BUSINESS SERVICES SECTOR IN THE CZECH … CR_en_e-publish_4.pdf · Profile of the business services sector in the Czech Republic 9 ... IT outsourcing ITO and ... 12 Business services

BUSINESS SERVICES SECTOR IN THE CZECH REPUBLIC

2016

Report prepared by the Association of Business Service Leaders (ABSL)

in cooperation with:Grafton Recruitment, Jones Lang LaSalle, PwC, CzechInvest

Project Coordinator :

Darie Zmátlíková, Operations Manager, ABSL

e-mail: [email protected]

Authors of the Report:Ota Kulhánek, Accenture Services & Jonathan Appleton, ABSL | Chapter 1

Kevin Turpin & Jana Krajčíková, Jones Lang LaSalle | Chapter 2

Martin Ježek, Grafton Recruitment | Chapters 3, 4

Karel Kučera & Lucie Polášková, CzechInvest | Chapter 5

Mike Jennings & Adam Jamiol, PwC | Chapter 6

Chief editor and proofing: Jonathan Appleton, ABSL

Graphic layout and typesetting: www.copygeneral.cz

® ABSL 2016 All copyrights in this work are the property of ABSL. Unless otherwise stated by the relevant provisions of law, any use, reproduction, duplication, modification, adaptation or retransmission of this work, in whole or in part, in any manner, without the prior written consent of the copyright holder, is a violation of copyright law.

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Table of Contents

Introduction 5

1. Profile of the business services sector in the Czech Republic

9

About the report 10

Structure of the business service sector in the CR 15

Range of services the business service sector in the CR 20

Development of the business service sector in the CR 24

Human capital in the business service sector in the CR 30

2. Office market 37

3. Labor market 47

4. Salaries in business services 57

5. Investment incentives 61

6. Global services market trends and forecast 67

Table of Contents

5Business services sector in the Czech Republic 5

I am proud to introduce the third ABSL report. It presents the development of the Business Service Sector in the Czech Republic and I believe it shows the very successful story of one of the key industrial sectors in the Czech Republic. Overall we calculate that the business services sector creates around $3 billion in revenues or 75 billion Czech crowns and represents 1.5% of the Czech Republic GDP. The sector employs about 65.000 people in more than 180 centers. These are impressive statistics but even more important than the size of the industry is the growth. In the last year we have seen average growth of 15% per year and the demand for new centers is still high. We see continuing high interest of international investors in the Czech Republic and all our existing centers expect further expansion in their scope, as well as their employee numbers.

The other important trend we see is the change of the scope of services. While previously the centers were focusing on the centralization of the individual business processes, today most of them have become innovation centers, focusing on improvements and process optimization. With the development of new IT technologies, for example, we see a broad application of automation and robotics in many areas of our operations. Employees of the centers therefore no longer need to perform routine activities, but are solving tasks with greater added value. It is in this area, that we see great potential and opportunities for development in future years.

In the following chapters you will learn about the current profile and status of the sector, as well as some of the newest trends for the business service sector in the Czech Republic. The centers need two important elements for their existence – good people and the right office space. You will find more detailed insights in the relevant chapters that were provided by our strategic partners. The Chapter about labor market was provided by Grafton and chapter about the office market by JLL. I would also like to thank to CzechInvest for contributing to the report with the information about the Czech Republic and Incentive Structure.

One of the challenges we are facing is the correct terminology for this dynamic sector. Traditionally in the Czech environment and language, everything that belongs to the centralized Business services is called Shared Services. You will notice that we intentionally tried to avoid this term in our report and always use the term Business Services to reflect our members broad activities in Business Process Outsourcing BPO, Shared Services SSC, IT outsourcing ITO and research and development centres R&D.

I hope you will find the data and information published in this publication useful and relevant for your business needs.

Introduction

Ota Kulhánek President of ABSL

Introduction

6 Business services sector in the Czech Republic

ABSL Czech Republic. From strength to strength.

I am delighted that our ABSL Czech membership has grown by over 30% in 2015 to over 50 members. A significant part of this growth is members from the Pharma, logistics and IT/ digital technology sectors. This reflects the increasing demand and investment in these sectors across the Czech market today.

Our member companies now represent over 15,000 employees and many of the largest business services employers in the country. Our members are telling us that ABSL adds value to their firms by providing them with the following benefits:

» Access to our huge ABSL network and knowledge they can share with leaders of Czech and international business service centres

» Best practices from benchmarking studies, sector reports, conferences and workshops

» Opportunities to influence and change the Czech business environment to drive the growth of their business

As this years report clearly shows, our members are growing – in size and complexity. ABSL is growing with them and together, we will achieve our strategy to keep Czech Business Services at the forefront of the sector in CEE and Globally. Our future plans for ABSL 2016 include :

» The launch of the ABSL HR Club which provides HR leaders in our sector with professional insights and issues regarding recruitment, talent retention and development, employee remuneration.

» The launch of the ABSL Awards programme to recognize best practices and promote Czech service centres for their innovations and great working practices.

» The introduction of the ABSL Academy to promote the development of talent within the services sector and provide common learning solutions to attract and develop talent in business services.

» ABSL board members will keep supporting growth of our members by improving mutual cooperation with governmental, regional and educational bodies across the country.

We have achieved a great deal together in 2015 - and laid strong foundations for the future. I would like to thank all of our members and sponsors for their efforts this year and we look forward to building on our achievements in 2016

Jonathan Appleton ABSL Managing Director

Introduction

7Business services sector in the Czech Republic

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52

founded in 2013 by 15 members *

?ABSL growth

Introduction

* Founding members:

ACCA Gardner Denver CZ + SK ZEBRA Technologies

Accenture Services Infosys BPO PPG Industries Czech Republic

ČEZ Korporátní služby JNJ Global Business Services PricewaterhouseCoopers Česká republika

DHL Express (Czech Republic) MANN + HUMMEL Service Process Solutions

Edwards Services Monster Worldwide CZ Siemens

8 Business services sector in the Czech RepublicIntroduction

9Business services sector in the Czech Republic9

1 | Profile of the business services sector in the Czech Republic

The local market data for the business services sector shows that the Czech Republic is one of the key target destinations for the business service centers in Europe. International and local investors recognize the Czech Republic for the availability of a well qualified workforce with very good coverage of foreign languages. They also find here good infrastructure and competitive costs as well as political and economic stability. Another important aspect that influences investor decisions is our cultural and geographical proximity within Europe, as the majority of the services provided by the centers target end customers who are located in Europe.

Chapter Content Provider: ABSL


About the report The purpose of this Chapter is to provide a comprehensive profile of the business centers in the Czech Republic. The important source of the data and information that are published in this report was the survey conducted by ABSL among the business service centers that operate in the Czech Republic. The survey has been completed by 33 respondents representing investors from 15 countries and employing 12.000 people. The data and information collected through the survey enhances the ABSL database on the sector and provides the statistical study published in this report.

33 the number of companies that took part in this year’s ABSL survey

12 000 the number of people employed by respondents of the ABSL research in the business service centers in the Czech Republic

The Chapter is divided into five parts. The first part provides summary information about the business services sector in the Czech Republic. A broad definition of the industry has been adopted here where business services centers are typically internal units on mother companies (SSC), companies providing business process outsourcing (BPO) and IT outsourcing (ITO) as well as research and development centers (R&D). The following part present the structure of the sector in terms of the size and future potential growth, geographical spread in the country and investors information. The third part describes the range of services that are provided by the centers as well as what industries and geographies are supported from the Czech Republic. The next Chapter is especially interesting as it shows the development of the sector and captures also the trends and directions of the industry. The last part of the chapter present the current structure of employment including benefits and training typically provided by the centers.

Profile of the business services sector in the Czech Republic


65.000 employment in the business services sector

180+the number of business service centers

30%employment growth in the sector during last two years

361average number of employees in the business service centers

$3bannual revenue generated by the business services sector which is 1.5% of the total Czech GDP

5%employment of Czech workforce in 25-30 age group in in the business services sector

100.000 projected employment in the sector by the year 2020

SUMMARY INFORMATION OF THE BUSINESS SERVICE SECTOR IN THE CR

Table 1Size of the Business Services Sector in the Czech Republic that includes SSCs, BPOs, ITOs and R&Ds

Profile of the business services sector in the Czech Republic11Business services sector in the Czech Republic

12 Business services sector in the Czech Republic12 Business services sector in the Czech Republic

LiberecÚstí nad Labem

RakovníkRoztoky u Prahy

Plzeň

Písek

České Budějovice

Praha

Johnson Controls

ADP Aimtec

HayGroupKerio

PDM TechnologySony DADC

Czech Cloud Cluster

E.ONUniCredit Bank

Procter&Gamble

AtentoLaird Technologies

Prah

a

Accenture ServicesAdobe

ADPAmazon

Anheuser-Busch InBevAriba

Atento

AXA Assistance

Barclays

Blue-Infinity

BlueLinkBodycote

CA TechnologiesCarrier

CDK Global Clearstream / Deutsche Borse

CleverlanceComdata

CommerzbankCovidien

CSCDHL

eBayEDITEL

Edwards Lifesciences EPAMESET

ExxonMobil Google

GTSHayGroupHoneywell

Hewlett PackardICON

ICZIntel

International SOS Interoute

J&T ServicesJarden BSG

Johnson&JohnsonKomerční banka

LUKOILMallinckrodt

MicrosoftMonster Worldwide

NESSNNIT

NovartisNovellOracle

PanalpinaPfizer

Process Solutions

Regus Business CentreSAP BSCE

ScanserviceSiemens

SITASkype

T SystemsTesco

TMF GroupUniCredit Bank

Xerox


Table 2List of centers in the Czech republic

13Business services sector in the Czech Republic 13Business services sector in the Czech Republic

