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Colliers: The availability of workforce influences the outsourcing companies' demand for office spaces

The demand for office space for the BPO / SSC sector in four major CEE cities - Wroclaw, Lodz, Krakow and Sofia - accounted for 60 per cent of the total demand in the first semester, while in Bucharest this was one-quarter of the total.

2017-12-18 10:39:52

According to the latest Colliers International report, the whole phenomenon is the result of the influence of labor availability and good technological knowledge of employees.

The ECE region has strengthened its global competitive position in terms of attracting BPO / SSC (business process outsourcing / business services outsourced) businesses thanks to its favorable business environment. At the same time, the expertise and skills of employees are more developed than a few years ago.

However, the number of candidates properly prepared for this sector is deficient. Currently, the largest proportion of IT specialists, according to ABSL statistics, are in Brno, Budapest (both 13%), Bratislava (12%) and Kosice (10%). Also, in cities like Bucharest or Worclaw, BPO / SSC companies recruit approximately 20% of the total number of students, this being the highest percentage of the area.
"Taking into account that the office stock in Bucharest will increase by 300,000 sqm in the next period, multinationals will have the advantage of choosing between many options of the best spaces but will also need employees to occupy them. Although in Romania the graduates are mainly oriented towards the services segment, the educational institutions do not produce enough candidates for this sector and sometimes they do not produce the right qualifications. At the same time, the unemployment rate for people with higher education is at the lowest level in the last 10 years, at about 2%. All these aspects will prove critical for attracting new players and expanding existing ones, "said George Didoiu, Associate Director of Office of Colliers International Romania.

The appetite of BPO / SSC companies for Romania is, however, still maintained by the low costs and the complexity of the services offered to customers.

"We have employees who deliver the highest degree of complexity in BPO / SSC. A recent Milken Institute report indicates that the Northwest region is the first in the EU as a growth rate in hi-tech services over the period 2009-2014. Bucharest is also seen as having the highest concentration of such services in direct comparison with other major cities in the area. Increasing the complexity of these services led to an average hourly wage costs of 4 euros, 45% below Poland (6.2 euros) and 80% under Slovakia (7.2 euros). Together with the boomerang effect of Romanians working abroad in similar and returning roles, all these factors could lead to filling the gap created by the lack of labor availability, "George Didoiu explained.

In the CEE region, the BPO / SSC sector enjoys a strong presence despite the increasing location costs in recent years. A report by ABSL Poland shows that wages in the banking sector have increased about 40% in Warsaw and double-digit growth in other areas, especially for specialist positions.

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