The shared business services sector expanded year-on-year by 19% and now generates 3% of GDP in the Czech Republic. Companies conducting business in this sector provide employment to a total of 75 thousand employees. This is the result of the annual survey by the ABSL Association, which was presented at the 4th annual ABSL conference on 18th October in Prague.
The results surpassed the expected 16% increase and indicate that 2017 will be in the spirit of even greater development. “Signals from the market indicate that we will grow at a 25% rate. This will concern development of existing centres and also arrival of new investors,“ Ota Kulhánek, president of the ABSL Association, which associates companies from the business services segment, commented. Even though companies in this field offer above-standard salaries, they find it increasingly more difficult to find suitable candidates for the growing number of jobs. Candidates must speak perfect English and other European languages, as well as having expertise in their field. According to the current survey a total of 31 languages are spoken in the centres, during which time German, French, Italian, Spanish and Dutch are most frequently required in addition to English.
The Czech Republic is growing fastest
The Czech Republic has managed to attract 200 major global companies, which have established a business services centre here. Over 25 of these can be found on the Fortune 500 scale of most important global companies. “The centres are truly international, they provide services to companies from five world continents. As well as traditional investors from the USA, Germany, Great Britain or Switzerland, companies from India, Singapore or Canada are also establishing centre’s here,“ Ota Kulhánek commented, with the additional information that the Czech Republic has been one of the TOP 10 most popular world destinations for establishing and operating business services centres for some time and growth of the entire segment in the Czech Republic is one of the fastest in the world.
The business services segment is becoming a major pillar of the Czech economy, which is slowly approaching the importance of the automotive industry for example, from the aspect of the number of employees and from the aspect of benefits. “If the revenue from the related supporting services, such as lease, legal and consultation activities or HR, is added to the turnover generated by each segment directly, this segment’s contribution to the Czech economy doubles,“ Ota Kulhánek explained.
The biggest employer of university graduates
According to this year’s annual survey, business services are also the biggest Czech employer of university graduates. They employ 50,000 graduates, who specialise in fields such as IT, human resources, logistics, accounting and finance or marketing. 10,000 fresh graduates of technical, economic or linguistic fields enter this segment every year in order to begin their career and the business services segment is also the biggest employer of international talents. Nearly 40% of employees in the segment are foreigners who come from various European countries and also from overseas. “In relation to this I must mention that this mainly concerns foreigners who have decided to work and live in the Czech Republic under the same conditions as their Czech colleagues,“ Ota Kulhánek comments.
Czech Republic = quality
“Czech business services centres did not enjoy immediate success. Some centres were established in the Czech Republic a decade or more ago and gradually established an excellent reputation, thanks to which our country acquired a unique status among localities suitable for this type of service,“ says Ota Kulhánek and he adds: ”It is our goal now to maintain the sustainability of this segment and also the dynamics of its development and to ensure a sufficient number of suitable talents in cooperation with universities, government organisations and foreign partners.“
“The business services sector is a priority area, which we consider has enormous potential for growth. Companies in the Czech Republic are successful particularly due to the availability of high-quality employees with language skills and a developed infrastructure. It is also easy to attract foreign employees, as demonstrated by the HSBC study, according to which the Czech Republic is the fourth most attractive country in the world for life and work,“ says Karel Kučera managing director of the CzechInvest Agency, and he adds. “In cooperation with ABSL we are now trying to ensure ideal conditions for further successful growth of the sector”.
100,000 employees within two years
According to the ABSL survey most existing companies are planning to expand next year. Of these 61% wish to expand the range of provided services and 41% plan to expand their customer base. In combination with the planned arrival of new investors, the originally set goal for 2020, of a total of 100,000 employees in the segment, should be achieved approximately within the next two years.
The ABSL membership base is growing
The ABSL Association is also reporting growth as well as the business services segment itself. Its main goal is to create a platform for improved cooperation and facilitate sharing of experience between members of the association, and to defend their interests and create a better business environment. The Association also has the goal of helping companies active on our market to grow, as well as supporting newly arriving investors. “The fact that our work means something is reflected in the growth of our membership base, which expanded by one fifth during the elapsed year ,” Ota Kulhánek added.