Poland has risen to become the largest BPO market within the CEE region and one of the top locations in the global outsourcing market. Throughout the years, the country has become a highly attractive destination for foreign investors who seek economic stability and a favorable market for conducting business. Poland has been placed in Ernst & Young’s 2016 Top 10 most attractive European destinations for FDI, also ranking 1st in terms of outsourcing software development in Europe.
The Polish outsourcing industry has been growing in the past over 20 years at an annual growth of 20%. What is more, the country was placed 10th in the 2016 A.T. Kearney Global Services Location Index, as a result of a substantial improvement in compensation costs. The Business Services Sector has indeed become a catalyst for Poland’s economy. In the last decade, the country’s GDP per capita has almost doubled, and the growth rate is estimated to reach approximately 3% in 2017-2018.
Poland ranks 24th worldwide in terms of ease of doing business in the 2017 World Bank Group report. The country has a 40% investment market share, maintaining its leading position in the CEE region. In 2016, the total investment volume amounted to ca. 4.6 billion EUR.
Poland has Special Economic Zones (SEZ), areas within which the investors that have obtained a permit are exempted from the corporate income tax. However, not all activities benefit from this exemption – exclusions include, among others, activities requiring a licence or financial services.
R&D activities are financially supported, since they play an important role in Poland’s economic policy, and include a mix between both domestic incentives and those financed from EU funds. The R&D sector is the only one in which large-size companies can receive financing from EU funds. Moreover, the National Center for Research and Development also supports R&D activities. In the IT industry, some examples of R&D activities which can be funded are development of internet technologies, new methods of software design, new algorithms, research aiming at development on the level of operating systems, data management and others, according to ABSL (Association of Business Service Leaders).
Although Poland is not the least expensive in terms of outsourcing, companies that outsource software development to the region can save up to 50%. The Polish IT industry is, first of all, characterized by the superior quality of its services. The country has now become a regional leader in terms of IT outsourcing, with cities with a well developed IT infrastructure such as Warsaw, Krakow, Lodz, Katowice and Wroclaw. Moreover, major global ICT players established their R&D centers in Poland.
Around 5,000 IT specialists with excellent skills are annually employed in the industry. In 2016, the IT services market in Poland reached $7.9 billion, and approximately 140,000 IT professionals work in this sector in more than 450 outsourcing centres. Statistics also show that 200,000 IT jobs will be created by 2018. What is more, the fact that Poland currently ranks 5th globally in a ranking published by Topcoder – a crowdsourcing platform which consists of more than one million of the world’s top developers, designers, algorithmists and data scientists – is another demonstration of the country’s acknowledged leadership in the IT sector.
The Polish productive workforce has allowed the country to maximize opportunities in the services industry. Business services centers have approximately 212,000 employees, out of which 177,000 are in foreign centers and 35,000 in Polish centers, according to a 2016 study released by ABSL. What is more, the number of jobs is forecasted to reach 300,000 in 2020. Most jobs come from SSC (shared services centers), followed by IT centers, outsourcing centers and R&D centers.
IT and R&D specialists receive the highest income, alongside experts in the area of purchasing and employees responsible for settling the general ledger, according to the same ABSL report. For example, a software developer in Poland with 3 years experience can receive on average a gross salary of 1860 EUR per month, while a Quality Engineer with 2-4 years experience may earn approximately 1630 EUR per month.
Nonetheless, salaries also depend on the fluency in a foreign language. Specialists who speak German or Nordic languages are paid with 350 EUR higher than the ones who only master the English language. Fresh graduates applying for entry-level positions usually receive salaries 20-30% less than those who have more experience.
Poland’s educational performance has certainly remained solid over the last years, starting with its constant preoccupation with reducing the number of early school leavers to 5.3%, one of the lowest percentages in EU (European average is 11%). What is more, 93% of Polish students learn at least one foreign language as part of a mandatory language program, which greatly improves their communication abilities later on in their career. The most frequently learned language in Polish educational institutions is English, followed by German.
Moreover, 10% of all EU university graduates come from Poland each year, out of which 40.000 are ICT students.
With its pool of talented employees with a first class education, strong communication skills, and relatively low prices, Poland definitely has chances of maintaining its positions as both a regional and global player, being established as one of the most favorable IT outsourcing locations.