Created by Pro Progressio
www.outsourcingandmore.eu No. 2 (57) | March–April 2021 ISSN 2083-8867 PRICE EUR 6 (INCL. 8% VAT)
GEORGIA – UPRISING BSS DESTINATION Interview with Mikheil Khidureli, CEO of Enterprise Georgia | page 44 BUSINESS:
BUSINESS:
CAREER & DEVELOPMENT:
The EU posting of workers directive and its implications for business |page 14
The Polish Investment Zone |page 16
RPO – customer support tailored for current times! |page 82
INTRODUCTION
Created by Pro Progressio
Editor-in-chief Dymitr Doktór dymitr.doktor@proprogressio.pl Managing editor Katarzyna Czylok-Dąbrowska katarzyna.czylok@proprogressio.pl DTP
Iwona Nowakowska Advertising reklama@proprogressio.pl Published by Pro Progressio spółka z ograniczoną odpowiedzialnością spółka komandytowa ul. Dziekońskiego 1 00-728 Warszawa www.proprogressio.pl Editorial office address ul. Dziekońskiego 1 00-728 Warszawa www.proprogressio.pl Selected photos come from stock.adobe.com. Print Drukarnia Jantar Legal support Chudzik i Wspólnicy An electronic version of the Magazine see the website www.outsourcingandmore.eu Circulation 3,000 copies Place and date of issue Warsaw, 10.03.2021 All rights reserved. No copying, reproduction or photocopying allowed without written consent of the publisher.
Ladies and gentlemen, The year 2021 has already accelerated and it looks like it will be a year of many challenges and decisions regarding the working environment. Remote work, B2B relations, changing approach to office spaces are the phenomena that will accompany us for the next months. The sector of modern business services is not slowing down and, like in other industries, it is full of interesting topics, some of which we have selected for you and presented on the pages of the current edition of Outsourcing&More Magazine. We highly recommend you to read the main interview, where with Mikheil Khidureli, CEO of Enterprise Georgia, we discussed Georgia as the uprising destination for BPO/SSC and IT projects. In the SSC Lions section, we invite you to the beautiful world of AVON. The company has its Global Business Services center in Warsaw, headed by Katarzyna Zalewska. The subject of our conversation was business models that respond to the challenges of the pandemic. The March edition of Outsourcing&More also includes new texts on legal, investment and HR issues, to which I invite you to read. Dymitr Doktór, Editor in Chief
The views expressed in this publication as well as the content of the adverts are not necessarily those of the editor.
Authors: Edward Nieboj • Dagna Chrzanowska • Katarzyna Saganowska • Michał Maj • Dorota Chudzik • Konrad Matuszewski • Jarosław Karlikowski • Anna Mirek • Katarzyna Zalewska • Katarzyna Postawa • Ewa Kamińska • Pawel Młyński • Violetta Małek • Mikheil Khidureli • Elias van Herwaarden • Olga Shapoval • Monika Vilkelyte • Anna Tymoshenko • Mateusz Sipa • Bartosz Wojtasiak • Szymon Rudnicki • Katarzyna Pączkowska • Agnieszka Grzybowska • Katarzyna Piotrowska
Outsourcing&More | March–April 2021
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BUSINESS NEWS
Financial statements for the year 2020 How to reduce the risk of making the wrong decision?
Leading virtually in Corona times. How we did it The sudden change brought about many unexpected challenges, which put our organizational and leadership skills to the test.
The EU Posting of Workers Directive and its implications for business Since 30 July 2020, the Directive on posting of workers is valid and binding across EU.
The Polish Investment Zone Enterprises operating in Poland, irrespective whether are local firms or the foreign ones, may benefit from various state aid programs for new investments being carried out in Poland and as such may obtain tax exemptions in Corporate Income Tax (CIT) or Personal Income Tax (PIT).
Essential changes in income taxes in 2021 The impact on Polish businesses
Employers and COVID-19: new responsibilities On 29 December 2020, a regulation came into force that introduces an obligation to update workers’ occupational risk assessment sheets. SSC
Centralized models as a response to the challenges of a pandemic? Interview with Katarzyna Zalewska, Director, Board Member, Avon Global Business Services.
We are on the right track Interview with 3M GSC Poland: Katarzyna Postawa, Brand & Communication Leader and Ewa Kamińska, Risk & Compliance Manager.
Robotics in the organization The answer is YES and NOW, but do you know HOW to start?
INVESTMENTS NEWS MAIN INTERVIEW Georgia – uprising BSS destination Interview with Mikheil Khidureli, CEO of Enterprise Georgia.
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52 54 56 58 62 66 70 72 74 76 78 82 Outsourcing&More | March–April 2021
Money on the table Actionable opportunities for BSC leaders.
Kharkiv IT Cluster 2020: what the special year was like Despite all the challenges, Kharkiv IT Cluster succeeded to gain more power, has better results, and even more plans for 2021!
Lithuania’s GBS & ICT operations: gradually climbing the value chain At the beginning of 2021, after a turbulent and unpredictable 2020, Lithuania proved it is still the top choice for global ICT leaders in search of first-rate talent and a mature infrastructure.
Gender doesn’t matter. Women of Poznań that inspire We present to you the real Poznań SuperWomen, who do not even think about stereotypes.
IT is our Bydgoszcz specialty Bydgoszcz continues to strengthen its position among the most important BPO/SSC centres in Poland.
Professional Częstochowa Better Job is the one that meets expectations, gives satisfaction, a sense of security, enables development and fulfilment of ambitions.
Reimbursement of even more than half of two-year employee payroll costs for the BSS in Łódź The Polish Investment Zone (PIZ) provides a new formula for the functioning of the Economic Zones in Poland.
The city of Kielce creates the ground... for business! 20,000 students, well-developed metropolitan functions, and companies that have been operating for years make a favorable climate for investment.
Ex Oriente Lux Normally light shines from the East but this time lets turn the spotlight on the East!
HR NEWS Recruiting talents at the time of pandemic The sector of modern services for business boasts a significant and stable position in the Polish labour market.
RPO – customer support tailored for current times! The Recruitment Process Outsourcing service has been so far associated mainly with new investors on the market.
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BUSINESS NEWS
CRYPTOCURRENCY THEFT GLOBAL VALUE RISE 38% WITH $513 MILLION STOLEN IN 2020 Last year, the cryptocurrency sector witnessed increased mainstream adoption but it was accompanied by hackings and theft that resulted in the loss of millions of dollars. According to data researched by Trading Platforms UK, the value of cryptocurrency hacks and thefts between 2019 and 2020 increased by 38.38% from $370.7 million to $513 million. Over the last five years, the value was highest in 2018 at $950 million. Elsewhere, the value of blockchain fraud and misappropriation declined between 2019 and 2020 by – 57.77% from $4.4 billion to $1.3billion. Cumulatively in 2019, the value of both cryptocurrency theft and blockchain fraud was $4.5 billion, while last year, it dropped to $1.9 billion, signifying the cryptocurrency sector’s maturity and improved ability to detect fraudulent activities. The increase in the value of cryptocurrency theft comes even as the sector continues to mature with exchanges, wallets, and other digital assets custodians investing in their security mechanisms against hacking. Most custodians have also established relationships with law enforcement making it easy to trace any fraudulent activity almost instantly. However, the rise in crypto theft value is an indicator that hackers are also
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accounts for prominent people like Elon Musk and organizations were compromised to promote a Bitcoin scam aimed Most hackers largely shifted their atten- at giving back to society. To date, the value tion from exchanges and wallets taking of the scam has not been determined. advantage of the Decentralized Finance The scam was further enabled due to (DeFi) explosion. The sector attracted the lack of a paper trail that gives scaminterest from more investors based mers more opportunity to embezzle funds. on the immense potential to revolutionize the finance sector. Notably, DeFi Worth mentioning is that regulatory protocols are permissionless hence they bodies are already taking action to do not have regulatory compliance and curb crypto-related fraud. This explains anyone can access their code. This nature the drop in value of blockchain fraud ultimately attracted hackers. in 2020. With fraud involving practices such as money laundering regulatory Besides easy access, DeFi applications bodies have increased their oversight are also vulnerable to external exploits. of virtual assets. The projects’ success largely depends on composability hence the more For example, there is a proposal in projects that are linked, the more value the United States that requires transthey can offer. Therefore, the ability to actions between exchanges to include attract more investors opens the door personal information about the sender for hackers. and the receiver of funds similar to international bank wire transfers. Interestingly, At the same time, the blockchain fraud the blockchain infrastructure can signi from last year saw scammers take advan- ficantly help improve the existing monitage of the COVID-19 situation. Some toring system and detect, deter and docuscammers impersonated legitimate ment possible fraud. organizations and prominent people to obtain information and cryptocurrency Overall, most blockchain and cryptocurpayment. Some of the payments were rency projects are still in their experi disguised as helping people impacted mental and speculative stage. This means by the pandemic. that there might exist some vulnerabilities. However, as the sector continues to One high-profile case was recorded mature, the loopholes might be sealed on July 15, 2020, when selected Twitter from hackers and scammers. innovating new means to outpace the current security measures.
Outsourcing&More | March–April 2021
REAL ESTATE’S FIRST TRULY INTERNATIONAL GRADUATE PROGRAMME Leading global real estate services and investment management company, Colliers International, in partnership with RICS have launched real estates’ first truly international graduate programme.
Prior to the application process opening, students across the region can now register their interest in Colliers International’s future programmes and stay updated with the newly launched Colliers Early Careers Website. This platform will
be the hub for the next generation across the region, providing them tips for the application process, ways to stay updated with property news and updates on work experience opportunities.
This market differentiating programme will provide the next generation with the opportunity to gain an internationally recognised qualification whilst they travel, explore and experience what it is like to live and work in a different country. Over two years successful candidates will have the opportunity to work in three of the six participating markets – Denmark, France, Germany, Spain, Poland and UK. The virtual application process opens on 01 February 2021.
TOP 25 GLOBAL RETAILERS OF 2020 – AMAZON NO.1 WITH $1.63T MARKET CAP COVID-19 reshaped the landscape for many industries and e-commerce sites benefitted from the sudden influx in e-commerce activity. As a result, Amazon cemented its place as the leading global retailer in the world. According to data presented by TradingPlatforms.com, Amazon ended 2020 as the top global retailer with a market capitalization of $1.63T.
2020, Amazon’s was the leading retailer in the world with an estimated market capitalization of $1.63T. The second-highest market capitalization belongs to another e-commerce site, Alibaba with $629.7B – an estimated difference of almost 90%.
Amazon also grew tremendously in 2020 as a direct result of the pandemic. Amazon’s market capitalization experienced a 78.4% YoY growth from 2019Amazon crossed the trillion-dollar mark 2020 and grew a modest 3.6% from Q3 in market capitalization midway through 2020 to Q4 2020. Alibaba meanwhile, 2020 and continued its strong perfor- had a more tumultuous 2020 compared mance in 2020. As of December 31, to most, including controversies involving
the company and its founder Jack Ma, late in the year. This caused a 20.8% QoQ decline in growth from Q3 2020. Despite this, Alibaba still experienced a 10.6% YoY growth from 2019 to 2020. As a result of the problematic effects of the COVID-19 pandemic, lockdowns were enforced in many markets around the world. Digital retail then became an integral part of the new normal as brick and mortar shops and groceries were forced to close down. 77% of the combined market cap from the top 25 global retailers were from online retailers. The likes of Walmart, Nike, Lowe’s, Fast Retailing, Target, and Dollar General all experienced over 20% YoY growth in market cap precisely because of these companies’ efforts to build up their digital capabilities. Brazilian retailer Magazine Luiza was the only new entry on the top 25 global retailer list aside from eBay, after an impressive 60.2% YoY growth in market cap for 2020. The company’s strong performance was bolstered after the omnichannel retailer decided to further enhance its online offerings.
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BUSINESS
FINANCIAL STATEMENTS FOR THE YEAR 2020 Employees of accounting departments who are drafting financial statements for the past year face a difficult time as they need to answer the question about the validity of the going concern assumption. How to reduce the risk of making the wrong decision? The going concern assumption is a fundamental principle that influences how financial statements are drawn up. Therefore, the basic question that needs to be answered before we start drafting the statements is whether the company will continue its business activity in the foreseeable future, in a scope that has not been materially changed, without being under liquidation or bankruptcy proceedings. Importantly, the time perspective in which we have to make the assessment covers a period not shorter than one year from the balance sheet date.
THE KEY ASSUMPTION: THE GOING CONCERN We must remember that the Accounting Act (“the Act”) requires us to verify the going concern assumption until the financial statements are approved. For the first time, we should analyze it as at the date of the financial statements as that is stipulated directly in Article 5 item 2 of the Act because when determining the entity’s ability to continue as a going concern, its head should take into account all information available as at the date of the financial statements regarding the foreseeable future within at least 12 months from the balance sheet date.
Then, verification should be made in the period between the preparation of the financial stateMost entities in our country which draft ments and their approval. If there have been financial statements end their financial any incidents that make the going-concern year on 31 December. That is why now assumption unjustified, the financial stateis the time when many accountants and ments should be accordingly amended CFOs face the task of preparing financial and proper entries should be made statements. Already back in the spring in the books for the financial year last year, many of us had to face the task the financial statements apply to of correctly reflecting the uncertainty (Article 54 item 1 of the Act). connected with the pandemic in the statements. A year has passed and Given the continuing pandemic, it certainly cannot be said that we have the going concern assessment is returned to normal. In many sectors significantly more difficult and of the economy, the situation is worse. in some cases may even seem It is still difficult to predict what 2021 like fortune-telling, neverwill bring. theless, despite the risk of
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Outsourcing&More | March–April 2021
Given the continuing pandemic, the going concern assessment is significantly more difficult and in some cases may even seem like fortune-telling
making an incorrect assumption, the head of the entity is re quired to disclose in the financial statements an unconditional declaration that the entity will continue as a going concern or will not do so. In the first case, when the company expects to continue as a going concern, it should be assumed that there are no significant risks, the occurrence of certain risks is unlikely or that the going concern assumption is rational (despite the specified risk). Where significant risks have been identified, it is worth adding “optimistic” and “pessimistic” scenarios for the development of the financial standing and asset situation as well as the profitability of the entity to the financial statements. The report on the company’s operations is the right place to disclose that additional information. It is important because, in the current circumstances, disclosures in financial statements are becoming more and more important for their end-users who expect, above all, transparency of the information provided to them (the disclosures may concern e.g. the impact of financial market fluctuations on the entity, deterioration of creditworthiness or liquidity, governmental interventions or restrictions on production, etc.). If, in turn, the head of the entity decides that the entity is not able to continue as a going concern, the financial statements should be prepared in accordance with the principles specified in Article 29 and Article 36 item 3 of the Accounting Act.
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BUSINESS
HOW TO EVALUATE THE ENTITY'S ABILITY TO CONTINUE AS A GOING CONCERN? The decision on whether to continue the business activity or not should be based on an analysis of all kinds of risks and threats, including financial, operational, micro and macroeconomic ones, in particular taking into account the dynamic pandemic situation (both domestically and worldwide). A sensitivity analysis is a very good solution (it makes it possible to understand the scope of potential results for alternative assumptions, in particular, the degree of vulnerability of the entity’s results to changes on the macro and micro scale). When analyzing the entity's ability to continue as a going concern, we can also use e.g. the guidelines provided in the document "Audit of financial statements for 2019 – specific considerations regarding KSB 570 (Z) ‘Going concern’ in the conditions of the coronavirus pandemic" prepared by the Polish Chamber of Statutory Auditors (point 3 of the document).
Where significant risks have been identified, it is worth adding “optimistic” and “pessimistic” scenarios for the development of the financial standing and asset situation as well as the profitability of the entity to the financial statements. 12
Certainly, the following events should raise a red flag during verification of the entity's going concern assumption over the next 12 months: • operating losses that have continued for several years, • the ongoing tendency for negative operating cash flows and similarly negative forecasts for the future, • negative equity value, • negative key financial indicators, • the departure of key managerial or specialist personnel,
Outsourcing&More | March–April 2021
• impossibility to ensure the continuity of supplies of basic and raw materials, • regulatory changes which limit or even prevent the functioning of the entity, • competitors introducing technological changes which result e.g. in the fact that the entity uses outdated technology, • no possibility to secure funding, • reduced demand for products and services, • legal or administrative proceedings pending against the entity which, in the event of an unfavourable decision, will result in liabilities that the entity cannot satisfy.
2. financial flows, including in particular: • aspects connected with financial liquidity (ability to pay liabilities on time, mainly to employees and governmental offices), • the ability to secure or renew a loan, • access to potential sources of substitute funding, • problems with collecting receivables, • significant deterioration in the value of assets used to generate cash flows or the value of current assets (inventories), • exchange rate fluctuations (especially in the case of businesses based on imports or exports);
The decision on whether to continue the business activity or not should be based on an analysis of all kinds of risks and threats, including financial, operational, micro and macroeconomic ones, in particular taking into account the dynamic pandemic situation (both domestically and worldwide
Obviously, just like in 2020, this year, 3. changes in human preferences and behaviours resulting in e.g.: the risk connected with the uncertain epidemic situation in Poland and abroad • the potential loss of the only or is one of the key risks that must be taken the key customer and loss of the marinto account. It should be described ket or the need to significantly reduce production, this way in the financial statements of almost every business entity (of course • the loss of the only or the key supplier. depending on its business profile).
THE ANALYSIS OF RISKS AND THREATS TO THE ENTITY’S ABILITY TO CONTINUE AS A GOING CONCERN When considering the aspects which affect the entity’s ability to continue as a going concern in 2021, one must analyze in particular at least the fol lowing circumstances connected with the COVID-19 epidemic: 1. legal regulations applicable to the following: • the freedom to conduct various business activity (own sector, customers, contractors etc.), • restrictions connected with the free movement of people and transport of goods (supply chains), • legislative changes to tax and accoun ting issues, • loss of a license or concession which is necessary to run the business;
Outsourcing&More | March–April 2021
ASSETS AND LIABILITIES IN FS FOR 2020 Once we have resolved the going concern aspect and came to the conclusion that there are no significant factors that would force us to reject that fundamental assumption, then we will be able to estimate assets and liabilities as at the balance sheet date in accordance with Article 28 of the Act, taking into account the key principles of accrual, proportionality, prudent valuation, materiality, the superiority of content over form. Especially this year, the necessity to conduct tests on impairment of non-financial assets as at the balance sheet date and very careful analysis of estimates such as e.g. write-downs for receivables or inventories that have lost their economic usefulness might turn out to be an important aspect in all financial statements.
In December 2020, the Accounting Standards Committee published the document "Financial statements during the COVID-19 pandemic” which provides many practical guidelines on how to properly prepare financial statements in the current situation.
Where the going concern assumption does not apply, the entity’s assets should be valuated at net realizable selling prices, not higher than their acquisition or production cost, less existing depreciation or amortization write-offs and impairment charges. Additionally, the entity is required to set up a provision for the anticipated additional costs and losses caused by the cessation or loss of ability to continue as a going concern. NB! The epidemic does not provide grounds for the automatic application of Article 29 of the Accounting Act.
The current period is a time of particularly hard work for the majority of employees of accounting departments. It is cer tainly not easier than it was a year ago, at the beginning of the first wave of the epidemic. However, we cannot focus on complaining. Whatever might be said about the negatives of the pandemic reality, in the area of accounting (which is still being perceived as "paperwork"), accelerated digitization has turned out to be a kind of a side effect. Therefore, let us capitalize on modern technolo gical solutions and available tools, let us put our knowledge and skills to good use and let us introduce our accounting teams to a higher level of business efficiency and agility.
Author:
Edward Nieboj, Managing Partner, Grant Thornton
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BUSINESS
LEADING VIRTUALLY IN CORONA TIMES. HOW WE DID IT Coronavirus significantly impacted our lives and way of working. The sudden change brought about many unexpected challenges, which put our organizational and leadership skills to the test. We managed to adapt, however, overcoming those challenges and finding opportunities to improve our daily work and management. This new situation even gave us some unexpected insights, which perhaps under regular circumstances we would have never learned. In this article, I would like to share our experiences with you. The sudden first lockdown in March faced us with the need to dramatically change how we were used to working. As an international company adhering to various regulations governing the financial sector, we were not allowed in the past to offer our employees the possibility of remote working. Given that, when the first COVID-19 restrictions were introduced, we were compelled to take quick and decisive action to facilitate effective organization of home office by our employees. Of course, it’s easy to take your laptop home, but for creating an efficient and comfortable working space that was not enough. That’s why already in the first days we delivered additional equipment like monitors, keyboards, mice or chairs directly to our employees’ homes. The COVID-19 fear notwithstanding, most of the people in our company were quite enthusiastic to finally have the opportunity to work from home, but for those with children or less comfortable living conditions this prospect was not so one-sidedly appealing. That was just the first of many
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issues we had to address in the new reality, and we did not expect that the technical aspect of the challenge would actually turn out to be the easiest to deal with.
hesitant even to take a short break. On the other hand, when working, some tended to overutilize the “busy” status, which discouraged their colleagues from asking for help, even in case of short quesFor managers, it was demanding to tions, which created further, unneces suddenly not be able to see their team sary distance. members face-to-face in the office. That’s why from the beginning, the manage- The character of online meetings, e.g. ment team decided to have one or two relative invisibility of their participants, virtual team meetings every day, with made communication with introverts the purpose of not only organizing more challenging as many of them did the tasks, but more importantly to check not feel the need to voice their opi in with the team, connect with them nions. Our organization therefore made on a human level and offer them advice. an effort to shift from mostly task-foWe wanted to raise awareness of some cused to relation-focused, putting more newly identified risks in online commu- emphasis on the needs of individual team nication, such as amplification (as fewer members. In this spirit, managers orga senses engage in the online interaction, nized additional one-to-one calls with people are more prone to misinterpret their employees to give them space to things and get worked up) or mood express themselves freely. contamination (negative emotions are more easily transferred between home On the other hand, we had to make sure and work environments if people spend that we do not overload ourselves with all their time in one place). too many extra calls. Even though coronavirus affected the financial sector to Proper time management was not easy a lesser extent than it did other busifor everyone, either. Although there were nesses, we still had to pay close attention no co-workers dropping by their desk or to our efficiency; some of our teams actuother usual office interruptions, working ally experienced increased workloads as with kids and pets at home caused other a result of the pandemic. From the start, kinds of disturbances. Moreover, people we implemented detailed productivity were not yet accustomed to the online and volume tracking in all the teams to etiquette: with Skype as the main channel have a clear view of incoming volumes of communication, many felt the pres- and be able to manage the workload sure of being always “available” and were effectively.
