A quarter of the companies surveyed in the PwC survey reported fluctuations of more than 20%.
Domestic service providers (SSCs) are increasingly moving from being centers and repetitive activities to being global business service providers, according to PwC’s research. About a quarter of the respondents plan a significant, strategic change in the virus situation, and 8% even plan to expand their responsibilities. The leaders of the Hungarian SSCs see the main challenges in terms of the best workforce, as half of the respondents are afraid of the precarious labor market situation.
For the fourth time, PwC prepared the global survey of the service center, as well as the experts of the consulting company. Hungary is a popular location for SSCs: in 2020, the sector employed approximately 64,000 people in 131 companies, which significantly increases the number of employees compared to 2016. In the 2020 sector inquiry, pandemics, digitization and HR were key.
Longer recruitment, higher turnover
According to the results of the survey, the biggest challenge for service centers is related to the workforce: half of the managers of Hungarian SSCs fear the precarious labor market situation and high fluctuations, and 42% fear increasing employee expectations.
It takes 7-8 weeks to recruit career starters in Hungary, but at the management level it takes longer than 4 months to select the right colleagues. The Hungarian results showed interesting dynamics in connection with the fluctuation: a quarter of the surveyed companies experienced more than 20% emigration per year, which means an increase compared to the Hungarian results of four years ago and this year’s global results.
“Companies have made almost significant changes in workers’ expectations and job preferences. Basic wages and flexibility are still important factors in choosing a job, but new factors have also been added to the list – especially security, the impact of a pandemic depending on permanence. Competition for talent encourages Hungarian SSCs to position themselves in the market as attractive employers, “said Péter Selmeci, Director of Strategic and Operational Advisory Services at PwC Hungary.
If we examine the incentives to keep the workforce, Hungarian responding companies related to the participants in the international survey offer a higher proportion of personal development and training programs to their employees. At home, however, it is rare to develop individual career paths, which are encouraged by half of the responding companies worldwide as users.
Automation and digitization
However, workforce challenges should not be addressed by increasing employee satisfaction. A PwC expert added:
“Our survey of SSCs is increasingly based on the standardization and digitization of processes. These alone cannot solve labor market challenges, reduce the need for human resources and the opportunity to prioritize more exciting tasks – and this offers to retain the workforce.”
Although digitization, standardization and automation have all become significant strategic goals among Hungarian respondents, there is still a long way to go to reach the global average. A good first step in improving efficiency can be the emergence of Employee Task Management (ETM) tools. ETM devices are based on digital footprint tracking, recording and analysis of usage data for each application. User data can be linked to the appropriate task or project, so user data can be mapped and analyzed with a single click.
In addition to ETM, there are a number of tools to improve the efficiency of SSCs.
According to Péter Selmeci, the use of RPA (robotic process automation) is almost mandatory for efficient operation. In addition to those technologies, SSCs are also beginning to find more complex solutions in the simple market: process mining and automation, chatbots, voice recognition or artificial intelligence – all of which are forward-looking solutions that will sooner or later reach Hungarian. Moreover, in addition to increasing efficiency, these tools turn employee energies into tasks with greater added value, thus rewarding the employee experience.
After Covid, even more activities can go to service centers
Digitization efforts have been intensified by the epidemic with the rise of the home office. The impact of the pandemic was closely related to the service center sector, showing significant differences: about a quarter of respondents had no significant change in the virus situation, and 8% even planned to expand their responsibilities, in line with the drive to provide global services.
“The epidemic situation has shown that teleworking does not completely hinder or slow down operations in Hungary, so it is possible that companies will relocate more activities to their headquarters. In the near future, all options are available, recruitment may extend to rural cities. his need can be another motivating factor for outsourcing tasks, “added Péter Selmeci.