Hradec Králové

Pardubice

Okříšky u Jihlavy Brno

Olomouc

Ostrava

Eaton

Kingspan

Foxconn NonStop Recruitment

MANN + HUMMEL

ABBAcer

AT&TAtento

AVGCGI

Cleverlance

Deloitte

Dixons Retail

Edwards Services

EmbedIT

FaboryFEI

FNZGardner Denver

Home Credit IBM

ICONIMI NorgrenInfosys BPO

John Crane SigmaKBC Group

Lear CorporationLufthansa in Touch

MediClinicMonster Worldwide

NetSuitePixmania

PPG IndustriesRed Hat

Seznam.czYsoft

ZEBRA Technologies

EXL ServiceHoneywell

ICON John Crane Sigma

AXA AssistanceComdata

ČEZ Korporátní službyDHL

GE Money Genpact

O2OKIN GROUP

RWESiemens

StoraEnsoTieto

Xerox

Rozt

oky

u Pr

ahy

Member of ABSL



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Praha

Brno

Ostrava

Plzeň

48%

21%

22%

Figure 1Share of individual business service locations in overall employment / in # of centers

100% = 12.000people

4%4%

1% 1%

0,5%

Structure of the business services sector in the CR

Currently there are more than 180 business service centers in the Czech Republic. The centers are located in the country in three main hubs: Praha, Brno and Ostrava. These three locations cover about 90% of the market. The other popular locations are Olomouc, Pardubice and Plzen with 5% of the share. The rest of the centers are spread in the country in many locations very often connected to other business activities of their mother companies such as production plants, logistic centers, etc.

Share of locations

10% 20% 30% 40% 50%0

Praha

Brno

Ostrava

Plzeň

Pardubice

Olomouc

Liberec

Hradec Králové

Ústí nad Labem

České Budějovice

Other cities

48,3%

22%

21%

3,7%

0,8%

0,5%

0,4%

0,1%

0%

3,1%

0%

Pardubice

Olomouc

Liberec

Other cities



The typical business service center in the Czech Republic on average employs 362 employees. This number has not changed in the last two years, as the growth of the existing centers is covered with the small number of employees in newly opened centers. Almost half of the centers (46%) are centers with up to 200 employees. According to the ABSL study 10% of centers have more than 1000 employees.

Figure 2Employment growth in business service centers in CR

Figure 3Size of the centers according to the number of employees

100% = 33 centers

46%

36%

18%

> to 200 employees

200-500 employees

< than 500 employees

362average employment in all centers

0

20,000

40,000

60,000

80,000

100,000

120,000

In the last two years the employment in the sector in the Czech Republic has increased by 30% from 50.000 in 2013 to 65.000 employees in 2015. The growth was driven by establishing new centers as well as by the growth of existing centers. We estimate that the sector will continue growing also in the next years and reach employment of 100.000 employees in the next 4-5 years.


2013 2014 2015 2020

50.000 55.000 60.500

97.500


> to 200 employees

200-500 employees

< than 500 employees

The biggest share of the investment in the Czech modern business service sector comes traditionally from US companies. German companies remain the largest European investors in service center numbers and employees. Other European countries follow with growing demand for near shore operations from across Western Europe.

Figure 4Structure of employment in business service centers by industries of their parent company

USA

Germany

Switzerland

Belgium

Czech Republic

Ireland

UK

Other

30%

12%

6%

6%

6%

24%

Figure 5Structure of business service centers by parent company headquarter location

24% Industrial & Consumer Goods

Technology & Telecom

Business and Professional Services (incl. BPO)

Health Care

Energy, Utilities and Basis Materials

Consumer Services (incl. Media, Retail, Travel & Leisure)

Banking, Insurance, Financial Services (BIFS)

Other

24%

21%

15%

21%

12%

9%9%

6%9%

100% = 33companies



Figure 6Employment business service centers by parent company headquarter location

37%

21%

13%

7%

6%

4%2%

4%

3%

3%

USA

Germany

Ireland

Italy

Belgium

Czech Republic

India

Switzerland

Austria

Other

What we understand as a Business Services Center is an organizational unit responsible for the execution of specific tasks supporting the core activity of the company e.g. Finance & Accounting, IT support, Sourcing & Procurement, Human Resources and others. Such centers exist as captive centers being separate legal entities or just organizational units of the mother company. In terms of centers ran by BPO providers their Delivery Centers render various types of centralized services for multiple 3rd party clients. In the Czech Republic the great majority (around 80%) are captive Shared Services Centers. BPO providers have a higher share of employment because typically they employ a higher number of people and serve multiple clients. The survey also shows that the hybrid centers (centers that serve their mother company as well as 3rd party clients) cover the widest range of services while the BPO are more specialized on specific areas.



Internal unit / captive Service Center

Commercial provider / outsourcing Service Center

Hybrid model (both internal and external clients)

82%

12%6%

Figure 7The organizational structure of the sector by number of business service centers

59%24%

17%

Internal unit / captive Service Center



Figure 8The organizational structure of the sector by employment

More than half of the service centers benefit or have benefited from the public support in the past. The most used support is EU grants for training and employment and also government grants.

100% = 33 centers

Figure 9Public support used by business service centers

10% 20% 30% 40% 50%0

46%

Share of centers

Other public grants

Tax exemptions within Special Economic Zone (SSE)

EU training grants

EU employment grants

Company did not use / do not use the public support

Local tax exemptions

Government grants

27%

24%

21%

3%

3%

0%60% 70% 80% 90%



Share of companies

Range of services the business service sector in the CR

Czech business service centers support a diverse range of global industries. The Figure 10 shows that most centers are found in Technology & Telecom plus Industrial & Consumer Goods. Both industries are supported by more than 30% of the Czech centers and health care is a fast growing industry for new investors in the country.

Figure 10Industry structure of companies supported by business service centers *Mining, Logistics and Freight Forwarding

Czech business service centers support a wide range of services. The majority of them support several type of business services and on average the centers provide a minimum of 3 types of business services.

As in previous years, Finance and Accounting services are still the largest. More than 75% of the centers report they have F&A scope which represent almost one third of employees. However, the overall share of F&A in terms of employment is going down on previous years, while newer service areas such as Customers Operations, IT and HR are rapidly on the increase across Czech centers.

10% 20% 30% 40% 50% 60% 70% 80% 90%0

Other (please specify)*

Public Sector

Energy, Utilities and Basis Materials

Business and Professional Services

Consumer Services (incl. Media, Retail, Travel & Leisure)

18%


18%

Health Care 24%

Industrial & Consumer Goods 30%

Technology & Telecom 33%

15%

15%

3%

21%



Finance & Accounting (F&A)

Customer Operations

IT Services (incl. software development)

HR

Other services

Supply Chain Management


Figure 11The structure of employment in business service centers by categories of supported processes

Figure 12The structure of categories of supported processes in business service centers

21%13%

9%6%

13%

32%

4%

Finance & Accounting (F&A)

Customer Operations

HR

Other services

IT Services (incl. software development)

Supply Chain Management


Share of centers

10% 20% 30% 40% 50% 60% 70% 80% 90%0

42%

58%

76%

33%

33%

52%

18%

3average number of business processes supported by the business service centers



Figure 13The structure of individual business processes supported in business service centers* Technical Drawings for Manufacturing, Fleet management; Facility management, Logistics, Quality, Compliance & Fraud prevention


10% 20% 30% 50%40% 60% 70% 80% 100%0

Business Transformation

Project Management

IT - Other IT services

IT - Automatization / Optimization of Service Delivery (cost, quality)

IT - Enabling Services

IT - Request Fulfillment / process execution (BPO)

IT - Information Security

IT - Infrastructure Management / Support

IT - Application Lifecycle Management (incl. software development)

IT - User support / Service Desk

Knowledge Management

Customer Operation - Customer Helpdesk

Customer Operation - Fulfillment

Customer Operation - Sales & Account Mgmt Support

Operational Marketing

Document Management

HR - Administration & Reporting

HR - Compensation & Benefits

HR - Payroll

HR - Mobility

HR - Talent Management

HR - Recruitment

Operational Procurement

Strategic Procurement

F&A - Billing

F&A - Master Data Management

F&A - Treasury

F&A - Business Controlling

F&A - Travel & Expenses

F&A - Accounts Payable

F&A - Accounts Receivable

Other Processes * 33%

Professional Services 6%

Insurance Processes 9%

Banking Specific Processes 9%

Supply Chain Managemen 12%

24%

27%

15%

24%

12%

6%

12%

24%

18%

46%

15%

46%

6%

36%

15%

27%

39%

30%

36%

21%

18%

21%

33%

9%

27%

64%

36%

39%

76%

64%

76%

82%

90%

F&A - General Ledger & Reporting


Figure 14Average number of processes covered by business service centers according to their organizational model

11average number of processes supported by the business service centers

5

10

15

20

0Internal unit / captive

Service Center

11


18


9

Number of processes covered

85%

Western Europe

76%CEE (excl. Czech Republic)

76%

Asia Pacific

30%

42%

North America

Middle East & Africa

33%

15%

South America

Czech Republic

Figure 15Geographical structure / range

91%of centers support more than 1 country



20

40

0

60

Figure 16Share of grow companies

21%

< 200

17%

200-500

16%

> 500

17%

Total

Development of the business service sector in the CR

85%of the surveyed companies have increased the range of provided processes in the past 3 years (87% of companies with fewer than 200 employees, 75% with 200-500 employees and all companies that employ more than 500 employees.

