Category: Business Support

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.

In February the Deputy PM of Bulgaria spoke at a press conference of the Bulgaria of the Citizens Movement leadership’s meeting. There she stated that the presence of Bulgaria in the Schengen area is not only of great importance, but is also a matter of security. According to her, in case the position of Bulgaria is changed and it is accessed in the travel free borderless area of Schengen, in that case that will be a matter of security to the country and to the European territory in general.

Ms. Meglena Kuneva further stated that she understands why Bulgaria is being kept outside of the Schengen zone and that the country has issues according to the CVM reports, which concern the field of justice and the home affairs. The Deputy PM of Bulgaria said that she understands the wish for the rest of the countries in the Schengen zone to give us a push to do our job faster, yet they need to use another tool and not Schengen, as that is not appropriate now.

In the end of January the Bulgarian Interior Minister met with the German Internal Affairs Minister Thomas de Maizière. The meeting was part of the informal Justice and Home Affairs Council held which was organized in Riga, Latvia. The talks were organized in a constructive and open atmosphere, during which the cooperation between the two countries in the field of the home affairs was highly evaluated. The two countries evaluated their cooperation highly and expressed their readiness in the strengthening of that cooperation.

Germany stated that it will back up Bulgaria in its preparation for the EU Presidency planned in 2018. The Bulgarian minister informed the German Internal Affairs Minister about the current political situation in Bulgaria and which actions are to be taken in terms of the reform in the security sector and the judicial system. The Bulgarian government was encouraged by the Minister Maizière to continue with the reforms that are going on in order to achieve concrete measures that will bring visible results. The two ministers also discussed the Schengen bid of Bulgaria and the migration pressure. The German minister was also invited by his counterpart to visit Bulgaria.

The Bugarian Deputy PM of European Policies and Institutional Affairs has declared that Bulgaria is taking measures into being proactive and join the efforts of the European Union in its fight against terrorism. Bulgaria has already proposed the European Union to build a center against the arms traffic through the Western Balkans. According to Kuneva, there is a good location for that in Bulgaria and the state needs only administrative capacity to complete the task. The Bugarian Deputy PM declared that in front of the journalists in Brussels a month ago after meeting with Gilles de Kerchove, the EU Counter-Terrorism Coordinator.

Ms. Kuneva accounced that in May the European Commission will announce its new strategy that concerns the internal security. The Bugarian Deputy PM further stated that Bulgaria should actively participate in the preparation of that security and make its contribution in its capacity as an external border.

The Bugarian Deputy PM stressed that EC should not associate the Mechanism for Cooperation and Verification (CVM) report with the desire of Bulgaria to join the Schengen Area. According to Ms. Kuneva, the question with the Bulgarian membership in the Schengen Area is a matter not only of Bulgaria’s security but also of the EU’s security.

The Deputy Chairman of Citizens for European Development of Bulgaria (known as CEDB), Mr. Tsvetan Tsvetanov recently stated that Bulgaria has fulfilled the criteria for the entry into the Schengen zone. According to him the country has excellent security systems now and is completely ready to join the travel free area. All the recommendations that have been given to the country have been fulfilled in 2010 and that is now the country is ready to enter the Schengen zone. The Deputy Chairman stated that Bulgaria is ready to become part of the overall security of the EU since it has direct access to the Schengen Information System since 2011, which further guarantees the security.

In other words, Bulgaria is in the position to handle all the systems that can support the security issue. The Deputy Chairman of Citizens for European Development of Bulgaria further added that after the terrible terrorist attacks in Paris at the beginning of 2015, the Schengen issue is even more sensitive to the European Union.

On a meeting held at Sofia Airport, the Bulgarian Deputy PM of European Policies and Institutional Affairs Meglena Kuneva spoke about the Bulgarian acceptance into the Schengen area. According to her, the problem lies in the attempt of some countries to associate that step of Bulgaria to the judicial system reform in the country. During the meeting, Mrs. Kuneva confirmed the readiness of the country to work along the Schengen Area requirements.

