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Publication date: 20.05.2024
Lawyer
Diia.City United Business Union: the importance of employee reservation for Diia.City resident companies
### Financial backbone of national defense
The ongoing full-scale war has highlighted the critical role of the IT industry in Ukraine's economy and defense. Only in 2023, the IT sector paid UAH 20.8 billion in taxes, a large part of which is aimed at the protection and defense of the country. In addition to tax contributions, business plays an important role in creating jobs, supporting the Armed Forces through donations and volunteer efforts, and investing in Ukraine's future by generating capital investment and new employment opportunities.
However, the full-scale war sharply worsened the investment climate, causing a significant outflow of personnel and entrepreneurs. In this challenging environment, it is critical to the stability and survival of businesses that some of their employees are exempt from conscription.
### Need to book employees
Securing contracts from abroad, attracting investments and establishing partnerships are key to the growth and stability of the IT business. Without the ability to reserve key personnel, these goals become unattainable, resulting in potential reductions in investment, job losses, business relocations, reduced support for the Armed Forces, and a decline in living standards.
Currently, the Ministry of Digital Transformation reports that only around 4,000 professionals are booked in the IT sector, a figure that needs to be expanded significantly to ensure business continuity.
### Government measures and industry response
The government adopted a resolution defining the reservation procedure and criteria for recognizing enterprises of critical importance for the economy. This regulation allows these companies to reserve up to 50% of workers who do not have skills in short supply. Recent public discourse on company bookings has highlighted the need for a transparent and fair process, which is what the current legislation aims to achieve.
### Position of the United Business Union Diia.City
1. **Requirement of valid reservation procedure**: Existing reservation process is vital for the IT industry and resident companies of Diia.City. This ensures that businesses can maintain their operations, receive new contracts and continue to support the economy and defense.
2. **Improvement and Digitization**: The reservation process needs constant improvement, including digitization and speeding up the paperwork process for recruits. This will optimize work and reduce the administrative burden on the business.
3. **Industry Safeguard**: Any issues with booking specific sectors or companies should not jeopardize the ability of the entire industry to secure the necessary exemptions. A broad approach is necessary for the collective stability and growth of the IT sector.
### Call for dialogue and cooperation
Diia.City United strives for a constructive dialogue with members of the Ukrainian Parliament and the Cabinet of Ministers. Our goal is to improve the current reservation system to maximize citizen welfare, increase tax revenue, and strengthen the nation's defense capabilities and post-war reconstruction efforts.
### Demonstration of Ukrainian IT excellence
Ukrainian IT experts and their innovations are recognized all over the world. Here are some sample posts from Diia.City residents:
- **SoftServe**: collaboration with NASA to develop moon construction technologies.
- **GSC Game World**: Developers of popular PC games such as Cossacks and S.T.A.L.K.E.R.
- **Luxoft and Daimler**: joint development of the Mercedes-Benz User Experience infotainment system.
- **GlobalLogic**: Creating software for blood collection devices used in over 70% of the US blood donation market.
- **Ajax Systems**: protection of UNESCO World Heritage sites in Norway.
- **Readdle**: Development of popular apps for Apple devices such as Scanner Pro and Spark.
- **Miratech**: Provision of financial IT services for the World Bank and the European Bank for Reconstruction and Development.
These success stories are an example of the global impact of Ukrainian IT innovation, and Diia.City United continues to support such excellence.
### Supporting the wider business community
Diia.City United supports CEO Club Ukraine, a progressive community that has been an important component of civil society and business representation for 12 years. We support their values and advocate for:
- Rule of law and elimination of unjustified business pressure.
- Anti-corruption measures.
- Reforming the Bureau of Economic Security in accordance with international obligations.
### Conclusion
The united business union Diia.City remains steadfast in its mission to support and develop the Ukrainian IT industry. By ensuring the retention of key employees, improving administrative processes and promoting a transparent and favorable business environment, we aim to contribute to the growth and global competitiveness of the Ukrainian technology business. We believe o in the stability and potential of our industry to make a significant contribution to the economic and defense power of Ukraine both during and after the war.
