HIPA: Key players of SSC sector are satisfied and plan further expansion in Hungary

  • November 14, 2017
  • HIPA.hu
On November 2, the Hungarian Investment Promotion Agency (HIPA), EY and SSC Heroes presented the most comprehensive SSC industry survey at the annual SSC Gala.

During the gala, three awards presented by the Minister of Foreign Affairs and Trade, Péter Szijjártó and Róbert Ésik, President of HIPA were given to the top companies and managers of the sector. We are delighted to share that AmCham Board member Péter Csucska, Managing Director & General Manager of Lexmark International Technology Hungary Kft. was awarded SSC Manager of 2017.

The Best in Educational Cooperation prize was won by MOL Hungary, one of our Patron members, represented by Csaba Bozóki while the Center of Excellence prize was awarded to Nokia.

Zsolt Kelliár (SSC Heroes), Gyöngyi Varga (HIPA) and Arjen Sader (EY) (Source: hipa.hu)

About the survey

This year, for the first time, HIPA collaborated with EY and SSC Heroes to launch the Hungarian Shared Services & Outsourcing survey, which analyses the responses from companies and employees to profile current trends and the short-term direction of development of one of Hungary’s most dynamic sectors, and which provides an orientation for both existing companies and organizations and those planning investments in the region.

The young industry sector has developed at a rapid pace in Hungary during the past few decades, and is now one of the most important sectors for job creation, with further growth potential. 110 shared services centres now operate in Hungary, employing approximately 46,000 people.

The representative survey questionnaire was completed by 53 companies which together employ 37,000 people, representing an 80% response rate in terms of numbers of employees. The number of those working in the industry who completed the survey exceeded 800.

A mature and developing location

The survey shows that Hungary has Central and Eastern Europe’s most mature SSC market, not only in terms of numbers but also with regard to the industry’s past and structure. This is supported by the fact that captive and hybrid centres dominate the market, as well as by the wide range in terms of the distribution by sector and activities of the centres. Two-thirds of the companies have been operating in Hungary for more than five years, which shows that Hungary can ensure long-term growth for companies that set up here.

In terms of the basis for investment decisions, the cost of labour increasingly no longer plays a role, with the location, attractive environment, economic and political stability, and the possibility to cooperate with educational institutions being beneficial factors in investment.

The trend for shared services centres to choose locations outside of Budapest is becoming stronger. According to this year’s survey, 50% of decision-makers take into account provincial locations for their expansion. Due to their educational background, university cities such as Pécs, Debrecen, Szeged, and Székesfehérvár are being targeted. The provincial cities are developing from year to year and are very open to helping companies in order to provide permanent local work for young people leaving their universities.

The companies that operate in the Hungarian market have a relatively low turnover of employees – the average is 11-15%, but half of the companies in the survey reported a figure below 10%. These days, it is increasingly indicative of the sector on international level that companies are placing more and more of a focus on employer branding and employee training in order to find and retain the workforce.

The dominant languages used in the centres, besides English and Hungarian, are German, Spanish, Italian and French, but more exotic languages such as Arabic and Chinese can also be found.

Human capital vs automation

The industry players are focusing on the issues of robotics and automation, despite the fact that only 30% of companies use them for everyday activities. Given that 90% of centres strongly wish to develop their services, the spread of automation within certain functions is becoming unavoidable.

It is a favourable trend that 80% of companies in the shared services industry plan to expand during the next cycle. Half of the companies plan to expand by more than 100 employees, with a total of expansion of about 3,500 to 4,000 staff expected across the sector in the next cycle.

Please click here to open the survey results.

Source: www.hipa.hu