Outsourcing&More | March–April 2021
After the first few weeks, we were able to evaluate how remote work was impacting the productivity; the only decreases we detected turned out to be a function of technical issues, which over time tended to disappear as well. Proper volume monitoring enabled us also to quickly identify teams requiring support and cross-train the teams that could provide it. This had an additional benefit for the employees in that they had the opportunity to learn new processes, expand their competences and get to know their colleagues from other teams.
comfortable working conditions and more flexible working schedule, women were able and willing to work longer before going for maternity leave.
As the key to our success we would single out regular and transparent communication that kept our employees motivated and engaged. Regular information sessions (town halls) included business updates as well as detailed organizational plans for upcoming weeks. The aim was to keep our employees feeling secure about their future in the ever-changing environment. Our It was also a challenge to instanta- goal was also to enhance our people’s neously switch from on-site training pride and sense of importance: as a part format to an entirely virtual environ- of operational core teams, they were ment. The initial difficulties were related significantly contributing to the compato physical access to equipment for new ny’s stable performance. joiners, technical constraints with getting in touch with the trainer and monitoring By the end of the second quarter of the progress of individual trainees. 2020, when the pandemic situation had Thanks to the flexibility of our training stabilized, we made our office ready team, we were able to quickly adapt our for the new reality by implementing training plan to the new reality, making safety instructions conforming to sure that onboarding of new employees the new regulations and rules of social remained uninterrupted. distancing, thereby addressing the needs of employees who were willing to return Another major benefit of remote work we to the office. As a result, at the begindiscovered is that it got us through the cold ning of June we welcomed back the first and flu season with significantly fewer group of volunteers, making the first step absences. We observed a similar trend with towards organizing ourselves in the future our pregnant female colleagues: due to post-COVID reality.
Last year was certainly an important test for our company. It proved our adaptability skills, organizational flexibility and demanded a remodelling of our business strategy. We can gladly report that all the efforts and actions we undertook made us stronger and more resilient in these uncertain times. The best confirmation that we succeeded in assuring a level of employee satisfaction as high as in pre-COVID times were the results of the Great Place to Work® Trust Index© employee survey: for the third time in a row, we not only managed to obtain our certification as one of the best employers in Poland, but we did so with a high response rate and achieved results exceeding those from the previous year. One of the key takeaways from the survey was that remote work turned out to be a successful solution and it remains a highly desired option for the future. See you at home! Author:
Dagna Chrzanowska, Head Customer Services Switzerland/ Nershore Center Poland, Worldline
Our organization made an effort to shift from mostly task-focused to relation-focused, putting more emphasis on the needs of individual team members.
Outsourcing&More | March–April 2021
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THE EU POSTING OF WORKERS DIRECTIVE AND ITS IMPLICATIONS FOR BUSINESS
Since 30 July 2020, the Directive on posting of workers is valid and binding across EU. It aims to establish a common framework for the appropriate measu res and control mechanisms necessary for a more efficient and uniform operation regarding the posting of workers within the EU Common Market. Polish employees are among Europe’s leaders in posting employments abroad. As a result of the enactment of these new regulations, Polish companies that offer services in other EU countries must pay their employees according to the rules of the country in which they perform their tasks. The aim of the regulations is to ensure equal treatment in a situation where a posted employee performs work on the same position as a citizen of another EU country. It can already be easily anticipated that it is a challenge to comply with the unique pay laws of individual EU countries. Especially when workers from Poland are posted to not one but several countries; a practice that occurs regularly in the case of construction and transport company’s BAU operations. In practice, this means that it is necessary for Polish employers to know the regulations enforced in each Member State where they post workers, in order to calculate their salary accurately. This change is also extremely important from the perspective of the amounts of remuneration paid
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Outsourcing&More | March–April 2021
to posted employees. Until now this calculation has usually been based on the minimum or more favorable rates that were in force in the host country of posted workers. Consequently, this is one of the most controversial outcomes of the new law. Speaking about potential benefits – the changes related to the introdu ction of the directive might positively affect the following issues in the area of labor law: • Regulations on individual and collective freedoms in the employment relationship, • Discrimination and ensuring equality in employment between men and women, • Protection of parenthood and related rights, • Added protections around the right to strike, • Other regulations concerning working time, rest, holidays, paid vacations, remuneration (including overtime allowances), health and safety regulations, child labour, illegal work, reimbursement of mission expenses (business trips). Experts in their assessments indicate as well that due to imprecise provisions of the EU Directive and its implementation by Member States, it may be very difficult to determine at the last moment which specific labor law provisions should be complied with. Individual countries have interpreted the provisions of the Directive in different ways and consequently implemented them into their legal systems at their own discretion and judgement. There are also many uncertainties related to long-term postings. The new directive limits the possibility of posting workers to 12 months with the possibility of extending this period by six months on the basis of a “reasoned notification” submitted by the employer to the authorities of the host country. The phenomenon of the posting of workers on the Polish labor market is beneficial for companies not only because of the competitive (often lower) price of the service, but also its availability and high quality. The new regulation results in significant limitations or even barriers in the possibilities and the way of posting workers. In summation, it is worth noting that if the barriers are too high, Polish entrepreneurs will be forced to establish a company in the host country. The opening of a company or a daughter company will mean an increase in the costs of the business and, consequently, higher costs for service recipients. Auhtor:
Katarzyna Saganowska, Head of Compliance (EMEA), TMF Group
Outsourcing&More | March–April 2021
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THE POLISH INVESTMENT ZONE Enterprises operating in Poland, irrespective whether are local firms or the foreign ones, may benefit from various state aid programs for new investments being carried out in Poland and as such may obtain tax exemptions in Corporate Income Tax (CIT) or Personal Income Tax (PIT). When considering a new investment it is worth to assess the possibility of including it in the Polish Investment Zone program which may result in a tax benefit (in form of an income tax exemption being calculated as certain percentage of so-called qualified investment costs). Even though the Polish Investment Zone program came into force in mid-2018, still based on the market observations, it seems that is not well known and thus not so popular among entrepreneurs (both operating in production sector as well as business services sector).
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technology solutions, and (iii) creation of new work places. In the Polish Investment Zone program the new investment does not have to be carried out in specific location (in contrary to Special Economic Zones, which determine location of investments) but may be carried out in the location where the enterprise currently runs its business operations or intends to operate.
According to the official data, at the end of 2019, 432 decisions were issued under the Polish Investment Zone program for the new investments of a total value (declared by entrepreneurs) of c. PLN 20.9 bn. These new investments should also contribute to approx. 8.5 ths of new work places (in production and business services sector).
What is the definition of the new investment used for Polish Investment Zone program purposes? The new investment is defined as an investment into tangible and intangible assets associated with (i) building of a new plant/factory/place of business (setting-up a new enterprise) or (ii) increase in production volume of an existing enterprise or (iii) products portfolio diversification by introducing new product(s) not being produced so far or (iv) material change in the production process within existing enterprise.
The Polish Investment Zone program was introduced based on the Act on supporting new investments dated 10 May 2018 and is aimed at: (i) economic and social growth of the state as well as particular regions in which the new investment are to be carried out, (ii) promotion and support of innovative business and
The above definition seems to be more relevant for production sector than business services (e.g. shared service centers), still in practical terms is it applicable to the latter as well. This is due to the fact that qualified investment costs (their amount determines the amount of tax exemption) include among the others two-years
costs of employment of new employees being hired as a result of the new investment. Consequently, in order to be able to benefit from the tax exemption it is required that new employees keep their jobs for at least 5 years (in case of so-called "big entrepreneurs") and 3 years in case of micro, small and medium range businesses. It should be noted that costs of new employees cannot be regarded as new investment as such, which means that in each case new employment would have to be connected with some investment into tangible and/or intangible (software, IP licenses, etc.) assets. Still, there is no formal indication what the proportion of these costs should be. Importantly, in order to be in a position to apply for tax exemption under the Polish Investment Zone program certain minimum threshold (being set for each specific location and depending on the size of the business and also speci fically for the entrepreneurs in business services sector) of the qualified investment costs has to be met. In practical aspects, when considering a new investment the minimum threshold for a particular location and viability for enterprise to apply for the tax exemption under Polish Investment Zone program should be checked.
Outsourcing&More | March–April 2021
employment contract, new employees to be offered with some special benefits – like healthcare package, certain amount of costs would be spent on R&D, eco-friendly solutions to be implemented, etc.). For each criterion being met a special points are granted and (depending on location) certain minimum threshold of points is required to qualify for the Polish Investment Zone program. Based on my experience, in vast majority of cases entrepreneurs are capable to obtain required number of points (especially that some of them are not required to be obtained when the new investment process starts) and qualify for Polish Investment Zone program.
The amount of the potential tax exemption is determined by the amount of the qualified costs of the new investment and so-called aid intensity (being also set per given location). For example, for Lublin location the minimum quali fied costs threshold is PLN 4m and the aid intensity ranges from 50% to 70% (depending on the size of the business) which translates into tax exemption of between PLN 2m to PLN 2.8m. Please note that the tax exemption is effectively tax that would not be paid, which means in practical terms that a taxable income of between PLN 10.5m and PLN 14.7m would effectively not be taxed. Such tax exemption is granted for a period from 10 to 15 years (depending on location).
It should be underlined that the potential tax exemption resulting from the Polish Investment Zone program would be connected with the new investment (so the tax exemption would not be applicable to taxable income generated by other parts of the enterprise). Still, in practice, depending on the nature of the investment and its link (so-called "strict link") to other parts of the enterprise, it may be possible to effectively apply granted tax exemption to the income generated to others parts the enterprise. Looking back at investments qualified for Polish Investment Zone program, the range of the tax exemption and link between the new investment and other parts of the enterprise is the most crucial and sensitive part, especially having in mind that once the tax exemption is granted, the tax authorities will start a tax audit to verify the above aspects. So, this part has to be well prepared and should have solid grounds.
Apart from certain spending that is required to qualify for Polish Investment Zone program also an entrepreneur has to meet some other criteria – so-called "quali fication" criteria (e.g. certain % of new employees to be hired under standard
If you plan to carry out a certain investment, it is worthwhile to spend some time to investigate whether it would be feasible to qualify for the Polish Investment Zone program and obtain a tax exemption and what would be its amount. This may be
Outsourcing&More | March–April 2021
even more important nowadays, when as a result of recent changes in the tax law the level of taxation increases and obtaining the said tax exemption may be a good solution to manage effective tax rate of an enterprise. Author:
Michał Maj, Tax Advisor, Baker McKenzie
When considering a new investment it is worth to assess the possibility of including it in the Polish Investment Zone program which may result in a tax benefit.
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BUSINESS
ESSENTIAL CHANGES IN INCOME TAXES IN 2021 – THE IMPACT ON POLISH BUSINESSES Despite the challenging times for entrepreneurs, in the era of the COVID-19 pandemic, the New Year brought many changes in income taxes which may harm the operations of Polish businesses. CIT TAXATION OF LIMITED PARTNERSHIPS AND GENERAL PARTNERSHIPS Among the most critical issues, one which has raised the strongest objections was the imposition of CIT payer's obligations on limited partnerships and registered partnerships. As of 1 January 2021, new regulations on the taxation of registered partnerships and limited partnerships with CIT came into force.
DOUBTS REGARDING THE TAXATION OF REGISTERED PARTNERSHIPS
for the possibility to deliver information by 31 January. The problem also applies to newly established registered partnerships where an entity other than a natural person is a partner, which, according to the Act, should submit information before the beginning of the financial year. However, according to the applicable regulations, the date of entry in the relevant register is the date of commencement of the partnership's operations. It is also considered the first day of the financial year. A registered partnership cannot submit information before the beginning of operations, because under the law, it does not exist before the entry has been made. Experts clearly indicate that the information should be provided on the register entry date. However, the safest solution is to refrain from establishing registered partnerships where legal persons are partners until the tax authorities have taken a final stance.
It should be emphasised that the changes do not apply to all registered partnerships. This obligation applies to companies whose partners are not only natural persons and which have not submitted the information indicated in the applicable regulations. What is of interest is the fact that the Act entails specific legal effects that affect the entire duration of the company. That means that a regis- TAXATION OF LIMITED tered partnership that has become a CIT PARTNERSHIPS taxpayer will remain so until its compo- Another type of company that became sition changs, it is liquidated or deleted a CIT taxpayer as of 1 January is the limited from the register. partnership. A limited partnership, unlike a registered partnership, cannot avoid In the first month of the regulations the new tax obligation. The legislator only being in force, the legislator provided provided for the possibility of postponing
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the entry into force of the new regulations until 1 May. According to the legislator, such a solution is to prevent the application of tax optimisation. In practice, however, this type of company allowed entrepreneurs to run a safe business. With the new regulations, the companies that postpone applying the new rules can extend the fiscal year until 1 May 2021. Unfortunately, the legislator was not precise and only introduced the obligation to close the ledgers the day before becoming a CIT taxpayer, but did not specify whether this activity obliges the companies to prepare financial statements. Another issue that was changed was the settlement of income from a limited partnership. According to the new regulations, the income from such a company constitutes a dividend, which means that it no longer constitutes income from the partner's activities. This amendment had a positive aspect for people whose income qualifies for taxation under the solidarity surcharge. When the amending Act entered into force, dividends were not taken into account when determining the amount of the solidarity surcharge.
Outsourcing&More | March–April 2021
As of 1 January 2021, new regulations on the taxation of registered partnerships and limited partnerships with CIT came into force.
With the change in the method of ob taining income, doubts arose as to how to settle losses unsettled by partners. The legislator allows for the settlement of a loss as part of business activity. If a partner does not run a business, it is possible to settle the loss from income in the limited partnership.
ESTONIAN CIT The introduction of the so-called Estonian CIT was one of the flagship changes announced by the Ministry of Finance. Estonian CIT was supposed to be a simple and transparent form of taxation for companies willing to invest in their business. However, an analysis of the regulations shows its complexity.
companies with shares in other companies or whose shareholders are not only natural persons, financial enterprises, loan institutions or taxpayers in bankruptcy. Further restrictions related to the application of the Estonian CIT are grace periods for entities created by a merger or transformation or for entities contribu
While remaining on the basis of the gene rated income, the amending Act indicates the option of applying a 50% tax With the change in the method of obtaining income, doubts arose exemption for a limited partner. However, the exemption will only apply to as to how to settle losses unsettled by partners. The legislator allows the maximum income of PLN 60,000 in for the settlement of a loss as part of business activity. one company and is subject to many conditions that most partners do not meet. The exemption will also be available to the general partner, pro-rata to First of all, it is necessary to point out ting their enterprise as an in-kind contritheir share, up to the amount of tax paid the catalogue of conditions that must bution. In such cases, the grace period be met to apply the Estonian CIT. They shall be two tax years, indicating that by the company. include: operating in the form of a capital this period must not be shorter than Summing up, the tax burden for part- company, the previous tax year's income 24 months. The option to use the Estonian ners in limited partnerships will increase below 100 million or employing at least CIT is possible in 2021 despite the grace significantly. The tax will be paid first three employees. Also, types of entities period; however, the company will be by the company and then by the partner have been prevented from benefiting obliged to pay tax on the income from who receives the profit. from this form of taxation, including the conversion.
Outsourcing&More | March–April 2021
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BUSINESS
Other taxation subjects, such as hidden profits, the sum of undistributed net profits, or expenses not related to business activity, raise the most doubts. In the legislator's understanding, hidden profits are benefits, other than the distributed profit, that the company's shareholder or its related party shall receive.
Another obligation that must be fulfilled when choosing the Estonian CIT taxation is to incur expenditures for investment purposes, greater by 15% but not less than PLN 20,000 or 33% but not less than PLN 50,000, depending on the selected 2-year or 4-year period. An alternative to capital expenditures may be to incur expenses on the remuneration of natural persons increased by at least 20% compared to the previous year. Please note the necessity to invest in new fixed assets defined in categories 3–8 of the Classification. The most critical thing is that taxation in Estonian CIT should only occur when profits are distributed to partners. The Act lists two tax rates of 15% and 25%. However, other taxation subjects, such as hidden profits, the sum of undistributed net profits, or expenses not related to business activity, raise the most doubts. In the legislator's understanding, hidden profits are benefits, other than the distri buted profit, that the company's shareholder or its related party shall receive. In such a case, the hidden profits tax shall be payable till the 20th day of the month following the month when the benefit occurred. It thus turns out that being subject to Estonian CIT will not exclude taxation at times other than the payment of profits. Bearing in mind how many doubts and unpleasant surprises entrepreneurs may encounter when switching to an Estonian CIT, changing the taxation method to the Estonian CIT in its present shape without the tax authorities' well-established position is highly risky.
FUND FOR INVESTMENT PURPOSES A fund for investment purposes seems to be an attractive and safer solution. It allows for the monies transferred to a separate fund in the reserve capital to be recognised as tax-deductible costs. In order to use it, the company must meet the conditions as in the case of the Estonian CIT. The prerequisite for applying the deduction is its separation in the reserve capital. The fund must be in the form of a bank account, and the funds transferred must come from the profit earned in the previous year. The monies
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accumulated in the investment fund should be allocated to investments no later than at the end of the year when the write-down was made. However, it is possible to extend this period up to 3 years.
SUMMARY 2021 is rich with changes in the corporate income tax that will negatively affect Polish businesses' activities. Estonian CIT, which was supposed to be a highly positive solution, is not safe due to uncertain definitions and many "pitfalls". Many small family businesses that have run their businesses in the form of a limited partnership must decide whether they care for protecting their assets or low tax burdens, and change the form of their business accordingly. We are also not sure how the tax authorities will treat limited partnerships wishing to transform into a different business form. Will such action not be considered as attempted tax evasion? It is also essential to properly select the form of business, and even the moment of transformation, as many of these factors may affect the taxation amount. Unfortunately, even during the pandemic, the legislator additionally complicated the situation of Polish entrepreneurs who, instead of focusing on running a business, are now challenged with many difficult decisions.
Authors:
Dorota Chudzik, tax advisor | general manager in the Law Firm “Chudzik i Wspólnicy Radcowie Prawni” sp.p. www.chudzik.pl
Konrad Matuszewski, legal and tax consultant in the Law Firm “Chudzik i Wspólnicy Radcowie Prawni” sp.p. www.chudzik.pl
Outsourcing&More | March–April 2021
Use the e-Sprawozdania GT web application! In accordance with the requirements of the Accounting Act, remotely, conveniently!
www.GrantThornton.pl
e-sprawozdania@pl.gt.com
BUSINESS
EMPLOYERS AND COVID-19: NEW RESPONSIBILITIES The ongoing pandemic means that more and more obligations are being imposed on employers. On 29 December 2020, a regulation came into force that introduces an obligation to update workers' occupational risk assessment sheets. What are the sanctions for employers who fail to do so? What else should employers bear in mind in 2021? OCCUPATIONAL RISK ASSESSMENT One of the basic principles of Polish labour law is that the employer is obliged to protect the health and life of employees by ensuring safe and hygienic working conditions. To ensure that this principle does not remain just an empty provision, the Labour Code imposes a number of obligations on employers, the fulfilment of which is supervised by the National Labour Inspectorate. One of them is the obligation of the employer to assess and document occupational risks related to work performed by employees and to inform employees about these risks. This applies not only to employers who carry out activities that we usually associate with occupational risk (e.g. mining, heavy industry), but also to all other employers – including those whose employees work only in an office.
of the Ministry of Health on so-called harmful biological agents2, which came into force at the end of 2020. According to these provisions, employers should, within 30 days of the entry into force of the new regulations, reassess the occupational risks to which an employee is or may be exposed, taking into account the impact of the COVID-19 virus on the work environment. The deadline for conducting such an assessment passed on 28 January 2021.
on persons responsible for health and safety at work in a given workplace (and therefore also on the management board of a company, for example). The maximum fine is PLN 2,000. However, the National Labour Inspectorate may also file a motion with the court to further penalise the employer who committed the above offence. In such a case, the maximum fine that could be imposed by the court is PLN 30,000.
Employers who have not yet performed this obligation are committing an offence under Article 283 §1 of the Labour Code. According to this provision, anyone who, being responsible for the state of occupational health and safety or managing employees or other natural persons, fails to comply with the regulations or principles of occupational health and safety, is subject to a fine ranging from PLN 1,000 to PLN 30,000.
