A few days ago I was comparing labour costs between european countries on the Eurostat’s web site with a client. They had operations in UK, Spain and Poland. While my company, XL World, owns BPO centers in Romania and Albania.
I realized that labour costs double (almost exactly) between these countries.
Albania: 250 EUR
Romania: 500 EUR
Poland: 1.000 EUR
Spain: 2.000 EUR
UK: 4.000 EUR
And every one of these countries has its own value proposition for outsourcing services:
UK: Excellent infrastructure and wide availability of excellent skills
Spain: Lowest-cost western country
Poland: First eastern european country to enter EU. Good skills and stability
Romania: Current price leader in EU for multilingual support
Albania (and others in the southern baltic area): lowest cost emerging european country
With all these choices, clients are becoming more and more sophisticated in choosing the best location for business process outsourcing, and try to balance cost with local skills, country stability, ease of travelling etc.
More and more outsourcing companies are forced to offer a mix of different locations to their clients in what many call a best-shore model.
The good news is that I don’t see such a strong effect on the job market as activities move from country to country. In fact the overall market is growing and many jobs losses are rapidly compensated by new ones.
Forrester predicts that total spending on BPO in EU will rise from EUR11.0 billion in 2006 to EUR18.9 billion in 2011. And, since a lot of this spending is coming from emerging countries, the overall number of people employed in outsourcing companies will grow far more than the value of the market.
Roberto Montandon – Roberto Montandon is a Partner in XL World, one of the leading business process outsourcing companies in eastern Europe. XL World offers services to multinational …
Business process modelling