EXECUTIVE SUMMARY OF PEOPLE AND WORK One of Hungary’s most dynamic industries, employing almost 75,000 people, proved to be quite crisis resistant in 2020. COVID-19 and the uncertain economic environment of the year influenced in different levels almost all service centres in Hungary. Most had a temporary headcount freeze, some reported a cutin working hours (Kurzarbeit), benefit cuts (salary increase cancellation, deleted bonus) but there were relatively few layoffs. This period gave a possibility to redefine the strategic path of the centres. For multiple reasons, we see a positive trend of development already in the short term at 77% of the centres: a. The dominance of high value-added jobs increased as a resultant of migration to and from Hungary. We observe a new trend of a growing combination of transactional and more added value jobs that help to retain and develop young talents. The lower number of transactional jobs (due to automation and migration of jobs from Hungary) is a challenge for freshly graduated students who will have more difficulties in getting their careers started. b. Hungary’s geographical/time-zone location, close distance to the businesses, with more than just English language skills, remain important assets. The quality of life in Hungary attracts many foreigners to work in Hungarian business centers although, due to the limitation in traffic, the number of foreigners slightly decreased (14%). c. The quality of services, the salary and cost arbitrage keeps Hungary in the competition among other CEE countries. Although Hungary attracted few new centers over the last year, the majority of those present expressed their satisfaction and willingness to expand in Hungary. d. Captive centre development is observed in jobs where complexity, cultural alignment and privacy are all considered close to core business areas. BPO development is strong in transactional functions (IT, customer service) or very high-end tech jobs: cloud technology, analytics, AI. COVID-19 has multiple other effects on HR trends as well: a. Budapest, as a place of living, might be challenged. If employees can execute their work from remote locations, then centres can have access to new sources of workforce. It might balance the salary differences within the country.
b. Although the quality of services during the lockdown was high and seamless, it is clear that there are some challenges for freshly induced employees, new teams and inexperienced managers. c. As cost consciousness rises higher in times of economic crisis, we see more automation and AI projects being launched in transactional jobs, voice-bots etc. This will increase the efficiency of work and will put pressure on mainly transactional jobs. The migration of lower valueadded jobs to Asia is speeding up as more countries accept English as a service language (e.g. NL, D). d. Services centres adapted quickly and successfully to the new normal: working from home, flexible work time, better work-life balance, decreasing sick leave rates and attrition are all proofs of success. SUPPLY OF WORKFORCE According to the current estimations, around 10,000 fresh graduates are required per year to ensure the continued development of the BSCs, i.e., the migration of larger projects to Hungary. It is extremely difficult for the educational system to follow the development/changing needs of the different industries and thus, our BSCs as well. Mid-level and higher education must give deeper consideration to our industry, as it is not yet recognized in parallel with its importance and role in the national economy, or its current and future importance on the job market. The time-to-productivity of fresh graduates could be lowered. The centres used more time to train employees during COVID-19. Before, people preferred offline training, but online is now well accepted. The centres try to create multifunctionally skilled people that can work in more functions like a “Swiss military knife”. Hungarian GBS Report | Hungary, 2020 63
