hoa ssc survey 2013
TRANSCRIPT
hoa ssc survey
2013
Introduction
This survey had been initiated by the Hungarian Services and Outsourcing Association in order to have an overview about one of the most dynamically growing sector of the Hungarian economy. HOA intends to repeat this survey on a yearly basis to provide reliable, comparable industry measures to its members and the investors considering entering the market.
The survey targeted all currently active shared services centers in Hungary irrespective of their HOA membership. Data has been collected from an online questionnaire in June-August 2013.
One of the most important goals of the survey is to provide benchmarking data for industry members about the Hungarian SSC market. The survey has been focused on the key information and data required for a comprehensive analysis of the market and its trends.
Methodology
As the intention of the HOA benchmarking survey was to get an overall picture about the whole sector. The questionnaire covers 3 major areas: services, people and technology.
Questions are divided into two types. In case of one question group the companies had to choose the appropriate answer with ticking the box, and in case of the other type of questions a direct answer was required in numbers or percentages.The individual requests of the market players have been taken into consideration in regards of questions and topics by maintaining relevance level for the entire SSC sector.
The online benchmarking tool will be available to all survey participants allowing access to the benchmark results by locating the own companies personalized performance compared to the relevant market result.
Processes
People
Loca
tions
ProcessTechnology
hoa ssc survey | First edition, 20132 hoa ssc survey | 2013
11 793
1 735
250
460
� Budapest
� Debrecen
� Székesfehérvár
� Other locations
1. General findings
24 major Hungarian outsourcing companies have completed the survey. Seven industries were represented in the survey of which Services, Industrial production and Telecom took the biggest stake.Participants employ more than 14.000 people in seven cities. The participating companies in this survey represent at least half of the total Hungarian SCC market. According to the latest measures the estimated size of the Hungarian SCC market employs approximately 25,000 employees. Comparing Budapest and other locations, 83% of the headcount works in Budapest. Among other locations Debrecen is the most popular, employing more than the total of the other locations in the countryside.
Respondents of the survey employ 600 person in average, which indicates the bigger SSCs were over-represented in the survey.
Headcount breakdown by location
Categories by headcount
0-200 201-500 501-1000 1001
Number of participants
0
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0% 10% 20% 30% 40%
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25%
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38%
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45
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0
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100
2,80%
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0 20 40 60 80
0%10%20%30%40%50%60%70%80%90%100%
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� Internal
� External
� Both
50%
8%
42%
Who are the customers?
Fifty percent of the SSCs provide services for internal clients only, while others serve exclusively external customers. Less than ten percent of the companies work for both internal and external clients.
International companies prefer to establish a separate legal entity for their shared service operations as more than 70% answered, that their SSC operates in a separate legal entity. We also need to consider that some Hungarian SSC simply don’t have any other operations in Hungary.
The cost-based concept of settlement seems typical in the Hungarian SCC industry, 83% answered, that they run the business on a cost-based concept. Considering that 50% of SSCs provide services to external customers as well, it has to be pointed out that bigger stake of Hungarian SSC market provide services directly to external companies, while the income comes from the mother company based on cost.
Subsidies in the indrustry
38%
17%45%
� GOP fund
� EKD fund
� No subsidy
With regards of subsidies only 54% of the respondents have demanded any kind of subsidies either from Hungarian government or from EU sources. Since the bigger companies are over-represented, it is assumed that in the total industry the subsidy portion is below 50%.
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0
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0% 10% 20% 30% 40%
4%
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38%
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0%
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2,80%
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3,50%
0 20 40 60 80
0%10%20%30%40%50%60%70%80%90%100%
42% of Hungarian SSCs don’t use local contractors at all. The most commonly used services provided by Hungarian service providers are HR, Finance and IT services.
HR services
Finance services
IT
Logistics
Purchasing
Operational excellence
Treasury
Customer service
¢ What services the SSCs purchase from local subcontractors
¢ Biggest threats in the SSC sector
Country advantages and competitiveness factors have also been examined in the survey. The participants pointed out four major risks, ranked in the following order: labor arbitrage, language capability, skill arbitrage, and country risk. 38% of the participants mentioned country risk among the biggest threats of the industry, which seems to be a major risk considering the SSCs provide their services mainly offshore.