91%of the surveyed companies in past three years have increased the degree of sophistication of provided processes: in 58% of companies it has increased significantly and in 33% insignificantly. Advanced processes have increased in all companies employing more than 500 employees, in 83% of companies employing 200-500 employees and in 93% of companies with fewer number of employees than 200 employees.

85%of service centers predict an increase in employment through the end of 2016 on average of 17%. All companies employing more than 500 employees (100%) and operating in either commercial or hybrid model plan the growth.

17%average expected employment growth in business service centers



Percentage of companies

that predict an increase in

employment by the end of 2016

Average projected

employment growth

Total 85% 17%

Centers with less than 200 employees 73% 21%

Centers with 200-500 employees 92% 17%

Centers with 200-500 employees 100% 16%

Centers with more than 500 employees 100% 24%

Commercial providers 100% 10%

Hybrid model (internal and external clients) 81% 15%

Table 3Forecast for the employment growth by the end of 2016

20

40

80

100

0

60

85%of business service centers expect to grow in the next 2 years

73%

< 200

92%

200-500

100%

> 500

85%

Total


Figure 17Share of grow of employees


Global restructuring plans

47%58%67%55%

External demand increase

40%33%40%39%

Figure 18Stage of development of business service centers

64% of the business service centers plan to expand their business activities in the next two years. The more people employed in a service center, the higher the likelihood that the center plans to increase their activities. Further expansion is planned by 83% of companies employing more than 500 employees, by 75% of companies with 200-500 employees and by 60% of companies with less than 200 employees. Business expansion has been planned by all companies with hybrid operation models followed by 75% of the commercial providers (75%) and 67% of the internal units / captive centers.

The expansion is mostly driven by global restructuring plans (55%) followed by increased external demand (39%). 30% of companies are expect to build the new business areas and 21% of companies expect that the expansion will be driven by new acquisitions.

Figure 19Key drivers for employment growth in business service centers by employment range

10% 20% 30% 40% 50% 60% 70% 80% 90%0 100%

Rookie (Design and initial implementation in place)

Developing (Some processes transferred, majority of processes not standardized)

Advanced (Centralization completed as planned, processes standardized, continous improvement in place)

Business Partner (Optimization and Automation across organization, Business Outcomes focus & Partnership with clients)

0%27%58%15%

Total

0%17%33%50%

> 500

0%0%

83%17%

200-500

0%53%47%

0%

< 200

10% 20% 30% 40% 50% 60% 70% 80% 90%0 100%

< 200

200-500

> 500

Total

Share of employment growth


Acquisition13%25%33%21%

New business areas

27%25%50%30%


New business areas30%

0%30%50%

Acquisition

26%0%0%

21%

Figure 20Key drivers for employment growth in business service centers by organizational model

Figure 21Plans for expansion of business activities by employment range

Share of plans for expansion

10% 20% 30% 40% 50% 60% 70% 80% 90%0 100%

Total

Commercial provider

Hybrid model (internal and external clients)

Internal unit / captive center

Share of employment growth

10% 20% 30% 40% 50% 60% 70% 80% 90%0

No plans to change current activities

12%20%

8%0%

Reduction of activities

15%27%

8%0%

Expansion of activities – same activities, new customers

15%60%58%33%

Expansion of activities – new activities, new customers

61%60%40%83%

100%

Total

< 200

200-500

> 500

Expansion of activities – new activities, same customers

64%53%75%67%

Stabilization and optimization of current activities

70%87%58%50%


External demand increase

30%50%

100%39%

Global restructuring plans59%

0%100%

55%


10% 20% 30% 40% 50% 60% 70% 80% 90%0

No plans to change current activities

12%15%

0%0%

Reduction of activities

15%19%

0%0%

Expansion of activities – same activities, new customers

55%56%

0%75%

Expansion of activities – new activities, new customers

61%56%

100%75%

100%

Total

Internal unit / captive centers

Hybrid model (internal and external clients)

Commercial providers

Expansion of activities – new activities, same customers

64%67%50%50%

Stabilization and optimization of current activities

70%74%50%50%

Figure 22Plans for expansion of business activities by organizational model

Share of centers

Figure 23Ownership of the processes supported by the business service centers by employment range

10% 20% 30% 40% 50% 60% 70% 80% 90%0

< 200

100%

All decisions of process changes are made within retained organization

We do not own any processes in our scope, however opinions and suggestions of SSC regarding process changes are an important input for process owners

We have full ownership of some processes in our scope and have decision power to modify them. Other processes are owned by retained organization

We have full ownership of all processes in our scope and we have decision power to modify them

200-500

> 500

Total



Figure 24Level of process automation in business service centers by employment range

Figure 25Pricing models used by business service centers

Share of pricing models

10% 20% 30% 40% 50% 60% 70% 80% 90%0

Automation is part of the process (complex macros &

script, low end robotics)

100%

No automation of the process

Advanced automation (advanced robotics)

Limited automation (small macros, etc.)

<200

200-500

500<

Total

67%50%17%52%

40%50%

100%55%

Share of centers

0%0%0%0%

0%17%17%

9%

10% 20% 30% 40% 50% 60% 70% 80% 90%0

Time & Material (Cost-Plus)

100%

FTE based (rate card)

Transaction based

Fixed Price

Revenue based

Output based

Demand based

Benefit based

Other

49%

42%

42%

15%

12%

9%

3%

0%

6%



Human capital in the business service sector in the CR

The Business service centers in the Czech Republic deliver services globally to almost all geographies. The majority of the services are being delivered to European countries, North America and Middle East. This creates a high requirement for knowledge of foreign languages in the business service centers. In order to support 31 languages, almost all centers employ a proportion of foreigners. The average share of foreigners in the Czech centers is 34%.

Czech

Germ

an

Polish

French

Dutch

Russian

Italia

n

Slovak

Hungarian

Spanish

Roman

ian

Swedish

Portugues

e

FinnishNorw

egian

Danish

Bulgarian

Ukrain

ian

Greek

Arabic

Turk

ish

Hebre

wJa

panes

e

Serbian

IndianBela

rusia

n

Flamish

Chinese

Lithuan

ian

Share of centers

Figure 26Languages supported in business service centers

Croat

ian

10%

20%

30%

40%

50%

60%

70%

80%

90%

0

100%

English

31The number of languages used in business service centers



19the largest number of languages used by one business service center

9average number of languages used in business service centers

36%of business service centers use more than 10 languages

76%of business service centers use more than 5 languages

80%the maximum share of foreigners in one business service center

34%average share of foreigners among all employees in business service centers

97%of business service centers employ foreigners

85%of business service centers employ at least 10% of foreign employees

Table 4Structure of supported languages and employment of foreigners in business service centres



27%

Figure 27Levels of education of employees in business service centers

Subsidizing language courses

Sports entertainment

Benefit card (or other of that kind)

Life insurance

Subsidizing (postgraduate) studies or other professional courses

Leasure trips / activities

Service Center-provided mobile phone for personal use

Preferential share purchase options

Medical pack

Child care / infant care subsidies; Service Center kindergarten

Additional health insurance (other than a medical pack)

We do not offer any social benefits

Other

Figure 28Non-wage benefits offered by business service centers

Share of centers

Secondary School (or equivalent)

Master/Bachelor Degree (or equivalent)

Post graduate/Professional Cert. (ACCA, CIMA, MBA, ITIL, etc.)

68%

5%

10% 20% 30% 40% 50% 60% 70% 80% 90%0 100%

Pension fund

73%

61%

61%

49%

52%

46%

39%

33%

21%

18%

12%

12%

6%

36%

49%centers use cafeteria system



10% 20% 30% 40% 50% 60% 70% 80% 90%0

Induction / Introduction 94%

Soft skills incl. social communication, emotional Intelligence

88%

Language competencies incl. certifications 58%

Manager coaching 52%

Other professional trainings 49%

Financial e.g. CIMA, CIA, ACCA, CFA, etc. 49%

Time management 46%

Project Management e.g. PMP, Agile, Scrum, etc.

36%

Computer & Internet Technology e.g. CISA, ITIL, etc.

36%

Business Analysis e.g. 6 Sigma, CBAP, etc. 33%

Supply Chain e.g. APICS 6%

Other 15%

Figure 29Training offered to employees by business service centers

Share of centers

Employees of Czech service centers are well educated and over two thirds have a first University degree or Masters. The share of employees directly from high school is consistent with previous years and represents 27% of services employees. Continuing professional development or CPD is a growing trend in the business services sector and 5% of employees have or are studying for a postgraduate qualification. See fig 27. The importance of continuous investment in education is seen in fig 28 with the majority of centers providing additional language courses and nearly 50% investing in postgraduate or professional qualifications for their talent pool.

Training and education has become a key strategic tool for business services to attract, retain and develop the talent force that centers require as they ‘move up the value curve’ to deliver higher end reporting, analytical and front end services. Our survey shows that almost all business centers are providing induction training for new recruits see fig 29 and the vast majority have educational programs to develop the key business skills for leading teams, managing workloads and delivering complex projects.

An increasing number of Czech centers are investing in professional financial qualifications such as ACCA, together with recognized certification in project management, lean six sigma and leading IT certificates. This is clear evidence of the move within Czech business services to higher level, professional services requiring business centers to adopt sophisticated learning strategies and provide employees with international development options and qualifications.



