Outsourcing Industry in Sofia and Bulgaria Is Changing Face
20,000 new jobs requiring university degree will be opened by 2020. Bulgarian outsourcing business went through fundamental changes in the past decade moving from customer support services (call centers) in the period 2010-2013 where the processes and technologies were relatively unified and standardized to service with high level added value.
Driven by customers’ needs the outsourcing sector provides far more complex processes to include analytics, building, maintaining and securing growth of core business operations such as marketing, sales, accounting, human resources management, among others. “This sector needs experts in HR management, finance and accounting, IT specialists,” said Plamen Tsekov, Board Member of the Bulgarian Outsourcing Association (BOA). He presented results from Bulgarian outsourcing industry annual report and the latest sector development at a joint press conference with Vladimir Danailov, CEO of Sofia Municipal Privatization & Investment Agency (SMPIA).
“Around 80% to 90% of the outsourcing business in the country is concentrated in Sofia. The added value of the outsourcing sector in the capital reached the record high 2.2 bln Bulgarian levs in 2016, according to the official statistics,” said Vladimir Danailov. SMPIA focuses its efforts on one of the main issues the outsourcing industry faces – the shortage of experts. Together with the Ministry of Education and Science and businesses, SMPIA launched a new digital platform which facilitates the dialogue between schools, universities and business representatives in Sofia, Danailov said.
“Today speaking two or more foreign languages is less of an advantage; engineering and business skills are needed for this sector,” Tsekov added.
The outsourcing industry in Bulgaria is expected to generate a turnover of €2.5 bln, and reach 4.3% of the GDP by 2020. Bulgarian Outsourcing Association forecasts some 62,500 to be employed in the sector by end-2020. A total of 47,800 were employed at the end of 2016, with an expected growth for 2017 of 12%. The companies in the sector paid 1.5% of all income taxes in 2016 as 0.9% of the businesses’ operating income goes for taxes. The outsourcing industry forms the backbone of the middle class in Bulgaria, and creates jobs for many young people who choose to stay in Bulgaria,” Tsekov said. This industry share in the total amount of wages paid in the country is 6.5% as 5% of total amount of social contributions are paid by the companies in the sector. The number of outsourcing enterprises reaches 24,000 or 20% of the total number of companies in Sofia, according to a report on development of outsourcing economic sector, explained Vladimir Danailov. The report is published on the SMPIA website.
In the last years the industry saw a process of consolidation due to the entry of several large enterprises, Danailov and Tsekov explained. The number of large companies with more than 250 employees increased from 11 in 2011 to 19 in 2016. In 2011 the large outsourcing companies operating in Sofia employed 9% of all employees in the sector and rose to 18% in 2016.