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Continued growth, resilience and efficiency; these are the main characteristics of the business services sector in Hungary, the Hungarian investment promotion agency tells the Budapest Business Journal.
Over the past 20 years, there have been significant developments in the field of Business Service Centers (BSC), and Hungary has become one of the main international hubs for the sector in Central and Eastern Europe, according to HIPA .
The importance of the industry is underlined by the fact that currently 156 BSEs employ 70,446 people in Hungary. Based on the latest developments, the business services sector is one of the few segments that has experienced steady growth in times of crisis and hardship.
The industry has demonstrated a high level of maturity with resilient and flexible operations in a truly global services landscape while maintaining the ability to engage and retain talent and continuously attract new investment, even during COVID-19.
“Despite the pandemic, the Hungarian business services sector has performed exceptionally well and has remained one of the main industries in the Hungarian economy,” HIPA told BBJ.
“The attractiveness of the sector is reflected in the growth in the number of BSCs, the increase in staff and the continuous expansion of the scope of activities with high added value”, continues the agency.
The digital world and virtual value creation have become the “new normal” for the industry. This paradigm shift has highlighted that digital transformation is essential in the journey to next-generation BSCs, as these new technologies are transforming all business functions, including finance, HR, customer service, and others.
Telecommunications networks and connectivity are essential elements of a country’s ICT infrastructure to support online business activities. The importance of ensuring business continuity has increased and cost has become a less important factor in many business decisions.
BSCs are already developing digital capabilities through automation, advanced analytics and artificial intelligence, and this process has accelerated due to the COVID-19 pandemic. To remain competitive, BSCs still need to improve their skills, especially in digital technologies, warns HIPA.
The pandemic has forced BSCs to change their operating model and introduce new digital solutions and remote or hybrid work models to optimize operations. At the same time, COVID has also had a significant impact on how businesses perceive their human capital.
The emphasis is more on coaching and training, career development, supporting a better work-life balance and flexibility of workspaces and working hours. The training and development of employees will be the most important success factor, which is why investing in new skills and competences is of the highest priority.
Finding and retaining the right talent is essential for long-term success. The branding of the sector and the employer’s value proposition are also crucial to remain competitive in the job market.
Office culture is changing rapidly with the introduction of the hybrid operating model, which combines the physical space of a central office with working from home or remotely, emphasizes HIPA.
“Office owners are well prepared to meet space needs of all kinds and to offer office space of a wide variety of sizes, categories, designs and finishes. Feedback on working from home is mostly positive from the employee side, but it also gives companies additional opportunities to expand their business in Hungary and attract more talent, regardless of their location, ”says HIPA.
The investment promotion agency provides management consulting services to existing and potential investors, from planning to implementation and operational phases.
In the case of an investment resulting in the creation or expansion of a business service center, creating at least 50 new jobs in the countryside, a VIP non-refundable cash incentive may be provided by HIPA. Eligible costs are 24 months of staff costs of newly hired employees within three years.
New, more favorable regional aid rules will apply from 1 January 2022. On the basis of these, a VIP cash grant can be provided to establish and develop business service centers in the county of Pest up to 50% of eligible costs.
There are also different tools and mechanisms to support innovation and R&D activity in Hungary. HIPA can provide VIP non-refundable cash incentives for R&D projects in Budapest and the countryside. The objective is to strengthen the R&D activity of large companies and the creation or expansion of R&D competence centers in the country.
The Hungarian government also offers a VIP grant for employee training. The grant is available to investors creating at least 25 new jobs in business service activities. Funding is provided for internal and external training covering 50% of eligible training costs. The total amount of the subsidy may not exceed 5,000 euros per training participant and 2 million euros per training session, regardless of the location of the project.
This article first appeared in the print issue of the Budapest Business Journal on November 19, 2021.