Romania – Destination for Software Outsourcing
05 March 2014 | Outsourcing
We have the pleasure to start a series of articles about the software outsourcing phenomenon in Romania and Cluj-Napoca which will include both reviews of the existing literature and personal opinions on the issues addressed. The papers compare Romania with India and Romania’s counterparts in Eastern Europe on dimensions such as employee attrition, wage inflation (same), cultural gaps, infrastructure, government incentives, the educational system, availability of experts, innovation & entrepreneurship. Recommendations on the appropriate course of action a company looking for an outsourcing partner should take, depending on its specific set of requirements and priorities are also provided.
The Labor Market in Romania
According to a 2012 Romanian Perspective, published in Onshore, Nearshore, Offshore: Unsure?,
Romania evolved from a provider of call center services in the early stages of outsourcing to hosting all types of operations. The key drivers of the swift development of the shoring sector in Romania are the availability of a qualified work force, an excellent pool of university graduates, a good command of foreign languages, geographical proximity to Western Europe, good connectivity by air to major European cities, and the accession to the EU in 2007.
“All of our customers in Europe have mentioned the following factors as determinant in their decision to establish long-term partnerships with Fortech: the geographical proximity, the excellent connection by air Cluj has with many major European cities (e.g. London, Munich, Prague, Barcelona, Bruxelles, Vienna, Dortmund, etc.), the technical and linguistic prowess of the Romanian specialists, the pro-active attitude of the developers and their creativity, the broad technical and industry expertise the Fortech specialists demonstrate (e.g.: processes specific to the automotive, medical, retail, pharmaceutical, financial, and logistics industries, to name only a few), the modern processes and infrastructure, and the IP policy that conforms to the EU norms”
Calin Vaduva, General Manager of Fortech,
Romania’s population size also attracts companies looking for reliable outsourcing destinations. The country ranks 7th in the EU by population and 9th by area. In 2011 Bucharest, the capital city, had an official population of 1.7 million inhabitants, while the next in the list, Cluj-Napoca and Timisoara have 309,136 and 303,708 inhabitants. There are 5 cities in the tier 3 group, which have populations exceeding 200,000 inhabitants: Iasi, Constanta, Craiova, Galati, and Brasov.
The large pool of students in technical schools represents another important incentive for companies to look towards Romania with interest for offshore and nearshore software development projects. About 540,000 students were enrolled in the year 2011/2012 in the Romanian universities, of which 28% in engineering, a proportion that has been steady over the last 10 years and shows the great interest of our young generation for science education. A large percentage of these students graduate and attract companies from the entire world, from big corporation like Microsoft to small and medium sized companies that decide to open their own operational centers in Romania.
“With roughly 800 students graduating each year from technical departments of local universities, Cluj-Napoca has become a real magnet for foreign companies in search of well-prepared software and hardware engineers. Development centers have flourished lately and their number is constantly on the rise. This increase in demand determined a real exodus of engineers from the entire Transilvania region to Cluj. Software developers move to Cluj even from such remote areas as Moldova, Bucharest, or Chisinau. This migration helped Fortech consolidate its position in the local market. We are confident the current trend will continue for many years to come and we take a proactive attitude to ensure this will happen by investing a great deal in attracting, mentoring, and training our specialists, and by supporting local IT schools. Career planning lies at the heart of Fortech’s HR strategy, and covers both technical and leadership roles, focusing on technical, project management, language and soft skills. Our engineers find a variety of development opportunities while working on complex projects, using cutting edge technology stacks, under the careful eyes of experienced team leaders.” Alexandra Bayer, HR Manager, Fortech
The size of the labor pool, the technical and linguistic abilities of the Romanian software developers, their creativity and out of the box mind sets, the cultural affinity with Western cultures, the excellent technical infrastructure, and the well planned and implemented Human Resources policies make Romania the perfect choice for offshore and nearshore software outsourcing.