2021 gave the technology industry a boost: many IT companies received excess profits, and employees received excess salaries. The average income of Ukrainian IT businesses that work with foreign clients has grown by 29% over the year, according to the Pioneer payment platform.
Investors will invest in technology
Experts’ forecasts indicate that active investment in IT will continue for at least the next three to five years. According to Roelf Botha, a partner at Sequoia Capital investment fund, $16 trillion in the world is invested in instruments with negative returns. In simple terms, it’s like putting $100 on a deposit, and in a year the bank will return $99.75.
This situation means that large investors now, in fact, have nowhere to put their money. To be more precise, as Eugene Penta, a professor of finance and economics at the Kyiv-Mochila Business School, noted: “As before, IT companies with a focus on cloud technologies, cybersecurity and anti-fraud have prospects.”
The valuation of the business reached $13 billion (that is, increased 13 times compared to 2019, when the company received the status of a unicorn).
In order to attract professionals faster, companies will compete with rewards – in the short term this will reduce their profitability, but in the long term it will allow them to stand in the market, create many new breakthrough technologies and increase capitalization.
Possible black swans
Any scenario can be corrected by unpredictable events with a high degree of impact on the economy, including the technology sector. For example, it is difficult to predict how the risk of China’s stagflation (when the economy is collapsing and inflation is high at the same time) will affect the world. Many markets are economically linked to China. Obviously, the wave effect will affect many countries, including the US.
In the Ukrainian market, experts note the risk of lower investment due to the unstable political situation. The aggravation of relations between political forces, the investigation in connection with the Wagner case, the active pulling of Russian troops and equipment to the border with Ukraine – all this does not contribute to increasing the confidence of external investors.
As a result, many foreign investors are withdrawing money from government bonds and Eurobonds of Ukraine, which causes increased pressure on the hryvnia, whose exchange rate has reached a more realistic one (UAH 27/$1).
Negative factors affect the dynamics of the labor market, requests for developers in Ukraine are decreasing. This is due both to seasonality – the New Year holidays are coming, and to economic and political reasons. Nevertheless, there is restrained optimism on the market – hope that the situation will stabilize.
The talent market is going global
In the next five to seven years, the gap between the number of required specialists in this field and their availability will only increase. According to forecasts, by 2030 the global shortage will be more than 85 million specialists.
As a result, IT companies began to actively go beyond the borders of their country and look for talents around the world.
The global remote trend is intensifying the competition for talents: the choice of offers is growing, and there are fewer restrictions for specialists. Therefore, rewards for IT specialists – from developers to PMs and marketers – will be leveled around the world. For professionals from regions that are now considered “inexpensive”.
the forecast is good: we should expect that the average salaries of Ukrainian developers will approach the global median. This will increase competition for vacancies in “expensive markets” – so it is highly likely that, for example, American companies will reduce remuneration for local specialists. Again, because employers will have more choice.
It will be more difficult for a specialist, for example, from the USA, Great Britain or Germany, to get a job in an advanced company, because professionals from Ukraine are chosen on an equal basis with them. At the same time, together with Ukrainian specialists, professionals from Asian countries, whose value in the eyes of employers is also growing, will apply for vacancies.
Continue to grow professionals with your resources. Work with technological universities, launch internships for students and retraining programs for those who want to learn a profession in IT. Provide additional training to juniors: either pay for courses, or, if a large team growth is planned, open their own schools.
Strengthen the brand of professions in IT in the labor market. The developer needs a certain mindset and deep mathematical knowledge. Students who choose IT majors because of the myth of high salaries for everyone are quickly weeded out.
In order for the selection funnel to work more efficiently already at the entrance to the profession, it is necessary to introduce it earlier, from grades 5-9. Tell what opportunities there are, what skills are needed, what needs to be studied in order to become the next Zuckerberg or Musk. There are many other ways to introduce children and teenagers to IT: for example, museums of robotics and interactive centers where you can see and “feel” new technologies.
Business expects steps from the state education system: for example, to establish cooperation from the first year, adapt programs to business needs and conduct internships in companies with the support of experienced mentors. Benefits (for example, tax) for non-state educational centers that teach technology can improve the situation.
Improve the skills of managers and HRD. Working with global teams requires new managerial skills. For example, the willingness to work with people based on the principles of diversity (diversity & inclusion). Be able to organize the work of specialists from different time zones.
Companies need to pump development programs at all levels – from language courses to leadership and culture. There are not enough HRDs in Ukrainian companies that can support the work of global teams. To build a payment system or a corporate culture, you need comprehensive training and, preferably, a certain background. It may be an option for some companies to look for HRD in Europe or markets where expansion is planned.