Why Romania needs to be on your outsourcing (BPO) list
Romania’s reputation as an attractive outsourcing destination is on the rise. In fact, the 2015 Cushman & Wakefield BPO Location Index ranked Romania at no. 4, just after Bulgaria.
Likewise, the 2014 A.T. Kearney index ranked Romania 5th among the most attractive outsourcing destinations in Europe. And a 2014 study by KPMG ranked Romania as the fastest growing market in the European Union in terms of IT outsourcing services.
Thanks to Romania’s abundance of professional, multilingual, highly-skilled labor as well as its cultural proximity to Western Europe, the country has been climbing in the rankings of preferred outsourcing hubs for European and North American companies. Investors have labeled Romania as an “outsourcing valley” for BPO, ITO, software development, research programs, knowledge process outsourcing operations, and shared services. But let’s take a deeper look as to what makes Romania such a great BPO destination.
A few quick reasons:
- Geographical (1-2 hour flights) and cultural (business ethics) proximity to Western Europe facilitating close relationships with clients compared to offshore locations
- Strong aptitude for multilingual skills
- Knowledgeable and experienced IT workforce
- Academic readiness to support talent pool continuity
- EU member state, reducing legal and financial concerns
- Political and economic stability
The right price-quality ratio
Although not the lowest cost destination, Romania’s multilingual labor force combined with its technical and soft skills proficiency makes the country very cost competitive. Investors have labeled Romania as an “outsourcing valley” for BPO, ITO, software development, research programs, knowledge process outsourcing operations, and shared services.
As an example, Alina Plaia, VP at Luxoft, stated in an interview for ZDNet, that the cost of outsourcing to Romania compared to India is justified due to the seniority of Romanian staff and the level of execution. She adds: “The new age of outsourcing is more about innovation and outsourcing certain capabilities rather than merely doing things cheaply. More and more tasks are being outsourced because they cannot be done in house, not only for the economic reasons. Therefore, the cost-related question is often irrelevant.”
Large multilingual talent pool
The country’s sizable and multilingual labor force and student body are among the main lures for international companies to outsource in Romania. The diverse linguistic profile makes it especially attractive for BPO operations that require interaction with customers, while the large pool of IT professionals ensures best-in-class ITO engagements.
The labor force employed in the outsourcing sector has been increasing over the years, from 15, 000 employees recorded in 2007 to over 50, 000 employees currently working in the outsourcing industry, as per data from the Romanian Ministry of IT and Communications.
Romanians are known internationally for their strong aptitude for speaking European languages; primarily English, followed by French, Italian, Spanish and German. In the past 10 years, around 20 multilingual major call centers and BPO organizations have come to operate in Romania, finding a large talent pool to serve millions of customers across Europe and the United States.
When it comes to ITO, Romania has become a flourishing technology hub. As per data from ANIS, the Association of the Software and Services Industry in Romania, the country currently has around 50 offshore centers owned by large international IT vendors. More than half of these are BPO centers, 30% are IT services-related centers, and less than 20% are R&D facilities.
The diverse linguistic profile makes it especially attractive for BPO operations that require interaction with customers, while the large pool of IT professionals ensures best-in-class ITO engagements. According to the study “Software & IT Services in Romania – A Study on the Development of the Industry of Software and IT Services in Romania in 2013,”commissioned by ANIS and developed by IDC, 95.4% (more than 1.74 million) students were studying English in 2011. German was studied by 8.6% of students (156,236) and French was studied by over 1.55 million (85%) students – more than any other country in Central Eastern Europe.
The same study also reports Romania as having the largest pool of human capital in Southeastern Europe, with a total labor force of more than 9 million in 2011. In 2012, the Romanian IT sector employed more than 60,000 professionals. The majority of them (more than 80%) are technical specialists, such as software engineers, analysts, developers, and project managers.
Indeed, when it comes to ITO, Romania is first in Europe and sixth in the world, in terms of number of certified IT specialists. There’s a pool of about 100,000 people in various IT-oriented profiles. The successful presence of global high tech companies such as Microsoft, IBM, P&G, HP, Oracle, Wipro, S&T, Accenture, WNS, Intel, as well as Luxoft, Ubisoft and Amazon confirm Romania’s ITO experience and potential.
A preferred outsourcing hub
In summary, Romania holds its position as a home to more offshore and nearshore centers than any other Southeastern Europe country thanks to its cost-quality balance, flourishing technology hub, and abundance of professional, multilingual talent. And if these impressive stats and studies are not enough, we welcome you to visit us for yourself!