SSCs evolve Aalongside Hungary’s economy
No one should doubt the importance of the shared service center to the Hungarian economy. In its way, the evolution of the sector (how its name has changed, even the battle to get potential employees to understand what it does) is a metaphor for the development of Hungary’s own economy.
There was a time when it was all about cost. SSCs began to appear here because multinationals realized it was cheaper to employ someone to answer a simple question or perform a basic function in Budapest than in most Western European capitals. Those same multinationals had to be careful about how excited they were to announce 50 jobs in Budapest because it usually meant 50 jobs had been axed back home.
They came to Budapest because its bright lights have always been a giant magnet, drawing talent to it. That answers a riddle I struggled with when I first came here. Hungarians, traditionally, have not scored well in terms of the foreign languages they speak, yet the managers of the SSCs I spoke with unfailingly said one of the attractions of Budapest was the availability of young graduates with good language skills. The young are generally better than the old regarding languages, and Budapest could effectively recruit from across the country.
But just as Hungary has purposefully moved away from a “Made in Hungary” mentality to “Invented in Hungary,” what the government calls a paradigm shift from manufacturing jobs to value-added roles, so those services centers have morphed from a workbench setting to something intellectually more challenging.
It started with myth-busting. Sector players realized they had to convince people that an SSC was not synonymous with a call center. They started reaching out to ever younger year groups at school to explain what they did and what they could offer. They were even prepared to band together to evangelize: think of AmCham Hungary and its BSS Hungary Working Group. BSS, standing for the business services sector, became part of the evolution, too, the new name aiming to reflect a fresh reality but also cement a different reputation.
The government has been a willing partner in this, realizing the SSCs, BSCs, Global Business Centers, and Centers of Excellence offer it the possibility of reversing the brain drain by demonstrating that exciting career opportunities and reasonable pay levels can be found here, just as easily as abroad. And with good universities scattered around the country, there are inducements it can offer to set up a center in Debrecen or Szeged, for example, and spread those roles across the regions.
Those multinationals who have been here the longest talk of earning the trust of home boards, of proving they have the talents and skills and disciplines to do more varied work here, to run end-to-end processes, to trouble-shoot, to handle research and design, of creating a virtuous circle where the better they perform, the more complex the roles they can attract. There is a balance point here. I am told that Hungary still offers a cost advantage, but the whole concept of convergence, of the country inching towards parity with the EU average, must eventually bring that into question. Then it will be a case of who can do the best job. Then Hungary, which has always prided itself on its brain power, will genuinely be standing on its own feet.
This article was first published in the Budapest Business Journal print issue of November 18, 2022.
Comments are closed.
March 2023 February 2023 January 2023 December 2022 November 2022 August 2022 July 2022 May 2022 February 2022 January 2022 December 2021 October 2021 August 2021 July 2021 June 2021 May 2021 April 2021 March 2021 February 2021 January 2021 December 2020 November 2020 October 2020 August 2020 July 2020 May 2020 April 2020 March 2020 February 2020 January 2020 December 2019 October 2019 September 2019 August 2019 July 2019 June 2019 May 2019 March 2019 December 2018 November 2018 October 2018 September 2018 August 2018 March 2018 January 2018 December 2017 November 2017 October 2017 September 2017
11th annual CEE Business Services Awards
Build it or Buy It?: Outsourcing in Poland and Central Eastern Europe
BSC Directors VIP WineTastings, June-September 2023
BSC Charity Beach Volleyball Tournaments - June and August 2023