THE FUTURE OF IT OUTSTAFFING SERVICES IN UKRAINE

In today's world, companies are sorely lacking in time. You need to constantly chase trends, innovations, development, etc. Sometimes there is no time to search for staff at all. It is because of this that outstaffing services were created not so long ago. If you understand the concept itself, then outstaffing is when employees are on the staff of one company, while working for another. The task of such services is to find a team of workers, offices, and all the equipment for comfortable remote work. With the help of an outstaffing company, the selection of a dedicated team for business becomes as convenient and fast as possible.

The global labor market for IT developers is becoming increasingly accessible thanks to personnel outstaffing. Ukraine, with its highly qualified specialists and competitive rates, is becoming a key player in this process. IT outstaffing agencies in Ukraine provide companies with a unique opportunity to assemble development teams around the world while saving resources and gaining access to global talent.

In Ukraine, such services are in their infancy and they will have a huge increase in popularity, but even now there are enough companies ready to help foreign employers in the selection of workers. Especially in the field of IT, agencies in Ukraine help to find excellent programmers and developers in Ukraine who are ready to work remotely for foreign businesses. This article will describe the main advantages of using Ukrainian outstaffing companies, and we will also delve into the nuances and features of this type of work.

According to the legislation of Ukraine, as part of the use of IT outstaffing, there are quite a lot of advantages for the customer. For example, when an employee concludes an employment contract with an outstaffing company, and not with a customer, this excludes the customer from participating in labor disputes that relate to this employee, and liability for violation of the law.

Dedicated IT services in Ukraine also simplify personnel management and personnel management. Vacations and sick days are issued by the outstaffing company. As a result, this reduces the burden on the client's accounting department and eliminates the need to provide separate social guarantees. The Tech Partner also maintains personnel records, administers business trips, draws up advance reports, and provides the necessary information to employees.

If we look at the benefits of outstaffing in more detail, we can see that it implies close cooperation between the business owner or his representatives and the IT department. This means that there is a direct connection between you and the programmers; you can actually become a project manager who controls the work. You will be able to directly assign tasks to your staff, see how much time they spent on a particular task, and also evaluate their effectiveness. Moreover, IT outstaffing companies employ experienced programmers and designers who have completed more than one project. In addition, you get a ready-made team; you don’t need to spend resources on team building.

IT recrutiment agencies in Ukraine also turn out to be more convenient due to the fact that you do not need to enter into a separate contract with each team member, as well as employ employees in your company. The staff already works and receives a salary in the agency; you only pay for their services for the project.

Minimizes the involvement of the customer in financial questions. The outstaffer calculates and pays salaries and compensations. Engaged in the payment of taxes and various fees, such as the contribution to the social security fund; optimizes taxation (deals with personal income tax, military fees, and ERUs), forms a tax credit for the customer.

Outstaffing in Ukraine is still perceived with caution. The reason for this attitude is usually a lack of understanding of what outstaffing really is, ignorance of the laws, or unwillingness to lose control over processes. But over time, people begin to understand that the main resource of a business is time and everyone is doing everything to reduce the time spent. That is why this model of cooperation has become indispensable in modern business. 

At the moment, dozens of companies have opened in Ukraine helping to create and find excellent teams for customers from Europe. Therefore, this area is only at the start of its development, and much more will improve over time. The most important thing is that people continue to use the resources of such companies to help in finding staff.

Ukraine ranks first in Eastern Europe in outstaffing of IT specialists. In 2020, our country exported more than $5 billion worth of IT services. It is also one of the top three countries in the world with the best certified specialists. Giant companies such as Grammarly, Oracle, Samsung already employ thousands of developers from Ukraine.

According to a study of demand for outstaffing services conducted by the «Promotion Staff» group of companies. Important to notice, that 60% of large international and national companies in Ukraine use or have ever used such services, 30% have never resorted to outstaffing and do not intend to use this service in the future, and 10% have never used it, but intend to use personnel employment by hiring dedicated developers from Ukraine. 