Availability of talent pool / highly qualified staff

City accessibility (airport, trains)

The quality of public transport in the city

Availability of modern office space

Cooperation with local authorities

Image of the city (in the opinion

of investors)

Figure 30Average scores from business service centers representatives pertaining to selected features of local markets in which the centers operate

6.76average rating of completion between business service centers in local markets

6,76

7,946,19

8,85

8,33

8,15

1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0


In the survey the leaders of Czech business service centers were asked for their opinion on the characteristic of the local market as a place for business. In the case of companies with centers in several cities, generally the respondents referred to the market in which they employed the majority of employees. The following aspects have been rated most positively: availability of modern office, the image of the city (in the opinion of investors and the quality of public transport (all were rated above 8 on a scale 1 to 10) as well as the city accessibility (average score 7.94). Investors are satisfied with the conditions of functioning that individual locations offer them. In general the average rating of the competition between business service centers in local markets was rated on 6.76 (on a scale 1 to 10).


Brno, the Czech Republic’s second biggest city, lies at the heart of the South Moravian Region. It borders Austria and Slovakia and it is strategically placed among Prague, Vienna and Bratislava. Brno is a constantly developing metropolis which many times in its history has proven to have something to offer the world. So internationally renowned were its local textiles, that Brno was called the “Moravian Manchester” in the 18th and 19th centuries. Later, it became one of the great engineering powers, created the largest exhibition centre in Central Europe and founded a respected technical university. It was in Brno that Gregor Johann Mendel came up with his laws of genetics, Viktor Kaplan invented his turbine, Kurt Gödel began his logical reasoning and Leos Janacek started his musical pilgrimage.

Brno is a city with great potential. A number of universities with more than 80,000 students ensures that it is a creative and dynamic city with a youthful spirit. Universities with a tradition in a number of fields oversee advanced research, especially in the biological and medical sciences, as evidenced by the presence of leading scientific research centres. Whole chapters could be devoted to the local academic and research successes in information technology, the life sciences, electron microscopy and, especially, cyber security and software development, where Brno has taken on the role of a courageous, successful and promising leader within Europe.

Brno The Knowledge City


Foreign companies see the city and its surroundings as a region with prospects in which it pays to invest. Several multinational concerns have established their development centres and top production facilities there (e.g. FEI, Honeywell, IBM and Red Hat). Brno assists incoming and current investors in finding locations and provides solutions based on their individual requirements, utilising a perfect knowledge of the local environment. The city actively cooperates in developing its potential with regional institutions (the South Moravian Innovation Centre, the Regional Development Agency South Moravia, CzechInvest and the Brno Regional Chamber of Commerce). It is working to ensure that the results of innovative and daring projects become a reality. Brno also helps with the creation of more new centres and places to inspire fruitful ideas and goals (e.g. the Europoint Brno project for modernization of the rail interchange, a large ring road, the Czech Technology Park Brno, the Brno Creative Centre, the Janacek Cultural Centre and the Brno Industrial Zone – Cernovice Terrace).

Part of Brno’s long-term strategic plan is also the development of the knowledge economy, which brings with it economic development, an improvement in the quality of life, research, development, innovation and education. A key word for Brno and South Moravia is cooperation. Universities and scientists are on one side, and companies and entrepreneurs are on the other, and all of them are striving for closer connections. As well as providing an excellent background for work, this sharing of experience and information also brings with it an increase in the competitiveness of the city, as well as the region as a whole.

This is probably also a reason why ever more investors are choosing Brno as a home which offers everything necessary for the harmonious combination of working success and a fulfilling personal life. Everyone who comes there in order to build something is welcomed with open arms. Evidence of this is the constant effort to improve and perfect the region to meet the requirements of the hectic and demanding pace of our times. Ease of movement within the region is guaranteed by the sophisticated transport system, thanks to which there is nowhere that its inhabitants cannot reach whenever and however. Everything is available – culture, monuments, national institutions, an international airport, services, sports and recreational areas. The Brno Expat Centre is available to help with the integration of foreigners.

The current rankings of the respected Numbeo.com server has Brno as the city with the highest quality of life in the Czech Republic. On the worldwide rankings it is ahead of such giants as London, Los Angeles and Brussels. We take pride in this but we are aware that we cannot rest on our laurels.

City of Brno e-mail: [email protected]

Brno The Knowledge City

http://www.brno.cz

http://www.brno.cz

mailto:investors%40brno.cz?subject=

37Business services sector in the Czech RepublicChapter Content Provider: JLL

2 | Office market

The Czech Republic has continuously proved to be an attractive location for international businesses. This is largely thanks to the high quality and high technical standards of available office accommodation, coupled with highly skilled, well-educated and competitively priced labour. As of 2015, there is approximately 4 million square meters of modern office space spread throughout the country with the largest concentration located in Prague, Brno and Ostrava. Current market conditions are favourable to occupiers with more than 650,000 m2 of space currently available to lease across the country. A range of rental costs, to suit all budgets, are available with typical BPO/ SSC rental costs at between 8 -15 € / m2 / month.


Prague Office Market

Stock and supply As the capital city, Prague has the largest office stock in the Czech Republic which currently stands at approximately 3.2 million m2 of modern office space. The majority of the stock meets the requirements of A class buildings which account for ca. 69%. The remaining 31% are high quality refurbishments. The largest office districts are Prague 4, Prague 5 and Prague 1 which are regarded as the core office areas in Prague. Over the last few years however there has been a growth in importance of Prague 8 which has been the target of the majority of new developments within the inner city area. In 2015, we expect new office supply to reach approximately 187,500 m2 which would be the highest level since the record year of 2008. In 2016, office completions are expected to drop to a level of around 25,000 m2. New supply should increase again in 2017 when it is expected to reach pre-crisis levels.

50,000

100,000

150,000

200,000

250,000

300,000

2005 2006 2007 2008 20090 2010

350,000

2011 2012 2013 2014 2015

Figure 31Prague Office Completions

Office market

m2


Availability The level of choice in office space in Prague decreased to 16.38% which means that there is more than 520,000 m2 of office space available. A large portion of available space is currently in new office buildings which are predominantly being built on a speculative basis and therefore are usually not fully occupied by the time of their completion. The majority of available space is nevertheless in older office schemes as a result of tenants relocating from these schemes into newer, more modern premises. Due to strong speculative supply, the level of choice increased significantly in 2015 and in Q1 reached its historical maximum by exceeding the level of 17%. Despite the fact that a significant amount of the vacant space has already been leased throughout 2015, we expect the level of choice to remain relatively high. As net demand is driven mainly by relocations of existing tenants within the current stock, we can expect more second hand space to become available on the market in the forthcoming quarters. This will keep the level of choice relatively high, despite the limited office supply pipeline in 2016.

Rents Prague is quite a stable market in terms of rental costs. In 2015, prime headline rents in the city centre remained stable, ranging between €18.0 and 19.5 m2/month. Inner city rents were between €15.0 and 16.0 m2/month in Pankrác (Prague 4) and Smíchov (Prague 5) and between €13.5 and– 15.5 m2/month in Florenc (Prague 8). Rents in the Outer City, which was historically one of the most sought after locations by companies from the SSC and BPO sector, remained between €13.0 and 14.5 m²/month.

Stodůlky

12.0 - 14.0

Holešovice

12.0 - 13.5Karlín

13.5 -15.5

Prague 2 & 10

13.0 - 16.0

Butovice

12.0 - 14.0

City Centre

18.0 - 19.5

Prosek

12.0 - 13.5

Chodov/Opatov

12.0- 15.0Pankrác

14.5 - 16.0Anděl/Smíchov

15.0 - 16.0

Prague 3 & 10

11.0 - 14.0

Vysočany

12.0 - 13.5

Figure 32Prime Rental Levels in Major Office Areas

Office market


Net Demand: A figure representing the total floor space known to have been let or pre-let, sold or pre-sold to tenants or owner-occupiers over a specified period of time. Net demand includes lease extensions and subleases but excludes lease renewals.

Gross Demand (Take-up): A figure representing the total floor space known to have been let or pre-let, sold or pre-sold to tenants or owner-occupiers over a specified period of time. Total demand includes renegotiations.

50,000

100,000

150,000

200,000

250,000

300,000

0

350,000

2011 2012 2013 2014 Q1-Q3 2015

All of these values refer to prime levels achieved in a limited number of prime properties. In general there are ca. 1-3 properties in each submarket which achieve these levels as they are usually brand new, above standard quality and/or very well located. Second hand products stand at approximately €1.5 below the afore-mentioned ranges.

Rents are predominantly denominated in Euro. CZK rents are available for some properties owned by local investors. Rents are paid quarterly in advance. Indexation is annually in line with European CPI. In case the contractual rent is in CZK, landlords prefer to use Czech CPI.

Demand and SSC/BPO sector Over the last two years we have seen revived activity from both developers and tenants. Many companies, especially the larger ones, have used the opportunity of tenant favourable conditions, due to strong supply coming to the market, to relocate their offices into new and modern premises which would correspond with the highest standards of office workplaces.

Between Q1 and Q3 2015, the gross demand for office space reached almost 300,000 m2 which represents a 36% increase on the previous year. Renegotiations accounted for approximately 43.5% of that volume. Thanks to a very strong demand for offices between Q1 and Q3 and several large deals in advanced stages of negotiation, we expect 2015 to exceed the record-breaking result of last year and become the most successful year ever recorded on the Prague office market in terms of gross demand.

