply opened an office in Ukraine. They would need, for example, 10 people for customer support. Here is a comparison of the expenses of organizing customer support for business:

  • Option 1 – Your company is located in the States. The calculation is made based on the assumption that you already have an office, and if you add technical support (the rest of the employees are already there), the additional costs will be only the salary of the new employees. If such an employee is paid $13/hour, working 8 hours and 5 days a week comes up to salary expenses of $2080 per month per one person.
  • Option 2 – your company is located in the States and you want to open an office in Kyiv and independently organize customer support. The monthly expenses (rent, salaries for managers, customer support staff, lawyer, accountant) will constitute at least $14,200. Let’s also add one-time expenses for the purchase of furniture and office equipment.
  • Option 3 – your company is in the States, and you decide to use the services of an outsourcing company in Ukraine. That will cost on average $10,000 per month.

The numbers speak for themselves.

What Are the Prospects for Outsourcing to Ukraine?

Ukrainian outsourcing companies can fulfill major requests from European and American customers in terms of both price and quality.

Outsourcing companies are legally responsible for the quality of their work. Besides, when they work with customers’ requests every day, they can’t do a bad job, otherwise the business will close after the first complaint to the court.

As for the prospects, the demand for the services of Ukrainian outsourcing companies will only be growing.

Interested in outsourcing to Ukraine? Contact us for detailed consulting.

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