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April 4, 2022

Ukraine conflict highlights global IT professional shortage

The conflict between Russia and Ukraine is intensifying the global IT and software professional shortage, problematic to enterprises looking to accelerate app modernization efforts.

For an industry already sorely lacking in software developers, engineers, and SREs, the Ukraine conflict has magnified the situation. Hundreds of thousands of technology professionals based in Ukraine and Russia (reportedly at well over 200,000 in Ukraine alone) will cause a ripple effect and exacerbate the shortage of consultants and integrators available to provide crucial enterprise technology services. Furthermore, the large numbers of technology professionals based in Ukraine and Russia are facing the daunting loss of their livelihoods, making the situation even more desperate.

Ukraine represents an important destination for IT outsourcing, tapping the country’s tech talent pool which are primarily software developers. One in five Fortune 500 companies reportedly uses Ukrainian IT services. These companies are now under pressure to quickly establish contingency plans, as well as reevaluating overall global outsourcing structures in anticipation of ongoing geopolitical activities.

Timing of Ukraine conflict couldn’t be worse

The timing is particularly damaging post-pandemic when companies are struggling to accelerate their digital transformations to vastly improve business efficiencies and customer services in a tumultuous global economy. The loss of IT personnel has given pause to numerous vendors and systems integrators (including Microsoft, Oracle, Google, Salesforce/Slack) counting on those engineers and developers to support customers’ digitization and app modernization projects. Vendors are scrambling to devise new outsourcing strategies

The industry is largely in support of the US Department of Commerce’s massive export controls. Tech giants including Microsoft, AWS, Google, Apple, Cisco, IBM, and others have gone even further. Swift actions include halting technology services to Russia, backing up or relocating data centers within Ukraine, offering free services/technology to Ukrainians including cybersecurity threat monitoring, providing humanitarian support to refugees in the form of IT professional training, and readjusting Ukraine IT consulting/integration outsourcing strategies.

The significant loss of IT outsourcing services in the Russia and Ukraine regions resulting from the conflict has given pause to numerous companies relying on those outsourcing services for digital transformations. Feeling the effects of a war on the global market and devastating reduction in tech professionals, software vendors are bracing for the geopolitical activities to have an effect on next year’s revenues.