Bulgaria No 1 Outsourcing Destination in Europe
The consulting company Cushman & Wakefield had recently presented a detailed global report discussing the most popular outsourcing destinations in the world. The report named “Where in the World? Business Process Outsourcing (BPO) & Shared Service Location Index” evaluates factors that are supposed to effect the successful operations of the different companies around the globe.
The report
The Cushman & Wakefield report ranks the best outsourcing locations around the world, assessing the risks, the costs, and the operating conditions. The report covers 36 markets all over world and is based on companies from the business process outsourcing services. According to that report Bulgaria makes it to the top place as the best outsourcing destination in Europe and reaches the third place on the global scale right after Vietnam and the Philippines. Compared to the report from last year, Bulgaria has made a record leap going 11 positions up the outsourcing ladder. The country is followed by Romania.
Risk, cost and conditions are the main key factors to be considered when ranking countries.
The key factors mentioned by the consultants when evaluating Bulgaria were the low taxes and the availability of affordable and highly-qualified workforce for the needs of the outsourcing companies. Annually in Bulgaria graduate around 60 000 graduates and in half of the cases the graduates have the necessary major and knowledge that is suitable for the sector services. Another key skill for the outsourcing business is the excellent knowledge of foreign languages. In fact 98 % of all students in Bulgaria who are enrolled in secondary school study a foreign language and 73 % study at least two foreign languages.
The rented Sofia offices
During the last few years, all markets around the world had gone through economic turbulence and many companies had to experience challenging situations. The global recession, followed by the debt crisis concerns in the Eurozone, as well as the unstable political situation brought many risks to all business sectors. Well-established within the outsourcing market, Bulgaria enjoyed an upward trend in the office rental market thanks to the outsourcing companies moving to Bulgaria and particularly to the capital Sofia. In 2014 the office space in Sofia that was rented reached 154 000 sq.m. These results have been valid on the office market in Sofia back in 2007, in the pre-crisis period.
Last year 49% of the rental market deals in the capital of Bulgaria – Sofia, have been signed with growing eco-companies from the outsourcing and from the IT sectors. According to the prognosis of the real estate agents, that growth will continue and will further be transferred outside the borders of Sofia. The realtors expect strong demand for suitable office space in other large cities of the country such as Plovdiv, Bourgas and Varna.
The Employees
Currently more than 25 000 people work in the outsourcing sphere in Bulgaria. The starting salary in the sector is around 1500 BGN, yet the experienced professionals get a monthly paycheck of 4 000 BGN. Since there is a demand for young and talented people, the outsourcing companies are even eager to pay bonuses of 250 BGN to their employees who bring new people in the office. Most often the companies that are outsourcing their business to Bulgaria work in the sphere of maintenance, programming, optimization of business processes, high technology.
Europe vs Asia
Resulting from the stagnant economies and labor markets in Europe, the difference between Europe and Asia as outsourcing destinations is melting. At the same time there are fears that some large Asian markets such as China and India, will soon overheat and start asking for a high cost of labor.
Despite all that however, the largest market worldwide for outsourcing services is still India even if it remains at 20th position in the ranking.
The Global Trends for the Outsourcing Sphere for 2015
• Costs: Rising inflation, labor and property costs in established outsourcing destinations (China and India) add to the attractiveness of the emerging locations.
• Value creation: The outsourcing providers start looking beyond the cost reduction and focus on customer care optimization and innovations.
• Outsourcing service provisions: The companies offering outsourcing services are now providing a combination of vertical solutions (such as health payer business processing, claims processing, and loan portfolio management) with horizontal solutions (such as HR, payroll, and supply chain management) in order to provide effective BPO strategies.
• Language proficiency: Very important aspect of the outsourcing destinations. Companies are looking for outsourcing countries where the employers are well educated and have multiple language skills.
