This edition of the report encompasses 774 Bulgarian companies operating in three main segments - 20 companies in research and development (R&D), 349 companies in business process sourcing (BPO), and 405 companies in information technology sourcing (ITO). The report preparation took place in September and October 2022.
KEY HIGHLIGHTS In 2021, the sector almost doubled the annual growth rate of its operating revenue to 22.4% from 12.7% in 2020. This swift recovery after the slowdown in 2020, caused by the COVID-19 pandemic, was driven by soaring demand for high-value-added solutions and supported by the solid technological development, skilled talent, and innovative nature of the vendors in the sector. Based on the five-year compound annual growth rate (CAGR) of 19.9% in the period 2017-2021, the aggregate operating revenue of the sourcing companies in Bulgaria is projected to exceed EUR 8.9 bln by 2025, more than double the EUR 4.2 bln generated in 2021.
LABOR MARKET Bulgarian sourcing companies employed a total of 89,165 full-time employees (FTEs) in 2021. By 2025, the aggregate headcount of the sector is projected to exceed 120,000. BPO was the biggest employer at the segment level, accounting for 61% of the total FTE number in 2021, followed by ITO with a share of 28% and R&D with 11%
SALARIES AND TAXES Sourcing companies boosted their salary expenses by 22% y/y in 2021 to a total of EUR 2.1 bln. Thus they accounted for 11.4% of the total salary costs in the Bulgarian economy, compared with 10.7% a year ago. The sector's social security contributions followed the salary costs trend and amounted to 8.6% of the national economy's aggregate, up from 8.4% in 2020.
In 2021, the companies in the sector paid EUR 55.8 mln in taxes, an annual jump of 40.6%. The aggregate contribution of sourcing vendors amounted to 3.2% of all taxes paid in the Bulgarian economy, a notch up from the share of 3.1% recorded in 2020. The companies in the sector spent 1.3% of their aggregate operating revenue on taxes.
OPERATIONAL INCOMES The sourcing sector had a share of 2.1% of the total turnover generated by private companies in the Bulgarian economy in 2021. Its aggregate operating revenue also equaled 5.9% of the country's 2021 GDP at current prices. If this mid-term growth rate persists, by 2025 sourcing companies are expected to have an aggregate turnover corresponding to 9% of the national GDP.
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