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Published: 3 month

Home office is the new currency, Hungary is an attractive BSC target

Hungary remains the most attractive destination for business service centres (BSCs) in the region, along with Poland and Romania. 2023 was a difficult year for the sector, but this year managers are more optimistic. The primacy of language skills is declining, tech-skills are becoming more valuable, recruitment is easier if there is a home office. How does the trade association plan to give the industry a new boost? Where is the BSC sector heading? We talked to ABSL Hungary President István Lenk, Tata Consultancy Services CEO Datta Prabal and the company's Head of Marketing and Government Relations Edit Bencsik.

Lenk István BSC ABSL ügyvezető-

More than twenty years ago, the first BSCs were established in Hungary. Currently, there are around 200 business service centres operating in the country, employing nearly 100 000 people and generating nearly 6% of the value added in the sector. The history of ABSL Hungary (Association of Business Service Leaders in Hungary) dates back to 2005. As the industry expanded, so did the HOA, which by 2019 had 100 members. In 2022, the organisation moved to a regional level, joining the ABSL network, the Central and Eastern European umbrella organisation for BSCs. HOA thus became ABSL Hungary, and István Lenk, CEO of Eaton Hungary, was elected president.



\"Hungary leads the way in the Central and Eastern European region\"



While the BSC industry in Hungary has overcome a difficult 2023 - economic recession, inflation, energy crisis, Russian-Ukrainian war - István Lenk is optimistic about 2024. The Central and Eastern European region, including Hungary, is an attractive investment destination. This is confirmed by Prabal Datta (pictured below), managing director of India-based Tata Consultancy Services, a member of ABSL Hungary.



Prabal Datta Tata Consultancy Services\"Although labour costs are increasing in Hungary, but that is only one aspect, the tax environment, labour availability, efficiency and productivity also need to be taken into account. All in all, Hungary leads the Central and Eastern European region," the CEO noted. He added that they have doubled their staff in the last 9 years. When asked about Hungary's regional competitors, the CEO said that BSCs have been present in Poland for the longest time. Although there are already 450,000 people working in the sector, there is still potential for growth. Among the other Central and Eastern European countries, Prabal Datta highlights Romania. And in the southern Balkans, Albania is expected to make progress, with the state investing heavily in IT and technology training.



Foreign language skills are no longer everything



The manager said that the content of jobs in BSCs is changing, far from being call centres. Increasingly, technology-related positions are coming to Hungary mainly from Western Europe, and in particular from the region known as DACH (Germany, Austria, Switzerland). Whereas IT jobs used to account for 20 percent, they now account for 50 percent." What are the most sought-after languages? István Lenk said that English is the main language, followed by German, French and Italian, with other languages being less represented. Edit Bencsik, director of marketing and government relations at Tata, adds that while translation software has come a long way, and language dependency is minimal in chatbots, language and cultural proximity are becoming increasingly important in business and service delivery.



Where are the workers coming from? "Universities are an important source. However, a significant proportion of new positions are recruited from within through retraining and further education. There is no longer as sharp a line between jobs as there was ten years ago. Even a finance person needs to have some understanding of technology," says Edit Bencsik. István Lenk adds. We need to make the BSC and the company attractive in other ways, for example by presenting career paths and joint industry activities. The ABSL has a role to play in this."



István Lenk said that 25-30 percent of their employees are non-Hungarian. Most of the foreigners had lived in Hungary as students or worked for other companies before they were hired, so they had no problems integrating. Eaton employs a small Italian colony: they came to Budapest from southern Italy as recent graduates in electrical engineering. They are happy and recommend the opportunity in Hungary to their friends and acquaintances.



The new currency is the home office



About turnover, István Lenk said that last year it averaged between 18-20 percent in the industry. It was higher in transactional jobs such as German accountants, while in higher value-added engineering and IT it was close to zero.



\"BencsikHow much have working conditions changed? "The new currency has become the home office," says Edit Bencsik (pictured) with a smile. Most companies offer their employees the opportunity to work from home 2-3 days a week. Of course, it depends on the expectations of the parent company and the clients. Where working outside the office building is not allowed for security reasons, there is no home office. István Lenk says that where there is hybrid working, the company is more attractive to job seekers. Edit Bencsik warns against overestimating the power of the home office in recruitment. For the 20-something age group, also known in sociological jargon as Generation Z, other factors are important when choosing a job. Among other things, how sustainable the company is, what it does to combat climate change, how much carbon dioxide it emits, what community activities it offers after work, what NGOs it supports.

Is there life outside Budapest?



90% of Hungarian BSCs are based in Budapest, there are few examples of a rural presence, with a few units in Debrecen, Szeged and Pécs. In contrast, in several countries of the region, a number two location has grown up after the capital: in Poland, Krakow, in the Czech Republic, Brno, in Romania, Cluj-Napoca. Prabal Datta and István Lenk agree that this is not impossible in Hungary. ABSL Hungary, in cooperation with the government investment promotion agency HIPA, conducts an annual site screening, coaching local political, economic and educational decision-makers on what is needed to make a city a potential BSC investment destination, how to convince companies, which cities are competitors, what are the strengths and opportunities of Hungarian cities.

As a Hungarian city, ABSL Hungary has a strong track record in the field of BSC investment.

How ABSL wants to level up



The 11-country ABSL network reached a milestone in January. At the World Economic Forum in Davos, it was announced that it would open an office in Brussels. The aim is to give visibility to the industry, representing the interests of the BSC sector to decision-makers in the European institutions. István Lenk said that they have redefined the sector. It now includes not only multinational companies serving several countries, but also any organisation that centralises certain functions, such as accounting, finance, HR, even within a country. The industry now employs 40 million people in the EU-27. ABSL Hungary also wants to step up a gear and will launch several initiatives in 2024. These will aim at community building, networking, sharing good practices, raising awareness of the sector, advocacy, training and retraining. Women Together targets women leaders, the CEO Club targets senior managers, Business Services Experts targets professional managers, and the Project Management Hub and Continuous Improvement Hub target experts whose voices are often not heard in the industry. And on 19 September, ABSL Hungary is organising a major professional forum and networking party for everyone from the sector.



The opening photo shows István Lenk, President of ABSL


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