“In the coming years, outsourcing companies estimate growth of 17% to 20% of this industry in Romania. At the current development rate, the business services industry can take the IT&C sector as a whole to a 9% share of the GDP by 2020 (from the about 6% contribution to the GDP formation in 2016 i.e.),” said Florin Grama, the chairman of the ABSL, the organization representing employers in the Shared Services Center (SSC), Business Process Outsourcing (BPO), IT Outsourcing (ITO) and Research & Development (R&D) fields.
Following the 2008 crisis, Romania became the destination of choice for the companies that relocated services centers form Western Europe, because salaries are five to six times lower in this country. Technical and foreign language skills, state aid to create jobs and tax exemption for programmer pay have been Romania’s competitive edge in attracting investment.
ABSL expects services centers in Romania to see growth at a rate of 17% to 20% a year over the next few years, but some companies in the industry say the growth rate will be even higher at least this year.
“Competition is becoming increasingly fierce in this industry and this year I think the market will grow beyond expectations because a lot companies announced they were opening services centers or expanding in Romania,” said Gregoire Vigroux, marketing director for Europe and board member of Telus International, a Canadian outsourcing service provider.
The number of people working in this industry has gone up 15% to 20% since 2007, and 2017 is the first time when the number is expected to increase by more than 30%, which means 130,000 employees in the outsourcing and shared services centers by the end of the year compared with about 100,000 in 2016, Vigroux added.
Telus has about 1,200 employees in Romania, 1,000 of whom in Bucharest and 200 in Craiova.
Services centers such as Amazon, General Motors, Voxpro (which will provide support services for the Airbnb platform) have announced they will be hiring hundreds of people in Romania this year while companies like Societe Generale, European Business Services, Genpact, Samsung and Oracle plan to expand and will hire several hundred people this year, too.
Gregoire Vigroux says he cannot provide details about the number of people his company plans to hire this year only that it expanded the office space it rents in AFI Park in Bucharest from 5,200 square meters to 8,200 square meters to be able to boost headcount.
More than 70,000 people are now working in services centers in Bucharest now, over half of the number of people in this industry. ABSL says Bucharest has the greatest variety of technical and language skills and the highest number of potential candidates to work in services centers. Bucharest on the other hand, pays the highest salaries (about 2,800 lei or EUR615 in net amount per month compared with the national average of RON2,000).
Other developed cities in terms of services centers are Timisoara (more than 12,000 employees) and Cluj (more than 10,000). The cities where the industry is now developing is Iasi (more than 8,000 employees in services centers in 2016, Brasov (4,000), Galati (2,000), Craiova (2,000) and Sibiu (1,000).
Services businesses are now developing fast in cities like Iasi, which they had previously avoided for a long time due to the poor road infrastructure.
“With an airport with more than 1 million passengers traffic a year and an information highway (among the top ten in the world) despite an obvious isolation due to the lack of road infrastructure, Iasi benefits from the fast-paced development of the IT&Outsourcing industry, with more than 15,000 employees and annual turnout of 2,750 relevant graduates for this industry,” said Dan Zaharia, senior consultant with office space market consultant Extind, based in Iasi.
Out of the more than 100 companies operating in the IT industry in Iasi, three are already employing more than 1,000 people and seven are already past the 500-employee mark. (EUR1=RON4.5512)
(English version by Loredana Fratila-Cristescu)