2015 – POSITIVE SIGNS FOR ROMANIAN OUTSOURCING
When talking about Romania as an outsourcing destination I am proud to mention the fact that our country has maintained a stable, well-deserved top-side place on the global outsourcing map. According to a review made by an important consulting company – a review that focuses on the first 100 outsourcing worldwide locations – Romania, through Bucharest ( the most important outsourcing city in the country ) reached the 44th position. It would be most desired that this chart would also include other Romanian large cities as Cluj – that already has a strong outsourcing community – or Iasi, Brasov and Sibiu.
The reasons why Romania is chosen as one of the best Outsourcing destinations worldwide are simple: we are talking about a list of skills other countries lack: language skills. Nowhere in the world will you find professionals that will speak fluently two, three or even four foreign languages. If we combine the language skills with IT knowledge, creativity, Western attitude, European culture and dedication – we can easily understand why multinationals choose our country as their perfect outsourcing destination.
However, the human factor and the cost efficiency are not sufficient at this moment in order to bring Romania to the top 10 Outsourcing destinations in the world. In my articles, even more than once, I have also stated the fact that Romania had several drawbacks along the years when talking about the relationship created between the education field and outsourcing line of business (adding the necessary skills in the school curricula) or the threats coming from the lack of partnerships between the government and the outsourcing business.
The wind of change
Even though this particular line of business is highly challenging and perhaps lacks the maximum assistance from the state, companies in Romania are currently developing and growing their businesses while providing jobs for hundreds of professionals. The wind of change started to blow back in 2012 when several decisions of the government were taken for implementing a support scheme by the state to come in the investors’ help in different fields. The maximal value per company being approximately 28mil Euro. In order to obtain the state aid financing, the applicant must demonstrate, among others, that the project will create and maintain a minimum number of new jobs, financial ratios and results, which over the next years will translate into profit tax, property tax and social security contributions in an aggregate amount at least equal to the state aid received. During the five year post-implementation, the project will be subject to detailed monitoring period to ensure that these commitments are kept.
The challenges encountered by companies are many – they are obligated to keep each new subsidized job for at least 5 years, hire all the employees within a period no longer than 3 years from the moment they had received the aid and pay maximum attention to the exact location where their business is being developed (not all locations are granted with the same amount).
The reverse of the coin, however, looks promising: companies will be more competitive in terms of pricing, they will be given the opportunity to develop further and will be provided with the funds to create subsidiaries in other Romanian cities, not only Bucharest. We must not also forget about the numerous jobs and working places created for young professionals in Romania.
The number and most of all the names of the companies that acquired this state aid looks promising! We can outline many important Outsourcing giants – all of them currently having important outsourcing centers in various cities in Romania:
As a direct result of this support scheme the total number of new jobs created by 2015 has risen to 6120, the majority of these being created in Bucharest – 5000.
The responsibility the companies have at the moment is also important – as mentioned before, they must demonstrate that their results will translate into profit tax, property tax and social security contributions in an aggregate amount at least equal to the state aid received.
Having in mind that 82% of the new created jobs are and will be located in Bucharest we must also think about the importance of state aid for the other important outsourcing locations in Romania – cities that are currently rising in the BPO/Outsourcing map in our country, such as Iasi, Sibiu, Brasov, Cluj or Tg Jiu. They too have a greater chance of proving themselves in the future and companies are supported to open new support/shared service centers there. Maybe in the future we’ll be presented with reports that will provide a different perspective, presenting a constant development in these areas as well.
Prospects for 2015
The Outsourcing landscape for next year in Romania looks promising – companies are constantly developing new shared service centers and BPO newcomers are interested in the Romanian market. The new comers are companies that either have a SSC in another European city and they plan to move their business in a more competitive country – relocating jobs from EU especially, the result being they have a significant labor arbitrage ( at the same time they are ready and organized, and the movement will be done smoothly and fast), or they represent companies that never outsourced in Eastern Europe but choose Romania due to the mix of language skills and IT proficiency provided by the employees here.
Article published in the printed version of Business Arena magazine