Published in 2025 • EDITOR-IN-CHIEF: Robin Marshall • EDITOR: Levente Hörömpöli-Tóth • CONTRIBUTORS: Annamária Bálint, Mihály Kovács, Erika Törsök • LISTS: BBJ Research (research@bbj.hu) • NEWS AND PRESS
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Foreword
Given the growing importance of the Business Services Sector in Hungary, it is essential to regularly take stock of what is happening in that segment of the economy. And there is a lot going on, indeed.
While Budapest remains a top location for HQs, companies are increasingly relying on the strong talent pool of regional university strongholds. However, local municipalities must be properly prepared if they are to stand a chance in the site selection competition. That’s what a unique collaboration between ABSL Hungary and the Hungarian Investment Promotion Agency (Hipa) targets: their Tier2 City Development scheme is switching into high gear to serve that purpose.
Artificial intelligence is an even hotter issue that has already kicked the door in. As it turns out, while stakeholders go above and beyond to leverage the technology by training employees and adopting the largest possible number of solutions, at the end of the day the ultimate factor remains humans. They are the ones that provide the inevitable contextual knowledge – knowledge that interprets information and connects in-house departments.
Acknowledging humans’ crucial role is one thing. Employee well-being is another as it tends to be disregarded or treated as a minor HR issue. While companies spend lavish amounts on team building and the like, oftentimes well-being-related investments appear to be of inferior importance. It is high time to deal with the matter at the highest level of management as the most valuable asset of an enterprise is its staff.
The government, including Hipa, keeps supporting the sector with measures that facilitate day-to-day operations and incentivize development. Stakeholders expect further assistance, though, when it comes to simplifying the work permit and visa processes for skilled workers from outside the EU, for instance. On the other hand, certain companies that maintain innovative approaches especially with educational institutions continue to capitalize on the R&D tax incentive.
Apart from featuring in-depth content, this publication is also meant to present a fine selection of top executives in the sector that share key insights on how they personally perceive the state-of-play of the local 110,000-strong industry and what issues deserve closer attention. Our top-notch professionals share the sentiment that the Hungarian BSC landscape has undergone immense transformation in recent years moving from simple transactional services to deliver complex high value-added solutions. Most companies partner up with universities to tap into the vast talent pool and get joint R&D activities going to gain an edge over competition.
These telling signs point in the same direction: the BSC industry is not only standing its ground, but thriving and dreaming big in Hungary. If things keep going the way they are – and there is no reason why they shouldn’t – we will have a lot more exciting material to report on in the future as well.
Levente Hörömpöli-Tóth Editor, Budapest Business Journal
What Lures Talent to BSC Sector and Why Third Country Workers Still Matter
University cities in the Hungarian countryside hold immense potential for future BSC investments, but local municipalities must be properly prepared if they are to stand a chance in the site selection competition.
Meanwhile, the government’s incentive schemes provide a stable base for newcomer investors, while there are new opportunities to consider for the sector - specific needs - says business services expert István Lenk.
By Levente Hörömpöli-Tóth
Employers can’t complain enough about the labor shortage in this country, or at least so it seems. But when you scratch the surface, that bottleneck appears to exist in specific, mainly blue-collar professions. The business services sector is a white-collar employer and doesn’t really feel the pain of the lack of skilled staff, according to István Lenk, president of the Association of Business Service Leaders in Hungary. He says the market is not now as turbulent as earlier when big players were entering one after another, which intensified talent competition. Mass hiring has been replaced by business-as-usual headhunting, followed by dropping fluctuation rates.
“While the annual survey of the Hungarian Investment Promotion Agency found that the industrial average attrition rate is 14%, individual companies typically witness rates of between 10 and 14%,” Lenk points out, noting that it used to be well over the 20% mark.
Another reason for calmer conditions is that many choose stability over job hopping. Apart from that and benefits, of course, a clearly defined career path tops the preference list of BSC employees. Given the multinational environment, there can be much to look forward to, including offices
HELP FROM ABOVE?
ABSL Hungary works closely with the Hungarian Investment Promotion Agency to ensure that the sector’s development is on the right track and that stakeholder interests are met. This is in everybody’s interest, given the growing significance of an industry that doubled the number of its employees between 2019 and 2024 and gives work to highly skilled staff that create high added value.
The Hipa connection is beneficial since the collaboration provides a direct route to the government. Lenk praises the cooperation but believes there is still more opportunities to do.
“We need to take this to a whole new level since it would be important if political decision-makers understood the relevant added value of the longterm employment of 110,000 people.” Poland did precisely that and created a regulatory framework to remain competitive on the European level.
Hipa incentives are attractive, and they represent a great deal of support for new investors in the country. Certain companies that maintain innovative
TCS GM ON THE USE AND POWER OF ARTIFICIAL INTELLIGENCE IN A BSC ENVIRONMENT:
“Contextual Knowledge Matters Most When it Comes to AI, and you Need Humans for That”
“You can’t even take a screen shot of your phone.” It doesn’t get any more reassuring than that, right? Prabal Datta, general manager of TCS Eastern Europe convinces in an instant that there is absolutely nothing to worry about security issues at his firm, whether it’s about AI or any regular IT matters. In a compelling conversation he talked about other key aspects of artificial intelligence and digitization given TCS is a frontrunner when it comes to adoption of innovative solutions. Efficiency, UX and AI ethics were all touched upon too, not to mention the most crucial aspect, the role of humans – and the so-called contextual knowledge only they are capable of providing. (Editor’s note: if you are into use cases and best practices, you are going to love this.)
