Bringing Workers Back

Economic News

22 Jul 2010
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"Brain drain", the loss of a country's most talented and skilled workers to more attractive overseas employment, is a common challenge for developing economies. In Bulgaria, however, the private sector is taking the initiative to reverse this process and bring skilled Bulgarian migrants back home.



A study on human capital released on October 16 by the Lisbon Council, a Brussels-based think tank, concludes that for Bulgaria, along with Croatia and Poland, "there is a realistic chance of being stuck in relative poverty compared to the European average" and recommends heavy investments in human capital.



In addition to changing demographics - Bulgaria's working population is forecast to drop by 26% between 2005-2007 - and insufficient investment in education, "a persistent brain drain" is one of key causes of the human capital problem, according to the report.



A World Bank report published in January this year states that 688,000 Bulgarians, or 7.7% of the population, emigrated from the country between 1989-2005. Following the country's accession to the EU at the beginning of this year, the rate of emigration is expected to increase, although not by as much as many analysts predicted. A survey by BSS Gallup reported that only 46,000 Bulgarians have serious intentions of working in another country. However, many of these will be amongst the most skilled. According to Plamen Vachkov, the chairman of the state agency for information technology and communications, there are 120 Bulgarians working for Microsoft in the US alone.



Enticing members of the Bulgarian diaspora, estimated at over a million, to return to their country of origin has become the goal of many businesses that struggle to find adequate human resources on the domestic market. Plamen Voushev, CEO of Jobs.bg, a national employment website, told OBG there was a particular struggle to find talented engineers and software programmers.



Anthony Hassiotis, CEO of Postbank, told OBG the company had undertaken an aggressive recruitment strategy aimed at encouraging foreign-based Bulgarians to return.



"At the moment we do not see too many returnees," he said. "I think there is a general lack of awareness among the Bulgarian diaspora of the opportunities and salaries that are available to them should they return. While Bulgarians living abroad maintain their family ties, few maintain their business ties."



The age and familial status of the returnee is a key factor. "It is crucial to help them return before they establish a family unit abroad," said Hassiotis.



George Georgiev, the country manager for Motorola in Bulgaria, is one such returnee. Having studied and worked in the US, he believes an increasing number of Bulgarians are looking to return to the country as the business climate improves.



"The brain drain is slowing down," he told OBG. "As the economy grows and the demand for highly skilled managers increases, so do the salaries on offer and the opportunities for career progression are excellent. Given the low cost of living in the country, more and more Bulgarians are investigating the possibility of moving back."



Many CEOs feel that next year's proposed income tax drop to a flat rate of 10% - a significant decrease from the current 20% to 24% - will also help attract returnees.



In order to assist this process, the Confederation of Employers and Industrialists in Bulgaria (CEIBG), is registering a new company aimed at facilitating the return of migrant Bulgarians. Expected to be in operation by the end of this year, the new company, named KRIB, will provide consulting services for businesses. The company will assist Bulgarian employers regarding their employment needs and help to prepare the documents necessary to hire employees from foreign countries.



Svetlana Boyanova, legal advisor to CEIBG, will be the manager of the new company.



"There is a great demand for this service in Bulgaria," Boyanova told OBG. "KRIB will now focus on collecting more detailed information on Bulgarians abroad and we will propose to the government concrete measures for improving the legislation and administrative procedures in order to create [better] conditions for the return of these migrants."



The belief that successful Bulgarians living overseas would like to return is confirmed by the World Bank report. A survey showed that only around 4% of Bulgarian emigrants intended to stay away permanently, while around 70% said they intended to move abroad for a short time before returning home.

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