Net take-up

Renegotiations

Office market

Figure 33Prague Gross Demand (Take-up) 2011 – 2015

m2


In the first three quarters of 2015, the gross demand has been driven mainly by IT and telecommunications companies which accounted for almost one third of the total take-up. These were followed by companies from the manufacturing and professional services sectors.

29%

IT & Telecoms

Manufacturing & Consumer Goods

Professional Services

Other

Pharma & Medical

Banking, Finance & Insurance

Construction & Transportation

Advertising & Media17%

15%

11%

10%

9%7%

2%

The strong demand for offices in Prague has been also reflected in the SSC and BPO sector. Some of the key players on the market of business services decided to either relocate into newly built offices or to renegotiate their leases in the current premises. ExxonMobil, for example, has renewed its lease in its current premises in Prague 3. SAP Business Services Centre and Oracle on the other hand, have both decided to relocate into newly built buildings in the outer city of Prague 5.

Company Year Floor-space (m2) Location Type of deal

ExxonMobil 2015 9,230 Prague 3 Renegotiation

ExxonMobil 2014 8,649 Prague 3 Renegotiation

Amazon 2014 6,047 Prague 6 New occupation

JNJ Global Business Services 2014 4,356 Prague 5 Renegotiation

Accenture 2015 3,053 Prague 4 Renegotiation

Office market

Figure 34Demand drivers of 2015

Table 5Examples of the recent activity of companies from the SSC and BPO sector in Prague

The following table shows examples of the recent activity of companies from the SSC and BPO sector in Prague


Over the years, Prague has been selected as a headquarter location for a number of the largest corporations in the world and their SSC and BPO activities. One recent newcomer is e-commerce giant Amazon which opened its SSC in Prague 6 providing mostly HR shared services and remote IT support for its employees. Amazon leased approximately 6,000 m2 of office space and plans to create over 500 jobs.

Thanks to the strategic location of Prague in the centre of Europe and its highly skilled and qualified workforce, companies already present on the market are becoming more specialized and are expanding the scope of services that they provide. Recently, many companies have established their ICT and R&D centres in Prague and in other Czech cities. For example in 2014, pharmaceutical company Merck Sharp & Dohme (MSD) opened its IT centre in Prague, leasing approximately 6,200 m2 of office space in the inner city area of Prague 5.

Brno Office Market

Stock and Supply As the second largest city in the country, Brno has the second largest modern office stock which amounts to approximately 483,000 m2. The majority of the office stock has been delivered to the market since 2005. Modern A class offices cover 80% of the total stock while the remaining 20% consists of B class projects. A very similar ratio of 77% to 23% is in favour of newly built buildings in comparison to quality refurbished schemes.

After the strong year of 2014, when ca. 45,000 m2 in 5 new office schemes and one extension was added to the Brno office market, there were no new completions in the first half of 2015. Overall in 2015, only 1,500 m2 of offices within one multifunctional project should be delivered to Brno office market. In 2016, we expect the office supply to amount to approximately 22,000 m2.

Availability and Rents Since 2013, due to the strong demand for offices, the level of available office space in Brno has been gradually decreasing. With the subdued development activity and very limited supply coming to the market in 2015, the level of choice declined to 16.48% by the end of H1 and it is forecasted to decline further as the market absorbs more vacant space.

Prime headline rents for A class office space oscillate in the range of €12.0 to 12.5 m2/month. However, this value represents only a limited part of the stock. In general, modern offices in the Brno market are currently being offered between €8.0 and 12.0 m2/month, depending on the vicinity to the city centre and the overall quality of the project.

Office market


Demand and SSC/BPO sector Over the last decade, Brno has been very successful in attracting offshoring and shared service centre activities. This is mainly thanks to the availability of an educated, highly qualified labour force, obtainable at a significantly lower cost to Prague, combined with an above-average level of regional unemployment which includes a large proportion of higher education graduates. Over the years, Brno has attracted a wide range of businesses covering areas of software/IT development, accounting/finance or customer service centres. Demand in Brno has been driven by multinational corporations including IBM, Infosys, Lufthansa, Red Hat, KBC and Monster Worldwide, to name a few.

In 2014, the gross demand for offices reached 58,700 m2 which represented the second strongest result since 2005 and y-o-y increase of ca. 21%. The share of renegotiations reached almost 50%. In H1 2015, total demand reached ca. 26,400 m2. Due to the large renegotiation of IBM at Technologický Park Brno, the share of renegotiations reached 49%. Over the past year and a half, demand for offices was driven mainly by the manufacturing and IT sectors, accounting for ca. 35% and 27% of the total demand respectively.

10 000

20 000

30 000

40 000

50 000

70 000

0 2012 2013 2014 H1 2015

Net take-up

Renegotiations

2011

60 000

m2

In terms of the SSC and BPO sector, the most significant transactions of 2014 and 2015 included the renegotiation of IBM at Technologický Park Brno with ca. 13,000 m2 or renegotiation and a pre-lease deal of Motorola Solutions within the same business park.

Office market

Figure 35Brno - Gross Demand 2011 – 2015


IBM 2015 12,953 Brno Renegotiation

Motorola Solutions CZ 2014 2,435 Brno Renegotiation

Motorola Solutions CZ 2014 1,207 Brno Pre-completion

Table 6Examples of the recent activity of companies from the SSC and BPO sector in Brno


On top of this, several companies have expanded their R&D and ITC activities in Brno. A great example of this is Honeywell which has recently renegotiated and expanded its premises in Brno to its current ca. 20,000 m2. The R&D centre in Brno is therefore the largest innovation centre of Honeywell where approximately 1,500 specialists are employed.

Ostrava Office Market Stock and Supply Ostrava has the third largest office stock in the country which exceeds 205,000 m2 and consists of mainly A class, newly built office premises. A class stock currently totals ca. 147,000 m2 which represents 71.4% of the total modern stock in Ostrava.

The most active years with respect to new development, as well as demand for new premises, were between 2006 and 2009. The economic downturn and lack of available financing had subsequently put many of the development projects on hold, mainly those of a larger scale. This resulted in a limited number of completions between 2010 and 2011.

The excess of supply over demand in 2013 resulted in continued limited development activity. After the completion of one large speculative project with ca. 25,000 m2 of offices in 2013 we did not record any new completions in 2014. In 2015 we expect the delivery of ca. 7,700 m2 of offices but there are currently no projects under construction with planned completion for 2016 onwards.

Availability and Rents The level of choice in Ostrava stands at 24%. Overall, there is more than 49,000 m2 of available office space for lease in various projects. 3 projects would be currently able to accommodate larger tenants with requirements exceeding 5,000 m2 of offices.

Prime office rents in Ostrava range between €10.0 and 11.5 m2/month, depending mainly on the location, quality and age of the building.

Some landlords, especially the local ones, are quoting and collecting rents in local currency. This trend is currently more common on the Ostrava market than in Prague or Brno, where almost all rents are denominated in Euros. Larger, international developers such as Red Group however use similar conditions to those that are common on the primary markets.

Office market


Demand and SSC/BPO sector Companies from the SSC and BPO sector have recently been seeking alternative locations in the Czech Republic to establish their centres outside of Prague and Brno. They have focused on regional cities such as Ostrava, Olomouc, Hradec Králové, Pardubice or even smaller cities. Unlike the smaller cities however, Ostrava has the advantage of a rather developed office stock.

Over the past couple of years, gross annual demand for offices in Ostrava has oscillated in the range of ca. 15,000 to 25,000 m2. In H1 2015, gross demand reached approximately 7,350 m2. The largest deal was the expansion of OKIN’s shared service centre in The Orchard by almost 4,500 m2.

5 000

10 000

15 000

20 000

25 000

30 000

2012 2013 2014 H1 2015

Net take-up

Renegotiations

0

In Ostrava there are several key players in terms of shared services and ITO centres such as Tieto, Siemens, OKIN and GE Money. These companies have also been quite active in terms of demand for office space. Examples of the major transactions from the sector are listed in the following table.


OKIN Group 2015 4,437 Ostrava Expansion

Siemens 2013 4,093 Ostrava New occupation

Tieto Czech 2013 2,690 Ostrava Expansion

Office market

Figure 36Ostrava Gross Demand 2012 – 2015

Table 7Examples of the recent activity of companies from the SSC and BPO sector in Ostrava

m2

46 Business services sector in the Czech RepublicProfile of the business services sector in the Czech Republic

3Main office markets: Prague, Brno & Ostrava

Almost…

4 000 000 m2 of modern office stock

The total m2 volume of office space due for delivery in 2015 is close to

200 000<50 000 m2 of office premises are estimated to be under construction and due for delivery in 2016

A range of rental costs, to suit all budgets, are available across the country. Typical BPO/SSC rents are between

8 -15 € / m2 / month Subject to individual lease negotiations, typical tenant incentives may include: Rent free periods, fit-out contributions, additional free parking spaces

>650 000 m2 of estimated vacant space is available to lease across the major office markets in the Czech Republic

The estimated total vacancy rate across the major office markets in the Czech Republic is approximately

16%

CZECH REPUBLIC

THE MODERN OFFICE MARKET IN NUMBERS

Office market46 Business services sector in the Czech Republic

Table 8Source: JLL, Q3 2015

47Business services sector in the Czech RepublicChapter Content Provider: Grafton Recruitment, ABSL, CzechInvest

3 | Labor market

There are around 350,000 students enrolled within the Czech Republic’s stable environment of both public and private universities. This represents 3.5 per cent of the population and around 90,000 new graduates enter the labor market each year, many to start careers in business services.

