Romania – “The Big Thing”

in the global IT outsourcing industry






In the rush to outsource all or substantial portions of their work in search of reduced overheads, companies have focused for too long on cheap labor alone. For countries in Asia, this model has been a lifeline and a major economic driver. However, for many, overall value – in the form of top quality work at a good value – has become more important than price alone, and corporations have begun to factor in price-quality and cost efficiency into their calculations.


In search of the higher-level work and skilled labor that many traditional players in outsourcing have not been able to meet, corporations have begun looking closer to home for outsourcing solutions, and Romania has emerged as an attractive option. In recent years,-

Romania has seen a large shift toward offering these services, and large international companies across diverse industries – including IBM, Microsoft, Oracle or Dell – have opened offices there. The country is already ranked in the top 20 countries worldwide for outsourcing and is a top choice in Europe for a number of reasons.


The Human Capital


The sector already employs a sizable workforce of over 100,000 IT professionals, mostly focused on insurance, financial services, telecommunication, banking, and gamin. The number is also rapidly rising, with the sector expanding by 10% in the past year alone while contributing nearly 20% of the existing outsourced workforce in Central and Eastern Europe.

This explosive growth is the result of the country’s strong emphasis on technology and language education. Even with a rate of nearly 15.000 students with IT-related degrees graduating annually, companies are in a race to fill open positions and demand continues to skyrocket.

Most importantly, these new workers entering the market are highly skilled. They are multilingual — an estimated one in five Romanians speak multiple languages — which is a key characteristic for companies that work across continents, exhibit high-level technology and financial skills.


The Logistical Upper Hand


More so than human capital, however, Romania’s position relative to the world’s major Western business hubs makes it a more appealing option than its Asian counterparts. Unlike India, which is several time zones ahead of the US, UK, and most of Europe, Romania is only two hours ahead of England, and seven away from the US East Coast.

This may seem superfluous in a digitized world, but the speed of operations can lead to major profits, or losses if tasks must wait for a full business cycle to be approved or completed. For companies that establish branches within countries they outsource work to, traveling to Romania may also be significantly more cost-effective than repeated trips to Asia.

And while costs of labor may be lower in Asia than Eastern Europe, overhead costs – including costs of flights, management, and the potential costs of cultural gaps – are lower when outsourcing to Romania.

Romania also benefits from two political factors – its membership in the European Union, and strong institutional support from the government. This includes several tax incentives and breaks, alongside wages that remain highly competitive within the EU. More importantly, membership in the EU comes with more than just financial and security advantages.

As a member state, Romania’s regulations and compliance laws must fall in line with the broader EU union, meaning that companies have significantly fewer startup barriers when setting up offices. Apart from easier setup, this gives companies a much safer framework and infrastructure for financial transactions and services.


A Rising “Big Thing” Near-Source Destination


For companies looking for near shore outsourcing solutions, Romania is increasingly appealing. The country’s labor force is highly qualified and focused on sectors that have not been overtaken by automation. The provision of financial and IT services still requires a highly skilled hand, and education is a vital component contributing to Romania’s place as a top destination for these solutions. For any company considering outsourcing, going with the cheapest option may not always get the best results. Instead, going for the most cost-effective option, as Bucharest Cluj and other Romanian cities are quickly proving to be, means that companies can still reduce overheads, but without the worry of regulatory headaches and work that isn’t up to accepted standards. Overall, East Europe continues on its emergent financial trajectory, and Romania is rapidly picking up the mantle of leadership.