BFSI sector in Łódź – success on solid ground

Nordea, Pekao, Commerzbank, PZU, Citi, Accenture, mBank, BFF... the list of local and global BFSI leaders that trust and grow together with Łódź goes on. And, quite frankly, it’s an extensive one. What encourages world-renowned corporations operating in an extremely competitive market to locate their hubs in the city? What exactly are the business ingredients convincing these companies to reinvest in Łódź year after year and thus commit their long-term future to this vibrant metropolis located in the heart of Poland?

Generally speaking, short and simple answers do not exist; however, if we are to look for the central reason behind Łódź’s continuous success with corporate clients, two words should do: human capital. Over the years, it’s proven to be the best and the most effective driver for the business service sector, and its holistic development is among the key activities undertaken by institutions supporting business development in the city of Łódź.

The “Business Services for the Financial Sector” report by the Office of Economic Development and International Co operation (Invest in Łódź) published in July is an excellent starting point for a closer scrutiny of the role played by human resources. According to city officials' estimates, Łódź has over 800,000 inhabitants and approximately 10% come from all around the world. Wave of refugees from war-torn Ukraine significantly contributed to an increase in this number over the last two years.

The increasingly international feel of Łódź is also reflected in its modern business services sector. Processes are delivered in several European languages – with English, German, French, Spanish, Italian, and Portuguese leading the way. More than 35,000 people are already working in the sector and around 10% of them come from abroad. Correlation with the number of foreigners within the general urban population clearly demonstrates that expats in Łódź are gradually warming to the idea of working in the modern business services sector.

This represents a clear signal for businesses that may consider recruitment campaigns on foreign markets, are based on the experience of several thousand people already working in their Łódź offices.

An appealing talent pool also translates to a constantly growing number of BSS investments in the city. The “FOCUS ON Łódź" report by Pro Progressio indicates that there were 8 brand new investments in 2022 and 4 brand new investors settled in Łódź in the opening three quarters of 2023. This means that more than 110 SSC/GBS/CoE centers are now based in Łódź and employment has increased by 100% over the past 7 years. Extraordinary growth remains at a high level despite a very demanding period, both geopolitically and socially. Łódź consistently ranks among the most cost-effective BSS locations in Poland which is a crucial contributing factor.

The numbers above prove that Łódź has gained the resilience typical of mature markets – and companies view this as an extremely important indicator. As a result, the city can both expect a certain level of new investments’ inflow as well as reinvestments by companies already present in the Łódź market. Report drawn up by Invest in Łódź together with Michael Page in 2022 confirms that the city’s investment climate is extremely favorable and conducive to such expectations. As many as 95% of respondents from companies with a BSS hub in the city said that choosing Łódź was the right move. Main reasons they pointed to included: convenient location, excellent talent pool with great knowledge of foreign languages, and a very robust academic base. That last element in particular – itself the result of an innovative education program and smart internship initiatives – is a clear sign that Łódź's success is based on sound and firm ground that allow room for optimism about the future.

Human capital – comprised of young and well-educated people – comes into play yet again here. Łódź has a lot to be proud of: there are 75,000 students at 19 city-based universities, with nearly 6,000 reading economics at the University of Lodz alone! More than 17,000 graduate every year, and this number includes over 4,000 business, finance, and law graduates, as well as close to 500 master degree holders in a whole host of language-related courses. Universities are constantly working to make their offer more appealing and adapt it to market requirements. Co-creating courses with Łódź-based employers is one way of doing it. This particular synergy resulted in courses such as "Modelling and Data Science" or "Automation and Robot Controlling", currently delivered by the Lodz University of Technology.

The same applies to internship programs and postgraduate courses, which are the result of many stakeholders coming together. The "Praktykuj w Łodzi" [Practice in Łódź] program is the crown jewel among them. Running for over a decade, it brings together hundreds of companies which have thus far offered nearly 3,000 internship positions to students and graduates of Łódź universities.

Postgraduate courses in fintech or AML are another result of this cross-sectoral cooperation. With a very hands-on, practical angle, these courses see market practitioners active in the Łódź business services sector share their knowledge in interactive workshops. These projects aim to strengthen the competences of current and future employees as well as boost the general appeal of working and doing business in Łódź for potential employees and employers.

Speaking of Łódź's appeal, we have to mention the excellent office infrastructure as well as projects aimed at im proving the quality of life of city dwellers. Łódź has successfully implemented a number of developments revitalizing the city center. Investments such as the Orientarium or EC1 Łódź – City of Culture play a double role, as they confirm the city’s commitment to improving the quality of life as well as add to what’s on offer in terms of culture and entertainment. Regarding office infrastructure, Łódź boasts over 630,000 m2 of office space with over 43,000 m2 of brand-new space being delivered in 2022 alone. The office real estate market was dominated by new tenants – accounting for nearly 60% of all new lease contracts – which is a testament to the fact that new investors show unwavering interest in Łódź. A case in point is one of the leading new office buildings delivered in 2022 being fully commercialized in that same year.

The modern business services sector in Łódź, including hubs delivering BFSI-related processes, can be described as a system of communicating vessels. Its foundations are very stable and robust – the mix of available foreign languages and competences is exceptionally rich; city stakeholders are working tirelessly to finetune the academic offer to cater to the market needs; and the number of domestic and global investors is well balanced. The future of the BSS sector in Łódź is definitely bright indeed.

This article comes from magazine:
FOCUS ON Business #13 November-December (6/2023)