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Future of Work

New Nearshore trends: Remote employees are drawing closer and closer

Frédéric Lasnier
Frédéric Lasnier
Chief Executive Officer

Our trip to Poland last week allowed us to analyze the Nearshore outsourcing practice in other countries, particularly in the UK and above all in Germany. One cannot but notice that the latter country, which invented the nearshore business, has a predominantly similar methodology to the one favoured by Pentalog. While the level of labor cost is lower by 13.5% compared to France (for a gross wage level which is higher by 15% – but the employers’ contribution is twice higher than that in France, which grants 7 additional leave days per year). However, despite this favorable difference in labor costs, German companies are fond of Czech, Slovak and Polish services, which are more expensive and easily exceed 200 € / day on average, even 230.The gap in labor costs between a German and a Polish employee of the same level hardly exceeds 33%. What the Germans particularly appreciate in these bordering countries is the high quality of their training, their German-speaking skills and … the time they have them spend in Germany with no duration restrictions or visas. Thus, these companies, like me, consider that remote teams must have a maximum amount of competences and that project management must absolutely be carried out locally for maximum efficiency. This is the paradigm that is precisely implemented by Pentalog to avoid intervention by project leaders who aren’t used to international projects and that the usual IT service providers of our clients are trying to sell us. Certainly, our project management structure in France, Germany and Israel allows us to have a close and constant contact with our clients but it is true that the lack of visa requirements for our Romanian employees is what makes the difference compared to their Moldovan and Vietnamese colleagues and our competitors in the Maghreb. Germans do not hesitate to have the employees of their Polish or Czech partners spend 183 days per year in Germany (this figure represents a well-known tax limit). We also practice this system, with only one client, German, that continuously receives approximately 15 people out of a total of 30 in the team. Non-EU nationals are generally limited by visa and work permit systems (I will resume this topic one day).This trip, whatever city we may choose between Cluj, Timisoara and Wroclaw to open a new nearshore outsourcing production unit, has strengthened my conviction that our teams, at least those located in EU countries, must meet their clients more and more often to develop their knowledge of activities and learn about their economic stakes and their strategy.

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