Romania, an increasingly attractive outsourcing location

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Romania continues to be an attractive location for outsourcing, climbing 14 spots in the most sought after locations top, according to a recent study of consultancy A.T.Kearney. As such, Romania ranks 19 worldwide, this year, and 3 in Europe, after Bulgaria and Estonia, Business Standard daily informs.
This is a good spot, given that there are more than one hundred countries in the world which are considered relevant for the outsourcing activity, said Daniel Catana, A.T.Kearney consultant. „Our position this year and latest evolution entitle us to believe that the local outsourcing industry has a good growth potential in the near future, as well”, he added.
According to A.T.Kearney consultant, Romania’s evolution has been determined by two significant factors: first of all, other states have lost competitiveness ground as reported to Romania and, secondly, even though Romania registered a slight attractiveness decline, due to salary raise and of some other costs, this was offset by an improvement of the business milieu and of human resources quality and availability.
A.T.Kearney consultant estimates that the positive evolution in this classification will continue in the near future.
„If we look into the macro-economic indicators outlook, we could assess that both the Gross Domestic Product, and public and private demand will show a more accentuated drop in Romania compared to states such as Poland or the Czech Republic. In Romania, the return to a significant economic growth will be a slow one, and it will take two-three years at least”, said Catana.
So that salary expectations in Romania will be better correlated to labor productivity as against the past years, and the labor force will be found more easily on a rising jobless background. Companies will raise more slowly the outsourcing services prices for partners from abroad. Moreover, leu’s (national currency) depreciation in the past six-nine months contributed to the strengthening of Romanian exports competitiveness.
Crina Ilie, HR Operations&Enabling Functions Europe with Genpact Romania, said in her turn that outsourcing services demand is on the rise, but also remarked that the clients are more sophisticated and come with more complex demands. Recruitment made by the main outsourcing companies on the Romanian market remained steady, just slightly lower from the same period of last year, Genpact representative also said.
„Obviously, costs represent a significant dimension as for the outsourcing attractiveness, but not the sole one. If Romania seeks to occupy an important position in this industry on long and medium-term, it should grant more attention to the quality of its education system and make major investments into infrastructure. If it has a large number of experienced people in this field, western companies will become increasingly interested in relocating production to Romania”, Daniel Catana also said.
Despite outsourcing sector having posted a significant growth in the past years, crisis effects are also felt by these companies, the first signs indicating a slowdown in this sector’s growth.
The global economic crisis creates important opportunities for Romania, A.T.Kearney representative also said. „The companies in developed countries are more and more pressed to diminish costs and can do that by relocating their services to other countries, with lower costs. We can also assess a protectionist trend in certain states, but we expect that this will be a conjectural aspect and that it will dwindle in the near future”, Catana said.
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