VACCINATIONS
Following the commencement of the SARS-CoV-2 vaccination programme in Poland and the entry into force of the aforementioned amendment, many employers began to wonder whether the availability of the vaccine (or at least theoretical availability) would result in any new obligations or risks for them. Above all, the question has arisen as to whether employers can require an employee to Risk assessment and documentation in undergo vaccination. The answer to this this respect should be kept up to date by Such a fine may be imposed in the event question as of today is negative. the employer. With regard to the COVID-19 of an inspection by the National Labour virus, such an update is enforced by Inspectorate. An inspector of the National It is of course true that the aforementioned the latest amendment1 to the regulation Labour Inspectorate may impose a fine regulation officially recognises the SARS1 2 Regulation of the Ministry of Health Regulation of the Ministry of Health of 22 April -CoV-2 virus as a new harmful biological of 11 December 2020 amending the Regulation 2005 on biological agents harmful to health in agent and that this regulation states on biological agents harmful to health in the working environment and the protection the working environment and the protection of the health of workers occupationally exposed that in case of occurrence or possibility of the health of workers occupationally exposed to such agents [in Polish: Rozporządzenie Ministra to such agents [in Polish: Rozporządzenie Ministra of occurrence in the working environment Zdrowia z dnia 22 kwietnia 2005 r. w sprawie Zdrowia z dnia 11 grudnia 2020 r. zmieniające of such an agent against which a vaccine is szkodliwych czynników biologicznych dla zdrowia rozporządzenie w sprawie szkodliwych czynników biologicznych dla zdrowia w środowisku pracy oraz w środowisku pracy oraz ochrony zdrowia already available, the provisions of the act ochrony zdrowia pracowników zawodowo narażonych pracowników zawodowo narażonych na te na te czynniki (Dz. U. poz. 2234)]. regulating the obligation of vaccination czynniki (Dz. U. Nr 81, poz. 716 z późn. zm.)].
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It should be kept in mind that no negative consequences can be drawn for a person from the fact that they have not been vaccinated. Of course, from the point of view of employers (and the general public) it would be best if as many people as possible were vaccinated.
in Poland3 shall apply. The provisions of that act, however, divide vaccination into mandatory and recommended vaccinations and provide that, in order to prevent the spread of infections and infectious diseases among workers exposed to biological pathogens, recommended preventive vaccinations set out in a special regulation4 shall be carried out. This regulation has not been amended since its adoption in 2012 and does not indicate vaccination against SARS-CoV-2 either as mandatory or as recommended. Therefore, it does not automatically follow from the fact of the aforementioned Act of 5 December 2008 on prevention and control of infections and infectious diseases among people [in Polish: Ustawa z dnia 5 grudnia 2008 r. o zapobieganiu oraz zwalczaniu zakażeń i chorób zakaźnych u ludzi (t.j. Dz. U. z 2020 r. poz. 1845 z późn. zm.)]. 4 Regulation of the Council of Ministers of 3 January 2012 on the list of types of professional activities and recommended preventive vaccinations required for employees, officers, soldiers or subordinates undertaking work, employed or appointed to perform such activities [in Polish: Rozporządzenie Rady Ministrów z dnia 3 stycznia 2012 r. w sprawie wykazu rodzajów czynności zawodowych oraz zalecanych szczepień ochronnych wymaganych u pracowników, funkcjonariuszy, żołnierzy lub podwładnych podejmujących pracę, zatrudnionych lub wyznaczonych do wykonywania tych czynności (Dz. U. poz. 40)]. 3
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BUSINESS
According to these provisions, employers should, within 30 days of the entry into force of the new regulations, reassess the occupational risks to which an employee is or may be exposed, taking into account the impact of the COVID-19 virus on the work environment. Employers who have not yet performed this obligation are committing an offence under Article 283 §1 of the Labour Code.
amendment of the regulation that employers may send employees for vaccination, require them to undergo such vaccination or present the appropriate certificate, etc. Moreover, it should be kept in mind that no negative consequences can be drawn for a person from the fact that they have not been vaccinated. Of course, from the point of view of employers (and the general public) it would be best if as many people as possible were vaccinated. However, the regulations as they stand today do not make this task any easier. An employee who refuses to be vaccinated cannot be fired or punished for this reason today. Similarly, in the case of job applicants, the use of such a criterion when hiring new people is also not allowed and may expose the employer to liability under anti-discrimination legislation (a candidate rejected during the recruitment process could claim compensation of no less than the minimum wage).
protective equipment. Only in the case of certain industries, where employees carry out work indicated in the regulation of the Ministry of Health6, performed in conditions of exposure to harmful biological agents (e.g. work in healthcare settings or laboratories) could the lack of more specific preventive measures, e.g. appropriate air-filtering systems, also be relevant. However, the employees would still have to prove the connection between this omission and their own illness. In a situation where infections can occur in many other places outside the workplace, it would be very difficult to prove such a link.
Thus, it is clear that the risk of employer liability for an employee contracting COVID-19 does exist, but in practice it may be difficult for employeers to prove that their health has suffered as a result of their employer’s acts or omissions. However, this does not justify the conclusion that employers are excused from meeting their obligations. Even if, in EMPLOYEE ILLNESS a given case, the risk of employers being Simultaneously, questions have also sued is low, it is important to remember arisen as to whether the amendment the risk of penalties from the National to the regulation affects the possible Labour Inspectorate and, above all, liability of the employer for an employee the sense of responsibility for the people contracting the COVID-19 virus at work. we work with every day. Under the current regulations, SARS-CoV-2 6 Regulation of the Minister of Health of 22 April on biological agents harmful to health in is not considered an occupational disease, 2005 the working environment and the protection but this does not completely exclude of the health of workers occupationally exposed such agents [in Polish: Rozporządzenie Ministra the employer’s liability for such an infec- to Zdrowia z dnia 22 kwietnia 2005 r. w sprawie tion. However, the workers would have to szkodliwych czynników biologicznych dla zdrowia środowisku pracy oraz ochrony zdrowia prove that there is a causal link between w pracowników zawodowo narażonych na te their illness and the damage they suffered czynniki (Dz. U. Nr 81, poz. 716 z późn. zm.)]. and the employer’s act or omission. Examples of such omissions that could theoretically increase the employer’s risk of liability could be, for example, failure to update an occupational risk assessment, failure to inform workers of the risks associated with COVID-19 or failure to comply with obligations set out in a regulation imposing certain orders or prohibitions on the employer in connection with a pandemic5, such as a prohibition on a particular type of activity or an order to provide workers with Regulation of the Council of Ministers of 21 December 2020 on the establishment of certain restrictions, orders and prohibitions in connection with the occurrence of an epidemic situation [in Polish: Rozporządzenie Rady Ministrów z dnia 21 grudnia 2020 r. w sprawie ustanowienia określonych ograniczeń, nakazów i zakazów w związku z wystąpieniem stanu epidemii (Dz. U. poz. 2316 z późn. zm.)].
Authors:
Jarosław Karlikowski, Attorney at law, Noerr
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Anna Mirek, Attorney at law, Noerr
Outsourcing&More | March–April 2021
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CENTRALIZED MODELS AS A RESPONSE TO THE CHALLENGES OF A PANDEMIC?
Word of admission: SSC Lions is a new project run by Pro Progressio and focused on the communication support provided to Shared Service Centres. On O utsourcing&More Magazines’ pages we will present business cases and interviews with leaders of Shared Services Centres, industry experts and consultants.
Our interlocutors will provide the answers to the questions related to best business practises, project manage ment and employer branding. In this edition of SSC Lions we are presenting you the interview with Katarzyna Zalewska, Director, Board Member, AVON Global Business Services.
SSC LIONS
Outsourcing&More: AVON Global Shared Services has been operating in Poland for 15 years. What processes does it deal with and who does it suport? Avon GBS, formerly FSSC, has been supporting Avon for many years in the area of centralized Purchase To Pay, Report To Record and Order To Cash processes. At present, the service is provided for almost all units of the group, located in the geographical areas of EMEA, APAC, NA and LATAM.
the same time attrition is at very low level of <5% in 2020. This is possible thanks to the deployment of efficient management model and several technological improvements – only in 2020 we have implemented seve ral robots and a central project mana gement model with the use of comprehensive tools. We owe such a high level of employee engagement both to the flexible management and interesting development opportunities that we
AVON GBS HAVE BEEN WORKING IN A HYBRID MODEL FOR SEVERAL YEARS; OPERATING IN MATRIX MODEL AS A GLOBAL TEAM IS A NORMAL FOR US. HENCE, IT WAS EASY TO TURN TO FULLY REMOTE WORKING - WE HAVE PROVED THE EFFECTIVENESS AND ADAPTABILITY OF THE CENTRAL MODEL OF SERVICE DELIVERY.
The role of GBS has evolved over these 15 years. Initially established only for transactional services, FSSC, along with the company's development, evolved towards the position of a centralized operational partner responsible for relations with internal clients, opera ting according to a defined service cata logue and engagement model that corresponds to the needs of our client. In response finance function evolution and to the changing position of the company in the market, we decided to transfer transactional services to outsourcing partners, while in-house w ehave build lean skills, tech-based solutions and specialized competence centers. Today, in addition to back office services, Avon GBS also acts as a Transformational Partner for central functions. How big is the AVON GBS team in Warsaw? What can your employees count on? The team in Warsaw is part of the global Service Delivery team, loca ted in 5 centers – AVON GBS ope rates in a combined Captive & Outsourced model. The team in Warsaw fulfils controlling function and manages the maturity level of delive red processes in the 4 satelite centers – amongs others – through Continuous Improvement. At the moment, it is about 60 people; the employment in Warsaw remains at a constant level, at
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offer both in GBS and beyond – we are guided by such concepts as "Building Meaningful Careers", "Leading with Heart", we also have a program where we promote experience and knowledge share through participation in the "Train the trainers" program. In addition, at the enterprise level, we offer an interesting Employee Value Proposition and a wide range of benefits, incl. MultiSport card, insurance package, discounts on cosmetics, and finally a wide award-winning day for preventive healthcare – the so-called “Day on U”. You have been managing AVON GBS for almost three years. Please tell us about your work... My each day, although similar to the previous one, brings new challen ges and is characterized by high dyna mics! My daily work focuses primarily on ensuring a high level of services provided – having a defined catalog, GBS operate on the basis of the agile model, applying course-correction when it is necessary. Working on future-oriente projects, conducting meetings with the team or with the units we work with as part of the delivered service, is another important element. However, the most important element of the area I manage is cooperation with an internal client, clear and transparent reporting of committed results, communicating chan ges and taking initiatives that are often
the result of feedback. Due to the high dynamics of changes that we have observed in recent months, I also very often participate in cross-functional projects supporting integration or transformation activities at the enterprise level – we provide expertise as well as substantive and managerial support at the stage of project formulation and its execution. You have almost 20 years of experience in the field of SSC / BPO / GBS… How was your career going on at that time? Is it easy for contemporary women to climb the career ladder? My over 20 years of professional experience was initially focused on the development of the so-called hard skills in a “hands-on” approach – it was, therefore, conducting operations, deploying efficient delivery models, implementing transformation programs to further evolve in the leadership area in models that – regardless of their scale – offer scalability and support business in its way to sustainable growth. My expe rience is driven by concepts that going beyond day-to-day management and are oriented towards improving the maturity of the SSC / GBS organization. In the course of my career, I focused on projects that gave me exposure to various models and involvement in various transformation programs, often carried out outside Poland. Cooperation with organizations with a diverse business model, I typically perceived as a valuable experience, which gave me not only the opportunity to build a solid expertise in the area I currently manage, but also – the ability to understand business needs and in response – deploy efficient models as well as fulfil expectations. Today, I am happy to share my experiences at industry conferences (e.g. SSOW, Puls Biznesu, etc.), but I also follow the trend and new developments having relating to the experience of recognized practitioners. Many years of my observations show that in the SSC / GBS or BPO industry, women mainly represent lower and middle management, however, a gra dual change can be observed and these day, more women than ever hold C or C-1 positions and we are getting invited on the various committees and industry boards more often. It is probably fair to say that portfolio of speakers at
Outsourcing&More | March–April 2021
IN THE COURSE OF MY CAREER, I HAVE FOCUSED ON PROJECTS THAT GAVE ME EXPOSURE TO VARIOUS OPERATING AND MANAGEMENT MODELS AND INVOLVMENT IN SEVERAL TRANSFORMATION PROGRAMS, OFTEN CARRIED OUT OUTSIDE OF POLAND.
Outsourcing&More | March–April 2021
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SSC LIONS
conferences organized by the SSOW is diversified; many women are also visible in the areas of technology that support the industry. I yet think that what would matter the most, are skills that are brought in by an incumbent and can be of perceived as value-add, particularily in so called “soft” competences. Today, an average of 70% of workforce in SSC/ GBS/ BPO are the so-called “Millen nial”s, where the traditional methods that we know from the handbooks of recognized management experts may no longer be seen as effective.
and compliance models guarantee almost uninterrupted restoration and continuation of the service. The challenge we faced was the need to implement additional elements of technology that allow for fast and uninterrupted communication as well as securing additional space and tools to control results and strengthen employee engagement.
The pandemic to some extent accele rated the implementation of the digital solutions that Avon is working on. We are a company operating in the B2C model, therefore many solutions will be directly related to it, taking into account, above all, the needs related to effective communication. Limiting direct contacts with customers must be reflected in effective tools that will The pandemic has significantly accel- allow you to reach the recipient despite erated the digital revolution. What the extended distance. The pande projects in this area has your compa- mic, however, is not the main driver ny accomplish? of digitization. Avon has been working
We can’t skip the question on the situ ation caused by the COVID-19 pandemic, which is an increasing challenge and threat to business and work organization. How is AVON GBS in Warsaw dealing in the current situ ation? What model of work have you adopted? Avon GBS has been operating in the hybrid model for several years; Working at a distance in a global team is therefore the norm for us. So it was easier for us to switch to remote work. Functioning in the central model quickly turned out to be very effective in returning to normalcy, because it was GBS, among all the functions of the unit, that was able to provide the service almost uninterrupted one week after the announcement of the lockdown in Europe and India. Moreover, it is this situation that has proved that target management, effective communication
THE PANDEMIC TO SOME EXTENT ACCELERATED THE IMPLEMENTATION OF THE DIGITAL SOLUTIONS THAT AVON IS WORKING ON. WE ARE A COMPANY OPERATING IN THE B2C MODEL, THEREFORE MANY SOLUTIONS WILL BE DIRECTLY RELATED TO IT, TAKING INTO ACCOUNT, ABOVE ALL, THE NEEDS RELATED TO EFFECTIVE COMMUNICATION.
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on significant system investments for some time as a tool for a changing business strategy. Certainly, the recent merger and the appetite for change at the group level will also be a significant development factor here. GBS is one of the beneficiaries in the area of chan ges implemented by DigitIt. Finally, I would like to ask about AVON's CSR activities. The company's activity in this area is known and inspiring. Please tell us about your recent actions / projects. CSR is one of the integral elements of brand management. Both before the COVID-19 era and during the pandemic, Avon made every effort to ensure that the CSR area develops and supports the development of women and more. So, despite the ongoing pandemic, we managed to implement key projects – proving that no matter what the circumstances, we have been helping women for almost 135 years. As part of Avon Kontra Rak Piersi, we financed over 3,000 breast ultrasound examinations in "Cabinets with a Pink Ribbon", located all over Poland. In addition, together with the Rak'n'Roll Foundation, we conducted the second edition of the "U Day", during which we reminded the importance of prevention and why women should have regular examinations. In turn, on the occasion of the 16 Days of Action Against Violence on grounds of Gender, we conducted the campaign "Speak aloud about it!". The initiative implemented with the Feminoteka foundation talks about various manifestations of domestic violence and harmful beliefs prevailing in society. We overthrew, among others 16 myths about violence, and have introduced a procedure known as the Gender-Based Violence (GBV) Protocol so Avon employees can get immediate support from the Violence Ambassador. In 2020, we additionally helped institutions fighting the coronavirus on the front lines. We have donated over 12 tons of Avon products – hygiene cosmetics, disinfectants and hand creams to many hospitals and nursing homes. Thank you for the interview.
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WE ARE ON THE RIGHT TRACK Interview with 3M GSC Poland: Katarzyna Postawa, Brand & Communication Leader and Ewa Kamińska, Risk & Compliance Manager. while being aware of the enormous effort required on employees’ part. Our objective is to motivate towards the acquisition of new knowledge and to provide necessary support at every stage of this process. We have a big say in whether this is a miserable undertaking or an enjoyable challenge we embark on together. The Brilliant in Quality campaign is an apt example of this approach. Let us start from the beginning. What is the campaign about, what was its purpose / backdrop? Ewa Kamińska, 3M GSC Poland: A crucial element of our mission is the provision of the highest level of customer service – and we have been continuously improving this particular area of our expertise. In 2019, we made a decision to launch a certification programme of our quality management system according to the requirements of the international standard ISO 9001:2015. This standard demonstrates that an organisation is not only compliant with the most exacting quality management guidelines but also adheres to all its specifications. Outsourcing&More: 3M GSC Poland has been awarded the Golden Paperclip (Złoty Spinacz) in the Internal Communication category for its campaign Brilliant in Quality. Congratulations! How do you feel? Katarzyna Postawa, 3M GSC Poland: We are extremely chuffed as this award supports our belief that we are on the right track. The 3M GSC Poland team is conscious of the relevance of continuous development and improvement
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The certification process requires the implementation of many new rules, which understandably makes the entire procedure very time-intensive and rather complicated. On top of that, the successful completion of the certification process is determined by an external audit which requires the participation of the company’s employees randomly chosen by the auditor. Therefore, the entire 3M GSC Poland team had to
be made aware of the new standards and the quality management system in use. K.P.: Having deliberated on the effective methods of getting our employees involved in this notoriously unexciting and unappealing process, we decided to organise a campaign which would allow all the team members to actively take part in this crucial change and introduce them to the new guidelines through engaging and unconventional exercises. What is more, we were keen to integrate our teams in achieving this common goal. This is how the idea behind the Brilliant in Quality campaign was created. Why did 3M GSC Poland decide to commence the ISO 9001:2015 certification process? E.K.: On one hand, we wanted to respond to the expectations and requirements of our internal and external business partners who tend to be certified. On the other hand, we were eager to receive external validation of our new quali ty management system. Another reason, and at the same time another one of our goals, was the integration of management solutions for all the processes within the organisation. In this way, we wanted our client service to be given new standards and a transparent quality management system, and at the same time we wanted to boost our employees’ expertise and team competencies through the creation of new training systems and opportunities for employee development.
Outsourcing&More | March–April 2021
“Our cooperation was multilayered and multidimensional, which allowed us to achieve the correct distribution and organisation of our workload. The use of dual leadership helped us to coordinate the entire team” – Katarzyna Postawa, 3M GSC Poland Brand & Communication Leader.
Outsourcing&More | March–April 2021
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“A crucial element of our mission is the provision of the highest level of customer service – and we have been continuously improving this particular area of our expertise. In 2019, we made a decision to launch a certification programme of our quality management system according to the requirements of the international standard ISO 9001:2015” – Ewa Kamińska, 3M GSC Poland, Risk & Compliance Manager; In 2019 – Quality & Process Leader, QMS Certification Program Leader.
What were the biggest challenges when implementing this project? E.K.: The greatest difficulty was the timeframe in which we wanted to become certified – the timeline was unnaturally short even at the planning stage. Another obstacle was the size of our organisation – the sheer number of employees and processes which needed to be systemised and thoroughly analysed by the entire team. What activities did you plan out as part of the certification programme / project / campaign? How did you promote the recognition of these activities among your employees? And why did you choose these particular activities? E.K.: Exemplary communication and symbiotic collaboration with all our stakeholders were undoubtedly of primary importance. Moreover, we wanted to create an appealing and attractive approach which would allow us to attain all our objectives linked to the certification process.
childhood – TAMAGOTCHI. Although this device is commonly associated with having fun, it also teaches patience, consistency and the skills needed to keep the animal safe for as long as possible. TAMAGOTCHI helped us develop an engaging e-learning platform, and the entire process of knowledge acquisition was transformed into an enjoyable gamification mechanism. Of course, the campaign necessitated regular communication with employees using both online and offline channels – one-on-one meetings and workshops, weekly newsletters, stickers and posters in the office, pleasant surprises, Q&A sessions with employees and much, much more. In order to optimise communication on an ongoing basis, we took advantage of the interactive Pulsetip tool, which was positioned inside the office space and accessible via a mobile application. This solution allowed us to update information in real-time.
What made you decide to organise a year-long campaign instead of simply providing employees with standard training materials and training sessions? E.K.: Training and educational materials were an essential component of our activities. However, the campaign itself made the certification process much more attractive. What is more, it provided a tool which reinforced and consolidated knowledge through employee involvement – it positively impacted knowledge sharing across teams, as well as building E.K.: We began by building an inter- a sense of belonging and employee idendisciplinary team responsible for running tification with the company. the campaign. This gave the employees real influence on different types of deci- This is an example of activities which sions, such as the choice of the hero and involve many people, which usually creates various design challenges. the tasks included in the game. How was the collaboration between Our hero was Qupi! (a combination the communication department and of the word “quality” and “process”, letters the team responsible for preparing “Q” and “P”) – a turtle inspired by the well- the company for certification? known process-planning diagram. As K.P.: First and foremost, we made sure a result, the brand hero was associated to create a robust project team, which was with quality while evoking positive not only directly linked to QMS but also emotions and highlighting the unique- included a 3M communication team and ness of the project. the external agency Komunikacja Plus. Our cooperation was multi-layered and K.P.: Interestingly, the entire process multidimensional, which allowed us to was carried out using a device that most achieve the correct distribution and orof our employees recognised from their ganisation of our workload. The use K.P.: In order to gather valuable insights (hidden needs), we carried out internal employee surveys. Our findings confirmed that our employees form a young team which values creative solutions. A large share of our employees are interested in computer games, enjoy having influence in the workplace and teamwork is what motivates them most. For these reasons, we decided to use a campaign based on a gamification concept and developed with the brand hero campaign in mind.
