The authors of the publication have produced a comprehensive overview of the leading BPOs/SSCs (Business Process Outsourcing/Shared Services Centres) destinations in Poland. They also present an analysis of the labour market and office real estate markets in major cities, with the aim of providing investors with support in crucial decisions concerning the relocation of their business processes to Poland.
Over the past year Poland has outpaced India in the rate of job creation and project expansions in the BPO sector while the number of people employed in it has been growing steadily by over 20% annually since 2008. Poland’s dynamic growth, much faster than in the rest of the CEE, has been a magnet for investors, however companies see relocation as a serious endeavor and require information about various aspects of the Polish market. They also welcome the incentives on offer from the state and regional authorities.
Slawomir Majman, president of Polish Information and Foregin Investment Agency says: “Statistics comparing the pace of BPO growth in Poland and India, where the number of new establishments is decreasing, show that companies are increasingly choosing CEE and above all Poland as the destination for their investments. The fine track record of existing players also encourages others to enter the market. The key attraction is however the availability of well-educated and qualified workforce, the best incentive to invest in Poland.”
Skills highly sought
The sector of modern business services in Poland currently employs over 110,000 people and the number continues to grow. In May 2013 Krakow was host to 25.400 jobs in the sector (growth of almost 31% since January 2012) in 43 centres, Warsaw offered 18.900 jobs (33% increase) in 55 centres while Wroclaw offered 18.400 jobs in 38 centres (46% increase) and is ever more popular, especially with manufacturing and high-tech companies setting up their R&D centres. Over the past 10 years employment in the sector has grown as a result of expansions by existing companies such as State Street, Hewlett Packard and HSBC and by new investors.
The operations set up by Qatar Airways in Wroclaw (airlines) and Laureate International in Tricity (higher education) are examples of the wide range of industries which are contributing to the growth of business services Poland. What they have in common is the requirement that employees speak a foreign language, most often English. Such skills are on the increase among young Poles, with over half of the population stating, for the first time in history, that they speak at least one language other than their native tongue. The number of students of engineering & technology has been growing since 2010 thanks to the introduction of ministry-sponsored fields of study, a project aimed at increasing the number of graduates in mathematics, engineering and natural sciences. These are recognized by experts as crucial for the development of the Polish economy.
Małgorzata Jasinska, Corporate Accounts Director, CEE, Hays Specialist Recruitment says: “One of the many incentives offered by Poland is the large number of highly qualified and well educated graduates who often speak several foreign languages. Moreover Polish employees offer quality services at par with European standards, while the wages they command are competitive with remunerations not only in Western Europe. We are also witnessing an evolution in higher education and heightened interest in technology degrees. Today there are nearly two million students in higher education in Poland and the number of engineering and technology graduates is growing with each year. We are also seeing successful cooperation between employers and universities which allows graduates to develop the knowledge and skills required by employers. This is an excellent recommendation for the future and also an opportunity for companies offering more advanced business services such as KPO (Knowledge Process Outsourcing) and R&D.”
Office space availability and cost
Often when a company reviews potential locations for its BPO site, the long list starts with 75% of the cities in Poland and the remaining 25% across other countries in the CEE region. While leading Polish regional cities such as Wroclaw, Krakow, Poznan and Tricity attract the largest numbers of investors, new destinations on the BPO map are increasingly interesting options. The availability of modern office space is a serious consideration for companies choosing where to outsource. The growing office stock in smaller cities, for example Olsztyn, Bydgoszcz, Opole or Rzeszow means that over the past four years they have been able to meet BPO requirements from international companies across diverse sectors, such as JP Morgan Chase, Atos, Alcatel Lucent, Cap Gemini, France Telecom, Citi Group, Carlson Wagonlit Travel, Orange, Sanofi Aventis and many more.
Joanna Mroczek, Head of Research and Consultancy, CBRE in Poland adds: “Since the beginning of 2010, regional markets have again been booming, with the global economic slowdown working in favour of low-cost locations. In 2012, both Polish and international companies, including BPO investors, leased over 600,000 sq m of office space in Warsaw and over 350,000 sq m in regional cities, not including renegotiations. In coming years we expect a number of corporations to both expand and enter the market. Therefore leasing activity should remain high. Available office stock will also grow as, after a period of slowdown, construction activity has again accelerated. Currently there is over 1 million sq m modern office space under construction of which 45% is being developed in the regions. Ready-to-use office space is essential to attract foreign investors, who once they decide upon a location, cannot wait long to move.”
Daniel Bienias, Director of Tenant Representation in the Office Department at CBRE in Poland comments: “Currently the prime asking rents for top quality office space in Poland range from 12 – 16 euro/sq m/month in the best buildings in the regional cities as well as non-central Warsaw, and up to 25 - 26 euro/sq m/month in Warsaw Central Business District. The average rates however are much lower, particularly in the most developed areas. Tenants also enjoy many incentives, lowering the effective rent by as much as 15 to 25%. These may include the landlord giving the tenant a negotiable budget for the fit-out. Such costs as the move, office furniture, interior design or logo on the façade can also be negotiated and a rent free period ranging from 1 to 1.5 months per each year of the lease agreement, depending on its length, can also be obtained.”