Outsourcing

This Is What You Need To Know About Outsourcing To Romania

Estimated reading time: 10 minute(s)

This Is What You Need To Know About Outsourcing To Romania

This Is What You Need To Know About Outsourcing To Romania

Eastern European countries are becoming an increasingly popular resource for organizations needing to outsource their software development or IT services. Most notably, Romania, Poland, and Ukraine are among the top three countries within this region that boast a competitive pool of talent in the global outsourcing market. Aside from the unbeatable cost-saving benefit, outsourcing to Romania can give way to a wide variety of skills and experience, which can create a robust and well-functioning cross-cultural team.

But what about Romania in particular makes it a competitive country when it comes to outsourcing compared to other nations, especially when it comes to high-quality software development?

Here is what you need to know about outsourcing to Romania.

What is Outsourcing

What is Outsourcing?

Let’s first start with a refresher on the definition of outsourcing. Outsourcing is the practice of hiring a third party to complete services or other business functions that originally were done in-house by the company’s own employees. Outsourcing gives the company an opportunity to expand its global network and create streamlined processes that benefit the entire organization and its many operations.

Some of the most in-demand business functions that are most commonly outsourced include:

  • IT services
  • Software Development
  • Web Design and application
  • Customer Service
  • Financial Services/Accounting/Payroll
  • Administration
  • Data Entry
  • Chat Support
  • Banking/Insurance
  • Manufacturing

According to Fortunly, over 300,000 jobs get outsourced out of the United States each year. And over 44% of Chief Intelligence officers say that they are more likely to use outsourced suppliers than they were over five years ago. 51% of technology executives outsource their software maintenance and application, with over 40% outsourcing their data centers.

Outsourcing has become an essential part of how businesses operate on a global scale. While there are various advantages and disadvantages with outsourcing, it’s important to keep in mind the business needs and demands (or restrictions) must operate within a designated budget. However, outsourcing has proven to be an effective way of improving the efficiencies of an organization’s general operations, leaving the internal team to focus and deliver high-quality work. With its many benefits including saving time and money, opening up a more diverse pool of talent, and maximizing the resources available to them, outsourcing outside of the United States has become a cost-effective way to streamline certain business processes. Additionally, talent across the globe has access to state-of-the-art technologies that have the potential to bring innovative and novel ideas into the workplace, transforming how the core team works and operates. This exchange of ideas can elevate an organization to new heights.

Top Eastern European Countries for Outsourcing IT

Top Eastern European Countries for Outsourcing Software Development and Information Technology

These eastern European countries have been globally identified as the best destinations for outsourcing, especially within the IT and software development fields:

  • Romania
  • Poland
  • Ukraine
  • Belarus
  • Russia
  • Hungary
  • Czech Republic
  • Croatia
  • Bulgaria

The reputation of these eastern European countries is growing rapidly due to the high-quality services and level of expertise in their robust talent pool. Of course, there are a variety of factors that contribute to how an organization chooses where to outsource, despite geographical location. This includes:

  • Level of technical skill – This will depend largely on the business need of the company and the level of expertise needed in order to complete pressing assignments and projects.
  • Service costs – Organizations will need to research the average hourly rate of experts in their particular field outside of the US in order to get a clear understanding of what the overall cost will be to outsource their services.
  • Language barriers – Another area that deserves attention is the command of the English language. When outsourcing to another country, it’s important to keep in mind that there may be some cultural and language barriers the organization will need to work through. The team must be aware of such potential circumstances and exercise patience, extensive collaboration, cultural sensitivity, and effective communication to ensure everyone remains on the same page.
  • Time Zone – Companies also need to consider the time zone difference when they choose to outsource outside of the United States. Significant time zone differences can create difficult scheduling conflicts and availability issues. On the flip side, it also allows someone to be working on your business even while you sleep! This is a factor to consider in choosing where to outsource depending on the demands of the business.
  • Reputation – An organization must do extensive research on the company and country they are considering outsourcing their services to. This helps build trust and fosters a sense of respect for the team the organization chooses to hire to support their operations. For example, HackerRank is used to identify and assess the technical acumen of developers on a global scale. For example, the HackerRank for Romania currently sits at 81.9%.

