BSCs need to improve their staff retention

Business service centres in Hungary and the region are stronger in service provision and weaker in employee retention. This is according to recent research just published by Deloitte, which looked at the development of BSCs in eight countries. Overall, Hungarian centres score 3.51 on a scale of one to five, slightly above the regional average (3.4).

For the first time, research into the maturity of business services centres in the Central and Eastern European region has been carried out by international consultancy Deloitte. 83 company managers from eight countries completed the questionnaire, 29 of them from Hungary. In addition to Hungary, BSCs from the Czech Republic, Slovakia, Poland, Romania, Bulgaria, Latvia and Lithuania also participated.

The researchers looked at the development of centres along four dimensions - strategy, service delivery, organisation, processes and technology. Respondents were asked to rate their own company on a scale of 1 to 5, with additional subcategories within the four dimensions. The stages of maturity were also named by the authors of the survey. 1: lagging, 2: developing, 3: performing, 4: maturing, 5: leading. The overall average score for the eight countries surveyed was 3.4, meaning that the BSCs in the region were in the 'performing' and 'maturing' phases. A correlation can be found between the establishment and the maturity of the centres: the older the establishment, the higher the average score. However, there are also a number of exceptions - centres that have recently arrived and are operating at a high level, having exited transactional activities.

What does the Hungarian data show?

According to the responses from Hungarian participants, the average score is 3.51, slightly above the regional average of 3.4. Of the four dimensions, the highest is service delivery (3.57) and the lowest is organisation (3.4)The same outliers are also observed in the regional data.

In terms of strategy, Hungarian BSCs are well structured and their operating model is effective, but they are weaker in raising awareness of vision and long-term plans. In the service delivery dimension, business continuity plans stand out, while in the management structure they have room for improvement, especially if they move towards agility. In the process dimension, the highest score was given to creating the opportunity/resource to work from home, while the lowest was given to standardising processes between global endpoints.

$\"Eszter$

E Eszter Lukács presents the results at the ABSL breakfast

When looking at the organisational dimension, business decision-making received the highest score (3.69). 62% of respondents said that the BSC management team has decision-making autonomy and authority in key business areas such as resource allocation, budget management, day-to-day operational and employee-related decision-making. And the lowest score was given to staff retention not only in Hungary (2.97) but also in the region (2.89)

E Eszter Lukács, director at Deloitte and one of the authors of the survey, said that companies perceive that they have to do something about retention, and there is a great demand for HR consultancy work. The saturation of the Hungarian BSC sector is not helping to reduce turnover. Covid has significantly changed employee expectations. "The home office reduces the commitment to the employer, loosens the bond between employer and employee. There is more pressure on middle managers, who are expected to create team cohesion."

Istvan Lenk, president of the ABSL trade association - who himself completed the survey as managing director of Eaton - noted that the business service centre job market has really picked up since the covid epidemic passed, and the sector was ahead in retention before the epidemic. Although the president said investors have become more cautious about Hungary, two or three new players are still entering the country every year. This increases the supply of jobs and makes it easier for workers to change. Retention is also made more difficult if employers want to bring workers back to the office.

The ABSL chairman added that the trend of more value-added jobs coming to Hungary is continuing, while transactional activities are being replaced by software-based, artificial intelligence solutions in more places.

What is BSC? BSC stands for Business Services Center, in Hungarian it is called Business Service Center. They are units of multinational companies located in a single location that provide services covering several countries - such as finance, IT, HR, sales marketing, logistics - within the parent company or even to external customers. The first BSCs appeared in Hungary in the 1990s, and the industry started to take off in 2005, with the majority of employees being multilingual. Central and Eastern European EU Member States have become a particularly attractive investment destination due to cheaper labour costs and a skilled workforce. Currently, there are around 200 BSCs operating in Hungary, employing 150,000 workers and generating 6 percent of Hungary's GDP.

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