26 Feb 2019

IT Outsourcing to Romania and the OECD Statistics

What makes the a small European country like Romania so attractive in terms of IT outsourcing to the big global players? Should you outsource your business to Romania? So many big names cannot all be wrong.

“Hiring smart people everywhere is a challenge, and I think there’s a unique talent in Bucharest,” said Eric Friedman, CTO of Fitbit, in September 2017, as the US wearables company admitted that IT outsourcing was a good business option, opening their latest and largest European research and development center in Bucharest.

Adobe, SAP, Ixia, and Bitdefender also have their R&D centers in Bucharest. Oracle, IBM, Ubisoft, HP, Accenture, Intel, Amazon, Luxoft are equally present in the capital of the up-and-coming Eastern European country.

So many big names cannot all be wrong. With so many options globally, with competitors like India and China, what makes the small European country so attractive to the big global players? And more importantly, should you outsource your business to Romania? Would it be safe? Is it profitable?

According to OECD, yes, it is safe and yes, it is profitable. In its labor productivity and utilization chart, Romania ranked second after Lithuania, with a 4.6 labor productivity. In terms of GDP per hour worked, Romania topped everybody else in 2017, at $142.1, followed by Ireland and Turkey. This indicator shows the efficiency of labor and other factors combined in the production process. This means that your work will be done as efficiently as possible in the shortest amount of time possible. Let’s not forget, efficiency means profit. It is not about the lowest cost, it is about cost effectiveness and the competitive edge.

Unlike China, Romanians speak English. Quite well, actually, and it is only getting better. This eliminates language barriers and speeds up the production process. Avoiding misunderstandings and clearly expressing thoughts and suggestions is key when it comes to custom software development and outsourcing in general. Faulty communication is one of the main causes of business failure, loss of productivity, and flawed products. We cannot emphasize enough – although we’ve said it many times before – how paramount good communication is for business.

The IT sector also gets tax discounts, part of the Government’s sustained efforts to encourage the growth and development of the industry. There is a 16% income tax waiver for IT professionals, thus benefitting IT businesses.
There is always a chance that you have already worked with a Romanian IT specialist. After all, Romania boasts more IT engineers per capita than countries like India or China and the numbers are only growing. There are over 100.000 people working in ITO-oriented fields, from software engineers to web designers.

According to hackerrank.com, Romania has very good developers, situated firmly at number 20 in the score index, ahead of countries like Sweden, South Korea, or India, the US or UK.
To the same tune, A.T. Kearney ranked Romania on the 18 place in its Global Services Location Index.

If all of the other points still haven’t got you thinking, this one definitely should. According to Invest Romania, Romania is the best performing country in the EU, while also being “recommended for investment” by S&P, Moody’s, and Fitch, all three of them. Indeed, the Romanian economy is expected to grow by +4.1% in 2019, and Romania is around the 40th largest economy in the world.

Obviously, these are more than just opinions. These are cold hard numbers. We would be happy to translate the numbers for you. By outsourcing to Romania, not only would you make as safe an investment as ever, but you will also get your return on investment fast. You will be talking to well-trained, experienced professionals who speak your language. You will enjoy tax deductions and other financial incentives. Your custom software will be compliant with all the relevant European standards. Bucharest is highly accessible by plane, email, and Skype. As is already legendary, Romania has one of the top Internet speeds in the world, with a modern infrastructure and state of the art technology.

So, in short, yes, you should outsource your business to Romania. It is absolutely safe. It is absolutely profitable. Drop us a line and we will be happy to assist you.