All of these are deciding factors in choosing the right resource for the company. With eastern European countries quickly on the rise in the global market, let’s dig into why outsourcing to Romania has proven to be a smart and fruitful endeavor.

Why Do Companies Outsource to Romania?

Why Do Companies Outsource to Romania?

Romania’s IT industry has been growing rapidly over the course of the last 20 years. During this period of time, Romania has earned its reputation of being one of the top custom software development, maintenance, and support services in eastern Europe.

As Romania has over 4,000+ technical universities, the country boasts more than 5,000 engineers and computer science graduates—this is supported by their growing and flourishing economy. The country has maintained its steady growth by the increasing number of companies that choose Romania as its number one destination for outsourcing.

While Romania may not offer the lowest prices in the outsourcing market, its highly competitive technical proficiency and general soft skills are vastly superior compared to surrounding countries. The country’s geographical location also lends a hand to its economic growth. Romania is at the center of three major markets: the Middle East, the European Union, and the Commonwealth of Independent States (CIS). It’s the second-largest country in central and eastern Europe, a 3-hour flight from London and only a couple of hours ahead of Berlin. Investors typically find themselves in a vast pool of over 500 million consumers, which provides companies with unique advantages and opportunities to develop and grow.

Earlier this year, BalkanInsight reported that Romania is one of only six countries in the world (China, Chile, Australia, Lithuania, and South Korea) whose Gross Domestic Product (GDP) has grown despite the rippling effects of the pandemic. Major software companies such as IBM, Amazon, and Oracle have tapped into Romania’s growing talent pool of experienced software developers to support their operations since the competitive rates continue to produce high-quality results compared to other countries across the globe.

As Romania continues to reveal itself as a highly advanced technological hub with over 100,000 trained software developers and certified IT professionals, the country has become a hot spot for IT offshore/nearshore outsourcing.

The Advantages of Outsourcing to Romania

Advantages of Outsourcing to Romania

There are a number of advantages that exist when an organization chooses to outsource to Romania.

  • Robust talent pool – According to Rinf.tech, Romania produces the highest per capita technology workforce in Europe and also contains the top 5 technical universities. Over 68% of employed IT professionals in Romania received an advanced degree. By choosing to outsource to Romania, organizations have a plethora of various talents to use to support their team and bring innovative ideas to the table. While Romania is known for its superior IT and software development professionals, other essential fields include robotics, automotive innovation, and cyber security. Depending on the organization’s needs and projects, Romania can offer a variety of options in different professional arenas. Romania’s in-demand talent pool can also lend a very important hand in spreading gender balance in a largely male-dominated field. On average, 24% of tech graduates are women according to Romania’s Country Commercial Guide. Outsourcing to Romania can not only capture competitive skills and expertise, bolstering the company’s vision for the future but can also actively encourage inclusivity in the workplace.
  • Ripe Location – Romania neighbors many European countries, making the time zone difference minimal for those located in Europe looking to outsource their business operations. This poses little to no interruption for general communication and coordination between teams or with any travel plans as most surrounding countries are only separated by 2-3 hour distances. Put simply, Romania is easily accessible. For the United States, Romania remains about 10 hours ahead of the west coast, including the major city of Los Angeles. Although this time difference may initially sound drastic, Romania’s familiarity with US companies makes this transition as simple as possible. Maintaining constant (and effective) communication during vital company projects is always a pivotal piece of the project management process, no matter where the team is located. This is especially true in the case of outsourcing to countries outside of the United States. But Romania’s geographical location makes the process of outsourcing to Romania an easier experience and many find its high-quality services are worth the investment despite any time zone differences.Multilingual
  • Multilingual – Although Romanian is the primary language in Romania, the country boasts a multilingual culture. Most developers in Romania are proficient in English and are experienced working with a vast array of international clients. Their talent for language doesn’t just stop at English, however. Other languages include German, Spanish, and French. This is an incredibly valuable soft skill to have in today’s market. As more and more organizations begin to outsource their services, having a team that is adaptable to different languages is becoming a critical skill to stay competitive. And because Romania’s popularity continues to grow, their flexibility with learning additional languages becomes an attractive factor.
  • Cost savings – One of the most important factors for deciding to outsource to Romania is the cost-savings benefit. While the standard hourly rate for software developers is not concrete (this depends on a variety of subjects including the type of software needs that a company requires, relevant years of experience, and unique qualifications or specializations), on average, the hourly rate for a developer from Romania is anywhere between $15-$25. This is largely due to the country’s low cost of living and its economic conditions. Let’s compare this to the United States. For an entry-level position at a tech company, the average hourly rate begins anywhere between $40-$50. Let’s take a look at other notable examples. In India, the average hourly rate for a developer with 1-4 years of experience starts at approximately around $30, and in the UK, the same level of experience starts at $38.
  • Economic stability – According to Near-shore Romania, since becoming a member of the European Union in early 2007, Romania has become a safe and reliable nation to work with when it comes to business needs. As a central IT hub, Romania’s economic stability and growth, robust education system, and technological advancements make it easier for other countries to work with Romanian software teams.

