Portugal, the great post-Brexit outsourcing opportunity


The Brexit process is coming to an end and companies need to think about the future of their outsourcing services. 

Words by
in 12.08.2019

The Brexit process is coming to an end and companies need to think about the future of their outsourcing services. 

The departure of the United Kingdom from the European Union has been discussed for a few years now. Each time this process seems to be nearing its end, large IT companies are forced to look for reliable post-Brexit outsourcing resources.

Brexit was consolidated on the June 23rd of 2016 vote, in a British referendum that decided that the United Kingdom should leave from European Union.  The decision to “Leave” won by about 52% and political stability was never the same.

Three years later, the resignation of former Prime Minister Theresa May was due to successive failures in communicating with the European Union. Boris Johnson has now taken over her position and is trying to find a solution (for better or worse) to Brexit's real definition.

What will change in post-Brexit?

The UK without Europe will surely bring changes to its member states. With the devaluation of the pound, tourism will probably be cheaper for those who visit. On the other hand, they suggest that ticket prices from Portugal to England will be more expensive.

Roaming is another major injured party in this post-Brexit case. As the UK will close its entire market, the chances are that English citizens visiting the Member States of the European Union will encounter problems with mobile services. Also, citizens of the European Community will find a higher value in mobile communications in the United Kingdom.

These are just small examples of the simple but drastic changes that British society will experience from a viable exit from the European Union. Companies that previously worked for outsourcing services will also have to think of new solutions in the near future.

post-Brexit outsourcing
Activating new post-Brexit outsourcing services will be harder

Outsourcing as a possibility for IT companies

The year 2020 promises great challenges for companies that until then we're working on more concrete outsourcing services. First, because there is a predominant fear alerted by the possible loss of jobs, and second because there are not enough professionals within the country with the skills needed for large IT projects.

The shortage of talents of accredited people to produce such services is constant. In the past few years, the number of IT specialized graduates decreased, forcing large companies not to hire internally, but to seek outsourcing services in other countries.

According to studies, many companies struggle to hire IT professionals internally, being forced to end this attempt months later. The main reason is that the local market is already saturated and overloaded with the lack of qualified labour. What does this take? Increased salaries for local market specialists, forcing these same companies to invest in outsourcing services to fill the remaining job vacancies.

There can then be a huge influence on the progress of these post-Brexit outsourcing services. Just imagine if the final agreement between the United Kingdom and the European Union means closed borders for European citizens. Many of the great IT specialists are foreigners living in London that would be forced to return to their homelands. On the other hand, it will also be more difficult for foreign graduates and specialists who want to move permanently to the UK, due to the social instability that will be mainly focused on immigrants.

Other issues that can greatly influence a change in a new outsourcing opportunity are related to the rising devaluation of the pound against other currencies such as the euro, the dollar or the Swiss francs (which they have appreciated in recent times). It is well known that Indian outsourcing for IT services is quite relevant in the UK but this currency decline, also compared to the Indian rupee, may mean a renegotiation of outsourcing contracts. The consequences may be to the point that contracting companies in the United Kingdom need to switch to a cheaper service provider in the European countries.

Post-Brexit will force companies to already have the outsourcing companies they work with and Portugal (including MD3) is an option to keep in mind. The goal of hiring is always the same: reduce costs and increase the efficiency of the Mother Company - all situations that IT professionals in Portugal have on a large scale.

Advantages of UK companies relying on Portugal to implement post-Brexit outsourcing services

Portugal can undoubtedly be the European alternative, i.e. nearshoring, for IT services in the UK's major technology and development companies.

Post-Brexit brings with it substantial and unpredictable risks but a reliable choice like the Portuguese market will be the right decision in the medium to long term. Why choose Portugal as a source of nearshoring in this time of crisis?

1- Talents in IT areas

Portugal is a great opportunity for post-Brexit outsourcing. Here you will find a great diversity of qualified professionals with work experience and specialists in various IT areas. This is MD3 main force: a company with a structured team able to work with any type of outsourcing business.
The current free movement of workers from other EU member states also turns out to be an incentive for subcontracting, while the current negotiating module remains deadlocked.

2- Nearby: Distance and time zone

If you have a scheduled vacation in Portugal and your outsourcing company is on this side of the Atlantic, there is no problem showing up without notice. Since Portugal and the United Kingdom are within the same time zone and the distance between them is short (there is a huge variety between daily direct flights between the two zones) and cheap (low cost), communication between the Mother Company and the nearshoring company becomes even more cohesive.

3- Labor In Account

Costs in Portugal are quite competitive, compared to the vast majority of European countries. The lower cost of living in Portugal coupled with the pound's decline makes the country an excellent choice for post-Brexit outsourcing services.

4- Portugal as a country with great capabilities

Portugal is a country known throughout Europe for its safety, quality of life and climate. In addition, it is also politically and socially stable - important virtues for the implementation of companies with outsourcing services (such as MD3), being important supports for other large-scale foreign companies.  Portugal follows European Union standards, important in business matters such as the recent European unification of data protection.

5- Portugal and United Kingdom - Long Date Partners

Portugal and the United Kingdom (formerly along the lines of present-day Britain) have been allies for centuries. Since the Middle Ages and with some treatises in the mix, respect for both countries has always been an obvious fact. The British community itself sees Portugal as the perfect country for tourism, as well as a quality living place for retirement.

While there is a stalemate over the Brexit deal, it is now the time to choose your outsourcing company.

MD3, a specialized technology company, sees outsourcing as an essential source for further internationalization and building business relationships with the best companies in the market, including those in the UK.

If you need to change post-Brexit outsourcing services, contact us. We are ready to grow together!