A third of major outsourcing companies come from Central and Eastern Europe
There are 6.6 million employees who work in the Outsourcing business in the region and the direct economic impact of that fact alone reaches a number of 67 million EUR.
Outsourcing had established itself as an important market before the economic crisis as well, but the companies’ pursuit for low costs caused the environment to develop even more and at current we are witnessing a major growth in the business market from this point of view.
The expansion this industry shows made companies worldwide rethink their strategies and turn towards countries and cities that provide best operational costs. It’s easy to see why Romania, as well as other countries from Eastern and Central Europe represent a true heaven for foreign investors when it comes to opening shared service centers of branches here. In addition to costs, the workforce found here is well prepared and competent.
Romania and Poland are the largest outsourcing markets in the region. Romania is ranked second in Europe, after Poland, and No. 9 in the world market value. But not only Romania and Poland have proven themselves as having valuable potential in terms of Outsourcing. As this market continues to develop, we see that over 30% of the top 100 companies worldwide have branches in Eastern and Central Europe (as per a study conducted by Colliers International).
The BPO (Business Process Outsourcing) segment has shown a growth in the last years as well. “The BPO market is evolving at a fast pace and figures are showing that Europe is currently exceeding its status as an emerging Outsourcing destination. An analysis conducted by Colliers International in 2014 on companies operating in Central and Eastern Europe show that 30 percent of the top 100 global outsourcing companies are already present in the region. We currently have 2.8 million work places created in contact centers in Eastern and Central Europe while the number of employees working for Outsourcing processes reaches 3.8 million. The impact of that fact alone reaches a number of 67 million EUR” – as per a press release received by our magazine.
Outsourcing companies are expanding in countries that have lower costs
Central and Eastern Europe is truly making a statement with its Outsourcing destinations, rivaling Western Europe’s position globally. Central Europe is often chosen as a destination for outsourcing due to the maturity of the industry and the professional players activating in the field at a cost up to 50% lower compared to Western Europe. However, the cost advantage is even greater in Eastern Europe.
The low cost, however, is not the main advantage this area has to offer. Balkan countries come with a specialized and educated workforce. In the top presented by Kearney Global Services Location Index 2014 (that measures the offshoring potential from 51 different states), two Balkan countries are listed in the top 20: Bulgaria (9) and Romania (18). Poland is listed 11th.
The Balkan region offers investors the possibility to open Outsourcing centers in different cities from within the same country, each presenting enormous potential. Moreover, these cities are continuously developing, and that fact alone makes them even more competitive in terms of offering better cost locations, convenient spending in terms of salaries, experienced workforce and a secure business environment. The infrastructure in most European cities is safer compared to the leading countries present in global rankings in terms of outsourcing such as India and China.
The Outsourcing and offshore market in Central and Eastern Europe is dominated by the IT and telecommunications sector – 46%, followed by banking and insurance – 23%, professional services – 13%, energy / industrial and other business sectors – 20%.
The latest developments in the outsourcing industry show a paradigm shift in terms of customer interaction. With an annual growth of 30%, social media is now the digital channel with the largest increase, covering an important sector in the customer service industry, given the fact that digital interactions represent 35% of all interactions.