Running a business in Europe today can be a huge challenge. Both the aftermath of the COVID-19 pandemic and the ongoing Russia-Ukraine conflict have caused economic turmoil, and companies of all sizes are struggling to find ways to cut costs and improve efficiency. To make matters even worse, external factors like rising labour costs, a shortage of skilled workers in certain industries, and increasing competition from low-cost countries are exacerbating the already dire economic landscape.
So, what's the solution for European businesses looking to stay ahead in this tough macroeconomic environment?
This is where outsourcing—nearshore outsourcing, in particular—comes in. It's a way for companies to maintain their competitiveness, optimise costs, and deliver even better customer experiences.
Nearshore Outsourcing: A Closer Look
Nearshore outsourcing is assigning certain repetitive business functions to a third-party or business processing outsourcing (BPO) company in nearby countries. Through this, European companies can effectively reduce costs, increase efficiency, and gain access to a broader pool of skilled professionals that nearshore BPOs already have.
For Western European companies, this often means outsourcing work to Central and Eastern Europe. By doing so, they can tap into a wider pool of skilled professionals and streamline their operations. And with digitalisation in full swing, the demand for IT skills, especially cybersecurity, has skyrocketed. This is why nearshore IT outsourcing is an excellent way for companies to keep up while minimising financial impact.
In fact, BPO investments soared by 84% across all industries in 2022, according to tech research and advisory company ISG.
- German-speaking countries (Germany, Austria, and Switzerland) spent $823 million on IT and BPO services, while France spent $502 million.
- Two-thirds of UK organisations expect to outsource at the same level or more over the next two years.
- 67% of Dutch companies used nearshore IT service providers to outsource software development.
Advantages of Nearshore IT Outsourcing
By working with a nearshore BPO in a nearby country within Europe, businesses can reap several benefits:
- Cost savings
With generally lower labour costs and cost of living compared to Western Europe, countries like Croatia, Serbia, and Romania offer a more cost-efficient option for businesses. With experienced nearshore outsourcing companies as your partner, you'll have access to economies of scale and specialised technology, allowing you to make the most of your investment.
Nearshore BPOs also offer flexible staffing options to fit your needs. There would no longer be worries about overstaffing during slow periods, or incurring the costs of hiring, training, and retaining new employees during peak times.
- Access to skilled talent pool
Eastern and Central Europe is home to a highly educated and skilled talent pool, especially in the IT sector. These regions have a strong tradition of technical education and a growing number of highly trained professionals in software development, data analysis, and IT support.Eastern Europe had over one million tech professionals in 2021.
In addition, many Eastern and Central European countries have a strong work ethic and a culture that values technical expertise, which often leads to increased productivity and a higher level of service.
- Favourable business climate
Apart from having pro-business governments, Eastern and Central European countries are members of the European Union and comply with the EU General Data Protection Regulation (GDPR). This provides Western European businesses, especially those seeking nearshore outsourcing, with an extra layer of security and peace of mind when it comes to protecting data and privacy.
On top of that, tax regulations in Eastern and Central Europe are often more favourable than those in Western Europe, which can help businesses save money on taxes and increase their bottom line.
- Language capabilities and cultural alignment
Many people in Eastern and Central Europe are multilingual, including English. This makes communication and collaboration between international teams both easy and efficient. It also allows businesses to access new markets and improve customer satisfaction because language and cultural barriers are no longer an issue, thus resulting in smoother interactions and shorter call times.
∼80% of Croatians speak a second language and 65% speak English.
86.6% in Greece, aged 25–34, know at least one foreign language.
- Convenience and proximity
Time zones in Eastern and Central Europe are similar to Western Europe. That means your business teams can easily coordinate and communicate with your team during regular business hours. And because of the proximity, you can easily travel for face-to-face meetings and on-site visits. This can help you build strong relationships with your outsourced team and ensure projects are completed to high standards.
- Croatia
- 4,000 graduates annually
- Multilingual outsourcing professionals (English, Garman, and Italian)
- #11 in the EF English Proficiency Index
- Serbia
- Government tax support and increased investment in the IT sector
- #27 in the EF English Proficiency Index
- Bulgaria
- Courses specific to outsourcing are being offered in universities
- Bulgarians speak English, German, and French professionally
- Has one of the lowest labour costs in the European Union
- Romania
- 7,000 tech graduates annually
- Home to Cluj Napoca, the “Silicon Valley of Eastern Europe”
- Provides outsourcing services to major tech companies
- Greece
- 97.94% Literacy Rate
- #14 in the EF English Proficiency Index
- Caters to both European and Asian markets in terms of trade and industry
Close to Home
Nearshore outsourcing proves to be an effective solution to address the challenges of European companies today. However, it’s crucial to partner with a nearshore BPO you can trust and see as a true extension of your business.
Recognised by the Everest Group as the World’s Fastest Business Process (outsourcing) Service Provider in 2022 and highly rated in the Gartner Peer Insights Review, TaskUs is more than equipped to provide you with end-to-end solutions, a wide array of languages, and unmatched results. We’ve been delivering tech-enabled solutions, exceeding client and customer expectations, and enhancing employee experiences for over a decade in the BPO industry.
With a wide European footprint bolstered by our acquisition of heloo, culture fit between teammates and customers, and white-glove services; you can expect results that are truly Ridiculously Good.
- 1^What is the demand for IT Outsourcing Services on the European market?
- 2^European IT and BPO outsourcing off to strong start
- 3^UK IT outsourcing set to continue after service levels improve during pandemic
- 4^Why is it Worth Outsourcing to Eastern Europe?
- 5^Outsourcing from Eastern Europe can Help You to Overcome the Tech Talent Shortage
- 6^What You Need to Know Before Outsourcing to Eastern Europe
- 7^Almost 80% of Croatians speak a second language
- 8^Foreign language skills statistics
