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Business

Bulgarian company grows impressively despite recession

Synovate is an exception to Bulgaria’s tale of economic woe. During the recession, this branch of a global research company nearly doubled its workforce. Low labor costs brought internal outsourcing to Bulgaria.

Sofia, Bulgaria

The minimum monthly wage in Bulgaria is 115 euros

Like the rest of the world, the European Union's poorest country, Bulgaria, has been hard hit by the global recession. Its private sector is still cutting jobs, especially in the services area, which makes up about 60 percent of the country's economy. Unemployment in the public sector is now nearly 10 percent.

But Synovate Bulgaria is an exception. This branch of Synovate, a global market research company with branches in about 60 countries, has nearly doubled its workforce and now employs more than 130 people.

Each Synovate branch provides market, consumer and industry research to businesses all around the world to help them with decision making. Housed in a sleek glass office building on a major thoroughfare in the Bulgarian capital of Sofia, the company's center of excellence seems to be a quiet office except for the ringing phones.

Low labor costs

An apartment building in Sofia, Bulgaria

Bulgaria suffers from many post-Soviet troubles

Ivan Dimitrov, who manages the center, says the branch started in 2008 with 50 people.

Many current employees are in their 20s. Dressed casually in T-shirts and jeans, they sit in orange cubicles decorated with intertwining circles to match the company's logo and seem to enjoy their informal work environment. One high-level associate demonstrated how to open a big jar of homemade honey with a knife – at her desk.

“I could say that since the start of the financial crisis, we almost doubled our personnel,” Dimitrov told Deutsche Welle. “We have more than 20 regular clients and more than 30 in total. That means we work with more than 30 countries on a day-to-day basis. No other office actually works with so many other offices within the global company.”

So what is it that has caused this office to double its workforce and to continue hiring amid the recession? Due to internal outsourcing, the different global branches of Synovate have been sending more data processing work to the Bulgarian arm of the company because it's cheaper: minimum wage is 115 euros a month.

Exports and foreign investment collapsed

In the grand scheme of things, Synovate Bulgaria is a small company. But because it has experienced the opposite of what other businesses have dealt with – and in the poorest EU country – it seems like an interesting case. Many businesses ended up buying Synovate's research because during the recession, in pursuit of information about how to weather the financial storm.

An unemployed man in Sofia, Bulgaria

Bulgaria's unemployment rate is nearly 10 percent

“The difference between the Bulgarian recession and the Western European and North American recessions is that in these two regions, the recession started from the financial crisis, from the banking crisis,” Georgi Angelov, an economist with the Open Society Institute, told Deutsche Welle. “In Bulgaria, we didn't have a banking crisis. Our banks are stable. So our recession started because our exports fell dramatically.”

Parallel to exports, foreign direct investments into Bulgaria have also fallen dramatically – by as much as 90 percent. In pre-recession times, such investments reached up to 7 billion euros annually, and the decline is a big problem, according to Angelov. He criticizes the Bulgarian government for not having done enough to persuade investors that Bulgaria is not going to default like neighboring Greece.

“Most of the economic growth in Bulgaria in the last decade was financed through foreign capital – either foreign direct investment or foreign banks lending to Bulgarian companies,” Angelov said. “So now we lost this inflow of capital because foreign investors are afraid of investing in our region because of Greece, because of Romania.”

Unemployment remains stubborn

At Synovate Bulgaria, however, the recession has fueled demand for its products and created job openings in the process. And today, Synovate's human resources department continues to seek skilled people.

“We're looking mostly for people with a technical background, as what we do here is data processing activities,” Malina Sirakova, human resources advisor at Sznovate, told Deutsche Welle.

Many well-trained Bulgarians are seeking work today and some offer the qualities required by Synovate. But experts warn that although the economy has started to recover slowly, it will be months and possibly another year before the job market picks up.

Author: Yaldaz Sadakova (gps)
Editor: John Blau

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