Nearshoring Guide Part 2: The Romanian Talent Pool

Jump to the other two parts:Nearshoring Guide Part 1: Choosing Romania as the desired destination and Nearshoring Guide Part 3: Finding the Right IT Partner

There’s no secret that nearshoring is gaining more and more popularity amongst Western European companies and with this in mind, we’re continuing our discussion about nearshoring to the CEE zone and Romania, in particular. In the first part of this guide, we've extensively covered the subject of choosing a nearshoring destination, why Romanian software development companies are  a great choice when looking at costs, time zones, cultural affinities, economic reasons and more. But what truly makes for a great choice when searching for an IT Partner that can help bring those ambitious ideas to life? You probably guessed it, of course, it’s people. And more importantly, their skill set and knowledge base. There’s an old saying that makes total sense even in this context and it goes like this: “ A team is only as good as its weakest member. Companies who choose to invest seriously in their employees are the ones that succeed. The ones that step ahead and ride every wave of change smoothly having a strong team doing the sailing. This detail should definitely be on your watchlist when analysing your future partner. But more on this subject later. Let’s start talking about the talent pool. What does it mean exactly and why is it such an important aspect to consider when searching for an IT partner located in a different region. Across Europe, there are over 5 million people working in the IT&C sector, most of which are located in the central and eastern part of the continent. The talent pool in this area alone is so diverse and highly skilled that most western companies don’t even think about going beyond Europe’s borders in search of a software development provider. But what does the concept of talent pool actually mean in this particular context and why is it relevant when looking for the right IT provider? From educational attainments to employment costs and labour market demands, they are all extremely important factors that should go into the overall decision-making process, and we’ll see shortly why.

The IT&C Sector in Romania

Technology is considered a primary economic driver for Romania. With Business Process Outsourcing and Shared Services Centers deeply settled into the market, Romania quickly became the leading nesting ground for global companies such as Oracle, Amazon or IBM to settle in and leverage the local development potential that this country has. And to put it into numbers, the IT&C sector in Romania has earned more than 6 billion EUR and is as we speak, growing faster than ever. Even in times of major global economic distress, like the COVID-19 crisis that we’re constantly battling, the IT&C sector was able to continue most of its business processes and sustain the local economy even further. This IT cluster that formed in this part of the world has helped with the development of the technology start-up scene that is taking a giant leap forward every year. One of the best examples is UIPath, a Romanian-born start-up that a few years ago was valued at $1billion, has seen a fantastic growth recently, being raised at $10 billion.The major IT hubs in Romania are found in a few of the major cities of the country. The biggest is of course Bucharest, followed closely by Cluj Napoca and Timișoara. A study of the technology market in Romania conducted in 2017 showed that the total number of people employed in the IT&C sector was more than 100K, representing over 2% of the total number of employed people in Romania. The same study estimated that the real number is actually bigger taking into account the collaborators and other forms of employment available, and it concludes that in Romania in 2017 the number of IT programmers and specialists were representing more than 3% of the total number of legally employed people in Romania. Having all this information in mind, we can paint a pretty clear picture of what this means in terms of economic potential. The Romanian IT market is quickly expanding and is strongly connected to the global business environment, delivering high-quality services and products to all developed countries in the world.

The Education

In Romania alone, the IT sector counts over 120K specialists and every year, more than 8K graduates are joining the labour force. Software development and the related fields are gaining more and more popularity for today’s generations than ever before. Add to that the fun and friendliness of the work environment.But let’s back up a bit to the background of Romania’s educational system. From an early age, children go through a theoretical and technical educational approach, thus preserving the late soviet educational model. Subjects such as mathematics, physics, and sciences are amongst the most important ones, and the teachers make sure that every student takes them seriously. From a higher education perspective, the approach stayed almost the same - high academic standards especially in fields like engineering, mathematics and computer science. So it’s only natural that their career paths are strongly shaped by the system itself. The local universities play a big role in this because of their high academic standards, and an ambitious, results-oriented mindset that gets passed on to its students.The local firms are hiring annually from the recent pool of graduates. They are taught by the best and brightest, so if you’re considering a nearshoring partner from Romania, you can rest assured that you’re getting highly qualified professionals.

The Entrepreneurial Mindset

When starting a partnership with a software development company from Romania, the first thing you will notice will be their approach to work. Rather than executing orders from a well-defined process, they will choose a more collaborative way and will want to act as a true partner, sharing their opinions and expertise with you. Having a fast-growing economic development, especially in the IT sector, which alone makes for about 6% of the annual GDP, Romania’s workforce potential is definitely worth exploring. This fantastic growth was only possible due to their innate entrepreneurial skills, willingness to learn and create something of quality.When it comes to taking on external projects, the Romanian IT professionals take ownership of deliverables with a high level of commitment to outcomes and the overall relationship with the client. Having that in mind, they are eager to find the best way to implement software requirements and are more than happy to assist the client in writing the specifications to the project. And remember the most important aspect, always strive to choose a partner, rather than a team of plain performers that do not ask questions or look at a problem from different perspectives. They will be the ones that will make a difference, and ultimately your project will have a superior outcome.

The Costs

When it comes to the financial aspect, Romania has a tremendous advantage in terms of value-added vs costs, compared to other countries. Take Asia for example, extremely cheap labour, a lot of outsourcing companies, but at what cost? You guessed it, at the cost of quality. Whether you’ve experienced working with an offshoring firm or not, you cannot deny the fact that your main goal is to get the most out of your invested money. Cheap services usually come at the bitter cost of quality. So why not choose a better option that is closer to home? Nearshoring your projects to a Romanian software development company can help you take your projects to a higher level of quality, all while keeping the costs under control. The country’s overall development is still catching up to its western neighbours, and the IT&C  market is an important contributor to this growth. With a vibrant western work culture, and delivering high-quality projects at a fraction of the costs compared to anywhere else in western Europe, Romania is considered a nearshoring paradise. Did we mention the tax incentives that the government is giving to any IT Specialist? This fiscal practice aims to encourage research and development activities. Thus, salary income derived as a result of carrying out research and development is exempt from Romanian income tax. The people working in this field are therefore getting a very good income, and thus are rewarded and driven to always step up their game and put their best work forward. The living, rental and maintenance costs are relatively small which is also a bonus point for everyone looking to relocate, work or hire teams from this country. But whichever your choice might be regarding the location of your remote team, there are a few things you should always consider before jumping into anything. Take a few moments to answer these questions honestly.

  • Is your company ready for outsourcing projects?
  • How is this decision going to impact your employees? What is their opinion?
  • Are you looking for a partner or just a plain provider?

Qubiz has been the technological partner of choice for many Western European companies in countries such as The Netherlands, The UK and the DACH region. We’ve worked with both big and small companies from different industries and managed to successfully deliver cutting edge IT solutions for businesses that are on an ascending path towards innovation. That is what a true technological partner should look like. Qubiz can act as a one-stop-shop, by providing services that cover the whole application lifecycle, including functional design and consulting, software architecture design, UX/UI design, software development, QA, and finally maintenance.

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