Outsourcing&More | March–April 2021
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What is more, we continue to improve the system we have introduced – we have already passed the second audit and received a certificate. We are currently working on an ongoing advancement of the system. We have also become a leader in globally-oriented QMS. What do the ISO 9001:2015 standardi sation rules currently apply to at 3M GSC Poland? E.K.: They are related to the broadly defined field of client service. On one hand, these are new guidelines for maintaining compliance with 3M’s strategy and global standards, achieving customer satisfaction, and striving for optimal quality and proactive risk management. On the other, they are connected to ta lent expansion within the organisation. Quality Day poster in the office.
We wanted our client service to be given new standards and a transparent quality management system, and at the same time we wanted to boost our employees’ expertise and team competencies through the creation of new training systems and opportunities for employee development.
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Why was internal communication also included in the standardisation process? How does such standardisation of internal communication look like in practice and what are the benefits for the organisation? K.P.: The standardisation of commuWhat did the programme and the cam- nication was necessary as previously this paign achieve? area lacked consistency and clearly deE.K.: The campaign had a favoura- fined rules. Internal communication also ble outcome. We have successfully im- had to become aligned with the standplemented new guidelines and a quali- ard of our global strategy. By adding it ty management system, gaining certifi- to the standardisation process, we have cation in a very short time. Additionally, streamlined it and assigned specific roles we have boosted employee engagement to individual people – both within interwithin the team – over four hundred em- nal and external communication. ployees were involved in the process itself. Moreover, the external auditor noted What are your conclusions? What that the campaign allowed our employ- would you recommend another comees to feel a considerable sense of em- pany to look out for if it decided to powerment and genuine influence over face a similar challenge? the final shape of the campaign. E.K.: Before everything else, it should be remembered that such processes call Having received the certification – for considerable employee involvement. what is the situation today, are you The undertaken activities must also be able to see any added value resulting legitimate and compliant with the strafrom ISO 9001:2015? tegic path of the company. Otherwise, E.K.: Of course. On an operational le the entire endeavour will not be driven vel, we see a substantial improvement in by a real need for change, which can afour communication with partners – we fect the success and the overall outcome speak one global language and work of the effort put in. on compatible systems. In fact, we would find it challenging to work without an im- Thank you for the interview. plemented QMS. of dual leadership helped us to coordinate the entire team. Of course, we also organised regular meetings to review our progress and prepare ourselves for the subsequent stages.
Outsourcing&More | March–April 2021
Marcin Jaśniaczyk, 3M GSC Poland Quality & Process Leader; In 2019 – LSS Black Belt, leader of 4 projects in the QMS Certification Program
Outsourcing&More | March–April 2021
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ROBOTICS
IN THE ORGANIZATION – THE ANSWER IS YES AND NOW, BUT DO YOU KNOW HOW TO START? The last 12 months have passed under the banner of the COVID-19 pandemic. Managers have been leading the companies adapting to extraordinary conditions. Hybrid models with partially or fully remote work have been implemented, teams have been equipped or retrofitted with IT equipment, cyber protection systems have been introduced, product portfolios have been revised, and 90% of companies from the modern services sector surveyed by SSON are considering the digitization of End-to-End processes to be an urgent necessity now!
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In order to analyze processes within the scope of their robotization possibility, it is necessary to evaluate them and their individual elements in terms of meeting a number of robotic criteria. Meanwhile, the profitability of robotization of processes is most often expressed in the form of FTEs (full time equivalents), which could be released thanks to the robotization. Of course, when assessing the robotic potential, one should not only consider cost savings, but also other types of financial and non-financial benefits. Depending on the needs and priorities of the organization, the benefits may include the possibility of increasing the efficiency of processes, and improving their quality / reducing the number of errors. They may also bring about a greater reliability and continuity of processes as well as an increase of the employees’ motivation and commitment due to the elimination of the most onerous and repetitive tasks.
The survey conducted by Gekko advisoryNOW shows that only 20% of companies interested in robotization have a defined robotic potential, another 73% see such a need and intend to define it.
THIS YEAR WILL BE A YEAR OF TRANSFORMATION! Regardless of digital maturity, professional digitization has gained its place on the podium in many organizations. Strategic plans have been updated to include clearly defined digitization goals with a developed road map. Companies that successfully meet the challenges of tomorrow have already scanned all processes in the organization and have gotten a clear view of what improvements, process optimization, system automation and robotization opportunities are possible. Research shows that companies are still afraid of robotization, even though they know it is a powerful success factor. They start robotization by finding one
Outsourcing&More | March–April 2021
A comprehensive analysis of processes in terms of the possibility of robotization seems to be a natural first step in the robotization of an organization. The survey conducted by Gekko advisoryNOW shows that only 20% of companies interested in robotization have a defined robotic potential, another 73% see such a need and intend to define it. So why so many companies avoid this stage of a comprehensive analysis?
The main reasons are the lack of expe rience in robotic design, the lack of time, but also the lack of process analysis skills process that they think is suitable for auto- and the difficulty in defining appropriate mation and try to implement the robot and objective evaluation criteria. into it. While this approach works in many cases, it is not optimal and takes THE STAGES OF PROCESS much longer. Only when you get to know ANALYSIS the robotic potential of the processes Comprehensive analysis of processes, by scanning the entire organization can especially in large organizations, must be you effectively implement robots. carried out in a systematic and thoughtful manner. Often a big challenge in many THE ROBOTIC POTENTIAL organizations is the inventory of processes OF PROCESSES – WHAT IS IT? and their hierarchy. Therefore, in the first In simple terms, the analysis of the robotic step, the scope of the analysis should be potential of processes in an organization well defined by distinguishing processes within the organization. At this stage, it is answers two basic questions: already possible to exclude from robotic • which processes can be robotized? • which processes are profitable to analyzes the processes that are clearly not robotize? suitable for robotization.
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Companies that successfully meet the challenges of tomorrow have already scanned all processes in the organization and have gotten a clear view of what improvements, process optimization, system automation and robotization opportunities are possible. The second stage of the analyzes should be a preliminary assessment of the possibility of robotization of individual elements of the analyzed processes using spe cific criteria. This allows you to reject the processes and their elements that do not meet the boundary criteria of robotization and select those that initially meet these criteria for further analysis. The final stage of the process analysis is the application of detailed criteria and the estimation of the robotic potential and the prioritization of process elements for robotization. These analyzes should be performed by people who have a good understanding of the key aspects of robotization and have the ability to analyze processes. However, it is also very important to involve in these analyzes process owners and people who implement individual processes .
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BENEFITS OF ANALYZING PROCESSES IN TERMS OF ROBOTIZATION: • Comprehensive assessment of robotic capacity assessment; • Prioritizing processes and process elements for robotization – indicating processes that should be robotized in the first place; • Saving time – well-prepared prelimi nary analyzes significantly increase the efficiency and implementation time; • Assessment of the financial implications of robotization and identification of the most cost-effective options • Preparation of a robotization roadmap that will allow you to properly plan and carry out a robotic project in the organization; • Minimizing the risk of robotic design failure;
• Knowledge transfer – during the project, the people carrying out the analysis can share knowledge with people who implement the processes; • Employee involvement in the robotization project – process owners and specialists from the entire organization are involved in the work. A key factor in the success of process analyzes and the definition of their robotic potential is the proper definition of criteria against which the processes and their elements are assessed. These criteria may take various forms: quantitative and qualitative. They may also have a different application mechanism: they can be marginal (i.e. if failed to meet, the given process is clearly unsuitable for robotization) or detailed (if met they allow for proper prioritization of elements of processes for robotization).
Outsourcing&More | March–April 2021
Some of the criteria used in robotic important obstacles to launching robotianalyzes are universal and can be used zation in the organizations of top in all organizations, but each list and managers who took part in the study. definition of criteria should be adapted to the needs, capabilities and priorities of individual organizations.
SELECTED CRITERIA USED IN THE ANALYSIS OF PROCESSES IN TERMS OF ROBOTIZATION: Digitality of data used in the process – determining whether the input data to the process is digital, what types of data and files are processed (not all digital data can be effectively "robotized"), or whether any additional external data is collected as part of the process. This is a boundary criterion, the lack of digital data prevents the robotization of the process. Process standardization – allows you to verify to what extent the process has a clear, defined, unambiguous course, whether it is described by a procedure, or whether it is possible to clearly describe the course of action in the process, including the fixed path for handling possible exceptions. In order to robotize the process, it should be properly standardized. The resource intensity of the process – a key criterion from the point of view of assessing the robotic potential of the process and verifying the profitability of its robotization. On the one hand, the boundary value results from objective factors, independent of the organization, related to the costs of robots and their implementation. On the other hand, it is a derivative of the priorities and possibi lities of the organization.
I do not know what benefits are brought by robotization
30%
I do not know if robotization has any potentian in my organization
30%
I am afraid of the employee’s reactions I do not know what is needed for robotization
10%
I am afraid of high costs
20%
I am worried about data security
20%
Most of these obstacles can be overcome by properly analyzing processes and assessing their robotic potential. Such results have been achieved, among others, in a project for a large Polish insu rance group implemented by a team of process analysts from Gekko advisory NOW together with robotics experts from Digital Teammates.
THE RESULTS OF THE WORK INCLUDE:
• 232 processes analyzed, • 80 hours of workshops with process owners and specialists, • 12 processes (26 sub-processes) recommended for robotization, • Recommendation of the optimal RPA implementation model, • Implementation road map with an ana lysis of technological and regulatory Susceptibility to human errors – allows issues and a KPIs proposal, you to determine what types of poten- • Multi-scenario Robotization Business tial errors are associated with the impleCase, mentation of the process, how high is • Customer's team trained. the probability of their occurrence and how serious consequences are associa- There is no turning back from robotited with the errors made in the process. zation, but there is time that organiThe more vulnerable the process to zations still have to become digitally serious errors, the greater the justifica- advanced and ready for the challenges tion for its robotization (robots do not of the coming years. The COVID-19 make mistakes). pandemic undoubtedly contributed to raising the awareness of executives HOW DOES IT LOOK IN PRACTICE? and forced the redirection of most The survey carried out by Gekko advi- of the planned strategic investments soryNOW shows what are the most into digitization.
Outsourcing&More | March–April 2021
20%
Authors:
Pawel Młyński, Partner, Gekko advisoryNOW
Violetta Małek, Managing Partner, Gekko advisoryNOW
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INVESTMENTS NEWS ZOOPLUS MOVES ITS HEAD OFFICE TO HIGH5IVE The third stage of the High5ive office complex in Krakow, built by Skanska office unit, has a new tenant, zooplus Polska, a member of zooplus Group, a leading European seller of pet products, including pet food and accessories, will arrange its head office on nearly 2,000 sqm. The company plans to move to its new location in April 2022. Green and innovative solutions will wait for the new tenants in the first Skanska project in Krakow awarded with the WELL Core&Shell certi ficate. Experts from Walter Herz advised zooplus on the leasing process. zooplus is currently the largest online pet shop in Europe, which was established in 1999 in Germany. The company operates on 30 European markets. Its net sales in 2020 amounted to nearly EUR 1.8 bn. zooplus is listed on the Frankfurt Stock Exchange and is part of the SDAX stock index which includes 70 small and medium-sized companies in Germany. It is also successful in Poland – here, its
online store is one of the largest specialist e-shops with estimated net sales in 2020 of over PLN 700 m. The zooplus office in Krakow currently employs over 130 people, and more than half of them are IT specialists. The support centre for zooplus development on the CEE markets is also located here, as well as specialists from various business departments working for the development of the entire zooplus Group. The company is growing very rapidly, so it needs more space for new employees. High5ive is a complex of five buildings which will ultimately provide 70,000 sqm of modern office space. Thanks to its central location, it is one of the best connected office projects in Krakow. It can be reached by bus, streetcar, car or bicycle. The Main Railway Station, Galeria Krakowska and universities are also located nearby. Drivers can use a car park with electric vehicle chargers. Thanks to the more than 40 charging sockets
almost every car has access to it and can be efficiently charged while being at work. The last building is planned to be put into use in the first quarter of 2022. Walter Herz, a consulting company that has been operating in the commercial real estate sector for over 8 years, providing strategic advice to tenants, investors and property owners, was a consultant in the process. The last building, to be constructed in the third stage of the project, where the headquarters of zooplus will be located, will have the area of over 11,000 sqm and will be the first Skanska office building in Krakow with a WELL certificate awarded to healthy and comfortable workplaces. It is a certification system which verifies over 100 building features, thus measuring the quality of office space. WELL certification takes into account a building’s impact on the physical and mental health and well-being of employees and visitors. High5ive, like all Skanska projects, has been designed to be used by both tenants and the local community. The High5ive complex is equipped with advanced air purifiers, which is particularly important in the context of the smog problem in Polish urban areas. A smog-eating sidewalk was constructed near the second stage High5ive building and it will also be built near the last building of the complex. It reduces, by an average of 30%, the amount of car exhaust fume compounds that are harmful to humans, including nitrogen oxides found in urban air.
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Outsourcing&More | March–April 2021
THEY CREATED AN 'UNDERWATER' OFFICE FOR AN OIL COMPANY The architecture studio The Design Group has designed four floors (over 6,000 sqm) of the Podium Park B building in Kraków for a new tenant, TechnipFMC. The company is a concern with global reach, providing technological solutions for the energy industry, specializing in innovative solutions of oil and natural gas extraction. It works in both offshore, onshore and above-water projects. The new TechnipFMC office takes us to the world of water stories. The architects
from The Design Group created such a space that reflects the ambience of the underwater depth and sea associated with the TechnipFMC profession. – Bearing in mind this client’s need, we decided that the design office would refer to what TechnipFMC does, i.e. designing machinery for oil and gas extraction from the seabed. Therefore, we have designated four levels: the first floor is the underwater space, the second is the water level, the third and fourth floors are decks of watercrafts used in marine operations. Our client liked our concept very much – explains arch. Konrad Krusiewicz, founder of The Design Group. The TechnipFMC office in Krakow has several unique solutions. Among them it is definitely worth mentioning the so-called void, i.e. a free space integrating floors 2, 3 and 4 and connected by glazing with floor 1. This original TDG idea allows you to look from the first floor to the other levels of the office, almost as we can observe the world while under water. The void zone is also a symbolic integration of all teams working on each floor, where open spaces, collabs and rooms are located. Due to the size and different space requirements of TechnipFMC employees, the project was very complex and demanding. The end result is an office tailored to the client’s needs. It is the place where employees can enjoy suitable working conditions and inspire with its outstanding arrangement values.
INVESTMENT TOP PICKS IN 2021 Savills predicts that core and core+ real estate investors will continue to be attracted by high specification office buildings in key European CBD locations with low vacancy rates such as Berlin, Munich, Paris, Stockholm and London this year. The international real estate advisor also anticipates that convenience retail and last mile logistics assets in densely populated areas, and high specification logistics warehouses in markets with high or rising e-commerce penetration such as France, Germany, Spain, the Netherlands, the Nordics and the UK, will continue to attract this group of investors. Multifamily assets in cities and regions with supply shortages such as the Randstad (Amsterdam, Rotterdam, the Hague and
Outsourcing&More | March–April 2021
Utrecht) in the Netherlands, Stockholm, Opportunistic investors may be able to Paris, London and multiple German cities repurpose secondary offices into residential assets, and purchase distressed will also remain key for investors. hospitality assets in tourist destinations Savills top picks for value-add investors this this year, according to the international year are logistics developments in under- real estate advisor. One of Savills top picks supplied markets such as the Nordics and for alternatives in 2021 is science parks Spain, short-term income sectors such in core European university clusters in as flexible offices and student housing, Denmark, France, Germany, Sweden and which are likely to recover in the second Switzerland. Others are healthcare, senior half of this year, and multifamily devel- housing and care homes in countries opments in markets with rising demand with an ageing population and available for rental such as Southern and Eastern product, such as Belgium, Finland, France, Europe. Overall, with a number of Euro- Germany, Sweden and the Netherlands. pean countries having introduced stricter Furthermore, data centres in markets environmental building standards in with strong fundamentals and infrarecent years, another investment oppor- structure, such as Amsterdam, Frankfurt, tunity is the renovation of buildings to Paris, London and the Nordics are likely to meet higher green standards. remain attractive this year.
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Outsourcing&More | March–April 2021
GEORGIA – UPRISING BSS DESTINATION Interview with Mikheil Khidureli, CEO of Enterprise Georgia. Georgia is fast becoming a next-wave service delivery location in Eastern Europe for voice and non-voice business process services and IT. Several international businesses & IT services providers, and prominent local small and medium-sized companies are already serving international clients from Georgia, including brands from Fortune 500. Given the location, time proximity, talent pool – optimal mix of technical and foreign language skills with a significant cost arbitrage, Georgia is an excellent option for finding the right people and forming teams to deliver quality services to Western markets. In its continued efforts to strengthen Georgia’s position as a superior investment destination in eastern Europe, a new set of incentives were initiated recently in the country aimed at attracting foreign investments in Business Process Outsourcing and ICT.
Outsourcing&More | March–April 2021
We interviewed Mikheil Khidureli, CEO of Enterprise Georgia – a state economic development agency operating under the Ministry of Economy and Sustainable Development of Georgia about why Georgia should be on the radar of BPO and IT investors for the eastern European footprint expansion. Wiktor Doktór, Pro Progressio: It looks like Georgia is making business doors wide open for BPO and IT industry. It is a great information, as both those sectors quickly grow around the World and keep on looking for new investment destinations. What is the current size of BPO and IT industry in Georgia? Mikheil Khidureli, CEO of Enterprise Georgia: Over the last decade, Georgia’s economy has undergone a significant transformation and the country has become an example of rapid development
in the region. Georgia’s success story has been widely recognized and has gained the country the name of a “Top Reformer” many times over the years. As a result, a small country on the crossroads of Europe and Asia has become one of the best places to do business. Georgia boasts the world’s third-lowest total tax rate, is ranked 7th in terms of World Bank’s Ease of Doing Business annual index, and is in 8th place on the OECD’s FDI Regulatory restrictiveness Index. Georgia has an association agreement with the EU, which ensures alignment of regulations and high standards of personal data protection. Development of high-add value and knowledge-based sectors is a key priority for the country and is reflected within the strategy and activities of Invest in Georgia – FDI attraction arm of our agency. Five years ago, there were not many
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MAIN INTERVIEW
Tbilisi, Georgia.
Five years ago, there were not many people who believed that the country would become one of the prominent destinations on the global service delivery map. Today we already have anchor investors serving top global brands from Georgia.
people who believed that the country would become one of the prominent destinations on the global service delivery map. Today we already have anchor investors serving top global brands from Georgia. If we convert all of this into numbers, the estimated amount of employees in offshore IT & BPO activities reached 6,000 in 2020. We have positive numbers in terms of annual growth of exports in services as well. For example, in 2019, the export of IT and Business services exceeded 113 million USD, indicating 34% growth compared with the previous year. Despite the uncertainties arisen due to the COVID-19 outbreak, the BPO&IT sector demonstrated resilience and continued growth in 2020 and we expect positive trends to be continued. Even amidst a pandemic, most of the market participants were able to continue operations smoothly, initiate new projects and increase a headcount significantly. Who are main market participants and where so far, BPO and IT industry grew
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in Georgia? What are the most popular cities and their business environment? The real growth of the sector started in 2016, when foreign companies actively started entering the market. The early adopters in the business services sector were initially attracted to the country for multilingual voice services in German, English, and Russian languages. Soon after, non-voice business processes and IT became part of the growth of the industry. By that time, a limited number of Georgiabased companies were already delivering services to western markets. Key large size companies in voice services with more than 1,800 employees are Majorel and Evolution, followed by small and medium-sized companies, for example, CMX Solutions, Georgian Service Group. In IT, international companies such as EPAM Systems, Asseco, Olmait, Flat Rock Technology, and others are also operating. In addition to business and tech services, I would also bring to attention of readers to the potential of sourcing more niche services from Georgia, such as Architecture, Design, and Engineering services
Outsourcing&More | March–April 2021
in which professional and technical skills of talents are coupled with exceptional creativity. As a success story, we have US-based architecture and design services outsourcing firm Base4 operating in Georgia, and several Georgia-based companies are already partnering with foreign buyers. Back-office processes, such as finance & accounting are also quite well developed. Big 4 advisory firms and other leading international consulting companies (Nexia, BDO, Grant Thornton, and more) have the main presence in this segment and an average size of headcount exceeds 100 employees.
STEM, and related fields – potentially employable in IT & BPO. Most Georgians speak at least one additional foreign language. The most widespread is English, which is mandatory in all high schools and universities followed by Russian and German. Turkish, French, Spanish, Italian are also quite common. Talents with competencies in some more rare languages of Western Europe and Asia are also available in Georgia. In the BPO & SSC study conducted by Deloitte, it is estimated that there are more than 500 thousand speakers of English, Russian, German, French, and Italian in major cities of Georgia.
Currently, the majority of providers are operating in Tbilisi, the capital of Georgia, and the largest city with a population of over 1.1 million, with the main concentration of educational institutions and talent pool. On top of that, we have seen how Kutaisi and Batumi, regional centers in Western part of Georgia are also gaining traction from investors mostly in multilingual contact centre services. All mentioned three cities have international airports operating flights to major business hubs abroad, universities, foreign language training centers, as well as German schools. Internet connectivity and power supply are fast and reliable allowing providers to operate with the traditional office model, as well as implement remote work solutions.
