SSCs in Hungary are increasingly voting in favor of large rural cities. The decline in the centrality of Budapest is more noticeable year by year; according to surveys, 82.83% of the workforce employed in the sector in 2013, and 84.76% in 2014, were in the capital.
By 2019, this figure was only 76.48%, indicating the development of a diversification strategy. Several provincial cities have consciously begun to attract these companies.
The SSC sector within Hungary was able to really gain ground in Budapest. Seemingly ever more offices have been established since the 2000s, and today most of the more than 90 domestic SSCs are located here.
The very intensive demand for foreign language-speaking labor has reached such proportions that nowadays it is said that Budapest is “overheated”, which means that the demand significantly exceeds the supply. This started a spiral of wages and, in part to avoid this, a shift.
“In terms of having a center in Budapest or in a Tier 2 city, there is no significant difference in managing their operations, as BSCs are among the most digitized and digitalized workplaces in Hungary, and also worldwide,” Richárd Ránki, director of the Hungarian Service and Outsourcing Association (HOA) tells the Budapest Business Journal.
It has been a trend for more than five years that Hungarian SSCs and BSCs are targeting rural cities, says Katalin Fritzné Szénási, the ideas manager of the SSC Szeged Project. In this university city 175 km southeast of Budapest, they mapped out what the service centers needed, and what would make the city attractive.
The answer was high-quality office buildings with as many foreign-speaking young people as possible, mainly graduates, an investment-friendly city management and good infrastructural facilities. The big cities in the countryside can certainly compete with Budapest, Szénási believes.
The rural university cities have an absolute advantage over other provincial towns because there must be a continuous supply of labor in the catchment area to meet the sector’s requirements in the long run.
Thus, the SSC Szeged project was established with the cooperation of the Szeged city municipality, the Faculty of Economics and Humanities of the University of Szeged, and Szeged Pólus Nonprofit Fejlesztési Kft.