PwC’s survey – which is sponsored by the Hungarian Service and Outsourcing Association and the American Chamber of Commerce – is the first comprehensive study about this industry. Today, there are more than 80 SSCs in Hungary, providing a range of centralized business services at primarily a regional, but in some cases at a global level. Typical services include finance and accounting, procurement, logistics, IT and human resources and involve transactional roles as well as complex, high-end, value-add activities. SSCs primarily employ graduates with strong language skills. Further to being a significant employer, the shared services industry accounts for approximately 1.2% of the 2010 central state budget in terms of employee related taxes, duties and VAT payment.
|At a Glance – SSC sector in Hungary|
|Number of SSCs
Total number of employees
Employees with university / college degree
Contribution to central state budget
Predicted job creation
over 2,000 new jobs in the next 2 years
The survey also confirmed that Hungary is still seen as an attractive option for locating shared services. As the key attribute of that attractiveness, respondents named highly qualified labour with strong language skills, excellent infrastructure and ‘Class A’ real estate.
“Hungary is competing well for further shared services investment; however this competition is strong, with countries and specific regions coming forward with great offerings and incentives. Certain countries have a dedicated strategy for the shared services industry and a framework in place that helps attract and retain investment – such dedicated focus would hugely contribute to Hungary’s long-term success in building its knowledge based industry” – highlighted Gyula Bunna, Director of Advisory Services at PwC.
Mike Colicchio, Managing Director of Celanese Corporation’s Budapest Business Services Center said: “One important aspect of a country’s ability to maintain a leadership position in the SSC marketplace is the development of secondary locations outside the primary city. The talent is available in major cities across Hungary, but substantial investment is needed in infrastructure and a focus should be placed on awareness of career opportunities in SSC’s. The capital is becoming more competitive due to new entrants and the expansion of existing SSCs; however, in-country alternatives need to be explored if Hungary wants to continue to attract new SSC investment.”
The recently released survey is one of a kind in providing the most complete sector overview available in Hungary together with an analysis of the strengths, risks and opportunities of the industry. PwC is planning to conduct a similar global survey in the summer as a part of the company’s on-going work to improve best practice in management and operation of SSCs.