Poland's Rise as a Nearshore and Offshore Location of Choice

Poland is quickly emerging as a leading location of choice for Business Process Outsourcing (BPO) and broader Global Business Services (GBS). Noted for its significant growth to become Eastern Europe’s third-largest economy and being officially classified as a developed market, it has increasingly won the attention of GBS/BPO buyers, operators and investors.

While countries like India, the Philippines and Malaysia remain dominant players, Poland is making a name for itself with its growing pool of skilled professionals, global connectivity and cost-effective GBS/ BPO and IT outsourcing (ITO) services.

Overview of Poland as a leading GBS/BPO destination

Putting context to Poland’s emergence as a GBS/BPO location of choice is its skilled and diverse talent pool. Every year the country produces over 2 million secondary school graduates, most of which enter tertiary education and eventually translate into Poland’s 297,368 annual university graduates. It comes as no surprise that around 44% of Poland’s youth carry a higher education qualification.

These graduate numbers sustain a strong talent pipeline for GBS/BPO operators looking for young, dynamic talent to deliver complex offshore services, such as customer lifecycle management, customer administration, data management, technical support and software development.

Moreover, Poland’s educated talent pool are multilingual, speaking a variety of European languages, including English. In fact, Poland ranks 16th out of 112 countries in the Education First English Proficiency Index. The adeptness of the youth population in English serves as a catalyst for GBS/BPO operators situated in Poland to cater for key English-speaking source markets, including the UK, North America and Australia.

Enabling this service delivery is Poland’s sophisticated ICT infrastructure and fixed broadband internet speed, settling on an average of 188.49 Mbps. As such, Poland is ranked 28th out of 188 countries in the Speedtest Global Index.

Despite exhibiting these high-income economy features, Poland has managed to maintain low operating and living costs. As a result, the country offers some of the most attractive salaries for GBS/BPO operations. For instance, global contact center operators can save between 48% and 74% (or 64% on average) on salaries when delivering customer experience (CX) services from Poland.

The significance of this is that Poland’s competitively priced talent is in close proximity to the rest of Europe and the UK. Consequently, GBS/BPO buyers and operators based in Poland have access to regional markets in the European Union (EU) with more than 500 million customers.

Additionally, Poland's central location within Europe provides easy travel options for international buyers, operators and investors seeking to access the region's offshoring resources. As such, major GBS/BPO operators have chosen Poland as a key delivery location to service not only the regional European market, but also global consumers.

These combining factors have earned Poland second place as the one of the Most Favored CX Offshore Delivery Points in the 2022 Ryan Strategic Advisory Front Office CX Omnibus Survey. The report gathered the responses of 668 global executives from key source markets on their view of the top destinations for CX outsourcing.

Since 2020, Poland has featured among the top five, which clearly illustrates the country’s prowess in GBS/BPO delivery.

Poland’s strengths in CX and back office services

Poland’s recognition as a favored CX location is reflected by the country’s strengths in a range of CX and back office services. In the GBS World Competitiveness Index, Poland achieved high rankings in global data management and digital contact center services. The index and rankings were drawn from extensive survey data from an annual global vertical industry demand survey conducted on behalf of GBS.World by Genesis Global Business Services.

Achieving a score of 6.19 out of 8, Poland is ranked second for the delivery of global data management services, where it was topped by traditional offshoring giant, India (6.27), by a 0.08 margin. Trailing Poland are other notable emerging locations, including Egypt (6.03), Estonia (5.94) and South Africa (5.87).

Again, Poland appeared among the top five locations for global digital contact center channel services, scoring 6.15 out of 8. In this category, Poland was narrowly edged by Egypt (6.27), India (6.31) and the Philippines (6.46).

Poland’s dominance in digital and ITO delivery

However, where Poland is a standout is in its digital and ITO capabilities, which is augmented by the country’s ICT talent pool of over 445,000 people, the largest in the Eastern European region. Sustaining and building this rich ICT talent pool are over 12,000 annual ICT graduates. Furthermore, Poland’s start-up visa allows it to draw some of the world’s finest ICT talent across its borders, further strengthening its talent pipeline.

Endorsing Poland’s ICT talent is an impressive array of global companies that have established research and development centers in the country, including Google, IBM, LG, Microsoft, Samsung and Siemens. Correspondingly, Poland is ranked among the top five global destinations for general ITO services, scoring 6.08 out of 8, beating Egypt (5.47) and Malaysia (5.47).

When compared to its regional peers in Eastern Europe, Poland is ranked as a high performer for general ITO services by a notable margin and ahead of Romania, Czechia, Ukraine, Belarus and Hungary.

Poland also clinched the top position for the global delivery of technical and helpdesk support services in the 2022 GBS World Competitiveness Index, trouncing traditional ITO juggernauts the Philippines (5.82) and India (5.65).

Regarded as one of the world’s havens for software development, Poland is also among the top five for the delivery of global software development services, in third place. In fact, Poland’s high software development rank is a reflection of the country’s reputation as a popular nearshore software development outsourcing location, supported by approximately 295,300 software developers working in over 63,000 software development businesses.

Gaming, a sub-category of software development, is becoming a national brand for Poland and is worth over €470 million. Notably, the country is home to several gaming giants, such as CD Projekt, PlayWay, 11 bit studios, and Ten Square Games.

However, there is ample room for improvement, especially in the country’s ICT workforce size. Currently there are 131 ICT students and 23 ICT graduates per 100,000 people, which is one of the lowest in the Eastern European region.

The future outlook

With ample opportunities for growth, due to factors such as its educated workforce, cost competitiveness and advanced technological infrastructure, it appears that Poland is well-positioned to continue its growth trajectory in nearshore and offshore service delivery. This, coupled with increased investments in research and development and government initiatives aimed at promoting foreign direct investment (FDI), positions Poland well in its quest to gain a greater share of the global business services market.

Author: Mark Angus, CEO of market research consultancy, Genesis Global Business Services and Founding Partner of The World Source Marketplace for Global Business Services (GBS.World)

This article comes from magazine:
FOCUS ON Business #8 January-February (1/2023)