Many students are studying fields which provide the skills required in business services. These include engineering, technical, economic, administration and IT studies.

Czech universities are well distributed across the country and provide a steady pipeline of graduates into the main cities and regions. The number of foreign students studying at Czech universities is increasing rapidly and the business services sector is growing as a first choice for young people wishing to start their working careers in the country.


50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

0

2010 2011 2012 2013 2014

395 990 392 099381 047

368 304347 339

88 065 92 975 93 943 91 679 88 146

Students Graduates Students Graduates Students Graduates Students Graduates Students Graduates

10

20

30

40

50

60

70

80

0

69

26

Total Public

No. of Universities in Czech Republic *

Liberec

Plzeň

České Budějovice

Brno

Olomouc

Ostrava

Hradec KrálovéPraha

Opava

JihlavaZlín

Towns with Universities

Figure 37Universities in the Czech Republic (Source: Grafton Recruitment, 2015)* Ministry of Education, www.msmt.cz

Figure 38Student and graduate numbers in the Czech Republic (Source: Grafton Recruitment, Ministry of Education, 2015)

Labor market

Cheb

Ústí nad Labem

Pardubice


350 K Number of students in Academic year 2014/2015

90 KNumber of graduates in Academic year 2014/15

81 KNumber of Business Administration students 2014/15

36 KNumber of IT students 2014/15

74 KNumber of Engineering students 2014/15

210 KNumber of students studying foreign languages during University 2014/15

Czech Republic is in the Global

top 20 in respect to English language command (Education first: English Proficiency Index 2015.)

LABOR MARKET IN NUMBERS

Table 9Labor market in numbersSource Czechinvest. Czech Ministry of Education. 2015

95% English

70%German

67%French

48%Dutch

45%Italian

39%Spanish

25%NordicsFO

REIG

N L

ANGU

AGES

SPO

KEN

IN C

ZECH

BUS

INES

S CE

NTE

RS

Source ABSL 2015 survey for Czech Business Service Centres

49Business services sector in the Czech RepublicLabor market


5% 10% 15% 20% 25% 30% 35% 40%0 45%

Economics and administration

27,4%27,7%27,6%26,9%26,8%

Engineering and Technical studies

20,5%20,4%19,8%20,8%20,6%

Humanities,Arts and Philology

15,9%16,1%16,4%16,5%16,7%

Pedagogics (often include also Philology)

14,7%14,3%13,9%13,6%13,1%

2010

2011

2012

2013

2014

22 20622 39721 39721 52420 866

10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 0000

Masaryk University in Brno

39 45439 68438 93737 30934 822

Czech University of Life Science in Prague

21 54621 59822 89622 30120 438

University Palacky in Olomouc

University of Economics in Prague

21 93322 36221 71721 30521 063

Charles University in Prague

49 74549 48548 47047 79848 115

19 26618 79418 15117 19516 385

Czech Technical University in Prague

2010

2011

2012

2013

2014

Figure 39Student numbers in Czech Republic by subject (Source: Grafton Recruitment, Ministry of Education, 2015)

Figure 40Student numbers at largest Czech Universities(Source: Grafton Recruitment, Ministry of Education, 2015)

Labor market


2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

5 0002 500

English

German

Polish

French

Dutch

Russian

Italian

Slovak

Hungarian

Spanish

Romanian

Swedish

Portuguese

Macedonian

Norwegian

Danish

Bulgarian

Ukrainian

Greek

Croatian

Arabic

Turkish

Hebrew

Japanese

Chinese

Number of candidates registered by Grafton in Prague with a foreign language at C1 level or higher AND English at B2 lever or higher

Finnish

Slovenian

Hindu

Vietnamese

Albanian

Latvian

African

Estonian

Indonesian

Korean

Malaysian

Serbian

Lithuanian

24 243

3 545

2 051

1 513

1 329

1079

1012

695

441

342

324

242

236

195

170

139

128

126

97

83

74

69

57

43

35

32

32

31

2323

19

17

16

15

9

8

5

4

7 500 10 000 12 500 15 000 17 500 20 000 22 5000 25 000

Figure 41Foreign language speakers in Prague(Source: Grafton Recruitment, 2015)

Labor market


10 000 20 000 30 000 40 000 50 000 60 000

Prague

South Moravia

Moravia - Silesia

South Bohemia

Zlin

Olomouc

Plzen

Pardubice

Usti nad Labem

Hradec Kralove

Vysocina

Liberec

Central Bohemia

Karlovy Vary

0

Students

Graduates

Business Administration

ICT

Others

Law

HR

3%

62,5% 10,3%

23,3%

0,9%

More than 130,000 students are enrolled

in ICT, business administration, HR or

law programmes

Figure 42Business Administration, HR and Law student and graduate numbers in Czech Republic, academic year 2014/15.(Source: CzechInvest, 2015)

Figure 43Business, ICT, Law and HR students in the Czech Republic, academic year 2014/15(Source: CzechInvest, 2015)

Labor market


Liberec

Plzeň

České Budějovice

Brno

Olomouc

Ostrava

Hradec KrálovéPraha

JihlavaZlín

German

English

Chinese

French

Italian

Dutch

Spanish

Scandinavia

Korean

Japanese

23 711

14 749

5 587

3 874

3 810

2 946

2 262

1 661

1 517

1 488

10 000 15 000 20 000 25 00000 5 000

Number of Foreigners in the Czech Republic Selected Countries, According to the Languages as of 30 December 2014

Note: English - Australia, Canada, Ireland, United Kingdom, United States, South Africa; German - Austria, Germany, Switzerland; French - France, Belgium; Spanish – Spain, Mexico, Colombia, Peru, Cuba, Chile

Business Administration & HR Study Programmes

0

100 000

80 000

60 0000

40 000

20 000

Students

84 260

Graduates

28 395

Karlovy Vary

Ústí nad Labem

Pardubice

Business Administration and HR Study Programmes at Czech Universities

Figure 44Numbers of foreigners by country in the Czech Republic.(Source: CzechInvest, 2015)

Figure 45Student and graduate numbers in Business Administration and HR(Source: CzechInvest, 2015)

Labor market


University of Economics, Prague

Czech University of Life Sciences Prague

University of Hradec Kralove

Technical University of Liberec

VSB – Technical University of Ostrava

Silesian University Opava

University of West Bohemia, Plzen

VSTE Ceske Budejovice

Mendel university, Brno

Masaryk University of Brno

University of Pardubice

Tomas Bata University in Zlin

13 295 3 926

10 1973 263

1 512392

1 780559

3 1541 010

1 426448

2 143382

3387843

2 176516

2 606847

5 7431 791

3 9471 438

Business Administration and HR Study Programmes at Czech Universities

Figure 46Number of Students and Graduates. Selected Universities, academic year 2014/2015(Source: CzechInvest, 2015)

3 000 6 000 9 000 12 000 15 0000

Labor market

Students

Graduates


Students

Graduates

Cooperation between Business Services sector and Universities

The majority of companies in business services cooperate with universities (73%) as a means to attract and secure their talent pipelines. The most popular form of cooperation for 67 % of business centers is direct recruitment of graduates. Many centers are now creating additional forms of cooperation to promote their business and attract skilled students. This includes conferences and joint educational or research projects, especially in the IT sector. A growing number of centers offer students a range of career development opportunities during their studies – eg internships, training certificates. workshops and career advice. The strategy of university cooperation is now common across the Czech Republic with most larger business services centers offering university programmes at the major universities across the country. This is expected to grow in line with the sector and increasing competition between employers to secure the best graduate talent.

Figure 47Various forms of cooperation between business service centers and universities * Presentation, sponsorship, job fairs, diploma thesis, internship

Other (give examples)*

Share of centers

10% 20% 30% 40% 50% 60% 70% 80% 90%0

Recruiting future employees

Joint conferences

The Service Center (service Service Center) doesn’t cooperate with universities

Joint educational projects

Joint training courses

Joint research projects

67%

33%

27%

9%

6%

6%

18%

Labor market


LISTENREACTINITIATEDELIVER

WELISTENREACTINITIATEDELIVERYOU GROW

Main contact person for Grafton Recruitment CZJonathan Hill | +420 602 121 700 | [email protected]

Grafton.cz | Grafton.hu | Grafton.pl | Grafton.sk

CZECH REPUBLIC: Prague, Brno, Ostrava, Jihlava, Ústí nad Labem, České Budějovice, Plzeň, Zlín, Liberec,

Olomouc, Hradec Králové, Pardubice, Kolín, Vysoké Mýto, Chomutov. HUNGARY: Budapest.

POLAND: Warsaw, Cracow, Wroclaw, Lodz, Katowice, Poznan. SLOVAKIA: Bratislava, Košice, Nitra, Trenčín.

CEE RECRUITMENT LEADER IN PERMANENT, TEMPORARY AND OUTSOURCED SOLUTIONS.400 employees working in 25 offi ces in Europe across 20 specialisms.

Czech Republic

Slovakia

Poland

Hungary

mailto: [email protected]


LISTENREACTINITIATEDELIVER

WELISTENREACTINITIATEDELIVERYOU GROW

Main contact person for Grafton Recruitment CZJonathan Hill | +420 602 121 700 | [email protected]

Grafton.cz | Grafton.hu | Grafton.pl | Grafton.sk

CZECH REPUBLIC: Prague, Brno, Ostrava, Jihlava, Ústí nad Labem, České Budějovice, Plzeň, Zlín, Liberec,

Olomouc, Hradec Králové, Pardubice, Kolín, Vysoké Mýto, Chomutov. HUNGARY: Budapest.

