Romania, A BPO Destination On The Rise

Romania

Outsourcing has almost become synonymous with nations like India, China and even the Philippines. There are however, fledgling destinations like Romania that are in the process of making a mark on the Business Process Outsourcing market.

Romania is not particularly new to the arena, with an Information and communications market worth over $5 billion. Europe, besides Romania, has a few other destinations for offshore companies including Bulgaria and Poland. The market in Romania is poised to become Europe’s torchbearer.

The Demographic Advantage

Romania has a total population of over 22 million. Amidst the numbers, nearly 64,000 IT specialists call Romania home. With so many of its citizens well versed in the technological aspect, it seems to be only a matter of time before Romania cashes in on its demographical advantage.

The Rules, Laws and Regulations

Romania is officially a part of the European Union. With the integration came the better prospects for IT outsourcing in the country. Companies in Romania now have access to harmonized laws, regulations and complete access to the common EU market. The ease of access to the European market ensures an even greater ease of access to the global market.

Romania adhered to the socialist rules of taxation for a long period of time. With the climb down to the progressive and modern system of taxation, Romania has secured a respect and an inclination to stay in the nation from the local talent pool.

The Limitations

Besides the advantages, Romania is limited in its growth by a number of factors.

The infamous brain drain wave of the 1990s took a lot of Romania’s talent with it. The engineers left on the lookout for greener pastures away from the uncertain political and economic environment in the wake of the fall of communism. Many of those expats returned bringing invaluable expertise and experience with them.

Cost of Resources

While Romania does have an enviable resource pool, the cost that it paid to attract the same talent might prove to be too high. The attractive pay packages that encouraged the talent pool to fill up is a probable discouragement to the growth of the outsourcing market. The motivating ideal behind outsourcing or offshoring business processes is to save money and create greater profits. If the running costs in Romania stay on the higher margin, the outsourcing market will be stunted at best.

The Number Game

Although the demographic numbers of Romania is substantial, it is not sufficient to compete with the Asian countries that bank on a dense population.

The European debt crisis has created an uncertain job market for the rest of Europe. Romania can capitalize on the uncertainty as it has adequate physical infrastructure including IT networks. Attracting a migrant work force from the countries that have been hit hard by the recession can create an enviable work force for Romania.

The Ease of Starting Businesses in Romania

Unlike its Asian counter parts, Romania has a political and bureaucratic environment that is conducive to starting businesses. A new business can be up and running within a span of 10 days which is much faster than anywhere in Asia.

Despite the ease and the conducive regulatory environment, the high levels of corruption following the EU debt crisis has been hampering the growth of the outsourcing market. The same issues have been holding down the market in China, India and other Asian countries. Policy changes can easily remedy the issue or atleast further the interests of the BPO arena.

Aspirations for the Future

Romania is already set strong on the BPO path despite the hindrances created by the unhealthy recession and the debt crisis reigning Europe. Given the limited size of the country, it is nearly impossible for Romania to stand as a world leader in the outsourcing domain. While it cannot hope to compete with powerhouses like India and China, Romania can sure carve a unique niche for itself in the European market. With a growing BPO base, Romania can also stay well insulated from the debilitating European debt crisis.




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