Bulgaria has the most affordable labour force in the EU
A report released by Eurostat revealed the countries where employees get the lowest hourly rates in the EU. Bulgaria has the lowest average hourly rate (EUR 3,5), followed by Romania (EUR 4,2), Lithuania (EUR 5,5) and Latvia (EUR 5,9). The payment received by a Danish employee for one hour is equal to the payment which a Bulgarian employee will get for about eleven hours. Denmark is the EU leader in respect to hourly wages. Danish employees get on average EUR 38,6 per hour. The hourly rates in the other West European countries are similar, i.e., France – EUR 34,2, Luxembourg – EUR 33,7, and the Netherlands – EUR 31,1. The rate in Germany (EUR 30,1) is relatively low compared with the other Western EU countries.
In Bulgaria, the lowest-paid workers are the administrative workers who get about EUR 1,40 per hour. They are followed by employees in the sector of transport and communications who get about EUR 4,09 per hour and the employees in the financial and insurance sector who get EUR 6,64 per hour. The highest hourly rate (EUR 9,20) is taken by specialists in the energy sector.
As a result of the low costs of labour in Bulgaria, many companies outsourced their business operations to the Balkan country. The majority of those companies use business process outsourcing, whereas the remaining use information technology outsourcing. Just 52% of the outsourcing companies in Bulgaria have Bulgarian owners.
According to a report published by the Bulgarian Outsourcing Association 4,8% of Bulgaria’s Gross Domestic Product (GDP) comes from outsourcing activities. It is expected that the rate will reach 7,9% by 2021. By the same year, the turnover generated from outsourcing activities is expected to hit EUR 4 billion.
At present, 2,5% of all Bulgarian employees (i.e., 60,600 full-time employees) work in the outsourcing industry. It is expected that their number will increase to 79,000 by 2021.
Most companies having outsourcing operations in Bulgaria come from Western Europe and the United States. The biggest Bulgarian cities (Sofia, Plovdiv, Varna, and Burgas) are the largest hubs for outsourcing services. Nevertheless, some companies prefer to establish their outsourcing operations in smaller cities because of the lower property and labour costs.