Ukraine’s IT sector boasted some of the highest salaries in the country, long before Russia invaded, with roughly 200-thousand workers providing critical services to tech giants and other major industries around the world.
As the country enters its seventh week of the war, some of its top tech executives are making direct appeals to those same international firms to stick with them, even as fears of a brain drain consume the domestic market.
“We are showing [the world] that we can continue to work through any condition,” said Sergiy Fitsak, Managing and Technical Director at Softjourn, a technology consultancy and software development firm. “[Our message] is just believe in us. Continue to do business with us.”
Nearly 4.5 million Ukrainians have fled the country since the fighting began in February, according to the United Nations. That population decline has been slightly more pronounced in the tech sector, with 16 percent of the workforce, largely women, having relocated outside of the country, according to the IT Ukraine Association, a trade group representing the sector.
The migration has been most noticeable in the eastern part of the country in cities that have sustained the heaviest damage. But even workers who once considered staying in western Ukraine are leaving, in part because of heavy recruiting from firms in other parts of Europe, looking to tap into the country’s tech talent, with promises of higher pay.
“[We are] fighting for brains with other neighbors and countries because as the war started, I saw a lot of advertising and companies aimed at the Ukrainian people,” said Konstantin Vasyuk, Executive Director at IT Ukraine Association. “There is a huge lack of [tech] specialists. In Europe, they have [a skills deficit] of 1 million people until 2025.”
Lessons from 2014
Despite worker displacement, Vasyuk said the domestic IT sector remains stable for now, in part because of workers who continue to support clients globally, from safer regions. With a majority of employees now operating out of western Ukraine, companies have managed to retain 77 percent of their international clients so far.
Fitsak attributes that largely to contingency plans implemented in response to the events of 2014. A domestic uprising that led to the ouster of then President Viktor Yanukovych and Russian annexation of Crimea that ensued highlighted the critical need for a backup plan, he said.
Softjourn installed backup generators at their offices in anticipation of blackouts, deployed laptops to all 250 employees, allowing them to continue working outside of the office. The firm moved all of its databases to the cloud, and installed additional security layers on every company device to protect from cyber attacks.
“This is not our first invasion,” Fitsak said.
Vasyuk said two years of remote work during the covid-19 pandemic, only heightened firms’ resolve and allowed for largely undisrupted workflow.
On the frontlines
Still, the latest war has injected an additional burden - that of coworkers fighting on the front lines. 7 percent of tech employees have either enlisted in the military or joined government cyber forces since the Russian attacks began in February. Those who stayed back, have scrambled to deploy their own skills where needed.
Software firm N-iX, one of Ukraine’s largest tech companies, raised nearly half a million dollars to help the Ukrainian Army in its fight against Russia. In just over a month, the company has purchased more than a dozen vehicles to be used for humanitarian needs, donated ammunition and tactical clothing to the military, and purchased bulletproof vests for colleagues, according to CEO Andrew Pavliv.
As images emerged of civilians killed at the hands of Russian soldiers, N-iX workers pulled together to develop a website to collect information on Russia’s war crimes.
Others have gotten more creative.
Vasyuk said some competing firms pulled their resources to develop chatbots that allowed users in messaging app Telegram to report the location of Russian troops. Geographic coordinates embedded in images were pulled and shared, to warn Ukrainians of impending military activity.
‘Something new is being born’
For western countries, Ukraine remains a valuable lifeline as companies undergo a rapid transition to digital. Ukrainian code can be found in everything from Lyft maps that connect the platform’s drivers and users, to applications for JP Morgan Chase (JPM) and Citigroup (C).
That helped contribute to the 40 to 50 percent growth the industry saw during the pandemic. Pavliv has halted previous plans to expand his footprint to four Ukrainian cities this year, but he and Fitsak remain optimistic about the prospects for the domestic tech sector, in part because some employees who initially relocated outside of Ukraine have slowly started to return, even as the fighting drags on.
Fitsak said he is looking beyond the war, to the country’s recovery. He’s convinced it will be driven by the tech sector.
“Something new is being born right now,” he said. “It’s not just national pride to help rebuild the country. We want to do it for the rest of the world.”
Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AkikoFujita
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