Romania is in the top of relocation options for global companies

//Romania is in the top of relocation options for global companies

Romania is in the top of relocation options for global companies


  • According to a study conducted by ABSL in collaboration with KPMG, the Romanian business services industry will see a slight growth in the medium and long term
  • Most of the companies in the survey hope that the industry and the economy will return to normal by the end of next year
  • Approximately 50% of companies are considering a hybrid work system for 2021

“Zoom In, Zoom Out” is the theme of the national conference organized by ABSL this year. Industry specialists are paying attention to the details and frequent changes caused by the pandemic, but also to the overall picture and prospects of the industry.

The event will take place online between 17-19 November 2020, with more than 700 industry specialists and 100 companies registering for the conference.

On this occasion, the annual report of the business services industry will be launched, presenting the sector and its trends.

The business services industry has a history of over 20 years in Romania, and 2020 has brought unprecedented challenges. Fortunately, this sector is perhaps the best prepared one for remote work. The very term outsourcing intrinsically says this.

In the medium and long term, revenues generated by the business services sector will increase. The pressure put on costs, globally, determines companies to rethink the cost structure, opting for the consolidation of services to economically attractive destinations and the quality of human resources. Romania is doing well in this regard, so the situation generated by the pandemic may be an advantage for this industry.

According to estimates from the ABSL study, the revenues generated by the business services industry in 2020 are of 4.5 billion euros. The business services industry contributes with about 2-2.5% to the GDP, similar to industries such as wholesale, electricity and gas.

Regarding the impact of the pandemic on the turnover achieved in 2020:

  • 69% of the participants in the study said that their turnover is not expected to change.
  • 17% of the respondent companies estimate a decrease in turnover ranging between 5% and 30%.
  • 14% of the companies foresee a turnover increase between 5% and up to 50%.

Among the effects of the pandemic from a business perspective, companies list the decrease in external demand (39%), the impact of the pandemic on customer operations (33%), the search for new business areas (33%), the increase in external demand (30%), global restructuring plans (27%), acquisitions (3%).[1]

Working from home became the main option for companies in this period, but it also revealed its limitations in regards to face-to-face interaction, collaboration and socialization. Thus, 82% of the surveyed companies stated that they will keep their office space.

“The current context is favorable for Romania and the business services industry. Globally, companies are rethinking their cost structure and rebuilding their outsourcing strategies, Romania being in the top of relocation options. In the medium term, the Romanian industry can see annual increases between 5-10%. Economically, the crisis caused by Covid-19 is the biggest challenge of the last 20 years. Most companies hope that the economy and their business will recover in 2021. Out of the surveyed companies, 19% believe that the industry will recover in the Q1 of 2021, 19% in Q2, 5% in Q3 and 5% in Q4. 37% of the surveyed companies cannot estimate when the industry or the economy will recover “, explains Ciprian Dan, President of ABSL.

54% of the companies activating in the industry stated that they have a Disaster Recovery Plan / Business Continuity Plan in place, while 46% don’t have such a plan.

Regarding the support received from the authorities, 20% of companies applied for technical unemployment, 11% received state aid, 11% – local tax exemptions, 6% – tax deferral and 6% accessed EU grants / European funds. 38% of companies did not benefit from any form of public support.

The experience of the last months has shown that working from home 100%, as well as working from the office, have many drawbacks and no longer correspond to the current reality. Due to employee safety measures, companies cannot have large teams working from the office, so they have opted for a hybrid work system. 48% of the responding companies will consider a hybrid work system in 2021, 13% of the companies will continue in the telework system, while 39% of the companies consider that in the medium term telework is not a viable alternative.

“In the short term, companies in the industry will continue to migrate rapidly to the concept of “Flex Office” and will combine remote work with office work to streamline costs related to office space, but also to attract a diversified workforce, from a wider geographical area. Thus, the time spent in traffic will be able to be used in a productive way, and the workforce that could not be employed until now because of the distance from the office will become available. All these will contribute to increasing the efficiency and maintaining the appeal of Romania as a preferred destination for outsourcing”, says Cătălin Iorgulescu, representative of the ABSL Board of Directors.

In the medium and long term, 58% of companies estimate that the number of employees in the industry will increase, 22% believe that the number of employees will decrease, while 20% of companies believe that the number of employees will remain constant.

In the context of the pandemic and of cost revaluation and automation, the surveyed companies estimate that the number of employees is likely to decrease by up to 4.5% by the end of June 2021. The estimated number of employees in the industry at this time is about 131,000.

Before the pandemic, the biggest challenge for the companies in the industry was connected to a well-prepared workforce. All discussions related to the development of the industry focused on recruiting and retaining talent. The average rate of departures from the company was 22% for the period 2017-2019. Between January – July 2020, the average rate of departures from companies was 12%”, says Ciprian Dan, President of ABSL.

Most employees with long-term contracts provide Customer Service (29%), IT and Software Development (28%), Financial Services (19%), HR (10%), Supply Chain Management (6%), Banking and Insurance (1%).

The most important cities for the business services industry are Bucharest, Timisoara, Cluj, Iasi, Brasov, Sibiu.

The study is published by ABSL in collaboration with KPMG and was conducted between July and October 2020. The sample was 59 companies operating nationwide.

[1] The total percentage exceeds 100%, as the companies selected several options.