ABOUT CHALLENGES AND THREATS TO THE SSC/BPO SECTOR
Poland has been increasingly popular among foreign investors and the modern business service sector is doing well. In your opinion, what is the strength of the Polish market?
Despite significant marketing activities of our neighbours from Central and Eastern Europe, there are still many factors convincing foreign investors that Poland is the most attractive country in Europe for the BSS (Business Support Solutions) sector. Our success is due to several factors such as very proactive Polish Information and Foreign Investment Agency and Investor Service Centres in the municipal offices, relatively easy access to government and EU support such as grants or the CIT exemption as well as cooperation with universities, - said Agni Zygner, General Manager Director of Capita Poland, winner of the awards of Outsourcing Stars and CEE Shared Services as well as Outsourcing Awards for the year 2016.
According to Agni Zygner, the availability of new office space at still competitive rates encourages foreign investors to open their Service Centres in our country. The BSS sector in Poland includes already over 1000 companies employing almost 200,000 employees and these numbers are constantly growing. In Poland, we have highly qualified personnel, fluent in foreign languages as well as the largest number of students, among CEE countries, graduating each year. As per recent headcount numbers prepared by ASPIRE, Kraków only employs over 60,000 people in the BSS sector while in entire Bulgaria there are 50,000 of BSS employees. These numbers are impressive! Poland is the biggest CEE country; therefore, the additional advantage is the possibility to gain new clients in the local market.
Despite such a good situation, there are voices comparing the SSC/BPO sector to a bubble? Why?
There are many reasons for this opinion. We all want Polish Information and Foreign Investment Agency and Investor Service Centres to continue attracting new companies to the Polish market. On the other hand, the newly established BSS centres cause constant competition for employees. Companies in Wrocław and Kraków, for some time now, have been looking for employees outside of large urban areas. However, even this is no longer sufficient and we hear more and more about employees from Ukraine and even from other nonEU countries. This situation cannot last forever and we – employers – must stop increasing salaries as we may all lose this way. I have been living in Italy for many years and the market there is completely different. In some regions, e.g. Sardinia, unemployment among graduates reaches up to 60%! In comparison, unemployment in Kraków is at 3%–we live in a completely different world.
Not everyone realizes that the average salary increase in 2016 vs. 2015 in SSC/ BPO sector was at 5.85% and for the managerial and professional positions even up to 10% (eds. data from Antal Payment Report). The salary increase in other sectors was approximately at 3% on average. It is insane! I don’t believe that fighting for candidates and increasing salary rates is a good long-term strategy for the whole BSS sector in Poland. If we will not search for new solutions, this bubble will burst as price arbitrage will no longer exist and therefore we won’t be attractive for investors.
I have heard you mention a disproportionate salary increase. I think we are not able to counteract this. The Polish market is an employee’s market, after all.
I would like to underline once more that a disproportionate salary increase can lead, at a certain point, to a BSS market crisis. This topic is often discussed at Pro-Progressio, Aspire and ABSL groups meetings and we are thinking about a direction the Polish sector should take to maintain the current growth. Personally, I am convinced that Poland must find its niche; however, this will not be only a price arbitrage. Similar situation has happened in Ireland several years ago when the BSS sector had its European centre in Dublin. Currently, average salaries there are too high to allow the companies to think about opening their BPO/SSC sites. A similar situation may happen in Poland if we – the heads of the centres – will agree to ‘fight’ for employee.
How would you then propose to protect this sector against the possible breakdown you have mentioned?
I do not want to be misunderstood. I am far from predicting the forthcoming market breakdown. I am just pointing out certain risky trends that are clearly visible. I try to convince my clients at Capita, that Poland is a place for a socalled ‘High-end Intelligent Outsourcing’. The projects that we offer are quite complicated and advanced services requiring professional knowledge. This is why Capita carefully plans each transformation project and delivers solid training for graduates with no experience in this sector. We create interesting job perspectives and the possibility of acquiring knowledge and expertise, including certificates, that definitely can make a difference when the salary level will no longer be a case.
Which activities do you undertake?
My main objective is to position our company as a business partner, not only as a provider or supplier delivering services to our foreign contractors. It happens that I refuse to transfer to Poland services that are not challenging or complex enough. We want our employees to perform interesting and creative work. Customers appreciate honesty. Additionally, we focus on quality–price remains a secondary matter. Setting the right expectations, being a solid partner combined with enthusiastic approach of our management, is our recipe for success. Our strategy and adopted methodology helped to create projects and services allowing our employees to grow and this is what motivates us the most. Together with my Management team we continuously discuss directions for our growth and the future of the BSS sector in our country.
The SSC/BPO sector also complains about the challenges related to attracting new employees who are mainly focused on salaries when looking for work.
I wish young people focused more on their future by investing in their own development through conscious career planning rather than just looking to earn few hundred more as quickly as possible. Once the bubble bursts, only those who planned their long-term professional career will not have problems with getting or maintaining a good job. Others may be replaced by robots or colleagues from other, more competitive countries. An employee who is driven only by financial reasons will leave when they get a better paid job offer. I do not want to follow this direction. I want people employed by Capita to stay with us because of the unique nature of their work. Considering the dynamic growth of the sector, a new investor enters the market every month offering higher salaries. These activities are only shortsighted and they are harmful for the sector.
Is this where the success of Capita comes from?
To some extent, yes, but this is only the tip of the iceberg of the internal activities conducted by us. People matter the most in our business. We are constantly training new leaders in our Leader’s Academy programme, we identify talents and invest in the best ones. It is very important for me personally to give opportunities to our employees in the first place and promote them internally. This is our main objective. I pay a lot of attention to Generation Y that has been manifesting their diversity for quite some time now. Young people are very ambitious nowadays. In my opinion the most important for them is the opportunity to get a professional training and have career growth but also possibility to maintain the ‘work-life balance’.
Yes, this phrase is used by everyone. In Capita however, we are truly implementing this idea. In fact, our employees work for 7 hours and 30 minutes because a 30-minute lunch break is included in the 8-hour working day. We emphasize the possibility of changing career path within the organization. Let us face the facts: many graduates do not know which direction to follow in their professional career. Project management, process migration, HR roles…there are plenty of career possibilities. Today business is changing very quickly and the decisions must be quickly adjusted. Young people have the possibility of a swift change, even if they start working in one project, e.g. related to the HR sector, they can move to another area following a fully transparent internal recruitment process.
Recently I have had an opportunity to read an article on one of the portals in which the author of the text refers to the latest OECD study where Poland came in 6th on the list of developed countries which are at risk of massive unemployment. The cause – as in science fiction movies – are robots.
Yes, this is a very hot topic. That is why – as I have mentioned before – I am focusing my efforts on making sure that Capita Poland will deliver more advanced services allowing building teams of specialists where work cannot be easily automated or replaced by a robot, at least not in the nearest future. Obviously, simple repetitive processes will be automated sooner or later and then those, specialized in their field will win. This is inevitable. Robotics, particularly in our sector, is no longer a question ‘if’ but ‘when’.
Your activities and innovation did not go unnoticed by the jury of the Outsourcing Starsand Capita Poland for the second time in a row won in the category of the most dynamically developing BPO company in Poland.
Yes, this is a great honour. We are happy to be recognized on the market and that our ideas as well as business approach are appreciated by others. This is a great pride and motivation for the management and whole team. Who would not like to work for the best BPO in Poland and an Outsourcing Star!