Now that we’ve gone over the many advantages that come with outsourcing to Romania, it’s also important to consider some of the various challenges that may arise.

Challenges with Outsourcing to Romania

Challenges with Outsourcing to Romania

Many of these challenges are common pitfalls of outsourcing to countries outside of the United States. Here are the factors you need to keep in mind:

  • Misalignment of values – Bringing in an outsourced team can be tricky. It’s important that a company performs extensive research on the team they’re looking to bring in. In some cases, the prospective team may have conflicting values that don’t support the company’s missions. This could lead to difficult and awkward interactions for everyone involved and can have a proud effect on the company’s culture. While disagreements are common in the workplace, misalignment of essential values can come at a cost later down the road.
  • Remote team – An increasing number of organizations are switching to a remote workplace environment, which means that communication within teams needs to be sharp. This is especially true for outsourced teams, such as the developers in Romania. Frequent updates on day-to-day progress are essential in making sure that everyone remains on the same page and can do the basic functions of their jobs without very little delay or interruption. In these cases, diligent project managers would play a pivotal part in coordinating the many players of a project from across the globe.
  • Communication – Because of the remote nature of outsourced teams, deadlines must be carved out beforehand and relayed to all relevant parties. It can become very easy for due dates to slip through the cracks or miscommunication to occur frequently between team members. This is an area that needs to be highly regulated in order for processes to be truly streamlined and cost-effective.
  • Unclear needs – One of the most important areas that a company needs to address is its own unique needs. If a company is unclear about the type of skills, experience, or expertise that needs to be brought in, it may end up hiring the wrong set of hands, ultimately incurring a heavy price. A company must review its internal demands, its goals, and the development team it’s looking to hire before going with its decision to outsource to Romania (or any other country for that matter!). Especially in the field of IT services or software development, it’s critical that a company thoroughly review the gaps in its own organization in order to make the best decisions for the team as a whole. Remember, the idea is to make the processes easier on everyone, to give the core team another area of support so they can perform at their best.

When you understand both the advantages and disadvantages of outsourcing to Romania, you get a complete picture of what it may look like for you and if it’s the right direction for your company.

Biggest IT hubs in Romania

Biggest IT hubs in Romania

Romania is home to some of the biggest tech hubs in the world. And according to Romanian Journal, another one of Romania’s biggest cities has been added to the list of the fastest-growing tech hubs in Europe. Let’s take a look at some of the most vital Romanian tech hubs:

  • Isai – Ranks in the top 10 of year-over-year growth with its impressive number of members.
  • Cluj-Napoca – Often considered one of the best tech hubs in Europe and is known for producing the biggest pool of talent in software development.
  • Bucharest – Known for bringing in a steady flow of capital
  • Uipath – Was in the top 20 largest Venture Capital-backed fundraising deals, ranking third in Europe

In Conclusion

Outsourcing to Romania has a variety of different benefits. Aside from the lower cost of labor, Romania’s talent pool continues to produce innovative, efficient results that support an organization’s overall mission depending on its unique needs. While outsourcing in general (especially if it’s outside the United States), can lead to challenges that usually accompany remote teams, Romania has much to offer as one of the most reliable and effective outsourcing resources.

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