DOINGBUSINESS.RO

  |  31.03.2015

The Diplomat – Bucharest organized the ROMANIAN OUTSOURCING SUMMIT AND AWARDS 2015, an elite event that brings to attention the evolution of the local services sector and specific solutions to improve its development.

Francesca Postolache, Partner, Audit Services, PwC Romania: The competitive advantages of Romania as an BPO/SSC destination are language skills, soft and technical skills and lower costs with taxes

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Romanian Outsourcing Summit

Romanian SSC BPO market is mature, offering a high range of capabilities and a large pool of skilled employees. Romania SSC/BPO market started to develop in the early 2000, covering the traditional functions for IT, F&A and call centers. Bucharest and Timisoara, benefitting from large university centres and strategic locations, were the first preferred options for SSC/ BPO. After 2006, other locations started to be targeted as well, to leverage the first mover advantage and lower labour costs. The SSC-BPO market employs between 20-30,000 staff and is expected to grow with 20-30 per cent over the next three years, shifting from transactional processes to value-added activities (e.g. R&D, talent management, engineering)

 

According to PWC’s manager, Romania is the second largest talent pool in CEE, with over 120,000 graduates per year, main university centres of the country being the SSC/ BPO hubs, providing a qualified labour pool. “Romania has over 100 universities with more than 450,000 students mainly in the IT and Engineering (approx.140.000 students) and Economic fields (approx. 90,000 students). All university graduates are required to master at least one foreign language. For business degrees two languages are needed. Romanian workforce is highly receptive to typical western corporate values and possesses a high degree of cultural understanding. Current salary levels and future salary trends are highly competitive compared to neighbouring countries,” Francesca Postolache told The Diplomat-Bucharest’s event on Romanian Outsourcing Summit 2015.

 

The language skills available on the Romanian market have been one of the first attraction points for investments in SSC-BPO. Around 90 per cent of educated Romanians speak at least one foreign language 25 per cent of Romanians speak at least 2 foreign languages and 4 per cent of Romanians speak more than 3 foreign languages. “Romanians are internationally known for their high aptitude in speaking European languages: primarily English, followed by French, Italian, Spanish and German English is now spoken by 8 million Romanians; French by 4.5 million; German, Italian and Spanish, 1.5-2.5 million. In the eastern part of Romania there is a high density of Russian speakers, but there is also significant availability of Russian in Bucharest, through the Moldavian students coming for studies here. However, there is limited availability of more exotic languages, like Czech, Slovak and Nordic languages, which can be found only in small areas in the western part of the country, and usually not at business proficiency level,” Francesca Postolache said.

 

Regarding taxes, besides the VAT return, which is sometimes a difficult objective to achieve due to the higher than 45-day interval of reimbursement, another fiscal law specifies that the salaries generated from activities of software development and sales are except from taxes, up to the level of 10.000 dollars. “Another significant cost within the P&L indicator are the costs with the rents, which, for the companies in the BOP and SSC fields represent a large share due to the large spaces these companies are renting. Also, the Government introduced a new State Aid scheme starting 1 July 2014, which could bring a significant financial incentive for setting up the SSC in Romania. The new State Aid scheme provides for co-financing of salary costs incurred by the employer for the new jobs created if certain conditions are met. The application should be supported by a business plan which will also demonstrate the incentive effect of the state aid, an investment plan, a hiring plan and a number of admin documents (the qualitative and quantitative indicators required for qualification),” Francesca Postolache concluded.

 

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