Over the past 15 years, the Central and Eastern Europe region has become one of the most popular outsourcing destinations, including outsourcing of IT services. How did it affect the labour market and where does it lead?
Looking back at the last decades from the perspectives of the IT industry, we clearly see the changes caused by the development of the business services in the CEE region. Compared to Western Europe, the CEE region offers the same – and often even better – possibilities and quality of services at lower costs.
CEE: promised land for outsourcing?
Because countries such as Poland or the Czech Republic, in which NATEK opened its first office in 2004, don’t have a strong IT legacy, they are not burdened with certain ways of operating, old-fashioned practices and old infrastructure. Therefore, the latest technologies and tools are used and companies operate in accordance with the latest methodologies.
At NATEK, we have been providing our services in this region for 15 years and we are witnessing changes which have been taking place here since more and more foreign investors are deciding to offshore or nearshore their processes to CEE.
When 15 years ago we proposed to the world leader in technology to transfer the project from Western Europe to the Czech Republic, it was still seen as a “bold” undertaking. We currently provide services to our clients from our offices in four countries of the region – Poland, Slovakia, the Czech Republic and Bulgaria.
“Customers seek more and more information about capabilities in our locations and how we can improve their time to market deliveries”, says Jana Kruzliakova, NATEK Head of Business Development. She notices, that we see the tendency of relocating the projects from Asia to CEE pursuing higher efficiency and from West Europe and USA seeking better proximity delivery.
According to the ABSL report, in the first quarter of 2019, 1,400 foreign BPO, SSC / GBS, IT and R&D service centers were operating in Poland, employing a total of 307,000. persons, i.e. 10% more than in the same period a year earlier. From the beginning of 2018, to the end of the first quarter of 2019, 91 service centers were opened in Poland, of which as much as 80% are foreign investments.
Only in the last year, the number of jobs in service centers increased by 10%, and since 2016 by as much as 43%. As many as 85 new jobs are created daily in BPO, SSC / GBS, IT and R&D centers.
New investments and projects create great opportunities, but also make finding employees with the right qualifications a growing challenge. NATEK Head oh HR and Recruitment Joanna Pejo admits at NATEK we open doors to career in CEE to hundreds of candidates from both the EU and other parts of the world every day.
“Effective recruitment, recognition, development and retention of talents on one hand and the management of the costs of labour, are the biggest challenges currently faced by managers and employers. The answer seems to be the growing popularity of IT outsourcing services . Therefore, the selection of appropriate supplier is not the only strategic decision one needs to take. You need to think of them as employers as well. We know it from our own experience as we are an employer as well”, she says. She adds that despite many challenges resulting from the dynamics of the labour market, we have long term partnerships with our customers. At the same time, on board we have employees who have been with us for 5 or 10 years.
Our partners confirm that Central and Eastern Europe is synonymous with high quality services. One of the key factors is definitely the availability of qualified specialists. Globally, the European Union has the highest enrolment rate for higher education (4,000 per 100,000 inhabitants) in the world. In connection with cultural proximity and convenient geographical location, it is not surprising that global players choose this region.
In addition, thanks to the strong emphasis on education in the areas of STEM (sciences, technology, engineering and mathematics), the IT services market is growing rapidly. According to the Hackerrank ranking, 4 countries from the region (Poland, Russia, Hungary and the Czech Republic) were in the top 10, and another 3 (Bulgaria, Romania and Ukraine) in the next ten in terms of the best programmers in the world.
The future is a continuous development
Will this condition last for another decade? Some believe that Robotic Process Automation (RPA) will make the location of a project or a given process completely irrelevant. To meet the current needs of the economy, business processes will be increasingly closer to technology, which will significantly change the labor market.
First of all, the BPO industry will introduce robotisation and automation of all repetitive tasks that have been carried out by people until now. On the other hand, even handling basic processes will require the ability to use advanced programs and tools, so the current staff will have to constantly improve and develop new skills.
Do you want to know more about the topic of nearshoring? Go to: What does it take to make nearshoring successful?