POLAND: Warsaw, Cracow, Wroclaw, Lodz, Katowice, Poznan. SLOVAKIA: Bratislava, Košice, Nitra, Trenčín.

CEE RECRUITMENT LEADER IN PERMANENT, TEMPORARY AND OUTSOURCED SOLUTIONS.400 employees working in 25 offi ces in Europe across 20 specialisms.

Czech Republic

Slovakia

Poland

Hungary

Chapter Content Provider: Grafton Recruitment

4 | Salaries in business services

In the last year we have registered great changes in the conditions for employees in established companies. Most companies are aware of the growing competition on the market and have initiated improvement of benefit packages, salary terms and opportunities for external training. A rise in salaries has been registered, especially in jobs requiring candidates to speak German. Companies place great emphasis on the development of their employees in general.


Business Support ServicesRole Prague Prague Brno Brno

Min CZK Max CZK Min CZK Max CZK

Centre Head 120 000 200 000 100 000 180 000

Customer Service

Customer Service Manager with Languages 50 000 80 000 50 000 80 000

Customer Service Manager 50 000 70 000 45 000 60 000

Customer Service Team Leader with languages 40 000 50 000 35 000 45 000

Customer Service Team Leader 40 000 50 000 35 000 40 000

Customer Service Agent with English (1–3 years of experience) 28 000 35 000 25 000 30 000

Customer Service Agent with English (0–1 years of experience) 27 000 30 000 23 000 25 000

Customer Service Agent with English and core language (1–3 years of experience)

30 000 40 000 25 000 35 000

Customer Service Agent with English and core language (0–1 years of experience)

27 000 35 000 23 000 30 000

Customer Service Agent with English and non-core language (1–3 years of experience)

28 000 35 000 25 000 32 000

Customer Service Agent with English and non-core language (0–1 years of experience)

27 000 30 000 24 000 27 000

Order Entry Clerk with languages 27 000 32 000 22 000 25 000

Sales

Telesales Manager with languages 50 000 80 000 50 000 80 000

Inbound Telesales with languages 28 000 45 000 25 000 40 000

Outbound Telesales with languages 28 000 50 000 25 000 45 000

Technical Support (all platforms)

Technical Support Team Leader 45 000 60 000 40 000 50 000

Technical Support Level 3 45 000 55 000 40 000 50 000



Salaries in business services




Procurement

Procurement Manager 50 000 80 000 50 000 80 000

Procurement Operational Specialist 35 000 45 000 30 000 40 000

Procurement Strategic Specialist 45 000 60 000 45 000 60 000

HR

HR Delivery Manager 120 000 150 000 80 000 130 000

HR Business Partner Team Lead 75 000 100 000 50 000 70 000

HR Business Partner 50 000 80 000 40 000 60 000

Payroll Manager 45 000 60 000 45 000 55 000

Payroll Practitioner 25 000 35 000 25 000 35 000

Learning&Development Manager 40 000 55 000 40 000 50 000

Learning&Development Specialist 30 000 40 000 25 000 40 000

HR Operations Manager 40 000 60 000 40 000 60 000

HR Administrator 28 000 35 000 23 000 28 000

Compensation&Benefit Manager 50 000 60 000 40 000 60 000

Compensation&Benefit Specialist 35 000 45 000 35 000 45 000

Recruitment Manager 50 000 70 000 40 000 60 000

Recruitment Specialist 30 000 40 000 25 000 35 000

Finance

Finance SSC Manager 120 000 150 000 100 000 150 000

AP Manager 50 000 80 000 50 000 70 000

AP Team Lead 35 000 45 000 32 000 38 000

AP Analyst 28 000 30 000 23 000 27 000

AR Manager 50 000 80 000 50 000 70 000





AR Team Lead 35 000 45 000 32 000 38 000

AR Analyst 28 000 30 000 23 000 25 000

GL Manager 70 000 110 000 60 000 90 000

GL Team Lead 40 000 60 000 35 000 45 000

GL Accountant 30 000 45 000 25 000 35 000

Intercompany Accountant 30 000 40 000 25 000 30 000

VAT Accountant 30 000 40 000 30 000 38 000

Table 10Source: Grafton Recruitment, Salary Survey 2015, updated as of October 2015


61Business services sector in the Czech RepublicChapter Content Provider: CzechInvest

5 | Investment incentives

The amendment to the Investment Incentives Act fundamentally expands the number of districts in which cash grants for job creation as well as retraining and training of new employees will be available. At present, 4 districts are supported; the amendment will make it possible to increase that number to 14. The purpose of the regional focus of cash grants is to motivate investors to implement their projects in regions with the highest rates of unemployment. This measure will stimulate the economy and thus raise the standard of living in selected regions through increased production capacities, exports and purchasing power of the local population.

Karel Kučera, CEO, CzechInvest


Business support services centres

Conditions for qualification » The investment may not be initiated prior to submitting the incentives application to CzechInvest.» Fulfilment of the terms and conditions within three years following the granting of investment

incentives.» Retention of assets and jobs throughout the period of drawing incentives, at least for five years.

Investments in business support services centres – specific conditions» Creation of a minimum number of new jobs (see table below).» International reach: services provided by a BSS centre must reach two other countries

besides the Czech Republic.

Overview of the minimum number of newly created jobs for individual centres

Forms of investment incentives » Corporate income-tax relief for a period of ten years.» Transfer of land for a discounted price.» Cash grants for job creation up to the amount of CZK 300,000. » Cash grants for retraining and training new employees up to

the amount of 50% of training costs.» Property-tax exemption for a period of five years – only in special industrial zones.

100 200 300 400 500

Repair centres

Shared-services centres

Data centres

Software development

0

Call centres

20

20

70

70

500

Investment incentives

Figure 48Source: Grafton Salary Survey 2015, updated as of October 2015


Special industrial zones The Government of the Czech Republic approves the special industrial zones on the basis of a proposal issued by the Ministry of Industry and Trade. More attractive investment incentives are provided in special industrial zones. The specifications of special industrial zones are available from CzechInvest upon request.

* Region I (Special Industrial Zone)

1. Ostrava-Mosnov

2. Most-Joseph

3. Holesov

Region Job Creation Re-training

Region I * 300 00 CZK -

Region A 200 000 CZK 50%

Region B 100 000 CZK 25%

Region I *

Region A

Region B

2

1

3


Figure 49 Job Creation, Training and Retraiing Grants


Eligible costs A] Assets, whereas new machinery must comprise 50% of eligible costs orB] Two years’ wage costs of newly created jobs

State aid » 25% of eligible costs for large enterprises throughout the Czech Republic, with the exception

of Prague, for all types of business support services centres except data centres. » 6.25% of eligible costs in the case of data centres.

Process of applying for investment incentives » Abridged single-round process in the case of an expansion of an investment. The Decision

to Grant Investment Incentives is issued within roughly three months after submission of the application to CzechInvest. The investor can initiate the investment immediately following submission of the application; it is not necessary to wait for issuance of the aforementioned Decision.

» Extended two-round process in the case of initiating a new investment. This process involves the establishment of a new Czech legal entity. The Decision to Grant Investment Incentives is issued within roughly six months following submission of the application to CzechInvest. The investor can start implementing the investment immediately after submitting the application; it is not necessary to wait for issuance of the aforementioned Decision.

Sample calculation An investor (medium-sized enterprise) plans to start operating a repair centre in a region whose unemployment rate is 50% higher than the national average. The total investment in assets amounts to CZK 12 million comprising CZK 8 million invested in the building and CZK 4 million invested in new machinery. The investor plans to create 80 new jobs and to spend CZK 4 million on training its new employees. The average monthly wage of employees in these newly created positions will be CZK 30,000.



Calculation Region with unemployment 50% higher than the national average Notes

Eligible costs in assets CZK 8 mil. reduction by machinery,

i.e. CZK 4 mil. x 2

State-aid intensity 35%This concerns a medium-sized enterprise

Investment-incentive ceiling CZK 2.8 mil. 2,690 CZK 8 mil. x 35%

Structured as follows:

Cash grants for new jobs CZK 2.8 mil.80 jobs x 200,000; limited by

the ceiling

Tax relief CZK 0 Residual to the incentive ceiling

Plus:

Cash grants for training and retraining CZK 2 mil. CZK 4 mil. in training costs x 50%

Total investment incentive CZK 4.8 mil. incentive ceiling plus training aid

Calculation Region with unemployment 50% higher than the national average Notes

Eligible costs in assets CZK 57.6 mil. CZK 30,000 x 24 months x 80 positions

State-aid intensity 35%This concerns a medium-sized enterprise

Investment-incentive ceiling CZK 20.16 mil. CZK 57.6 mil. x 35%

Structured as follows:

Cash grants for new jobs CZK 16 mil. 80 jobs x CZK 200,000

Tax relief CZK 4.16 mil. Residual to the incentive ceiling

Plus:

Cash grants for training and retraining CZK 2 mil. CZK 4 mil. in training costs x 50%

Total investment incentive CZK 22.16 mil. incentive ceiling plus training aid


Table 11, 12 A] Eligible costs - assetsB] Eligible costs – wage costs


Investment in a technology centre

Technology centres Min. amount of investment in assets

Min. amount of investment in new

machinery

Min. number of newly created jobs

Investment CZK 10 mil. CZK 5 mil. 20

Strategic investment CZK 200 mil. CZK 100 mil. 100

Forms of investment incentives

» Corporate income-tax relief for a period of ten years» Transfer of land for a discounted price» Cash grants for job creation up to the amount of CZK 300,000 » Cash grants for retraining and training new employees up to the amount of 50% of training costs» Property-tax exemption for a period of five years – only in special industrial zones» Cash grants for acquisition of assets – only for strategic investments

Eligible costs C] Assets, whereas new machinery must comprise 50% of eligible costs orD] Two years’ wage costs of newly created jobs

State aid 25% of eligible costs for large enterprises throughout the Czech Republic, with the exception of Prague


Table 13 Overview of specific conditions

67Business services sector in the Czech RepublicChapter Content Provider: PwC

6 | Global/CEE Business Services Market overview

The Global services market continues to grow at 8-10% per year and CEE has emerged as the leading European Nearshoring destination with growth rates up to 30% across the region. This chapter explores the trends and changes in the Global and CEE services market and shows that the future promises even more opportunities – especially for those countries such as the Czech Republic that are at the forefront of the outsourcing industry.


