- December 20, 2016
- Posted by: Ryan Strategic Advisory
- Category: Industry commentary
The deluge of locations where determined government officials position their respective jurisdictions as the next best thing for BPO offshore delivery has been abundant over the past decade. The most recent addition to this group is Macedonia, which until recently has not been on the list of top spots of where to house outsourcing operations. But, vendors should not be quick to write this country off, as a proactive, western-oriented investment promotion campaign is starting to pay dividends. With business-friendly policies and ongoing funding for language skills as the hallmarks of its BPO attraction strategy, Macedonia just may be what many outsourcers are looking for as a Central European delivery option.
At first glance, Macedonia may not appear the likeliest candidate for BPO investment. After all, at roughly two million its population is relatively small compared to other European nearshore destinations. In addition, until recently it has not been a country that has actively pursued an outward outsourcing investment strategy. However, things are rapidly changing by way of the country’s Minister of Foreign Investment, Jerry Naumoff, who has made it his mission to provide outsourcers with the atmosphere that they need to make Macedonia a relevant point of service delivery.
To date, the government’s moves have been encouraging and multifaceted. For example, Macedonia boasts one of the lowest corporate tax rates in Europe, while transparency has also ameliorated in recent years. In fact, the most recent Corruption Perceptions Index shows Macedonia’s ranking improving steadily. The government has also placed a premium on language skills development. Specifically, each young Macedonian is required to learn English from kindergarten to the end of grade twelve, in addition to a second foreign language for at least eight years during their primary and secondary schooling (most often French, Italian or German). The current Macedonian investment incentive program pays outsourcers’ mandated social insurance contributions for the first three years and also offsets employee training costs. And, while still early days, these policy initiatives are starting to have a positive impact.
Over the past two years, Macedonia has been chosen for a number of offshore BPO investments. One of the most interesting is that of Task Force BPO, a US-based outsourcer that provides back-office support to firms primarily in the insurance and health care sectors. This is in addition to Xtrade, an Israeli outsourcer servicing clients in financial services. These two deployments provide Macedonia with crucial and credible first references not only in offshore delivery, but also in terms of its capabilities to support clients in compliance-heavy industries.
What’s next for BPO in Macedonia? Clearly, its government is making the right moves by ensuring a competitive, stable point of delivery. And, given the clear emphasis on language skills, many front-office vendors may find that it could be a viable country from which to deliver multilingual services for clients in Western Europe (or further afar). Going forward, Macedonia’s government must maintain its emphasis on competitiveness, while continuing the investment focus in education. Provided this pattern continues, outsourcers would be advised to give this emerging BPO destination the same attention its nearshore neighbors were accorded a decade ago.