In the past few years, even people sceptical about the development of modern Bulgaria started using a new word with a hint of awe: outsourcing. The concept, that is relatively recent for the country, has not only found a way in the modern vocabulary. The sector is undergoing a stable and impressive growth in this country. According to 2016 data, the average yearly increase of the IT and outsourcing industry in Bulgaria is around 2 percent. The sector makes about 3.7 percent of the GDP and according to some estimates employs 25,000 people. According to projections, by 2020 the number of people working in the ITO and BPO sector will double, and its part of the national GDP will reach 6 percent.
Bulgaria is also in the top 10 of international outsourcing destinations according to the Cushman & Wakefield consulting company.
Bulgaria's advantages as an outsourcing destination can be hardly debated. Bulgaria is a part of the EU, with all the positives this brings. The investments encouraging legislature keeps the taxation low. The labour costs in Bulgaria are lower than in the rest of the union, while the infrastructure is at a good level. Competitive advantages of Bulgaria are also the quality, fast-speed internet, and the geographical location, allowing people working in the country to serve in time clients from both Asia and North America. Bulgaria's advantages were recognised by Forbes as well; in 2016 it ranked the country 38th in the world for business conditions.
Not a single industry can manage without people, and this is the biggest advantage of Bulgaria. The country has excellent IT specialists and talents with potential for development. Another factor of importance is that studying of foreign languages in the country is at a top level, with the range going beyond English, thus providing Bulgaria with yet another advantage on more markets.
The growth of the ITO and BPO sector in Bulgaria can also be followed on the map of the country. While Sofia was the logical centre from which the development of the industry started, the increased demand for specialists led to its spread to the other big cities of Bulgaria. Plovdiv was the first place where the sector arrived, developed and won territory, followed by Varna and Burgas.
"Bulgaria's primary competitive advantage in the area of IT outsourcing is the access to exceptional talent," says Dimitar Dimitrov, one of the co-founders of Accedia, оne of the fastest growing technologies companies in the region (Sofia, 89 Alexander Malinov Blvd, floor 4, www.accedia.com). "In the last 30 years, Bulgaria has always been one of the leading countries when it comes to international informatics and mathematics competitions. Most recently, for example, the Bulgarian team won one gold and three bronze medals in this year's International Olympiad in Informatics."
However, Dimitar Dimitrov recognises that Bulgaria has some flaws as an outsourcing destination. "At the same time, the need for more and more qualified engineers is a real flaw and a capacity constraint for many companies. In terms of how this can be solved, I don’t think there is one simple solution. Both the government and the business should take considerable measures in improving the education system and further enlarging the IT talent pool," says he. Accedia is proactive in finding a solution. "As an employer, Accedia takes great responsibility in talent development. We are continuously working on developing internal innovation initiatives, supporting local & regional IT communities, offering student internships and inspiring young people to grow and build a successful career in Bulgaria," says Dimitar Dimitrov.
"In Bulgaria, talents are at a top level and are hence attractive for the industry," says Andon Simeonov, VP, Country Manager of SoftServe (Sofia, 49B Bulgaria Blvd, www.softserve.ua/bg/), the biggest global IT company with Ukrainian roots, specialised in software development and consultancy services. "Large international companies are accused of "stealing" educated talent, while we at SoftServe opened an IT academy in Bulgaria. Some of the young people who graduate from it remain in our company, and the others find jobs in the sector." The presence of large companies on the Bulgarian market is also a signal to the international clients that the local industry has the capacity to manage large-scale projects. "The companies here are still predominantly small, but Bulgaria needs large organisations in order to become a destination where big international companies feel comfortable that their projects will be adequately developed from end to end," explains Andon Simeonov. "This is the added value from companies like ours. We develop the market and its competence."
The plans of the Bulgarian office of SoftServe are ambitious. "On a global level we are preparing for a serious enlargement in the following few years, and we are focusing on service of large enterprise companies," says Andon Simeonov. "We already have terrific experts in different fields who have the know-how and the competencies to service enterprise companies. Our goal is to develop our office in line with our global organisation."
The brain drain and the talent flow are all problems that the outsourcing sector experiences. The solutions it applies are different.