In terms of tech skills, Georgia is strengthening its position in the region. Georgia’s Innovation and Technology Agency (GITA) is implementing a training program for 3,000 specialists in the most demanded fields of IT. A newly opened Kutaisi International University at full capacity will host 60 thousand students. KIU operational model was developed in partnership with the Technical University of Munich and will offer vocational, undergraduate, graduate, and post-graduate degree programs as well as research possibilities in science and technology. KIU will join other high-profile universities such as Tbilisi State University, Tbilisi Technical University, and Ilia State University that in collaboration with San Diego State University offer ABET, ASC, WASC accredited courses in STEM fields.
One of the most important elements of BPO’s and IT’s growth is the human potential of the location where the operations centres are being created. How does the students and graduates structure in Georgia look like when it comes to numbers and spoken languages? Georgia is a relatively new location for business and IT services delivery, meaning that market entry and scaleup is easier than in well-established outsourcing destinations. This is mostly caused by the availability of talent pool. There are 64 Higher education and 66 Vocational education centers in Georgia. Every year 24,000 students on average graduate from higher education institutions and 75% of students graduate from programs such as Business Administration and Social Sciences, Law, Humanities,
Outsourcing&More | March–April 2021
Georgia, at the end of 2020 has implemented grants program for various industries and BPO is also included in it. What kind of grants are dedicated to BPOs and what investors need to do to apply for those grants? 2020 has been a year full of challenges across the world and industries, and of course Georgia was no exception. Enterprise Georgia used this period as an opportunity to revamp the country’s investment proposition. The current developments in the globe showed us that high-add value industries and services are more important than ever for safeguarding jobs and they remain a key priority for Georgia. We elaborated a new FDI grant scheme, which covers key growth sectors for FDI attraction to Georgia, including Business Process Outsourcing and
WHY GEORGIA
Cultural Similarity and Time Proximity to the West
Young, Multilingual and Readily Employable Talent Pool
Competitive Business Operating Costs
7th Easiest Country to do Business
3rd Least Tax Burden Country
Grants and tax incentives for BPO&IT projects
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Significant cost arbitrage over Croydon, UK (75-80%), and Warsaw, Poland (55-60%) – Everest Group
are available in major cities of Georgia. Tbilisi, the capital has the largest supply of A Class business centers, while Kutaisi and Batumi owner-occupied properties, semi-commercial and stand-alone buildings suitable for business services deli very sites.
Business Center-King David BC.
According to the latest estimations by Colliers, within Office Market Study 2019, the total supply of modern business centers in Tbilisi amounted to 193,000 sq.m, and the estimated growth of office supply stood at 26% for 2020. Depending on a class, per sq.m prices in Tbilisi varied between USD 14.4– 22.6 in 2019. The weighted average of service category tenants in Kutaisi and Batumi stood at around USD 16, while the average rent of office area listings amounted to USD 5.4-7.1 per sq.m.
Business services. By employing a mini mum of 200 associates and investing a minimum of 1.5 million USD in business services delivery projects, foreign companies can receive up to 230,000 USD grant from Enterprise Georgia as a reimbursement of costs related to staff training and/ or infrastructure. Interested international BPO companies should apply for a grant through Enterprise Georgia.
benefit from reduced profit and personal income taxes to a flat 5%. Regular rates are 15% for profit tax and 20% for salary-related personal income tax in Georgia.
Let’s take a look on the office real estate market. Even during remote work times, companies need offices to grow their operation activities. How do offices market look like in Georgia and what are the costs of A Class office In addition to financial incentives, Georgia spaces in major Georgian cities? offers a favourable tax system to invesWorking with investors, we see tors. Reinvested profits are not taxed in that high-quality real estate is an imGeorgia and moreover, “International portant factor in the site selection proCompany”, a newly introduced preferen- cess. Georgia’s office market is developtial tax regime enables IT companies to ing year by year; modern office spaces
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Last but not least question I have for you. This one is focused on salaries. What is the average level of salaries in IT and Accounting positions in BPO industry in Georgia? Cost competitiveness is also of course an important decisive factor for foreign companies in location selection process; and Georgia is not only the place where investors can save costs, but add value to their operations and exceed growth targets. Monthly salaries for entry-level positions in customer service, HR, Finance vary between 300-600 USD, and for programmers is within the range of USD 1000 depending on seniority level and skills. Salaries for desktop support specialists and software testers are quite competitive in IT, starting from USD 300 per month. According to evaluations conducted by Everest Group covered in Locations Spotlight-Georgia report
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published in 2020, in comparison with well-established sourcing destinations such as Poland and UK, Georgia offers 55-80% cost-savings for annual operating costs per FTE in contact center services and IT. In addition of attractive salary levels, taxation is quite simple. Personal income tax paid from salaries is a flat 20%. We don’t have a social security taxes and premiums, there is only an insignificant amount of pension conribution – 2% paid by employer, 2% paid by employee, 2% paid by Government.
Georgia. We are continuously strengthening the country’s awareness as an attractive investment destination, working to develop sector support initia tives, and contributing to the improvement of the quantity and quality of the labor pool. I believe that this article enables readers to understand the key capabilities of Georgia as an investment destination in BPO & IT. I invite the readers to get in touch with us and explore how their businesses can grow via Georgia. Thank you for the interview.
Thank you for your answers. I’ll keep fingers crossed for the fast growth of BPO and IT industry in Georgia. Thank you, Wiktor for this opportunity. I am looking forward to sharing with you updates on how BPO & IT sector grows in Georgia. We are optimistic about Georgia’s growth potential in BPO & IT. Georgia offers lots of opportunities to international investors and is an excellent location to serve as Europe’s nearshore destination and also to cover the wider western markets. We believe that more global companies will find Georgia as a reliable destination to meet the needs of their clients in the fast-changing scene of the global business services sector, especially now when organizations are rethinking their operational models and location strategies. With this in mind, our team is committed to delivering exceptional service to all potential and existing investors to support their development plans and ensure smooth launch of operations in
Modern office stock in Tbilisi is expected to increase by impressive 26% at the end of 2020 – Colliers International Georgia Outsourcing&More | March–April 2021
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Batumi, Georgia.
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Key factors for the company’s success in Georgia lay on the deep knowledge of foreign languages and the engagement of local employees, and on the other hand on the business-friendly investment climate and the good partnerships with both – state and private local institutions. Georgia is a hidden jewel. We are excited to continue to invest there because it continues to pay off in a lot of ways. Alexander Mironenko, Country Manager, Majorel Georgia, which employs more than 1,800 associates
Georgia’s foreign investment policy and attractive business environment encouraged Asseco Group to enter the Georgian software development market in 2013. Asseco Georgia has adopted the international best practice and successfully implemented numerous innovative large-scale projects on the local market. Our software solutions have significantly contributed to the modernization and automation of the Government, Banking, and Insurance sectors. We believe interest will expand in the future, considering the increasing importance and potential of software development. David Bazierashvili, CEO of Asseco Georgia
After operating from the UK, and Bulgaria for 10+ years, in 2017, we realized that we needed to consider additional R&D location. Georgia has a notable ranking in the European region according to the ease of doing the business score. Apart from it, our analysis showed that the country had to offer a large talent pool of young professionals in the engineering field. The level of English language, affordability and availability of talent was instrumental for our decision making process. It's been nearly 2 years and we can say that the process of foundation of a new office in Tbilisi is being successful and becoming an important contributor to our R&D services. Ran Berger, co-founder and CEO of Flat Rock Technology
ABOUT ENTERPRISE GEORGIA: The department’s main services are: Enterprise Georgia is a government • Information: Support with reliable, economic development agency, opera up-to-date information and market ting under the Ministry of Economy and reports for a location assessment. Sustainable Development of Georgia. • Communication: Connecting potential investors with different government The agency focuses on promoting and bodies and local partners. facilitating foreign direct investments, enhancing the county’s export potential, • Business Visits: Planning of country and increasing the competitiveness of the visits, assisting potential investors in private sector in Georgia. identifying prospective development locations. The primary role of the investment attrac- • Aftercare: Legal advising and supporting tion arm – “Invest in Georgia” is to attract, services for existing investors. Facilitapromote, and develop foreign direct tion in reinvestment and expansion of investment in Georgia. operations.
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CONTACT PERSON FOR BPO & IT SECTOR RELATED INQUIRIES: Natia Parekhelashvili Senior Investor Relations Manager nparekhelashvili@enterprise.gov.ge
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MONEY
ON THE TABLE Actionable opportunities for BSC leaders. Achieving cost savings is why shared services centers emerged as a business concept. Now more than 30 years ago.
their cash. Many of them will demand one set of actions. And they have a case. If well-implemented, automation will “more for less” from their BSCs. increase process efficiency, which encompasses various factors such as speed, GLASS CEILING? Ever since, wage cost arbitrage and higher Yet have BSCs reached their limits in quality, continuity, and, of course, cost. process efficiencies have been the corner- reducing costs and increasing efficiencies? But IPA yet must deliver on its promise. stones for any Business Services Center A mid-2020 SSON global survey identi(BSC). Arguably not. The increased attention fied that only 33 percent of companies for Intelligent Process Automation (IPA) is are using IPA across their shared services, Certainly, other considerations have come strong testimony to that. And it is a trend and that half of those that do are struginto play throughout the years. But unmel to be reckoned with. As the Shared gling to scale it. tingly: cost remains a key consideration. Services & Outsourcing Network (SSON) notes: the adoption of automation by BSCs But there are additional options for BSCs Do not expect this to change any time globally jumped from 9 percent in 2018 to to enhance cost efficiencies. And some of these are less dependent on a still develsoon. Definitely not in 2021. Business 47 percent in 2020. globally continues to struggle with lower oping technology. earnings in the wake of the COVID-19 Some have it that automation allows BSCs pandemic. CFOs will continue to hold on to to tackle multiple business drivers through SOME LEADERS’ SUGGESTIONS During a recent summit staged by the European Business Services AssociaBSS location selection drivers tion, PwC’s Romek Lubaczewski offered some valuable – if not provoking – suggesSkills/expertise 69 tions. The subsequent lively exchange Labor cost 51 among BSC leaders present offered the following options to reduce costs or Language 23 to increase efficiencies: Cost of overhead operations 21 1. Expand existing scope. The pandemic showed that BSCs remained afloat, Risk (economic/political/natural disasters) 17 and that many of them took on addiUnderstanding of regulatory 15 environment / legal... tional tasks. Additional synergies and efficiencies can be achieved by “doing 15 Proximity to key Business Units more of the same”. It is up to BSC leaders N/A 14 to command more work from the businesses they serve. 10 Proximity to HQ 2. Revisit cost budgets. Travel and catering 7 Local Government incentives costs associated with migrations were down significantly in 2020. Yet BSCs Tax environment 4 continued to deliver. As Mr. Lubaczewski Flight / travel connectivity 4 put it: “Shouldn’t BSCs cut the budgets of old?” Other 2 3. Share resources. This is about different companies bundling their needs to Legend/source: Respondents prioritization of location criteria in percent. SSON, 2020 create a pool of talent, or even office
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space. As wild as the idea might seem, it is already put into practice by SIG in Cluj-Napoca. The company has peak demands in certain months and relies on pooled resources to operate its finance process needs. It teams with other BSCs that have finance processing demands surging off-peak from the SIG one. Noteworthy: the idea of sharing resources it is not restricted to transactional processes. Quite recently several Warsaw-based BSCs have explored the option in connection with automation roll-out specialists. 4. Exploit the potential of Tier-3 and Tier-4 cities to incrementally grow certain processes and volume at lower cost.
Kevin Turpin, Colliers Regional Director of Research for Central and Eastern Europe however recommends a prudent approach when it comes to seeking potential real estate savings. As Mr. Turpin comments: Real estate can typically account for around 9 percent of total operational costs, with utilities around 1 percent. The bulk of the remainder (ca. 90 percent) being staffing costs. Whilst we can envisage some BSC’s looking to downsize, some may well wish to keep and reimagine their space to attract and develop talent and potentially even grow their capabilities. He concludes: The risks of disengaging with and losing employees over the longer term (and the costs involved in re-recruiting) far outweigh the savings made by a 10-20% MONEY FROM REAL ESTATE? cut in real estate or service charge. Either A series of interviews with Colliers Inter- way, a workplace study gathering input national professionals and corporate from employees will also help support these real estate directors throughout CEE tough decisions. yielded additional opportunities for BSC OUTLOOK cost savings: 1. Have a lease service charge audit Deloitte’s 2020 autumn survey of 1,500 CFOs paints a mixed 2021 picture for conducted? 2. Rethink your floorspace needs. Surveys BSCs. On one hand it reveals that half globally point to an average space utili- of the respondents feel more optimistic zation rate of around 50 to 60%. Add to about the financial prospects for their that desk space idled as result of IPA or companies then when the pandemic migrations to other BSCs in a globally networked organization. 3. Optimize space needs through smart workplace allocation apps. E.g. AB InBev Prague operations’“Book-My-Seat” one. It reduced floorspace needs by 20%. 4. Demand flexible HVAC systems to focus energy consumption only to where and when it is needed. 5. Insert flexibility/reduction clauses in existing lease agreements. 6. Put vacant space up for sub-lease, before everybody else does.
started. The survey also found that most of the CFOs will invest in restructuring, streamlining and automation. But on the other hand, Deloitte notes that 38 percent of CFOs plan to reduce capital expenditures for the year to come. With that perspective, BSC leaders must look at improving efficiencies and shaving-off costs. More than ever, leaving money on the table is not an option.
Author: Elias van Herwaarden is Head of Location Strategy with Colliers International. He draws on +30 years’ experience with cross-border business and over 150 location and sourcing projects for the BSS sector. Elias’ Outsourcing & More columns seek to address burning BSS matters. For further inquiries on this article: elias.vanherwaarden@colliers.com.
Outsourcing&More | March–April 2021
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KHARKIV IT CLUSTER 2020:
WHAT THE SPECIAL YEAR WAS LIKE
2020 was special for everybody. We faced a pandemic and had to reorganize the ordinary workflow. Despite all the challenges, Kharkiv IT Cluster succeeded to gain more power, has better results, and even more plans for 2021! Kharkiv IT Cluster shares the results • More than 65 teachers from Kharkiv of the organization’s work and the most universities improved their qualificamemorable events of 2020! tions in the Prof2IT project in 2020 • More than 10,000 people from 12 counTHE IT COMMUNITY WORK tries participated in the educational RESULTS forum “NewEdu: Tech Future in focus” The results of the Kharkiv IT Cluster com 2020. munity work in 2020 in numbers: • Now, we have more than 120 parti In 2020, Kharkiv IT Cluster made a great cipants, leading IT companies and success in the five main work directions: partners • Education & Human capital development • More than 590,000 participants of • Legal support & GR the educational projects • Regional and international PR & Marketing • More than 270,000 dollars were collec • IT community & Values for members ted within the IT4Life project • 90 schools, colleges, and universities • City and infrastructure. participated in the educational projects • More than 30,000 followers on social This year, the organization made a huge media in 2020 impact on technical education develop• More than 3 million views on social ment and the IT industry promotion to media in 2020 young talents. • More than 13 educational projects and initiatives implemented during only Kharkiv IT Cluster also created a PR com2020 munITy for members specialists. The meet • More than 45 companies joined our ups of the community were so successful educational initiatives in 2020 that it inspired many other companies, • More than 2000 teenagers from 5 Ukra organizations and associations to create inian cities participated in the educa- its own PR communities. Now, Kharkiv IT tional projects in 2020 Cluster is launching the HR community • More than 130 work programs and and IT Sales community. disciplines for universities are now This is only the beginning on the way to being revised following the IT industry creating the “Silicon Valley” of Ukraine demands that we have collected in 2020 in Kharkiv.
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KHARKIV IT CLUSTER: REWIND At the beginning of 2020, Kharkiv IT Cluster joined the workgroup on the develop ment of the region at the meeting with the representatives of the Kharkiv Regional State Administration and participated in the Davos 2020 Ukrainian House. It was one of the main contributions to the Legal support & GR direction. The organization took the responsibility to realize IT projects to join the computer industry and the government for better results. The Cluster opened the New Members Welcome season, an annual meeting for new members of the organization to provide essential network, participated in the discussion of the VI Eastern business forum “Smart Real Estate: Where the real estate market goes”.
THE EPIDEMIC AND THE QUARANTINE HAD EVERYBODY CONFUSED Despite all the difficulties, we did not stop our work! Kharkiv IT Cluster united the Kharkiv IT community and initiated the IT4Life project to help people during the pandemic. For less than six months, IT companies have collected more than 270,000 US dollars to help hospitals, medical workers and patients with coronavirus.
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This year, the organization made a huge impact on technical education development and the IT industry promotion to young talents.
Later, Kharkiv IT Cluster and its members bought houses for those affected by the fire in the Kharkiv region and provided assistance in the relocation of Belarusian IT specialists in a difficult time for their country. Now, the IT4Life project continues its work as a charitable foundation.
Kharkiv IT Cluster participated in the dis cussion of the Kharkiv International Legal Forum “Human rights and digital technologies: Why IT companies need to be responsible”, attended the Open Day of the Business Support Center Diya. Biznes, took part in the Festival of Creative Industries from Create Kharkiv and received the honorary title of the AmbasIn spring 2020, Kharkiv IT Cluster parti sador of Kharkiv Creative Industries. cip ated in the business forum and the discussion about women in busi- This year, Kharkiv IT Cluster got bigger: ness: Women Techmakers Kharkiv Session Amazon Web Services, Clutch, EU #1, spoke at the webinar “Clusters as 4Digital, and UKRAINIAN CLUSTERS, the tool to counter crisis phenomena the Ecopolis KhTZ High-Tech Business and the driver of regions development”, Park became its partners. and took part in the discussion “Equality and Diversity Policy: Business Experience”. Besides, Kharkiv IT Cluster created a closed community of the Cluster members — PR In autumn, Kharkiv IT Cluster and the re- communITy for which we regularly hold presentatives of the IT business met closed thematic online meetings. with the president of Ukraine Volodymyr Zelensky, and, a little bit later, with INTERNATIONAL EVENTS the chairman of the organization “Office OF THE YEAR of Simple Solutions and Results” Mikheil In 2020, Kharkiv IT Cluster participated Saakashvili. Together, the representatives in ruhrSUMMIT 2020, European Cluster discussed the IT industry development Conference, EU4Digital Facility, Digital opportunities, and how the common Partnership round table with Germany, work with the government could help and Kharkiv EDU Forum. the industry to grow.
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In December 2020, the Cluster held an international B2B Matchmaking IT Forum with Latvia. At the end of the year, Kharkiv IT Cluster held an online brainstorm of the Cluster's educational committee, the World Cafe “Challenges for IT business in a pandemic” with its members, a general meeting of all members and partners of Kharkiv IT Cluster, and the conference “Synergy. IT Business & IT Education”. This year was full of fascinating and important events for the IT industry of the Khar kiv region and Ukraine in general. Stay tuned — let's develop the ecosystem for technology business in 2021 together with Kharkiv IT Cluster! Author:
Olga Shapoval, Executive Director, Kharkiv IT Cluster
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LITHUANIA’S GBS & ICT OPERATIONS: GRADUALLY CLIMBING THE VALUE CHAIN At the beginning of 2021, after a turbulent and unpredictable 2020, Lithuania proved it is still the top choice for global ICT leaders in search of first-rate talent and a mature infrastructure. SOLID GROWTH IN SPITE OF A DIFFICULT YEAR In IBM’s recently published Global Location Trends Report, Lithuania now ranks in the Top 3 in Europe for attracting FDI jobs per capita across all sectors. But what is outstanding is the fact that Lithuania was recognized as the #1 destination in Europe for ICT jobs per capita. This should come as no surprise when you consider how many well-known international Technology leaders chose Lithuania in 2020 for the expansion of an existing presence, or the setting up of new operations. What makes Lithuania the first choice for Technology leaders? Let’s dive in.
THE TECH GEMS OF 2020 Never waste a good crisis, they say. And Lithuania certainly did not. Even during 2020, Lithuania was able to attract some truly big industry names. One of the first movers to the market in 2020, the US technology leader Rocket Software, has plans to ramp up its next-generation Software development centre in Vilnius to 200 engineers and programmers within 2–3 years. Bostonbased Rocket Software specializes in IBM Z, IBM Power, and database and connectivity solutions, helping leading businesses leverage open source, cloud and artificial intelligence technologies. The Vilnius branch was fast to win its clients’ trust and now runs end-to-end R&D processes. And, after only a few short months of being part of the company, the Lithuanian team had already won
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One of these, Nasdaq – the world’s leading exchange and technology company, expanded its Global Technology and Business Services centre by 100 additional technology experts. Nasdaq’s team in Vilnius is integral to developing, testing and delivering state-of-the-art technology which powers trading venues, clearinghouses, CSDs and corporates around the world. According to Arminta Saladziene, VP at Nasdaq and Vilnius Site Lead – Vilnius has two main features that are essential for GBS & ICT operations: a well – developed infrastructure and a robust Another great achievement for the local pool of highly skilled technology specia Tech community is the arrival of global lists. Nasdaq’s expanded Vilnius team will digital platform engineering and soft- further focus on core technology areas as ware development player EPAM. This data analytics, technology development, new entrant will become an active cybersecurity and cloud operations. member of the local Technology cluster by supporting its key global clients’ busi- And these are only a few examples ness and technology transformation from a long list, proving that Lithuania programs. Its new Vilnius team will work continues to serve the needs of global with top-notch technology stacks such Tech leaders. as artificial intelligence and machine learning, cloud and DevOps, software and DIGITALIZATION data engineering, IoT and automation. In OF THE INDUSTRY IS ON THE RISE the words of EPAM Chief Financial Officer, Lithuania’s entire GBS & ICT industry is Jason Peterson – We are impressed with following the path towards digitalization. Lithuania’s dynamic ICT sector. The country And this drive is not only limited to ICT is home to a fast-growing IT and engi- centres that implement advanced techneering community, and we expect to nology solutions and practices – the local settle in quickly and become an essential market is also witnessing representatives part of it. from other industries implementing valuable Automation and Technology initia Alongside the arrival of elite global names, tives. Financial institutions and manuLithuania had more to celebrate during facturing companies are also actively a challenging year: existing market players pursuing various digital operations in also found opportunities for growth. their Lithuanian offices.
the newcomer award at the annual Rocket Software Hackathon. According to Elinga Kavaliauskienė, Senior Director at Rocket Software Lithuania – Lithuania has already proven itself as one of the top destinations for creating successful and highly performing IT centres in Europe. Therefore, it is not a surprise that Rocket Software decided to choose Vilnius as our next destination in Europe. Rocket Software Lithuania started strong by taking on an extremely complex Performance Monitoring product family and showing great results globally!