By Levente Hörömpöli-Tóth
TCS is recognized as a leader in leveraging technology for transformation. How has AI been instrumental in reshaping the Business Services Sector, and what specific innovations has TCS introduced in this space? Prabal Datta: Our presence in Hungary is connected to a global network. What we do is influenced and guided by our global strategy. When it comes to AI for us it is a twoway approach. On the one hand, we help our customers transform their business by using one of these new state-ofthe-art solutions, and the other part is AI for TCS, meaning how we can use it for our own purposes.
As far as the first aspect is concerned, we first look at the competences, capabilities and knowledge
in a specific area where training of all our associates is key. They need to have a basic understanding of the related issue at first, and then they get equipped with more advanced knowledge. That’s fundamental for any organization that aims to rely on AI in their operation.
While AI has been around for a while now, in the past year or so things have accelerated, the use of artificial intelligence has become more commonplace in the public, and its speed has improved a lot too. Now, as far as our operations are concerned, it’s used internally in different ways like for example in form of a chatbot for employees or as a productivity enhancer. These solutions are partly built by us globally and locally, and the biggest focus we have on is competencies.
Why Employee Wellbeing Needs a Seat at the Strategy Making Table
Employee wellbeing should become a key factor of corporate strategy making in the BSC sector given the bulk of operational costs are HR-related. This also requires investments at the workplace that pay off extensively in the long run; more importantly, a mindset change is needed to realize that every related measure will turn generous profits thanks to higher worker efficiency, better employee mental health and lower talent attrition rates, says Ottó Feuertag, founder of Europa Design and early adapter of the Well Certification Framework.
A quiet, well-designed environment boosts workplace productivity.
Photo by Tamás Bujnovszky
Hungary’s Business Services Sector Set for Further Growth in 2025
Hungary’s business services sector has been on a steady growth trajectory, with Business Service Centers (BSCs) expanding both in number and scope.
Over the past year, the sector saw the number of BSCs rise from 201 to 215, with workforce growth exceeding 10%. This expansion highlights the country’s growing appeal as a key hub for international business operations.
Looking ahead to 2025, the Hungarian Investment Promotion Agency (Hipa) expects continued development, driven by high-value service integration, regional diversification, and increasing focus on sustainability.
SUSTAINED GROWTH AND MARKET EXPANSION
Hungary's BSC sector plays a critical role in the economy, attracting foreign direct investment (FDI) and contributing to the country’s export potential. The sector has doubled in size since 2018, both in the number of companies and employees, surpassing 110,000 jobs in 2024. This resilience is attributed to Hungary’s business-friendly environment, strong infrastructure, and skilled workforce.
Hipa anticipates further growth in 2025, with Hungary continuing to be a prime destination for new business centers. Factors such as competitive wages, a well-educated workforce, and attractive office costs make the country a viable alternative for global companies seeking cost-effective locations. Whether through new investments, expansions, or restructuring of operations from Western Europe, Hungary is well-positioned to attract additional players in the business services industry.
SHIFT TOWARD HIGH-VALUE SERVICES
One of the most notable trends in Hungary’s BSC landscape is the shift toward high-value-added functions. The number of research and development (R&D) jobs within the sector has doubled over the past year, underscoring the emphasis on upskilling and innovation. More than 81% of BSCs plan to introduce high-value functions such as artificial intelligence (AI), data analytics, and automation in the coming years.
Hipa actively supports this transition by facilitating investment in emerging technologies. In 2024, the agency played a role in securing ten new investments in the innovation and R&D space. Hungary is moving beyond the “Made in Hungary” model to an “Invented in Hungary” approach, with increased focus on research-driven projects. Companies investing in IoT, AI, and automation receive targeted support, while collaborations with the National Research, Development, and Innovation Office (NKFI) further strengthen Hungary’s position as a regional innovation hub.
REGIONAL EXPANSION AND TALENT RETENTION
While Budapest remains the dominant location for BSCs, regional university cities are becoming increasingly attractive for investors. The presence of a young, highly skilled workforce in these areas helps alleviate the capital’s talent concentration while contributing to local economic development. Cities such as Debrecen, Szeged, and Pécs offer cost-effective alternatives while enabling businesses to tap into local talent pools.
This regional expansion supports Hungary’s efforts to retain young professionals. Hipa collaborates with universities and business service associations to promote career opportunities in BSCs, ensuring graduates see the sector as a viable longterm option. With a sector workforce predominantly under 35, retaining skilled professionals is a priority. Initiatives such as career fairs, mentorship programs, and industry-academic partnerships help reinforce the attractiveness of BSC careers.
Additionally, the government continues to support the reintegration of Hungarian professionals who studied abroad. The "Hazaváró" (Homecoming) Program
