Global Services – Nearshoring to Bucharest: Say Salut .

This article explains why Romania is growing as a location for nearshore outsourcing in Europe

AT Kearney published the 2009 revision of the Global Services Location Index.

Romania posts a strong growth from the 33rd position last year to this year’s 19th position. Romania and Bulgaria are mentioned as the low cost champions of the European Union. Bulgaria has a leadership in cost here, but it can’t match the breadth of languages offered by Romania.

For now in XL World we are still feeling a competitive advantage of Romania for Multilingual Outsourcing. It’s still one of the very few countries where you can build Offshore Services in multiple languages.

A few days ago I was comparing labour costs on the Eurostat’s web site with a client.
He had operations in UK, Spain and Poland. While XL World’s BPO centers are in Romania and Albania.

I realized that labour costs are cut (almost exactly) by half at every step between these countries.

• UK: 4.000 €
• Spain: 2.000 €
• Poland: 1.000 €
• Romania: 500 €
• Albania: 250 €

And every one of these countries has its own value proposition in terms of outsourcing:

• UK: excellent infrastructure and know-how
• Spain: lowest-cost western country
• Poland: first eastern country to enter EU
• Romania: current price leader in EU for multilingual support
• Albania (and others in the southern baltic area): lowest cost emerging european country

It may look as if in this ‘ecosystem’ the smaller fishes are eating jobs from the larger ones. But, as the outsourcing market is still growing fast overall, in this case I suspect the whole is greater than the sum of all parts. Forrester predicts that total spending on BPO in EU will rise from €11.0 billion in 2006 to €18.9 billion in 2011.

AT Kearney published a report that compares the different locations for outsourcing.

Offshoring for long-term advantage | Publications.

Romania is number 33 in the list.