Outsourcing&More | March–April 2021
Vilnius Central Business District
In IBM’s recently published Global Location Trends Report, Lithuania now ranks in the Top 3 in Europe for attracting FDI jobs per capita across all sectors.
In addition to the approximately 2,5K new IT specialists that entered the Lithuanian IT industry in 2019 from private coding schools, this new requalification initiative will further increase the local market by almost 2000 IT specialists by mid-2023.
Take the Norwegian company Yara for example, one of the world’s largest providers of fertilizers and crop nutrition solutions, who opened its transport management centre in Lithuania in 2018. The enormous amount of data that Yara processes prompted the company to create a business intelligence team in Vilnius so that it could harness the benefits of data analytics. And the city has proven to be the perfect location for the integration of this service line into Yara’s operations. – It’s a dynamic, attractive working environment – the hiring process was easier due to access to talent in the Lithuanian capital – states Sajid Rafiq, Head of Yara’s Business Intelligence Competence Centre. Financial services leaders with centres in Lithuania are also choosing to pursue the digitalization route. Intrum, a market leader in credit management services, has decided to expand its global business services (IGBS) team in Lithuania and hired more than 150 additional professionals in 2020. The centre, which currently employs approximately 550 operation specialists, finance controllers and data scientists, is planning to embark on a journey towards greater automation. With the expansion of the centre, Intrum will be able to focus on continuing to provide value whilst creating a stable
Outsourcing&More | March–April 2021
The fast-developing field of AI is increasingly becoming a major part of Lithuania’s ICT landscape. The country is currently home to over 40 mature AI businesses and growth in the field is showing no signs of abating, with 100 start-ups now developing AI solutions for a range of industries. So, for GBS and ICT companies looking to innovate in AI, Lithuania already has talent on the ground. And Centre of Excellence that boasts fully this talent pool is only set to increase via harmonized, lean and automated busi- the AI laboratory – a unique partnering ness processes. project between Vilnius University and business. Headed up by Dr. Virginijus EVERYTHING IN PLACE TO Marcinkevicius, the AI Laboratory’s initial BECOME THE REGION’S aim is to match-make companies looking TECHNOLOGY AND AI HUB to develop specific AI applications with Lithuania has everything it takes to bachelor, master and PhD students that become the primary Technology cluster can help them realize their vision. in the CEE region: a reliable, fast and affordable ICT infrastructure, talent that Finally, mid-2022 will see the launch of is ready to take on the world and a steady Vilnius’ very own tech neighbourhood – flow of FDI. In addition, local institutions Cyber City. Besides the actual office space, are also doing everything they can to this new complex will serve as a futureensure that Lithuania becomes a draw proof hub where top tech talents and for companies like Amazon or Google. companies will enjoy perfect conditions With the burning question of talent for work, growth and innovation. always at the top of every company’s agenda, Ministry of the Economy and With a very promising 2020 to build on, Innovation of the Republic of Lithuania and strong foundations in terms of talent, is further strengthening the pipeline infrastructure and governmental support, of potential candidates by introducing it would seem that Lithuania is on track an IT requalification program. This to become the region’s ICT and AI hub. program connects motivated candidates that are willing to enter the IT field with IT Author: training providers and GBS & ICT companies that are potentially looking for new team members. It is hoped that through this incentive new and existing investors of the industry will be able to hire candidates freshly requalified in the IT field, or Monika Vilkelyte, train and upskill their current employees Senior Investment into niche Tech areas such as cyber Advisor, Invest Lithuania security, data science, RPA and others.
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GENDER DOESN'T MATTER. WOMEN OF POZNAŃ THAT INSPIRE We live in a time when gender stereotypes are losing importance, especially in the context of professional development and career path. On the occasion of Women's Day, we present to you the real Poznań SuperWomen, who do not even think about these stereotypes (and have never thought about them). Thanks to hard work and ambitious development, they climbed very high.
When I think about my job at the fair, I don’t see it in terms of a career. Working in this place is a joy for me, the pride of being part of the legend and leader of the exhibition industry, it is a constant development. I started working at the Poznań Fair as a final-year student and, frankly speaking, I thought that I would spend a few months here. The fairs, however, are so absorbing that I have been here for over twenty-five years. During this time, I worked in various positions, observing the development and changes taking place not only inside the company, but also on the European meetings market. Today, we are not only the organizer of fairs and conferences, but we also have our own restaurants, we deal with outdoor advertising and interactive marketing. Paradoxically, the pandemic allowed us to focus on activities other than trade fairs, to effectively develop and display them. We focus on modern
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technologies and digital solutions. We implement extensive investment plans. We are opening the fairgrounds for residents, and soon we will begin the construction of modern office spaces in a great location, with access to conference and catering facilities, which are already popular with potential tenants. In the fair industry or the broadly understood meetings industry, there are many competent women who often occupy high positions. Women have different skills, a different view of the world than men, but both genders are needed to run a good business. They complement each other, their points of view intersect. Diversity is always good for business, especially when it’s about relationships and communication – just like our industry. In my work, I always got a lot of support from my co-workers and bosses. I never
ELŻBIETA ROESKE, VICE PRESIDENT OF THE MANAGEMENT BOARD, GRUPA MTP felt the glass ceiling. For people who want to be successful in business, regardless of gender, I advise you to have a lot of persistence and consistency; to constantly develop and educate, and also not to forget about how much you achieve with hard work.
Outsourcing&More | March–April 2021
I joined the Pekabex Group on behalf of one of the Group’s shareholders. It was 2009, the Group was going through a rather difficult time, the construction market was in crisis, and the then financial director and chief accountant resigned from working in the company. In fact, it was necessary to re-create the financial structure, build a team and restructure the Group not only in financial terms. I joined the management board of Pekabex and together we started to implement a strategy which, as you can see, has brought tangible results. We are the leader in our industry, achieving record financial results. We started with one production plant in Poznań, today we have 5 plants in Poland, and in December we made acquisitions on the German market – taking over the sixth plant. Since 2015, we have been a company listed on the Stock Exchange.
My story has come full circle. I started my professional career in one of the companies of the Bilfinger Berger concern, then I was not associated with the construction industry, and finally joined the Pekabex Group 11 years ago. I am not an engineer and I have the impression that sometimes it even helps in the engineering company we are, I have a different view of many things, it is easy to ask questions – because I do not need to know the technical details. Yes, it is an industry dominated by men, but in our Group there are many women in managerial positions, and the CO is also a woman.
I started my first full-time job in the last year of my studies. As employment in consulting was on the top at that time, I came across a company with such a profile of activity. While already working, I completed postgraduate studies in real estate brokerage and their valuation. I knew that it was with this direction that I would connect my future. I started my career as a Junior Negotiator at Knight Frank. I remember my excitement at the possibility of working on the most modern office buildings in Poznań at
the time: PFC, Andersia Tower, Malta Office Park, Skalar. In retrospect, I can consider this period as very intense, with a predo minance of professional over private life. The compensation was satisfaction in the form of signed contracts, won projects, and finally promotion. After a few years as an advisor and real estate agent, it is time for the next step and a professional change.
MAGDALENA MAKUCH, LEASING MANAGER, VASTINT POLAND
Outsourcing&More | March–April 2021
In my opinion, there is no single recipe for a successful career. I have achieved success in an industry dominated by men. It is worth emphasizing, however, that there is no achievement without hard
work and substantive knowledge – regardless of whether you are a man or a woman. The key to success is certainly a good team, self-discipline and consistent implementation of the set goals. A little luck and confidence will also come in handy.
BEATA ŻACZEK, VICE PRESIDENT OF THE MANAGEMENT BOARD, PEKABEX S.A. commitment, willingness to learn and the ability to build trust both in the team in which you work and among people with whom you establish business contacts. What, in my opinion, hinders the development of women in this industry is only self-limitation and our complexes that what is feminine is less perfect, less important. Against the internal brakes, you have to act and face challenges. This is a sure key to success.
With great enthusiasm and hope for new challenges, I started working for Vastint, an international developer implementing a large Business Garden office complex in Poznań. It was a perfect opportunity to learn from the other side of the investment preparation and implementation process, and then, step by step, participate in the commercialization of the facility. At the same time, I got a chance to join a well-coordinated team that cares about maintaining harmony between work and private life, which was important at that time of my life.
The definition of professional success is already an individual matter and depends on the values that a given person considers to be superior. After all, it is not synonymous with prestige and money for everyone. Even more so, I do not see any grounds for differentiating success into female and male although undoubtedly, due to our social role, it is harder for us women to achieve this success. What could I advise people at the start of their career? Believe in your strength and possibilities and trust intuition. Parallel to your professional life, focus on having Neither gender dominates the real estate a passion (in the plural), or at least a hobby market and the parity is maintained. I don’t or even a pleasant ritual. Finally, be open remember a situation where whether you to change. The last year has shown in are a man or a woman would be of any particular that life can provoke us to importance in negotiating with clients. change, and only those who can live up The recipe for success in this industry is to it will survive in business.
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INVESTMENTS
The world of IT recruitment drew me enough to join Nordcloud, build IT teams in Poland and develop and strengthen the company’s position – first in Central Europe and now also globally.
DOROTA KOWALIK, GLOBAL RECRUITMENT MANAGER, NORDCLOUD I have been living in Poznań for almost 5 years. I moved here mainly because of my job. I was also considering moving to Kraków, Tricity or Wrocław, but it was Poznań that finally attracted me and kept me. I joined one of the recruitment agencies, where I carried out international projects for NATO and public institutions.
Marketing has been my passion and since graduating from the University of Adam Mickiewicz, I knew that this would be my career path. I was very lucky to work for international brands from the beginning. I gained experience in the FMCG industry working for the Hochland brand and then developed my competences at NIVEA. I experienced working in all areas, from portfolio building to product price positioning. I got to know the product life cycle in practice, from concept to market launch. I worked with the product development department and external institutes to investigate the potential of new products before launching them on the market. I created packaging design and marketing communication. It was satisfying to watch a TV advertisement created from scratch. I am now taking over new responsibilities within the Beiersdorf group and I am already looking forward to the challenges in my new role. The cosmetics industry is very feminine and easy to find. Initially, however,
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The IT industry is a world dominated by men. This is, among other things, the effect of stereotypes, but today it is more and more difficult to understand, seeing how competent female employees are. There are plenty of inspiring examples of debunking myths in the IT industry. Ultimately, it’s talent, personality and quality of work that count. I often hear from my colleagues an open appeal: “more women in the industry!”.
of energy and heart into it. I am looking for ideas on what and how I can do even better, I am looking for people from whom I can learn. I also love the company I work for. Sometimes it is not the occupation itself and the environment that is of great importance to our development.
There are many opportunities in the IT sector to learn about new technologies and fashionable tools. Apart from traditional education, meetups, webinars, thematic groups, courses and certifications are also popular. Openness, curiosity and determination to cross one’s own boundaries are also important, which may suggest somewhere in the back of your head that IT is a “male” field. Fortunately, I believe that the most important thing is we don’t need to hear this. We all have to develop your competences, build good the opportunity to observe changes and honest relationships, be interested in in the labor market, where quality and the industry in which we want to operate. competences are of the greatest imporPassion pays off! I love my job, I put a lot tance – not gender.
I managed the categories of cosmetics for men, but it was not a problem, because purchasing decisions in this category are made mainly by women. The cosmetics industry is a friendly environment, in which many men also find themselves, mainly in sales and logistics. As part of the development, my responsibilities included: public relations, issues related to sustainable development and corporate social responsibility. These activities are now the basis for building a friendly image of the company. Going beyond the core business of a corporation has become a necessity. Consumers expect care for the environment and real pro-social activities. In this field, I was able to develop a lot by creating social campaigns that give real benefits and at the same time strengthen the perception of the brand. My advice to career starters? Be consistent in following your goals and ... set the bar higher and higher. You can’t get stuck in
KATARZYNA SINGH, COMMUNICATION MANAGER, BEIERSDORF MANUFACTURING POZNAŃ your comfort zone. As a mother of two children and a wife with a very active husband, I was tempted to stop. However, I know well that professional development is just a matter of planning and good organization. With this in mind, we can fulfill ourselves without losing the pleasure of having a family.
Outsourcing&More | March–April 2021
New investment in the city
My adventure with Poznań began thanks to my new job – in 2016 I took the position of Managing Director at MAN SSC and it was for this company that I moved to Poznań. After almost three years full of challenges and great cooperation, I decided to join the emerging GBS – Miele Global Services, in which we have already employed over 100 people and we continue to develop. I believe that the modern services industry is friendly to women. Definitely. I would say even more: this sector is generally employee-friendly. We represent a modern approach to management, we understand and address the needs of employees and through, among others, flexible working hours, work life balance, remote work, medical care, we make it possible to combine professional work with private life. I experienced it myself and despite working in a high position,
for many years I have been and am able to combine work with the role of mother and wife. If I were to advise women who are just starting their careers, I would quote Sheryl Sandberg* and say, “sit down at the table.” Women often underestimate their skills, and in business hardly anyone will convince you “you can do it, try it, take the chance”. First of all, you must know it yourself. Raise your hand and take the chance, even take a risk knowing that you don’t know something yet. So what? If you have a solid foundation and sufficient competence, you will learn. Sitting on the side, away from the “table”, not taking up challenges – you will not be promoted. * Facebook’s COO, quote from her book, “Lean In. Join the game“.
Name of the investor: Transition Technologies PSC Country of origin: Poland Number of workplaces: 50 Sector: IT/ITO/BPO Company's residence in the city: Omega, ul. Dąbrowskiego 79A Occupied place: ~370 sq m
We support business in digital transformation! We know this best, and we use our knowledge and experience to spread the idea of continuous technological development. We bring our business partners to a higher level through comprehensive activities and professional consultancy on many levels
ANNA MEDUNA, MANAGING DIRECTOR, MIELE GLOBAL SERVICES
in the field of Augmented Reality, Internet of Things, Product Lifecycle Management, R&D Augmentation, Cloud solutions or Atlassian products. We work with the largest suppliers in the IT industry, including: Microsoft, Google, PTC, Atlassian, AWS, Azure. Transition Technologies PSC belongs to the Transition Technologies Capital Group, which has been operating since 1991, constantly expanding its structures. Today it emoploys 2000 specialists who develop and create modern solutions for business. We are on three continents – in Europe, the North America and Asia.
The City of Poznań supports the diversity and professional development of women. In the Investor Relations Department, women have been in managerial positions for over three years: director Katja Lożina and deputy director Katarzyna Sobocińska. This is not an exceptional situation, because dozens of women develop their careers in the Poznań City Hall and other municipal units, including: Barbara Sajnaj – City Treasurer, Justyna Litka – President of Poznań Municipal Investments Company, Spokeswoman for the Mayor of the City – Joanna Żabierek, but also Directors of individual Departments of the City of Poznan – the Health
Outsourcing&More | March–April 2021
Department, the Financial Department, the Real Estate Department, or the Corporate Supervision Department. Glass ceiling? In Poznań, we forgot about this notion a long time ago!
We know and understand the needs of many industries, and we support our partners from around the world not only in introducing new technologies, but also in defining challenges and effectively managing the digital transformation process.
More information:
Investor Relations Department City of Poznań Za Bramką 1 Street, 61-842 Poznan Phone: +48 61 878 54 28 e-mail: inwestor@um.poznan.pl www.poznan.pl/invest
Ewa Łuczak, Head of Poznan Department, Transition Technologies PSC 63
INVESTMENTS
IT IS OUR BYDGOSZCZ SPECIALTY Bydgoszcz continues to strengthen its position among the most important BPO/SSC centres in Poland. Currently, it is not only one of the main locations on the Polish map of the modern business services sector, but it is also growing into a significant centre in the IT industry, successfully creating a strong local specialisation. For several years, Bydgoszcz has been consistently building its image as a "city open to outsourcing". According to the estimates of the Association of Business Service Leaders (ABSL), the sector employs nearly 10,000 people in the City. Including local IT and financial companies that often provide services to international clients, this number has risen to nearly 12,000. The vast majority of employees are employed in centres with foreign capital, which proves the scale of international investment projects located in the City. As many as 4 from the list of the 10 largest investors in Poland, according to the ABSL report of 2020, decided to locate their branches in Bydgoszcz. Moreover, Bydgoszcz was among five cities in Poland (next to Kraków, Wrocław, the Tri-City and Łódź) where the business services sector can be considered a clear local specialisation (the study used an approach based on the location factor, the so-called LQ – location quotient). A definite distinguishing feature of Bydgoszcz is the dominant share of IT companies in the local structure of the sector. The ABSL report shows that these companies generate over 8,500 jobs in total. When adding local IT entities, this
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number increases to over 9,300 jobs. IT is responsible for approximately 85% of employment in the entire sector. Such a large concentration of IT companies proves the City's strong specialisation. It also shows the role of Bydgoszcz in the nationwide list of IT centres, placing it in the forefront of locations selected by global technology companies. This is evidenced by the service centres of such global corporations as Atos, Nokia, Asseco and Sii, already existing in Bydgoszcz, who appreciate the local IT environment, qualified specialists, office opportunities offered in the City, as well as the region's experience in supporting activities in this field. The competences of the available staff, convenient communication location and the City's attractive investment offer also encourage new entities from the IT industry to enter the Bydgoszcz market.
advanced work on 5G network solutions carried out by the Nokia Techno logy Center in Bydgoszcz, the develop ment of an autonomous traffic system by the Bydgoszcz branch of Meelogic or electric vehicle charging stations manufactured by Kolejowe Zakłady Łączności. More and more companies from the IT industry, including those of domestic origin, win international awards for the highest level of products and services provided.
The prospect of further development of the IT industry in Bydgoszcz is currently related to, among others, the dynamic growth of the e-commerce market, deve lopment of 5G technology, cloud tools, industry 4.0, smart city solutions, automation or the possibility of cooperation with various sectors and industries. The newest solutions provided by IT companies INNOVATION AND GLOBAL present in the City are eagerly used, SUCCESS DRIVE THE IT MARKET for example, by the strong manufacturing IN BYDGOSZCZ sector, which has a rich tradition here. In Companies located in Bydgoszcz develop Bydgoszcz, the cooperation between their activities based on innovative tech- industry and technology companies is nologies, invest in the development clearly visible – such sustainable developof their R&D departments, develop inno- ment, based on synergy of competences, vative solutions and offer attractive jobs is often the reason for international entiin the implementation of global projects. ties to decide to develop key business Such activities include, for example, operations in Bydgoszcz.
Outsourcing&More | March–April 2021
FROM IT TO R&D Atos Poland Global Services has been intensively developing its activity in Bydgoszcz for years. It has become the largest entity from the BSS sector on the local market, and in 2019 it moved its headquarters here. Specialists from Bydgoszcz carry out strategic projects for global clients and parti cipate in work on such prestigious projects as, for example, IT services for the Olympic Games or the office of the Prime Minister of Belgium. The company develops R&D activities through the Atos + Google partnership, IOT projects and a wide range of automation activities. – In the last year, despite the ongoing pan demic, the planned large, prestigious projects have continued and are being implemented. One of them was the October establishment of a new company, Atos Poland R&D, focused on IT research and development. A separate R&D entity was created as a response to the needs in the field of new technologies and innovations, as well as the implementation of end-to-end projects – says Robert Wichłacz, a Board Member of Atos Poland Global Services and Atos Poland R&D, managing the Infrastructure & Data Management Services division and adds: In 2020, we also officially launched the Cloud Enterprise Solutions practice in Poland. The new department brings together Cloud experts from all Atos divisions, and its goal is to develop the services and products offered in the field of public and private clouds. Along with the development of the new company and expansion into new areas, the demand for new employees will also increase. This year, we expect the creation of over 500 positions in R&D area in Poland.
