TIRANA, March 29 – At least 30 call center companies operating in Albania and employing about 3,000 people have suspended their activity in the country following some late 2016 legal changes in Italy making the supply of inbound and outbound services for Italy-based companies from non-EU countries such as Albania much tighter.
Call center representatives warn more closures could follow as Italy has recently announced a repatriation plan for Italian call centers operating outside the country offering them subsidies in a bid to create 20,000 jobs at home.
“There are about 2,000 to 3.000 jobs from call centers that have been in Albania for more than 5 years and had an exclusive contract with an Italian multinational company which because of fearing penalties from the new law have suspended contracting companies registered in Albania,” Genti Drenova of the Association of Call Centers has told reporters.
Italian legal changes that become effective starting April 1 envisage huge fines ranging from €50,000 to €150,000 for call centers whose operators don’t inform customers about the country they are calling from or when answering to customer enquiries, something which up to now was avoided. The legal changes also make it more difficult for Italian companies to change their location or contract non-EU third parties who have to provide guarantees about data protection.
“From the moment we are forced to say ‘we speak from Tirana’ the law envisages that when customers want to be called from Italy or from an EU country, we are obliged to pass on the phone call to an Italian operator. This has a cost because you have to have an office in Italy or other EU country. There is no problem if you have an office in Romania or Bulgaria,” says Denis Minga, the administrator of a call center company.
Fearing the threat of the ongoing job cuts, call center representatives have appealed to the Albanian government to offer initial subsidies on social security contributions, accounting for about a quarter of gross wages in Albania, in order to provide incentives for local and foreign entrepreneurs.
“There should be subsidies on social security contributions, whose cost is too high, at least for a certain period of time. Some 25,000 workers could be a small number compared to the labour market, but it’s the most sensitive workers, students who not only grow in their career, but also financially support their studies and families,” says a call center representative.
One of the key employers in recent years, the call center industry currently employs about 25,000 people in Albania, mainly providing services for Italy-based companies. The industry has also had a key impact on reducing youth unemployment rates which still remains high at about 30 percent and curbing the huge mismatch between skills acquired in universities and labour market needs.
The suspension of work by some call center companies comes as Italy’s Economic Development Minister Carlo Calenda has recently announced a repatriation plan for Italian call centers operating outside Italy due to cheaper labour costs, offering subsidies in return for providing at least 80 percent of their services in Italy.
“Measures are being taken to move to Italy. At the beginning everybody was focused on moving to Romania, but the fact that the Italian economic development minister is ready to provide subsidies for call centers, I think the majority of companies will continue their activity in Italy,” says Roberto Caparrota, an Italian call center businessman in Albania.
In its letter to the Italian government before the December 2016 vote, Albanian authorities said the bill targeting to promote youth employment in Italy, mostly affected Albania as a non-EU country but did not stop the transfer of call centers from Italy to other EU members with cheaper labor costs such as Romania, Croatia or Slovenia where Italian companies are already present and have a Plan B to move after the Italian Parliament okayed the proposed changes.
The Albanian government lobbied the Italian Parliament over the law only few days before the vote at a time when all attention was focused on a constitutional referendum triggering the resignation of Italian Prime Minister Matteo Renzi after Italian voted against the Renzi-backed changes.
Other investors say the panic is unjustified as the Italian legal changes only curb the expansion of the industry by tightening the transfer of call centers to non-EU countries, but pose no threat to current businesses operating in Albania.
Agron Shehaj, a successful Albanian investor in the call center business, says the suspension of marketing campaigns by some Albanian companies comes after their Italian partners decided to bring back the services to Italy and signals the law could have harsher than initially thought consequences.
“I think that potentially some Albanian call centers will suffer the consequences of the law, the change in the work environment. It all depends on the effects of the law, the pressure the Italian government is putting on operators who have transferred their jobs to Albania, the reaction by Italian partners and call centers in Albania,” says Shehaj.
Shehaj who in 2008 founded IDS, the country’s biggest call center currently employing some 3,000 people, sold the business to a London-based company for €10 million in late 2014. He still serves as its administrator.
Data shows there were 847 call center companies operating in Albania at the end of 2015 employing about 25,000 people, compared to 414 companies in 2014 and only 75 in 2010 when Albania emerged as an attractive call center destination for the Italian market due to cheap labor costs and language skills by Albanian youth.
This service mainly engaged in marketing campaigns and customer service for big operators in Italy has seen a boom in the past five years mainly due to low operational costs and the fluent Italian that Albanian youngsters speak.
Operating costs are estimated three times lower compared to Italy where average wages for a call center job range from €900 to €1,000 compared to €280 to €350 in Albania.
Italy, the host of some 500,000 Albanian migrants, is Albania’s main trading partner, one of the top investors and main sources of remittances.