CEE in the premier league of outsourcing destinations Over the last 15 to 20 years, the centralisation of supporting processes into Shared Service Centres (SSC) and outsourcing has become very prevalent given the global economy and enhanced global competition. Businesses have been constantly looking for efficiencies in their processes, adapting best practice approaches and cost reductions. The reduced regulatory limits in setting up multinational service centres and major advancements in technology have enabled the movement of core processes to central or offshore locations with the resulting benefits on scale, cost arbitrage and enhanced control. Globally, the most popular regions for SSCs and outsourcing centres are located in Asia - India, China and Philippines, Central Eastern Europe (CEE) and Central America. Generally, these regions offer large labour pools with the right skills and very competitive costs. Therefore they are always popular when it comes to choosing the right location for a Shared Service Centre or finding an Outsourcing partner.

There is a broad variety of SSCS/Outsourcing centres that exist today. The most popular ones are:

» Shared Service Centres, where businesses have centralised significant portions of their back office functions, such as: Finance and Accounting, Procurement, Supply Chain, IT, Customer Service or Human Resources.

» Business Process Outsourcing companies – 3rd parties that offer delivery of a range of processes for a fee, based on service contracts. The range of functions covered are broad, similar to SSCs above.

» Knowledge Process Outsourcing – organisations that offer a scope of specialised decision making processes and/or research.

More scope and services in CEE Global trends do not differ much from those observed in the CEE region. The biggest global conglomerates familiar with the concept of SSCs, are constantly increasing the scope of their centres both in terms of serviced geographies and range of processes. As a result, the catalogue of the processes transferred to SSCs is expanding and includes such functions as: Marketing, Legal Services, “Big Data” and advanced analytics.

Global/CEE Business Services Market overview


Smaller centres are on the rise Another trend observed is an increasing number of smaller centres, often employing less than 50 employees. Despite low economies of scale, such centres prove to be financially effective and contribute to increasing operational efficiency.

CEE leads European Nearshoring – growing at 30% per year

Even though Asian locations can offer very competitive prices for their back office services, European countries are still an attractive option for the location of SSCs/Outsourcing centres, and CEE is by far the most popular destination for Europe. The nearshore market continues to grow strongly across CEE as businesses with operations in Europe seek SSC/Outsourcing locations closer to home with the requisite language and other skills for their European operations. Recent reports show that business services in CEE have continued to grow at an average of 30% per annum. This growth rate is faster than in India and has generally been through significant growth of existing centres as well as new centre arrivals into the region. This is a strong reflection of the growth in capability and performance of Central European centres and their established reputation as Centres of Excellence. Not only the biggest corporations but also companies operating on a regional or even national level look for cost saving, process optimisation and transparency which can be achieved in SSCs/Outsourcing centres. The significant growth in size and range of processes/functions for existing centres also reinforces the original strategic decisions made by business to locate their centres in the region.

For example:A relatively small SSC was recently set up in Prague by a pharmaceutical company. The scope for the SSC includes Finance and Accounting processes for 15 European countries. By focussing on centralised processes rather than multiple dispersed locations, the company has been able to achieve significant savings. In addition, the introduction of customer service provided in English and electronic documentation flow, helped in creating an effective process based organisation.



Czech cities are in the top league in CEE In CEE, the main SSC/Outsourcing destinations are Poland, Czech Republic, Romania and Hungary. They continue to attract the bulk of new investors in the region for SSCs/Outsourcing. One noticeable trend in recent times regarding international rankings of SSC/BPO hot spots is that cities in these countries are generally strengthening their position whilst Western European locations which traditionally have been ranked strongly are falling down the rankings to some degree, e.g. Dublin, Ireland. For example, according to the latest “2015 Tholons Top 100 Outsourcing Destinations” Prague is ranked as number 15 in the Global list and Brno is 25th – among the highest ranked European locations for outsourcing. Compare this to the same report from 2007 where none of the CEE locations were in the top 20 and Dublin was in the top 10.

Czech Republic has the right critical combination for outsourcing success. There are a number of critical characteristics of the CEE region which are key to the ‘location decision’ for the creation of SSC and BPO centres in CEE:

» A highly skilled workforce is a key differentiator and the CEE region has developed a large skilful workforce of service professionals. Current number of SSC/BPO companies operating in the region ensures the availability of skilled employees. Additionally there is a significant pool of the working population/students speaking a foreign language. For instance, in Czech Republic 42% speak one foreign language and 24% of the population is able to speak two foreign languages. For companies with the business dispersed across Europe the availability of a range of desired languages is a crucial point when choosing the location for a potential SSC/Outsourcing centre. Generally for European based languages, cities in Asia cannot compete with the ones in CEE.

» Notwithstanding a visible increase in salaries in the SSC/Outsourcing sector across CEE, the region still remains a very attractive location in terms of significantly lower operational costs. Factors impacting salaries include language proficiency as well as technical and professional experience of candidates.

» A majority of the necessary infrastructure serving the SSC/Outsourcing sector in CEE has been built in the past 20 years. Accordingly, the infrastructure is generally very modern and with a large and diversified range of properties. In CEE the number of available A-class office buildings is constantly growing and the main SSC/BPO locations in the region have no issues with accommodating incoming businesses.



Recent trends in CEE and Czech business services

The SSC/BPO market is very dynamic. There are several new developments in recent times in the CEE region that can be observed. Two trends are particularly interesting:

(I) Robotic process automation and continuous process improvement

Robotic Process Automation (RPA) is the application of technical solutions allowing employees to configure a “robot” or computer software to interpret and capture existing applications and data to process a transaction, trigger responses, manipulate data or communicate with other systems. More specifically, RPA applications may include: automatic reading and forms filling, repetitive keyboard and mouse tasks, database creations, periodic reporting and calculations.

By introducing RPA, companies using labour on a large scale can benefit from increased capabilities and reduced cost. Robotic automation tools are generally at least twice as fast as human staff and can function 24/7. In addition, a robotic FTE costs on average a third of what its costs to hire an offshored FTE in an SSC/Outsourcing centre. Other reasons behind RPA deployment include a general reduction in error rates, improved compliance and flexibility, as well as the ability to replicate the solutions across various geographies and business units. The technology of RPA can be applied to a wide range of industries with repeatable processes such as: banks, IT, BPO, SSC and others. Global outsourcing service providers have already started using RPA or are in the process of testing the approach. The biggest players who have invested in RPA business solutions are: IBM, HP, TCS, Genpact, and Accenture. This list is constantly expanding and it is believed that RPA will be a crucial trend in the upcoming years.

Although RPA is in the development stage and there are certain limitations to its application, the area is maturing and gaining more credibility and transparency. It is possible that in the future this system will leverage elements of artificial intelligence for more sophisticated functions, resulting in the further evolution of the SSC/Outsourcing sector.

(II) Expanding range of the processes being centralised/outsourced

For the SCC/Outsourcing industry, the initial waves of centralisation/outsourcing were generally limited to transactional and regular processing with the more advanced processes remaining onshore in the local businesses. However, over the years the industry businesses started to further optimise their delivery model to the next level. This has resulted in a broader and more complex range of process/functions being centralised into SSCs and Outsourcing centres.

Czech Business service centres reflect this wide range of processes and their success shows that an operating model with the support of Business Service Centres can be utilised in many different ways rather than limiting companies to centralise only certain, traditional back office functions.



CEE Perspectives for the future – over 1 million people in 10 years.

Considering the number of success stories and the dynamic increase of SSCs established in the region, the trend for growth of this type of business in CEE is positive. Countries like the Czech Republic, given their numerous cities with large well educated populations can offer skilled labour pools, good infrastructure and competitive salaries, will continue to be leaders in setting up new and expanding existing centres. For example, in CEE today there are approximately 335,000 people currently employed in the SSC/BPO sector. According to a recent ABSL/McKinsey report this number is expected to grow by 300% – 400% within the next 10 years to over 1,000,000 people employed in business services.

However, in order to reach this level of growth and maintain/improve the excellent reputation for the industry in the region, CEE countries will need to ensure that they continue to meet the needs of current and potential new business. It is recommended that within the CEE region governments should continue to and expand support to investors whilst universities should position themselves to be able to react to the market demand to provide the number of required graduates with the relevant skills for the industry. In addition there should also be a constant focus on developing the required infrastructure. Having these secured and given the current trends, CEE and the Czech Republic should remain one of the most important destinations on the global business services map.




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