Surprisingly, interest in hiring software developers offshore always increases during periods of crisis and economic downturn, when companies face the most pressing issue of staff reduction without reducing the scope of responsibilities. And now Ukraine is again beginning to experience a boom in outstaffing services.

Most importantly, in this niche, many companies still have room to develop and this creates competition in the market. That is why each outstaffing company adapts to each client and will make your work with him as convenient and profitable as possible.

To fully understand the benefits and profitability of IT outstaffing agencies in Ukraine, you need to delve into the legal component of this issue in more detail, because, unfortunately, at the moment, Ukrainian legislation is not yet very ready for the outstaffing model. Moreover, in 2018, several large outstaffing companies in Ukraine were accused of not paying taxes. Among the disadvantages of the outstaffing business model in Ukraine is its legislative uncertainty.

Firstly, neither the Civil Code of Ukraine nor the Economic Code of Ukraine contains such type of agreement as an “outstaffing agreement”. This does not mean that it cannot be laid. It is possible, but you should be guided by the general requirements for civil and civil law transactions. Also, subclause 14.1.183 of the Tax Code of Ukraine, contains the concept of “personnel provision service”.

Secondly, there is a big risk, due to an unsuccessfully drawn-up subject of the contract, the obligation of the contractor, when checking the State Labor Service or the State Tax Service, to receive a fine for not formalizing the employment relationship (30 minimum wages in 2023 - 201,000 UAH). In part, this situation is a consequence of the previous one - legislative uncertainty.

Thirdly, poorly executed acts of acceptance and transfer of completed work/services can also add “fuel to the fire”. Difficulties arise in this matter since instructions to employees are given by the customer company and this act must be drawn up based on the information provided by the customer. To do this, there must be documents that would specify the services provided and indicate their connection with the customer’s business activities.

If we summarize all of the above, then when agreeing with an outstaffing agency in Ukraine, we recommend that everyone, to minimize risks for themselves and the outstaffing company, and to avoid legal liability, should pay attention to the execution of contracts: draw up primary documentation; focus on drawing up contracts between the customer and the outstaffing company; ensure that contracts reflect actual services or work; correctly draw up internal documents of the counterparty; explain outstaffing processes to staff.

IT outstaffing in Ukraine is only gaining momentum, but the goal for the further development of this industry is already visible. Everyone knows that at the moment Ukraine is going through a very difficult situation due to the war, but European businessmen are still actively opening representative offices, as well using the services of It recruitment in Ukraine. But, at the moment, we need to pay attention to the time after the war, when the economy will grow and Ukraine will be on everyone's lips. 

The main advantage of hiring labor in this way is that the employee is hired by a staffing agency and the employer only pays him for the work actually performed, without the burden of the payroll budget and extensive administration associated with a traditional employment relationship. This fact brings the company significant savings in personnel costs since personnel and payroll management is transferred to a recruitment agency with which the “leasing employee” has a signed employment contract.

In the future, we can expect the greatest expansion of personnel services in this area, including in connection with the arrival of large international companies in Ukraine. Companies are increasingly interested not only in hiring employees but also in distributing complete activities and activities that are not their core business.

In general, outstaffing is a new vision of personnel search and settling the problems associated with it. If a company does not want to bother about where to find good specialists, how to raise them, and what taxes to pay for them, cooperation with an outstaffing company ukraine. Outstaffers take on all the costs of arranging specialists, and in the meantime, the customer develops his business and begins to earn more. 

The main task of such articles is to inform people about little-known services or services that raise questions from potential customers. We hope that the information presented in the article was useful and you learned more about IT outstaffing services in Ukraine.

If you have any questions or have an idea about hiring a team of professional developers in Ukraine, we would be glad to fuel your business idea with our services: contact.us@gointeractive.co.

Go Interactive is an IT outstaffing Agency from Ukraine with 13 years of experience.