September 25, 2018

Dutch companies nearshoring in to Romania

Nearshoring (outsourcing at shorter distances), first started in Romania due to Western companies’ wish to cut costs. However, as local firms started to do more complex work, Romania’s competitive advantage has moved more towards the skilled labor market. Although wages have gone up, the country is still trailing its Western peers in terms of pay. According to the Netherlands-Romanian Chamber of Commerce (NRCC), local net wages were the equivalent of 25 to 75 % of those in the Netherlands last year, depending on industry and staff qualification. However, the level of labor taxes and social security contributions are roughly the same as in the Netherlands. “The initial idea was basically to be cheaper than the people in the Netherlands. As time went by, we found out that we are not necessarily cheaper, but we have good quality programmers in our company who are hard to find in the Netherlands,” according to Bert Steenbeeke, owner of Dutch company BT&T Software Development. “There are fewer people doing computer science in the Netherlands than there are here. We are facing a big shortage of engineers in the Netherlands in the future,” he added. Nearshoring has proven to be effective in the IT business, but smaller foreign companies have acknowledged that high fliers are targeted by big companies, willing to pay big bucks for their skills.
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