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Association of Business Services Leaders in Poland (ABSL) along with its strategic partners of Jones Lang LaSalle and Hays and a supporting member of Baker & McKenzie have released a new report on the Business Services Sector in Poland. Key figures summarising the comprehensive report on the sector in Poland are: 38 new service centres and over 20 new investors to Poland in 2011, total employment in the sector to exceed 100 thousand staff by the end of 2012.
Poland as a top European shoring destination
2011 saw Poland strengthening its position as a leading global shoring destination. It was named by Everest the most mature offshoring location in Europe and one of top 5 worldwide. Also Hackett Group identified Poland as one of the most interesting offshoring venues for international investors and Kraków was ranked 11th globally in the TOP 100 outsourcing destinations by Tholons. Poland currently accounts for 40% of the total headcount in outsourcing centres in Central and Eastern Europe (CEE).
Jacek Levernes, President of ABSL, HP Executive Management Board Member Europe, Middle East and Africa, Vice-President of HP Global Business Services EMEA commented „The business services sector in Poland currently gives employment to over 85 thousand people, up by 50% compared to 2009. We expect that a total of 100 thousand people will be employed in the services sector in Poland by the year end. The country features a fast growth, and more importantly, increasingly more advanced services and processes are being relocated to Poland. Today the country successfully competes for outsourcing projects with places such as China or India and is amongst the top five global outsourcing destinations.”
„Business Process Outsourcing and Shared Service Centres account for most of the projects of the Polish Information and Foreign Investment Agency (PAIiIZ). 30 out of 149 investors we currently work with in Poland represent the offshoring business which is an equivalent of over 7.7 thousand potential new work places.” added Sławomir Majman, President of PAIiIZ.
The most recognizable brands present on the Polish market include Hewlett-Packard, IBM, Infosys, Capgemini, Google, Nokia, Motorola, Shell, General Electric, Xerox, Jones Lang LaSalle and IKEA amongst other.
In respect of headcount, 45% of the existing 340 “outsourcing” centres in Poland are Business Process Outsourcing (BPO) centres and IT outsourcing centres (ITO), followed by Shared Service centres – SSC (35%) and Research and Development centres – R&D (20%). Most typical processes executed by Poland-based outsourcing centres are finance and accounting, IT as well as research. The predominant countries of origin are those within the European Union (France, Germany, UK, Sweden, and the Netherlands) as well as the US. The sector gives employment to university graduates and students with a fluent English, German, French, Italian and Spanish as well as other less popular foreign languages such as Danish, Swedish, Norwegian, Dutch amongst other. They deliver services in a total of 34 different languages with a typical employee being 29-30 years old with approx. 3 years of professional experience. This is unlike only a couple of years ago when SSC and BPO/ ITO centres were recruiting mainly new graduates. Interestingly, employers are increasingly competing for talent pool who are not only experts in area of specialization such as IT for example but also have a general knowledge about the sector the company is active in.
The dominant three markets in respect of headcount in the services sector encompass Warsaw, Kraków and Wrocław with SSC and BPO/ ITO staff respectively of 20 thousand, 10 thousand and 10 thousand. In addition, Tri-City and Poznan are also recently receiving a lot of interest from BPO/ ITO and SSC investors. McKinsey & Company and Samsung have invested in Poznan in 2011 while Bayer, OIE Support and Metsa Group have all committed to the Tri-City market.
The seven biggest Polish agglomerations i.e. Warsaw, Kraków, Wrocław, Łódź, Silesia, Tri-City and Poznań concentrate approx. 80% of all service centres in Poland. The reasons behind this are universities and higher education centres in these cities but also a reasonably wide availability of office space albeit differences exist between particular markets.
Strategic role for office market development across the country
The business services sector in Poland is fundamental to the growth in the modern office market across Poland, most importantly outside of Warsaw where its strategic role is slightly marginalized due to a number of reasons. Jones Lang LaSalle estimates that the sector occupies up to 800 thousand sq m of modern office space in Poland. 40% of total modern office stock in cities such as Kraków and Łódź is leased to tenants representing this area of business, followed by Wrocław, Katowice, Tri-City and Poznań.
Anna Kot, Head of Office Agency and Tenant Representation Services, Jones Lang LaSalle, Strategic Partner to ABSL said: “The office market in Poland is increasingly well educated about the location, functional and technical requirements from the SSC and BPO occupiers and accurately responses to those enquiries. The spectrum of potential locations is growing to include also Polish secondary cities. At the moment, approx. 1 million sq m of modern office space is under construction across the country. Warsaw is the most active market in this respect, followed by Wrocław and Tri-City. Minor up-ward pressures on rents are currently evidenced in Warsaw, Wrocław, Kraków and Poznań.”
The availability of modern office space meeting the requirements from BPO/ ITO and SSC occupiers differs between the cities in Poland, reflecting the office stock under construction but also immediate vacancy of office modules. The vacancy rate currently ranges from slightly over 4% in Wrocław to beyond 17% in Łódź.