IT is responsible for approximately 85% of employment in the entire sector. Such a large concentration of IT companies proves the City's strong specialisation. Outsourcing&More | March–April 2021
INVESTMENTS
AVAILABILITY AND VALUED COMPETENCES OF LOCAL STAFF It is human capital that is a strong advantage of Bydgoszcz and that is noticed by companies from the IT industry investing here. The local specialisation of the City means, among others, better access to talented specialists. In addition, Bydgoszcz and the surrounding area within a radius of 50 km are inha bited by a total of over a million inhabi tants, which also puts the City in a privileged position in terms of the availability of workforce. The IT industry in Bydgoszcz also has its well-established, historical traditions – it derives from the telecommunications industry, which has been rooted in the City for decades, strongly connected with the education system. Bydgoszcz has an attractive academic base, and the education profile is constantly adapted to the specifics of the local economy. Bydgoszcz is constantly developing its potential in creating IT expertise. Almost 3,000 people are studying in fields related to the IT industry and each year this number is constantly increasing. In response to the needs of the local market, completely new specialties have appeared, such as Data Science, which was introduced to its offer by the University of Science and
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– The IT industry in Bydgoszcz is currently a lot of interesting and developmental projects, and recent years have been a time of intensive growth and building a strong local specialisation, supported by successes on an international scale – summarises Edyta Wiwatowska, President of the Management Board of the Byd goszcz Regional Development Agency, and at the same time emphasizes: – This is our Bydgoszcz specialty, which is undoubtedly a unique element of Bydgoszcz's investment offer. It is also a magnet for qualified specialists from various IT areas, who can The development of human resources successfully develop their careers here, and for the IT industry in Bydgoszcz is also at the same time – using the friendly space fostered by more and more initiatives to live and the advantages of a city with popularising the research and develop- a "boutique" atmosphere and in the spirit ment sector and building a community of work-life balance – realise passions around the industry itself. Bydgoszcz and aspirations. hosts, for example, meetings of specialists in the field who exchange practical knowledge on an ongoing basis: the Bydgo- More information: szcz Hackathon initiated by the Bydgoszcz IT Cluster, the first typically technical conference in the City organised by local IT companies "bITconf", or the annual event of the Bydgoszcz branch Nokia "IT Women", promoting science and 4C Unii Lubelskiej Street 85-059 Bydgoszcz information technology among women, Phone: +48 52 585 88 23 showing many opportunities for profes- e-mail: barr@barr.pl sional development in the industry www.barr.pl of modern technologies. Technology in Bydgoszcz. Also at the level of secondary schools, the City focused on education with a technical profile, and the Electronic Technical School in Byd goszcz is one of the best in the country. In addition, Bydgoszcz actively supports cooperation between science and business. Bydgoszcz pupils and students benefit from attractive programmes of patronage classes and courses created in cooperation with companies investing in the City – courses geared to practical skills desired by local employers.
Outsourcing&More | March–April 2021
INVESTMENTS
PROFESSIONAL CZĘSTOCHOWA New jobs for the inhabitants of Częstochowa have been one of the priorities of the Częstochowa local government in recent years. Better Job is the one that meets expectations, gives satisfaction, a sense of security, enables development and fulfilment of ambitions. Better Job is also done by qualified and committed employees. We want the labour market in Częstochowa to become the market of a socially sensitive employer who cares about its employee, knowing that it is his greatest capital. Entrepreneurs from Częstochowa are aware of the necessity and importance of investments in the development of human resources. Activities in the field of staff training cannot only take place inside the com pany. Entrepreneurs, already at the stage of secondary schools, look for their future employees and try to influence the profiling of their qualifications. The cooperation between entrepreneurs and schools, both at the secondary and higher level, is the only chance to educate qualified staff and follow the real needs of the local labour market. The task of the local government is to create a platform for agreement between these interdependent areas – education and business. That is why the Center for Better Workplaces was created and this is the idea behind the whole Better Job Now programme.
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The Better Job Now program is based on three pillars of action: • The "Fair Play" program promotes the principles of fair play on the labour market in Częstochowa: employing employees (minimum 80% of the staff) directly, under contracts that do not bypass the provisions of labour law and other initiatives within the scope of corporate social responsibility. • Center for Better Workplaces located in the building of the City Hall of Częstochowa, at Waszyngtona 5 Street, room 112 in the Investor Assistance Center. CFBW also includes a website called "Teraz Lepsza Praca" ("Better Job Now"), enabling students of secondary schools, entrepreneurs and residents who want to change or find a job to meet in one place; • Goal: Your Development involves many initiatives aimed at improving the qualifications of people who focus on developing their professional competences to get a better job. As part of the Program, an Employee Rights Ombudsman was appointed, who act in agreement with CFBW. Częstochowa is a city of well-working and honest people, work culture of Częstochowa residents is very high and industrial traditions – often cultivated from generation to generation, results in qualified employees in the scope of the heavy industry and services industries. Entrepreneurship and creativity in Częstochowa helped the city flourish during the partitions and successfully overcome politic al transformation. Today, SMEs and family businesses are still the power of the economy in the region and confidently cooperate with the world's largest corporations. All thanks to the quality of staff, their creativity and education.
HOW TO TALK WITH TEENAGERS The Częstochowa local government decided to use the time of the pandemic and the time of one-of-a-kind holidays to familiarize young people with the possibilities offered by the city... but this time in their area and their language. When in December the country found out what
Outsourcing&More | March–April 2021
the winter break in 2021 would look like, the Investor Assistance Center in Częstochowa shot a video promoting technical schools in the city. Musicians from Częstochowa were invited to the project. One of them was Piotr "Dziker" Chrząstek, one of the pioneers and promoters
of Polish hip-hop, leader of the band NEFRE, founder of the HIP HOP Elements festival, and the other one was MIKSER – a rapper from the young generation, freestyler. They are both known to the young audience and can communicate with them perfectly.
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INVESTMENTS
RAP AND MINECRAFT The music video and the schools' offer with a grain of salt was just an introduction to having fun online. When young people could not take full advantage of the winter break in science and spent even more time at their computers than usual, the city offered them to co-create the urban space. The Zawodowa Częstochowa website was created, and the youth of primary and secondary schools were invited to build the educational complex of their dreams at MINECRAFT. On the website, students had to familiarize themselves with the offer of technical schools and use the acquired knowledge in their online activities. The base project for this task was a drawing made by one of the students of the Fashion and Advertising Industry School Complex. The players had to expand and rebuild following their idea for an ideal school. The school was to be created following the principles of sustainable development and the Smart City concept, maintaining equal opportunities and access to education, as well as respect for nature. As it happens in Częstochowa, this competition became the nucleus of a completely new idea for the development of urban space by young people... For now, still online.
PROFESSIONALS There are still not enough professionals in the labour market. The generation gap and the stereotypical approach to vocational education result in a constant staff deficit. The city hopes that such activities will make youth aware of the value of a solid technical education. The 2020 pandemic situation helped somewhat. It showed how much technical skills are valuable and which have suffered the least from the crisis. Author: Anna Tymoshenko Translation: Magdalena Wytrzymała
More information:
Investor Assistance Center Department of European Funds and Development City Hall of Częstochowa Waszyngtona 5 Street, 42-217 Częstochowa Phone: +48 34 3707 212, +48 34 3707 213 e-mail: coi@czestochowa.um.gov.pl, fer@czestochowa.um.gov.pl www.czestochowa.pl
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INVESTMENTS
REIMBURSEMENT OF EVEN MORE THAN HALF OF TWO-YEAR EMPLOYEE PAYROLL COSTS FOR THE BSS IN ŁÓDŹ
The Polish Investment Zone (PIZ) provides a new formula for the functioning of the Economic Zones in Poland. It offers exemptions from corporate income tax and makes these exemptions available to the sector of modern business services on a preferential basis. The revised regulation enables our company to take advantage of tax benefits regardless of where our registered office is located. The location only
determines the extent of the support that we can obtain.
In the case of broadly defined modern business services (e.g. programming, financial and accounting services or The baseline quantitative criterion – R&D services), this threshold is reduced how much money we have to invest to by 95%, and in Łódź it amounts to merely meet the quantitative requirements set PLN 4,000,000. by the PIZ mechanism in Łódź is PLN 80,000,000 for the industrial investments. QUANTITIVE CRITERIA IN LODZ (REQUIRED INVESTMENT VALUE [PLN])
THE SCOPE OF ACTIVITIES FOR WHICH PUBLIC AID MAY BE OBTAINED MODERN SERVICES FOR BUSINESS (BPO AND SSC), IT AND R&D
MICRO IT related to software publishing and consultancy in the field of IT and related data processing, website management (hosting), and other services related to the provision of infrastructure for information and computer technologies
1 600 000
SMALL 4 000 000
SSC / BPO in the field of financial audit, accounting and bookkeeping, consultancy related to management and services of head offices
MEDIUM 16 000 000
R&D architectural and engineering as well as in the field of technical research and analysis, research and development works, specialized industrial and interior design, consultancy in environmental matters
OTHERS call centers, repair and maintenance of computers and communication equipment
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BIG 80 000 000
BUSINESS SERVICES 4 000 000
Outsourcing&More | March–April 2021
depending on the size of the company. A small company is eligible for public aid of 55%, a medium-sized company – 45% and a large company – 35%. In other regional cities in Poland, these thresholds are usually 10% lower in all these categories. In other words, a large company which invests PLN 10 million in Łódź is eligible for public aid in the amount of PLN 3.5 million while, for example, in Wrocław it will be only PLN 2.5 million. What does this aid provide? The investor receives aid in the form of a long-term exemption from corporate tax (CIT). In Łódź, the amount of aid is calculated on a project-specific basis and investors can use it over a period of 12 years of business activity. In principle, corporate income taxpayers are taxed at a rate of 19%. In Łódź, salaries in the sector of business services in the IT segment are 13% lower than the national average. In the area of finance and accounting, they are on average 9% lower. About 30,000 people work in the sector of modern business services in Łódź and this number is growing at a rate of approximately 14% annually. SIZE OF NUMBER OF THE COMPANY EMPLOYEES
MICRO SMALL MEDIUM BIG
YEARLY ANNUAL TURNOVERT BALANCE SHEET
< 10 < 50
<2 and
< 10
<2 or
< 10
(gross employee wage costs plus the obligatory contributions, such as the social insurance contributions, paid by the entrepreneur from the hire date) in its over>250 >50 >43 all investment costs. We can safely asOutsourcing&More: What expenses sume that the average gross salary in are included in the investment – what the sector of modern business services costs will allow us to reach the thresh- is PLN 8,000. This means that if we emold of PLN 4,000,000? ploy about 20 people, we will be able to Mateusz Sipa, City of Lodz Office: In reach the minimum threshold (irrespecthe case of the services sector, the main tive of the previously mentioned cost cost item for the investor are, of course, categories). salaries of employees. Therefore, apart from expenses associated with Why Łódź? Depending on the level of unemthe purchase of computer hardware, office equipment or software, an entity ployment, there are different threshoperating in the Polish Investment Zone olds for public aid in the regional cities and benefiting from public aid may also in Poland for the new investments. In include its 2-year employee payroll costs the case of Łódź, it is 35%, 45% and 55%,
< 250
< 50
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In the latest global ranking of the best economic zones, prepared every year by the team of fDi Magazine (periodical of the Financial Times group), the Łódź Special Economic Zone (ŁSEZ) has been named as the third best in the world. It has also been recognized as the best zone in Europe for small and medium- -sized enterprises.
< 43
* the information presented in this article only provides a basic insight into the functioning of the Polish Investment Zone and does not fully cover the objectives of that tool. Author: Mateusz Sipa, Vice Director Business Development and International Relations Bureau, City of Lodz Office / Attorney-at-law
More information: Business Development and International Relations Bureau Piotrkowska 104a Street, 90-926 Lodz Phone: +48 42 638 59 39 Fax: +48 42 638 59 40 e-mail: boi@uml.lodz.pl
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INVESTMENTS
THE CITY OF KIELCE CREATES THE GROUND... FOR BUSINESS! The city of Kielce has a constantly growing potential for the development of the office sector: 20,000 students, well-developed metropolitan functions, and companies that have been operating for years make a favorable climate for investment. The favor of the investors of Mayor Bogdan Wenta, who considers good contacts with entrepreneurs as a priority of his local government activity, is not without significance. An expression of this is his proposal for resolutions on real estate tax exemptions for newly constructed office and production buildings, which were adopted by the Kielce City Council.
The resolution on the exemption from property tax for the initial investment in the field of newly constructed office buildings was a response to the trend and expectations of investors visible throughout Poland. It is worth paying attention to this act of local law, because it is an important progress in creating economic development in Kielce.
During the session of the City Council of Kielce on February 11 this year, Kielce councilors adopted a number of resolutions dedicated to helping entrepreneurs operating here or planning to start business in Kielce.
– In this way, we tried to encourage deve lopers and construction companies to refer to this resolution and take advantage of tax exemptions under the real estate tax – says Bogdan Wenta, Mayor of Kielce.
The adoption of the resolution will enable entrepreneurs carrying out initial investments to obtain real estate tax exemption for a maximum period of 3 years. The resolution introduces a real estate tax exemption for newly constructed buildings with a usable area of at least 4,000 m2, related to business activities, where at least 80% of the usable area will be high-standard office space. This is an extremely important step for a still developing city such as Kielce, where human capital and competitive rental prices are also a powerful bargaining chip.
TAX RELIEFS FOR OFFICES – WHAT ELSE? A particularly important document is also the adopted resolution on real estate tax exemption for newly constructed buildings or their parts and structures related to business activity in the field of production. The draft resolution introduces a real estate tax exemption for newly constructed buildings or its parts and structures related to business activities in the field of production, constituting an initial investment, located in the Kielce. The adoption of the resolution will enable entrepreneurs carrying out initial investments to obtain real estate tax exemption for a maximum period of 3 years. Kielce, Świętokrzyska office area.
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– Companies from the modern business services sector choose only attractive locations in terms of office space, creating high-quality jobs, which in the long run translates into the image of a city open to investors, also from the IT and BPO sectors. The real estate tax exemption for newly built office spaces is a clear sign for these entities, and for developers, that Kielce wants to be at the forefront of cities with top-class office space and attracting the modern business services sector. This is extremely important because the out sourcing industry is vitally interested in expansion in regional cities, and the key factor is access to ready-made office spaces ensuring IT security and freedom of space arrangement, giving the company the opportunity to develop in the future.
– MAYOR OF KIELCE, BOGDAN WENTA
The resolution adopted at the February session is a continuation of the tax policy adopted by the City of Kielce, aimed at encouraging companies already opera ting on the Kielce market to make reinvestments here, as well as attracting domestic and foreign investors to locate their branches in Kielce.
NEW OFFICE AND SERVICE CENTER Recently, a decision was also made to develop plans for the last large, available investment area in the city. It is about 65 hectares in total between the S74 expressway, the eastern border of the city and green areas excluded from development.
is to include the area around the existing office buildings and the existing plan for the university campus which is adjacent to the grounds. The city planners therefore decided that it would be best to develop a concept for the entire area of 65 hectares. As a result, the communication system and media distribution will be more coherent. The city decided to make an unusual move: it commissioned an external company to develop a concept for the development of such a large area.
The concept will significantly facilitate further work on the spatial development plan. Metropolitan services, office buildings and areas will be created, e.g. for cultural units and research centers. The Mayor's decision and the formation At the same time, the city does not want of the team were crucial. Most impor- to allow a situation where in the area tantly, there is a real chance that we will where one function dominates, life dies soon get to know the route of Kielce's when the office is finished. Therefore, it eastern bypass. It is extremely important is assumed that approx. 15% residential to provide communication services in this buildings to complement the entire area area. The vast majority of the area in ques- with this function. tion is located in zone "C" of the Kielce Protected Landscape Area. This means GREEN ROOFS AND RETENTION that in the areas intended for develop- WILL PLAY A KEY ROLE IN THE NEW ment there are quite serious restrictions VISION OF THE AREA resulting from the provisions that protect The use of blue and green infrastructure the natural and landscape values. The plan is also to be important when creating
Outsourcing&More | March–April 2021
a spatial development plan. It is about green roofs, enabling the cultivation of plants on them and retention, i.e. the collection of rainwater, which is a problem with too much development of green areas. In general, the entire develop ment will give the impression of an area with a lot of greenery. – We definitely want the most perfect project to be created, taking into account nature protection – announced Mayor Wenta.
More information:
Investor Assistance Centre Kielce City Hall: Strycharska 6 Street, 25-659 Kielce Phone: +48 41 36 76 571, 41 36 76 557 e-mail: coi@um.kielce.pl www.invest.kielce.pl/en www.mapa.invest.kielce.pl/en
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INVESTMENTS
EX ORIENTE LUX Normally light shines from the East but this time lets turn the spotlight on the East! No, we are not talking about the Far East or even the Middle East. Surprised? Today, we shine the, “FDI Spotlight” on our neighbours in the East. In reponse to the current political and economic situation in Belarus, the regional board of the Pomerania Voivodeship ini tiated a support campaign called Come2Pomerania via Invest in Pomerania and Live more. Pomerania. Come2Pomerania is a compendium of knowledge for entrepreneurs, companies and specialists from Belarus and other countries. The website offers exhaustive information on legal issues, acts as a complementary service to the Poland. Business Harbour program (a great program by PAIH), details the facilities, supports and incentives available for entrepreneurs and companies wishing to relocate or grow their EU presence and helps specialists find a job in the region. The website also talks about the support available for students and Belarusians who are already in Pomerania. – Cooperation with investors, entrepreneurs and innovators from across the eastern border has a long tradition here and has been implemented systemically over the past few years. Due to several historical-geographical and socio-political factors, the Tricity is one of the most open, friendly and inclusive places in the country. From the 1970s to the present day, it has remained the cradle of the solidarity, freedom, democracy and human rights. For immigrants from the former Soviet Union, this spirit of freedom is clearly felt and extremely important – says Aleksandra Moszyńska
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from Kyiv, an Associate at Invest in Pome rania, responsible for the project. The topic of scale and adequacy of the allocated solutions is perfectly illustrated by the example of EPAM Systems, a company present on the Tricity market for many years. – Being the biggest IT employer in Belarus with over 12,000 employees there, EPAM Systems has been faced with an unprecedented challenge of having to provide a quick and efficient mean for interested employees to be able to relocate to Poland despite the turmoil in their home country. With the Pomeranian region already chosen by more than half of our relocating employees from Belarus, we do anticipate that at least several hundred more of our relocating colleagues from Belarus will join us here. We are most grateful to PAIH for the Poland. Business Harbour program, which enabled seamless expedited relocation for highly qualified individuals, and also to Invest in Pomerania for their continued support and cooperation when it comes to helping relocating colleagues with adaptation, information support for immigration and other queries, and also for helping us create a better, safer and more inclusive environment for relocating colleagues to feel like home away from home – Ievgen Berezenko, Director & Head of EPAM Northern Poland Deli very Organization.
companies moving or developing in Poland. – As a co-founder of an IT company, I am focused on the future. Sooner or later, the pandemic will end, and IT services will be even in higher demand. We’ve opened an office in Tricity to be prepared for this. There are three cities and three important benefits. First, Gdańsk is a great location that opens the doors to the Nordic and Benelux regions. The second benefit is access to well-educated and professional IT specialists who can strengthen our expertise and bring new ideas. And the last but not least, Tricity provides governmental support, has great infrastructure for business and generous people who make opening a business in this location smooth and efficient – Katherine Lazarevich from belarusian DIGITEUM.
The Come2Pomerania programme in volves consistent expansion of the target group that will be able to benefit from personalised assistance. It is hard to imagine a better place to build new forms and mechanisms of participation than in the Gdańsk with its Equal Treatment Model that is the first Polish city(ies) with such a comprehensive equality programme. This is particularly significant for protecting and ensuring full exercise of human rights and fundamental freedoms on an equal basis. Further contributions are made by institutions such as the Support Centre for Immigrants, the European Solidarity Of course, apart from employees, the afo- Centre and the Emigration Museum in rementioned support is also used by Gdynia. The foundation of the entire
Outsourcing&More | March–April 2021
structure invariably remains the freedom-oriented values of the historic Solida rity movement. The Gdańsk-Gdynia-Sopot metropolis is the only one in Poland with systemic solutions for foreigners covered by the minimum integration standard. This includes substantive support, legal advice, Polish language courses, as well as issues such as security, training for officials and creation of district migration teams. This approach has resulted in the creation of a favourable and cooperative environment for people living here (Gdańsk came first in Forbes' ranking of PeopleFriendly Cities, and the latest European Commission report places the residents of the capital of Pomerania among the most satisfied in Europe), as well as companies. The Tricity is also ranked in the top 5 Tech Cities of The Future rankings by FDi Intelligence in 2020. – At Invest in Pomerania, we ensure the satisfaction of our investors not only at the stage of choosing the Tricity as the location of their investment but also after the completion of the investment project. Therefore, we constantly monitor the economic situation in the region, identify challenges and obstacles that local entrepreneurs may encounter when running their business in Pomeranian
Voivodeship and, if the situation requires it, we try to solve such problems – says Anna Jagodzińska-Warzych, Investor Spokesperson, Invest in Pomerania. She stresses that – Investors can count not only on our individual assistance in a given case but also on systemic solutions, which we work on in cooperation with representatives of regional authorities and with the participation of local institutions. We pay special attention to issues related to the process of legalisation of employment and stay in Poland of workers relocated from Eastern European countries. Knowing that the procedure and the waiting time for a decision can be a source of inconvenience for companies and especially for their employees, we are taking various measures to clarify the procedure and to make the whole process more efficient.
Cooperation with investors, entrepreneurs and innovators from across the eastern border has a long tradition here and has been implemented systemically over the past few years.
the presence of highly qualified professionals is highly desirable, will also join us, which in turn will translate into easier access to the Polish labour market for our neighbours – adds Anna Jagodzińska-Warzych.