According to Meglena Kuneva millions of Euros have been invested in the airport equipment for the functioning of new systems. The Bulgarian Deputy PM stated that these systems were not eternal and will become old, without the possibility of Bulgaria to be able to recover the benefits from the capital investments it has made. She further stated that the problem that Bulgaria has is with the fact that some countries try to connect the reform in the judicial system with the security environment.

Addressing the ambassadors of the EU member states Meglena Kuneva, Bulgarian Deputy PM of European Policies and Institutional Affairs, stated that Bulgaria is accepting its potential entry in the visa free Schengen Area as a matter of security. She further stated that Europe should not allow itself to move at two different speeds as far as security is concerned. The Bulgarian Deputy PM stated that in the latest Paris events in the context, Bulgaria feels that it is very important to show its readiness to be accepted as a member of the Schengen zone.

Meglena Kuneva along with Hristo Ivanov – the Minister of Justice and Deputy and Filip Gunev – the Minister of Interior attended a business lunch with the European countries ambassadors. The meeting was organized by the Embassy of Cyprus. Mrs. Kuneva further commented that Bulgaria is against the association of the Mechanism for Cooperation and Verification (CVM) with the Schengen Area. Further were discussed the refugees’ integration, the migration pressure and the Bulgarian-Turkish border protection issues. According to Mrs. Kuneva a common European policy should be established on the migration and integration questions, as they concern a great number of countries.

In a recent interview the Minister of Interior Veselin Vuchkov of Bulgaria said to the journalists that Bulgaria deserves to join the Schengen Area even if it is only in association with the air borders. According to him Bulgaria deserves to stay next to Romania to join the Schengen area when air borders are concerned. The Minister is positive that the two neighboring countries should move in synchrony, just as they did until now.

The Minister of Interior further added that Bulgaria, as well as Romania has been technically ready to enter the passport free travel zone for many years now and that the criteria that has been previously set have already been met. Mr. Veselin Vuchkov further confirmed that the country has even managed to do well even when the refugee pressure is concerned. He said that Bulgaria did it better than some of the countries that are part of the Schengen area. According to the minister, the issue with Bulgaria entering the visa free Schengen zone is political and confirmed that the county will keep on synchronizing its efforts with Romania in order to convince all the countries to support the new members.

In the first week of December Meglena Kuneva, the Bulgarian Deputy Prime Minister for coordination of the European policies and institutional affairs, spoke at the Bulgarian Parliament, stating that Bulgaria is technically ready to join the Schengen zone. According to Kuneva the country has been constantly inspected in the period 2009 – 2011, and all the reports stated that Bulgaria is technically ready to enter the passport-free Schengen zone. Kuneva said that the Schengen accession of Bulgaria depends on the member states are ready to accept it.

The Deputy Prime Minister in charge of European affairs further stated that Bulgaria received serious support for Bulgaria’s entry into the travel free Schengen area from the President of the European Council. She further noted that Bulgaria has undergone a stress test with the migration pressure on its border with Turkey and the country did great. Kuneva is hopeful that Bulgaria will soon receive positive news for the gradual elimination of the borders with Schengen.

In the middle of December the Chair of the European People’s Party Manfred Weber stated that Bulgaria will not join the Schengen Area soon and that the process of joining is a matter of mid-term and long-term work. Mr. Manfred Weber was speaking in front of a group of representatibes from the Youths’ organisation of the Citizens for European Development of Bulgaria, who were on a visit to Brussels.

According to the European People’s Party Manfred Weber, when CEDB Deputy Chairperson Tsvetan Tsvetanov was interior minister, the trust on the part of some European countries increased with the ability of Bulgaria to exert control at its borders. He further said that currently these countries are lacking trust after a year of unstable government situation. Manfred Weber stated that Bulgaria should invest in its security and should start behaving like a partner in the European Union, deserving respect but also taking responsibilities.