"The market is very dynamic and the competition is brutal," says Snezhana Raikinska, manager and cofounder of Bulwork, the first HR agency for recruitment for the ITO and the BPO sector in B ulgaria (Sofia, 15 Tsarigradsko Shose Blvd, entrance 3, www.bulwork.com). "To attract the specialists they need, the companies increasingly resort to different additional social stimuli. Many of them offer a monthly benefits package with food vouchers, additional healthcare coverage, gym membership. The more inventive offer loyalty bonuses received by the employees for every year they have worked for the companies. A lot of companies began to organise their own internal training centres, creating specialists from people without prior experience in the industry. This trend will continue in the following 1-2 years," adds Snezhana Raikinska. To deal with the problem, the companies should be proactive and to work on a higher level. "The business should speak with the institutions and should influence them to create an administrative environment for an easier and trouble-free issuing of working visas for candidates from countries that are close geographically and culturally to Bulgaria, like Serbia, Macedonia, Bosnia and Herzegovina, Montenegro, Belarus, Ukraine, Moldova," says Snezhana Raikinska. Bulwork has experience, as it has opened an office in Belgrade, Serbia. "This will allow our country to become a hub for the Balkans and to attract more qualified specialists. Our country has an urgent need of more population and more labour force. If we have adequate policy and in the next 5 years we manage to attract 50,000 foreigners, this will allow us to develop this industry," adds Snezhana Raikinska.
The problems in the sector are not only in the lack of employees, but also in their qualification. Sadly, in spite of some positive examples like the start of an MA programme in information processes at the Prof. Dr Asen Zlatarov University in Burgas, initiated by the Bulgarian Outsourcing Association and the Burgas Municipality, the Bulgarian universities still lag behind. The specialists they educate are not adequate to the contemporary demands. The hunger for qualified labour led to the opening of a number of IT academies for training of the specialists needed. Tellingly, the age of the people who decide to find vocation in the ITO and BPO sector is increasing and many people with different professions look for pre-qualification in these academies. Some companies even decided to cut the process, and opened their own schools.
Upnetix (Sofia, 69 Bulgaria Blvd, Infinity Tower, floor 16, www.upnetix.com), a major provider of custom client-tailored software solutions for the corporate sector, is one of the few companies that trains their own employees, instead of recruiting trained professionals. "There are several reasons behind our choice of this innovative approach," says Radoslav Gaydarski, CEO at Upnetix. "It is mainly because we believe that we know how to improve and develop our employees’ technical skills and personal qualities, needed in this industry. Moreover, we believe that we are a different company with top values and requirements in regards to the quality of the services provided, so not everyone with 3 or 5 years of experience in the sector would fit our team. Lastly, we believe that through investing in the education and creation of new specialists we contribute for the development of the whole IT eco system in Bulgaria."
To a significant extent, this is the key to the future development of the outsourcing sector in Bulgaria. International companies cannot be attracted ad infinitum with low labour costs. On the one hand, in the world emerge new countries with even cheaper wages. On the other hand, due to the increased demand for IT talents in Bulgaria the salaries in the sector are rising and will soon reach the ones in other parts of Europe. Bulgaria can preserve its attractiveness with demonstrating potential for development, capacity for solution of increasingly complex tasks, accumulation of expertise and know how. The signs that the companies that look in the future are moving in this direction are already here. A growing number of firms now offer complex and complete ITO and BPO solutions, and establish themselves as consultants. To an extent, this evolution is an answer to the changed demands of the international companies, who are now looking not for partial, but for complete solutions.
In order to be sure in their success, companies looking for outsourcing their business in the country need a reliable Bulgarian partner and consultant.
"When we choose our Staff Outsourcing provider the most significant question that companies have to address is: do we want this company to become a part of our company, to influence our business through the employees provided and to interact with it every day? Do they have the same values? Are they flexible enough to meet our requirements?," says Svetoslava Delcheva, an HR consultant in Toro GroupS since 2007 and a specialist with 12 years experience in the field. Toro GroupS (Sofia, 26 Dragan Tsankov Blvd, www.torogroups.com) is a leading HR consulting company that provides HR solutions in three fields: outsourcing, search & selection, and assessment & development. The company has extensive experience in number of industries and works mainly with multinational firms. Toro GroupS works in cooperation with Friisberg & Partners International, present by 40 offices in 24 countries. "The Staff Outsourcing provider is an important partner and it will become an external part of the company," explains Svetoslava Delcheva. "Usually this kind of projects are long-term and from the quality of the service provided, from provider's attitude and the way they treat the employees depend their motivation, satisfaction and retention."
Globalisation and digitalisation of the lifestyle and the business is already a fact, and clever businesses make use of this. Bulgaria has all the ingredients of the recipe for its successful evolution to becoming an established name in intelligent solutions for the future.