October 25 (SeeNews) - The outsourcing sector's contribution to Bulgaria's gross domestic product (GDP) grew to 3.6% in 2016, from 3.4% in 2015, according to a report prepared by SeeNews for the Bulgarian Outsourcing Association.
By 2020, the outsourcing sector is expected to generate about 4.2% of the country's GDP, the report showed.
The share of the outsourcing industry in Bulgaria's economy has been expanding steadily over the recent years, from 3.4% in 2015 and 2.8% in 2014.
Bulgaria’s business process outsourcing (BPO) sector generated 53% of the total turnover of the outsourcing industry in 2016, as compared to 47% for information technology outsourcing (ITO). A year earlier, the share of the two sectors was 58% and 42%, respectively. Human resource outsourcing (HRO) and finance and accounting outsourcing (FAO) are also expanding, with strong potential for growth, the report showed.
Outsourcing remains a profitable sector regardless of the 18.3% decline in total net profit to 106.5 million euro, according to the report.
The ITO segment is continuing to improve its performance by double digit rates, while BPO reported a decrease in net profit by more than 20%. The differentiation between BPO and ITO is gradually fading due to the growing complexity of the processes and overlapping activities, the authors of the report commented.
According to the report, the declining workforce in the country, together with the diminishing number of graduates intensifies competition among companies for qualified personnel.
Most of the outsourcing companies, 83%, continue to be based in the capital Sofia, while the remaining firms are based mostly in Plovdiv, Varna, Burgas and Veliko Tarnovo.