In January 2021 the Mayors of Gdańsk, Gdynia, Sopot and the Marshal of Pome ranian Voivodeship signed a Declaration of Values. Defining the direction of the region's development based on “solidarity, integration and peaceful coexistence”, as King Felipe VI of Spain said, as he presented the prestigious Princess of Asturias Award in the “Concord” For example, in January this year, category to the Mayor of the City of we initiated the signing of a letter to Gdańsk, Aleksandra Dulkiewicz, for comthe Prime Minister of Poland by the Marshal mitment to protecting freedom, human of Pomeranian Voivodeship and the Mayors rights and peace, in 2019. of Gdańsk, Sopot and Gdynia with an appeal to include Ukrainian citizens By combining tradition with modernity, in Poland. Business Harbour programme. drawing on the experience of the past to We hope that other cities in Poland, where build a better, safer and more sustainable future, we invite the world to Come2Pomerania, because we care more! www.come2pomerania.com Author: Bartosz Wojtasiak, Project Manager, Invest in Pomerania
More information:
al. Grunwaldzka 472 D Olivia Business Centre – Olivia Six 80-309 Gdańsk Phone: 58 32 33 256 e-mail: office@investinpomerania.pl bartosz.wojtasiak@investinpomerania.pl www.investinpomerania.pl
Outsourcing&More | March–April 2021
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HR NEWS
NEW FACES IN ADAPTIVE GROUP TEAM Julia Hammerszmidt joined the company as an Administration Assistant, bringing with her some customer service experience and office management skills. Julia is studying Business Analytics at the University of Łódź. Klaudia Żaczek joined the team as a Process Office. Klaudia is studying Finance and Accounting at the University of Łódź. She’s a huge fan of water sports, baking cakes, and handcraft. Jakub Kaleta, Process Officer Adaptive SAG – professional with over 2 years of experience in AP Logistics and OCR service. Expert in operating OCR system with hands-on experience in reporting and process improvements. Employer Brand Ambassador, a student at the Uni versity of Lodz, bachelor’s program in Economics. Fluent English speaker. Agnieszka Baraś, Process Officers Adaptive SAG – professional with over 2 years of experience in BPO conglomerate of Accenture, where she had been engaged as Data Analyst, Quality Analyst, and Team Supervisor within Customer Service practice. She is a real professional traveler with great knowledge
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of five languages: Polish, English, Spanish, conducting training in the field of soft Portuguese and Italian. She has extensive skills. Graduated from the University experience in quality improvement. of Lodz, MA in management with a specialization in marketing. During Justyna Dusińska, Process Consultant studies at the university: Team Manager Adaptive SAG – professional with over in the student research club "Personali" – 14 years of experience in Infosys BPO organization of external training, preparaPoland where she had been engaged as tion and service of conferences and fairs, Accounting Associate, Transition Coor- marketing activities of the club. dinator, Associate Consultant, Transition Lead, Solution Design Consultant Martyna Pietrzak, Process Officers Adapand Takeda SCE where she worked as tive SAG – for 8 months of experience Accounts Payable Team Leader (Southern as an office assistant and for 4 months and Northern Europe) and Accounts as Customer Consultant in Call Center. Payable Deputy Manager. She is fluent Graduate of the Medical University of in English, Spanish, and German. Lodz, with a master’s degree in dietetics. Martyna speaks English and Spanish. Patrycja Szewczyk, Process Officers Adaptive SAG – over 2 years as a member Agnieszka Sadowska-Janik, Project of Student Scientific Club "SKN Stratolog". Manager/Senior Consultant Adaptive SAG She is the coordinator of the "One in – professional with over 8 years of expea Million" project. Student at the Univer- rience in BPO and SSC sectors. Expert in sity of Lodz, Faculty of Management, Project and People management. Expefinance and investment. Patrycja speaks rienced in end-to-end transition, tools English and German. implementation, LEAN, process automation, optimization and harmonizaEwa Stawicka, Process Officers Adaptive tion. Graduate of the University of Lodz, SAG – for 9 years, the owner of a company M. of Biology, post-graduate in Coaching in the B2B sector, 0.5 years of experience and Mentoring, holds a certificate of Interas an independent copywriter, and addi- national Coach Federation – CoachWise. tionally almost 3 years of experience in Agnieszka speaks fluent English.
Outsourcing&More | March–April 2021
PAWEŁ WARDA APPOINTED NEW EXECUTIVE VICE PRESIDENT OPERATIONS IN SKANSKA OFFICE DEVELOPMENT UNIT Skanska commercial development business unit in Central Eastern Europe has appointed Paweł Warda as the new Exe cutive Vice President (EVP) Operations in Poland and a new member of the management board. He is responsible for project development operations in Kraków, Katowice, Poznań and Łódź.
Paweł Warda has over 20 years of experience as a project and cost manager in the commercial, industrial, leisure, and retail sectors on behalf of owners, funding institutions and occupiers. Before joining Skanska he was Head of Project Management Services in Central Eastern Europe and Russia and Member of EMEA Board
of Project and Development Services at Jones Lang LaSalle (JLL). Prior to that, he held several positions in Atkins and Bovis Lend Lease. – We are very pleased to welcome Paweł to the Skanska team. Poland is the biggest market in our CEE portfolio and we want to keep our strategic aim on developing projects here. With his extensive experience in real estate, especially in project and construction management, Paweł will lead our project unit in four major Polish cities – Kraków, Katowice, Poznań and Łódź, and we hope for his great support in achieving our ambitious targets on climate neutrality, – says Katarzyna Zawodna-Bijoch, CEO and President at Skanska commercial development business unit in the CEE region. The Skanska commercial development business unit in Central and Eastern Europe operates on 10 city markets in four countries: Czech Republic, Hungary, Poland and Romania. Being the market leader in the CEE region, the developer has already delivered over 1,400,000 sqm of office space. In Poland, Skanska is present on seven markets: in Warsaw, Wrocław, Poznań, Łódź, Kraków, Katowice and the Tri-City. In February 2020, the company anno unced a new Senior Leadership Team (management board) to continue delivering successful business with a stronger focus on regional strategy supporting its customers. At the same time Skanska centralized the organization on the regional level with new Executive Vice Presidents responsible for business operations. The other EVP Operations in Poland, Mariusz Krzak, is responsible for the Warsaw, Wrocław and Gdańsk markets.
Outsourcing&More | March–April 2021
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CAREER & DEVELOPMENT
RECRUITING TALENTS AT THE TIME OF PANDEMIC The sector of modern services for business boasts a significant and stable position in the Polish labour market. ManpowerGroup experts are continuously observing a huge interest taken by foreign investors in new ventures in Poland, which causes further growth of that branch and entails constant demand for new workers. Simultaneously, the knowledge and competences of Polish labour force are judged to be at a very high level; therefore, both well-established and new centres intend to create here teams dedicated to handling highly advanced processes in finances, purchasing, R&D, IT, as well as in HR or digital marketing. What challenges, in the light of these changes, are faced by employers and how these
challenges can be overcome? The answers candidates. Unchangeably though, Poland are provided by ManpowerGroup experts. is an appealing market for new investors. What adds to that appeal is a pool Availability of candidates with desired of graduates (larger and larger every competences (including language skills), year) from technical universities which ever-bigger pools of more experienced follow current trends in the labour market workers, and the maturity of the Polish of the IT and R&D sectors and which annusector of modern services for business ally spawn new engineers ready to enter mean an increased traffic of more and the market and start work. Technolo more advanced business processes and gical know-how in Poland is constantly operations to the companies located growing and ever more complex projects on the Vistula. It leads to changes are completed thanks to Polish specialists. reflected, for example, in a rising demand Experience gained by Polish experts and for human resources with the senior the availability of high-skilled graduates experience, and in a smaller propor- from technical faculties secure ventures tion of vacancies for the entry-level planned in Poland, which – in turn – enhance competition for talents. In order to be able to provide more advanced solutions, employers need to recruit people with specific experience and knowledge so that they could comprehensively take over and manage new processes. These are positions for senior candidates, because such responsibility cannot be shouldered by people lacking the necessary experience and who are just starting their professional career. Besides that, highly experienced candidates are fully self-sufficient, able to arrange their work, familiar with streamlining measures that should be implemented, used to working in a dynamically changing corporate environment and they can share their knowledge.
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Outsourcing&More | March–April 2021
Availability of candidates with desired competences (including language skills), ever-bigger pools of more experienced workers, and the maturity of the Polish sector of modern services for business mean an increased traffic of more and more advanced business processes and operations to the companies located on the Vistula.
Outsourcing&More | March–April 2021
That trend, seen in the concentration on highly experienced people in an organisation, has bolstered a transition to the model of remote or hybrid work in companies. Thanks to such workers the transition was smoother and companies did not lose their efficiency. It is also confirmed by representatives of the IT sector who are increasingly looking for workers ready to start work in the organisation from day one and to take over the scope of work assigned to their function. ManpowerGroup experts predict that the trend will change in post-Covid days. A lot of IT companies want to implement the hybrid model of work after the pandemic and this partial return to offices will clear the path for hiring juniors again. This is so, because juniors’ work requires constant monitoring and support from more experienced staff. Organisations which will decide to continue work exclusively in the remote mode will be forced to implement instruments and solutions that will help juniors develop themselves in their organisations, on the one hand, or to limit their hiring to those candidates who are already
equipped with commercial experience, on the other hand. The transition to the model of remote work has let companies, particularly those IT-oriented, attract specialists without any specific location restrictions. If there is no need to commute to the office every day, the search area of new employees is much bigger, and specialists themselves admit that, while choosing a new employer, they consider first and foremost a project rather than the location of the prospective workplace. This comprehensive transition of recruiting for the needs of the remote mode of work has substantially affected the speed of recruitment. Experienced candidates are more open for talks with new companies. These interviews do not engage them as much as the former recruitment processes which required from them their personal attendance. Additionally, what is obser vable in the Polish market is a growing interest in IT specialists from Eastern Europe, i.e. Ukraine or Belarus, and thanks to modern instruments for virtual work, working online is gaining in popularity.
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CAREER & DEVELOPMENT
Reskilling and upskilling apply to both hard professional competences and soft competences. It is also noteworthy that the best candidates in the market – specialist in their field – will be more likely to cooperate with organisations offering development programmes in their benefit portfolio.
Attracting and maintaining workers with rich experience comes with new challenges for an organisation, because it is necessary to adjust the offered remuneration and benefit packages to candidates with another profile. Organisations also have to take care of career development paths for seniors, proper training programmes and ambitious tasks which may engage them with the company for longer. Today, companies from the sector of modern services for business unceasingly vie for experienced workers, so the risk of worker turnover is high and provision of development opportunities in dynamically changing economic conditions is necessary. Talent is a significant determinant of competitiveness and access to human resources with key qualifications is a growth criterion for organisations. That is why companies which will want to return to the pre-Covid scope of business operations or enlarge it alongside the growth of the sector through hiring experienced workers will more and more frequently turn to advanced recruitment
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solutions such as the RPO (Recruitment Process Outsourcing). They will seek customised solutions which will help them minimise the fixed costs of recruitment and attract talents equipped with desired competences at a particular time. It goes without saying that with the right people at the right place entrepreneurs can reach their goals and gain competi tive advantage in the market. Another important trend for companies wishing to bounce back to the level of activity from before the pandemic is increased hiring flexibility. Ever more evidently, in the sector of modern services temporary work is becoming more and more attractive; it provides an opportunity to replenish resources when there is no certainty with regard to long-term plans, orders and possibilities of permanent employment from the start.
Provision of such opportunities and creation of career prospects by a company are strong factors in building the image of the company as a brand of choice – an essential element in the strategy of employer branding.
Competing for talents, as a trend, is going to stay for a while in the sector of modern services for business. Companies will strengthen their position if they have a transparent employer branding strategy and a good opinion in the market among candidates and workers alike. Therefore, from the perspective of an employer, it will be critical to take care of candidates’ experience as early as at the stage of recruiting, which means interviewing in the climate of partnership, giving feedback, acting efficiently and in due time, and editing a job offer in an interesting manner. Among issues that will matter Naturally, workers profiled as juniors still as well there will be: offered conditions constitute an important part of appointed of employment, customised benefits teams, but they need to have mentors and an individual approach to employee from whom they can learn – people development. Finally, last year proved that who already have the right experience candidates highly appreciate an employto take care of the effective manage- er’s flexibility and stability, too. ment of entrusted processes. Organisations may capitalise on solutions that Authors: prepare a worker for a new role or equip her with new, desired competences. These are found in reskilling/ upskilling programmes. Upskilling focuses on equipping a worker with more advanced skills, knowledge and experience related to Szymon Rudnicki, a particular job function – development Talent Solutions of a worker within a particular specialist Director field, handing over a larger scope of responsibilities. Reskilling, on the other hand, involves gaining new work skills, which is often connected with changing one’s professional profile. Thanks to reskilling and upskilling of competences Katarzyna it is possible to reduce deficiencies in Pączkowska, competences in the whole organisation Permanent Placement and, as a result, to provide for the staffing Director, Manpower needs of the company. Reskilling and upskilling apply to both hard professional competences and soft competences. It is also noteworthy that the best candidates in the market – specialist in their field – will be more likely to cooperate with organisations offering development programmes in their benefit portfolio.
Agnieszka Grzybowska, IT Recruitment Project Manager, Experis
Outsourcing&More | March–April 2021
HOME SWEET OFFICE! How will you nd a balance between home and ofce for your co-workers in 2021 and beyond? What are the future challenges, needs and opportunities you need to consider? Based on insights gained from a series of interviews with various professionals in Europe, we’ve studied this ongoing shift and considered what you can do to harness these changes. By doing so, we intend to encourage well-being and long-term individual and organizational growth – from ergonomics and working practices to interior furnishings.
Discover more and get ready to prepare – download the Kinnarps white paper „Redening the workplace” at kinnarps.pl
CAREER & DEVELOPMENT CASE STUDY
RPO – CUSTOMER SUPPORT TAILORED FOR CURRENT TIMES! The Recruitment Process Outsourcing service has been so far associated mainly with new investors on the market. However, is it true that RPO is dedicated only to big organizations entering Polish market? What about smaller companies that are in the growth phase? Is the recruitment process outsourcing service profitable for the client? ...WHAT IS RPO? Recruitment Process Outsourcing is a service of transferring responsibility for some or all the recruitment process to an external company. In the case of such processes, a dedicated external consultant or the entire project team becomes client's internal HR team. As part of the RPO, the client can expect a comprehensive HR service – from creating job descriptions, through estab lishing a search and selection strategy, to guiding the candidate through all planned stages of the recruitment pro cess, up to the onboarding of future employees. An extremely important aspect of the entire process is the standar dization and unification of the entire process. RPO team supporting the project works according to established rules and has the necessary knowledge about the client's company in order to communicate with candidates on the market with the highest efficiency.
...IS IT RIGHT TIME FOR RPO? The external supplier services are mainly used by companies that have a high demand of new employees. This solution
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is most often chosen by new investors on the market, companies in the phase of growth or intensive development. On the other hand, there is also a large group of organizations with many years of experience on the specific market that decide to implement the RPO service. Reasons for that might be for example lack of an internal recruiter or shortage of HR team staff. Decision to involve an external supplier is often made when there is no or little knowledge about the local labour market or lack of tools to efficiently carry out the process in a given sector. The RPO process can be introduced in the case of not only building structures from the scratch, but also volume employment in a short period of time or building a completely new team in existing structures. What’s more, it’s possible to use the RPO vendor team as a temporary in-house HR team – available upon request at fixed time slots. In this case, the team of the external supplier remains ready for the client, e.g. during the year, according to the calendar of new employees’ start dates, transfers of processes, etc.
…WHAT WILL I GAIN BY OUTSOURCING THE ENTIRE RECRUITMENT PROCESS? The biggest advantage of delegating the recruitment process to an external company is the comprehensiveness of the service – from creating a job description, through recruitment and selection to onboarding stage. An external company specialized in recruitment can also adapt flexible solutions and tools, according to the specifics of a given industry. Added value of the cooperation with the provider of such service is gaining unlimited access to expert knowledge. Thanks to expe rience and access to a wide database of candidates, the external supplier can significantly shorten time to hire and adjust the activities to the employment calendar. Employer branding activities carried out by the external supplier as part of the RPO service also deserve attention. These can be communication activities as part of the recruitment process, as well as large-scale outdoor campaigns. However, the most important impact of the RPO process on any organization will be the cost reduction and time savings, in combination with high level of effectiveness.
Outsourcing&More | March–April 2021
The RPO process can be introduced in the case of not only building structures from the scratch, but also volume employment in a short period of time or building a completely new team in existing structures.
...RPO IN PRACTICE CASE STUDY A Our Client was an American software company who decided to open a centre of excellence in southern part of Poland. In the first 12 months after launch, the company planned to hire over 200 people in the areas such as product support & development, finance, and administration. The employees not only had to be professionals in their fields, but also were required to speak foreign languages. Some of the challenges in attracting desired candidates were: • High volume in short period of time. As a new player on the market, with a new and empty office, the Client needed employees for all type of positions quickly. More than 200 FTEs were supposed to be recruited within short period of time (12 months). • Language skills. The company needed specialists in variety of fields, but also number of them was required to speak foreign languages in high demand – e.g. Dutch, German, French, Spanish and Portuguese. • Competitive environment. Location was one of the most attractive locations in Poland for IT investors, while at the same time there is a limited number of qualified professionals, as most of companies target similar candidate profiles. • Rare positions on the Polish market. Some of the positions that needed to be filled were unique on Polish market and required know how from abroad – there were serious limitations for employees with such a skill set. • New brand. Even though our Client is a big, international company, it has been just launching its’ office in Poland. For many people it was an unknown brand and therefore could be perceived as less attractive future employer.
Outsourcing&More | March–April 2021
Added value of the cooperation with the provider of such service is gaining unlimited access to expert knowledge. Thanks to experience and access to a wide database of candidates, the external supplier can significantly shorten time to hire and adjust the activities to the employment calendar.
CAREER & DEVELOPMENT CASE STUDY
EXAMPLES OF ACTIVITIES CARRIED OVER BY Cpl: • For a new employer, it was important to create brand awareness within the local market. Brainstorming sessions with Cpl’s dedicated project team and Client took place around recruitment marketing and talent acquisition strategy incl. creation of consistent messaging and an attractive Employer Value Proposition. • Dedicated on-site Cpl consultants were placed at Client’s office and were acting as a temporary Client’s employees. This helped to reduce time to hire and significantly improved communication and KPI/SLA’s performance.
centre. The project assumed to recruit a team of 30 people from the scratch. What was interesting in this project, the Client's brand is very well known on the Polish market, however on the IT job market, Client was unknown as potential employer of choice to the candidates. Therefore, the project required not only recruitment of IT structures in Poland, but also building awareness and creating the image of our client as an advanced technology company and a stable employer for IT candidates. An additional challenge was the 5-stages recruitment process carried out according to agreed schedule and company policies. Recruitment days were supposed to be
implemented, among others: dedicated campaigns on social networking sites, video presentations of our client, etc. Our consultants had the opportunity to speak during conferences and meet-ups in order to present our Client. It was also great opportunity for candidates’ attraction for the Client.
PROJECT RESULTED IN: • 27 accepted job offers • 93% of recommended candidates were invited to client’s meetings • shortening the duration of the recruitment process (from approx. 1.5 months to approx. 3 weeks) • strengthening the Client's position as an interesting employer for IT candidates on the Polish market
The RPO process can be used by any entrepreneur who is looking for employees – especially nowadays, when the acquisition and development of the best specialists often determines the success of organization on the market. • Our on-site experts were then supported with an on-going talent pipeline coming from Cpl offsite project team. • Cpl marketing team was delivering employer branding and recruitment marketing services both to the Client and our internal teams to boost the effectiveness of sourcing efforts, at the same time providing exceptional candidate experience. Employer branding activities included outdoor campaigns, targeted social media campaigns on Facebook and LinkedIn, company open days and other meetings dedicated to the candidates, as well as employee referral scheme.
THIS RPO PROJECT RESULTED IN: • 200+ placements in less than a year • reduced time to hire during the process • established brand recognition • set up of effective sourcing strategy
CASE STUDY B Our client was an international technology company from the e-commerce area established on Polish market. Client decided to build a completely new team within their structure: international IT
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When considering RPO as part of your recruitment strategy, there are several key benefits to consider: • cost reduction – including costs of tools such as candidate’s database, advertisements, dedicated campaigns on social media, as well as no requirement to maintain a permanent recruiter's headcount, scheduled no more than once a month, • access to a wide base of ready candi due to requirement of presence of people dates – supplier base as well as consul involved in the project, who came from tants' networks, several locations around the world and • time saving, whose schedules had to be agreed. Such • team rotation reduction – the external narrow recruitment process created company cares about the best match of candidates in the created team. the risk of candidates' resignation due to the dynamic market of IT candidates on the Polish market. As the above examples show, Recruitment Process Outsourcing is an advanced As a solution, we’ve offered to our client solution that comprehensively supports the Recruitment Process Outsourcing the company's development in service for which we’ve dedicated a team the current talent shortage. The RPO of recruitment consultants and a Project process can be used by any entrepreManager. Knowing the local market and neur who is looking for employees – espethe specifics of the process on the client's cially nowadays, when the acquisition and side, we have defined a timeframe for development of the best specialists often the project and weekly KPIs / SLAs plan determines the success of organization has been established. As part of the pro on the market. ject, we’ve also implemented operational reporting – daily, weekly and monthly Author: progress report for the Client. Taking responsibility for the efficient execution of the entire process, we’ve implemented and coordinated the entire plan of monthly recruitment days, consi dering needs and capabilities of the hiring managers. As part of a dedicated employer branding campaign, we’ve
Katarzyna Piotrowska, Senior Commercial Manager, Cpl Poland
Outsourcing&More | March–April 2021
Work With Us. Work The Future. Our customised & human-centred solutions are constantly evolving to the needs of you, our clients – for now, and for the future. www.cpl.com/pl
