The Top 5 Countries for Outsourcing in Central & Eastern Europe

We previously featured the top countries in Southeast Asia for sourcing talent.  While Asia tends to dominate some of the outsourcing rankings, it’s worth exploring other geographies such as Central and Eastern Europe.  There are numerous locations in the region that offer readily-available, skilled labor and good physical and financial infrastructure to support cross-border business.

Here are five of the top eastern and central European countries to consider as you explore where to leverage international talent to help your business:

#1:  Bulgaria

Bulgaria, an eastern Europe country, placed 7th on Ranker.com’s list of top outsourcing locales.  We saw similar results at StatisticBrain.com, which placed Bulgaria in the top five countries for outsourcing overall, beating out even the Philippines.

Bulgaria is nowhere near the most populous country in the world given its citizenry of about 7 million, which only puts it near the 45th percentile. But as you’ll find, that’s a common theme on this list: you don’t need a huge population base to be a great destination for global talent.

Why is that the case with Bulgaria? The country is focused on providing outsourced labor to regions including Western Europe and the United States through government support of “nearshoring.”  Nearshoring refers to the outsourcing of business processes such as Information Technology, which makes Bulgaria especially suited for companies looking to save on IT costs.

There are also regulatory systems in place that make outsourcing to Bulgaria easier for US-based companies such as lighter employment and international trade rules. Bulgaria also scored an 8.8 in the cost index with StatisticBrain, which means it’s competitive with other low-cost countries like the Philippines.

#2: Estonia

Estonia is a small country with a small population – only about 1.3 million, according to the latest U.N. statistics – but the country makes up for this with plenty of ambition. Perhaps the most obvious sign of that ambition is Estonia’s e-Residency program. Estonia calls e-Residency “a new digital nation for global citizens.”

While this program is targeted toward individuals who want to establish and run a business in Estonia online, it’s a sign of Estonia’s business-friendly motivations. Thanks to the pro-business climate, Estonia boasts plenty of tech-savvy workers from good local universities who are capable of quickly adapting to existing corporate infrastructures. Estonia’s culture is largely digital, including paperless government meetings for over a decade, as ComputerWeekly.com notes.

#3: Hungary

Hungary scored a 5.6 overall rating at StatisticBrain.com, which placed the country a couple of spots below Estonia on the list but higher than popular outsourcing countries like Vietnam. That’s high praise for a country ranking 91st in world population – lower than countries such as Greece, Azerbaijan, and South Sudan. But as Estonia showed earlier on this list, sourcing quality global talent is not always dependent on raw population statistics.

Hungary excelled in particular on the cost index: a score of 6.9 at StatisticBrain put it on par with another favorite from southeast Asia – Malaysia. That’s good enough for roughly 20th overall in the world, depending upon the ranking factors.  Though its numbers don’t compete with Indonesia, India, or even Bulgaria, Hungary’s tech-savvy population brings plenty to the table. Another source – Clutch.co – puts Hungary’s overall ranking at 15 for outsourcing in the world. That’s a competitive ranking for a region that sometimes struggles to compete on cost with southeast Asia.

#4: Poland

High quality global talent pools arise due to a mix of factors – including one variable that US businesses often forget about: ease of doing business in the foreign countries. According to the 2017 World Bank Group report, Poland ranks 24th in the world when it comes to the ease of doing business. A McKinsey report also shows strong economic indicators that make Poland a rising economy on the world stage.

But what about sourcing global talent specifically? A.T. Kearney’s 2016 release put Poland in the top ten on its overall rankings list, placing the country above global services heavyweights like the Philippines. That lofty ranking for Poland was largely driven by a high-quality “business environment” rating, which help boosted its overall score after doing only moderately well in financial attractiveness. That means you can expect a large pool of well-qualified workers (Poland ranks 37th in world population with some 38 million citizens) to help fuel your staffing efforts.

#5: Russia

You might not find Russia on the top of many worldwide outsourcing lists – especially those global ones that tend to put countries like India and China at the top of the list – but Russia does warrant consideration in context of its surrounding regions in eastern Europe.

According to the A.T. Kearney release, Russia’s global services are ranked 17th in the world. That comes largely due to the “people skills and availability” score. The availability of labor in Russia is no secret – as the ninth most populous nation in the world, Russia has a wide range of workers ready to take on global employment. That’s why any list looking at eastern and central Europe has to consider Russia a competitor in this space.

Want to know more about the global HR outsourcing outlook?  Interested in outsourcing your own international HR process to simplify your business operations?  Be sure to contact Clearfront HR to discuss your central and eastern European employment needs.