As the shortage of skilled employees becomes more acute, employers look for solutions to attract the younger generation, or even replace it
By Beata Socha
The business services sector in Poland employs some 212,000 people, according to the Association of Business Service Leaders. Estimates say the BPO workforce will increase by 20,000 a year, which means that by 2020 employment in the BPO industry will most likely exceed 300,000. “You need to emphasize that 1,000 jobs in BPO generate another 260 workplaces in industries supporting business services,” stressed Paweł Panczyj, managing director at ABSL Polska at the European Economic Congress in Katowice in May.
The rapidly expanding BPO sector is creating substantial demand for office space. According to JLL, the business services sector in Poland currently occupies approximately 2 million sqm of modern office space and the number continues to grow. “According to our estimates, the business services sector in Poland might require some 250,000 sqm of new, modern office space each year. This stems from the industry’s development and the increase in employment that follows,” sad Mateusz Polkowski, associate director, Research and Consulting, JLL. By 2020, an extra 1 million sqm of office space will be needed.
The main reason why multinational corporations move their business processes to Poland is the shortage of skilled employees in their countries of origin. “It’s people, people and once again people. That’s what foreign investors like. Not because they are cheap. It’s their skills and efficiency,” said Marek Grodziński from Capgemini Polska.
However, the shortage of qualified workers is looming over the industry, even in Poland. “Can we maintain a 15-20 percent annual revenue and employment growth in the sector? Certainly, but the employee market is becoming more of a challenge,” admitted Iwona Chojnowska-Haponik from foreign investment agency PAIiIZ.
For years now, one of the areas with the biggest disparity between supply and demand has been the IT sector. It doesn’t help that international software giants, like Amazon, have been aggressively pursuing Polish IT specialists offering them positions in their European offices, further contributing to the labor shortage at home.
The growing talent shortage is already felt by companies in the business, but the biggest hit has yet to come. “We have fewer and fewer students in Poand. Only a few years ago, there were 2 million students in Poland, now there are 1.8 million,” said Panczyj.
The most significant shortages are, again, seen in computer sciences. “The market is growing rapidly, making competition for employees ever fiercer. Meanwhile, the number of computer studies graduates isn’t growing,” said Rafał Bator, partner at Enterprise Investors. “It will affect the entire market in the future,” he added. And it is not only technical skills that are in short supply. “Foreign languages are becoming a challenge as well, surprisingly, even English,” said Panczyj.
Attracting young talent has become one of the biggest challenges in Poland, and employers are aware that the new generation they are trying to lure has different expectations from the previous ones. Pay rises and promotions are not as effective incentives for Gen Y employees as they used to be with older generations.
“Companies are looking more favorably at work-life balance issues and are trying to adjust their work culture to the expectations of the youngest generation [in their workforce]. International tech firms are in the lead in this area,” said Michał Młynarczyk, managing director Hays Poland. “The employee’s market is fueling changes in the market as employees are paying increasing attention to work time and to its organization,” he added.
All over the place
The shortages in the labor market have started to shift companies’ focus from the BPO powerhouses that are Wrocław and Kraków (where unemployment stood at 3.5 percent and 4.5 percent respectively in March 2016, according to statistics office GUS) to less obvious locations. Some of the rising stars on the radar are: Kielce, Rzeszów, Białystok, Lublin, Zielona Góra and Bydgoszcz. A recent BPO investment that made headlines was Deloitte leasing 2,500 sqm of office space for its business service center in the Skyres project in Rzeszów. “We are talking about as many as 50 potential locations. One of the latest new BPO projects was located in Sandomierz,” said Panczyj.
Each of these locations has a lot to offer potential investors, although some are still largely underdeveloped. “We are increasingly involved in projects in non-obvious locations,” concurred Krzysztof Misiak, partner at Cushman & Wakefield.
The business services sector has become the major office tenant in cities outside of Warsaw. In 2015, business services companies leased 380,000 sqm of office space outside Warsaw, which accounted for 55 percent of the entire office demand, according to JLL. In Q1 2016, the share of business services centers in overall occupied office space totaled around 67 percent in Kraków, 52 percent in Łódź, 51 percent in Wrocław, 37 percent in Rzeszów and 35 percent in Katowice, according to JLL. In comparison, business services centers account for only 9 percent of occupied office space in Warsaw.
Warsaw, although behind regional cities in attracting BPOs, is still the go-to location for advanced process outsourcing, like R&D. “Investors locate their centers where they can find good employees. These could be talented students as well as people with many years of experience. The latter group is attracting companies investing in advanced services. For them the no. 1 location is currently Warsaw,” said Jacek Levernes, president of ABSL.
With the growing competition for the best specialists, the workplace has become a very important factor in the recruitment processes. According to joint research by JLL and Skanska conducted among employees from the business services sector, up to 65 percent of the specialists questioned say that a modern, spacious office that encourages productive work can tip the scales in favor of one prospective employer over another.
“The specific nature of our business clearly determines the expectations we have in relation to office space. In a large part we hire members of Generation Y, people who see their workplace as more than just an office. We expect developers to understand our industry and meet their needs,” said Levernes.
Developers are eager to accommodate the changing needs of the industry, which has resulted in the growing popularity of the new approach in designing offices, called workplace solutions. “A greater number of meeting rooms, space for project work, creative work, working in silence, or space for integration – these solutions are becoming increasingly popular in offices. They can trigger the growth of space leased by business services centers for which conveniently designed, attractively arranged and comfortable offices have become of crucial importance during recruitment processes and help them retain the best specialists. The office has become a vital tool for HR management,” explained Karol Patynowski, associate director, Tenant Representation, JLL.
Why need people at all?
Even the best possible working conditions may not be enough given the growing labor shortages. Some employers are considering implementing more automation into their business models. “We constantly arrive at a dilemma of where to find people to complete the orders we get. Instead of going in circles, why not think of using robots instead?” said Grodziński, and added that Capgemini is already working on automating BPO processes. “We have plans to create a virtual service center with special robots and software automation systems,” he said.
But even with growing automation, the business services industry will need more employees and will go a long way to win over the best talent. Offering cool offices and adjusting work culture may be just the beginning of a larger transformation. uwski, associate director, Research and Consulting, JLL. By 2020, an extra 1 million sqm of office space will be needed.