What services the SSCs purchase from local subcontractors
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0% 10% 20% 30% 40%
4%
8%
13%
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29%
38%
0%
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70%
0%
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0
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100
2,80%
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3,00%
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3,20%
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3,50%
0 20 40 60 80
0%10%20%30%40%50%60%70%80%90%100%
Country risk
How frequently the threat was mentioned
Labour arbitrage
Language capabilityProximity
Skill arbitrage
Technology andCultural
Country stability
In the SSC market the IT sector is the leading employer. More than 27% of all SSC jobs are offered in IT, 25% of the total SSC headcount works in Finance/Controlling SSCs. The third biggest SSC employer is Customer Services (16%), while the fourth one is HR representing 5%.
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¢ Average recruitment leadtime (days)
2. Benchmarks in SSC sector
E-invoice coverage of participants
HRThe average recruitment lead-time is 45 calendar days. Shared Services Centers provide high level training sessions to their employees, according to the survey in average 8.5 working days are provided for training purposes in each year. Majority, 70% of the companies use e-learning platform in their training programs.
Average recruitment leadtime (days)
0
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0% 10% 20% 30% 40%
4%
8%
13%
25%
29%
38%
0%
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60%
70%
0%
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100%
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45
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2,80%
2,90%
3,00%
3,10%
3,20%
3,30%
3,40%
3,50%
0 20 40 60 80
0%10%20%30%40%50%60%70%80%90%100%
Minimum Avarage Maximum
Customer serviceIn average 415 tickets per month are handled by one employee. One-third of customer services SSCs works non-stop (24/7), two-third works in normal business hours.
On-time resolution of tickets as per SLA (%)
0
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0% 10% 20% 30% 40%
4%
8%
13%
25%
29%
38%
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0 20 40 60 80
0%10%20%30%40%50%60%70%80%90%100%
Finance and controllingAlmost 40% of the invoices are electronically issued. The purchase order coverage is almost 67%; the first-time hit rate in purchase orders is exactly 50%. The compliance of harmonized payment terms is near to 90%. 77% of the companies use one chart of accounts globally.
� 0-25%
� 25-50%
� 50-75%
� above 75%
46%
18%
27%
9%
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PeopleThe annual voluntary attrition rate is continuously improving at SSC companies – current average is at 13%. Job grading system is provided by 95% of the SSCs. Also 95% of the participants implemented employee satisfaction survey processes resulting in an average of 71% engagement ratio.
Engagement ratio result among the participants
Yearly average salary increase
Less than 9% of the total number of employees are non-Hungarian citizens. 87% of the total number of employees has a university or college degree, the SSC sector is still one of the biggest employer of employees with a higher education among non-public industries offering jobs for more than 20.000 people. 85% of the SSCs support the education programs by offering educational contribution to their employees. Trade union is very rare among the SSCs; only 10% of the companies have trade unions within the company.
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0% 10% 20% 30% 40%
4%
8%
13%
25%
29%
38%
0%
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70%
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2,80%
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0 20 40 60 80
0%10%20%30%40%50%60%70%80%90%100%
Salary competitiveness had also been examined. The average salary increase in the SSC sector was 3.1% in 2011, 3.0% in 2012 and 3.4% in 2013.
33%
33%
25%9%
� 50-60%
� 60-70%
� 70-80%
� above 80%
2011 2012 2013
¢ Yearly average salary increase
hoa ssc survey | 2013 7
Flexible employment types in SSC sector
The flexible employment types are surprisingly popular in the sector. 63% of the companies offer flexible working hours, part time work is available at 58% and home-office is also available at 54% of the participants.
¢ Flexible employment types in SSC sector
0
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0% 10% 20% 30% 40%
4%
8%
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25%
29%
38%
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60%
70%
0%
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100%
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0
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2,80%
2,90%
3,00%
3,10%
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3,30%
3,40%
3,50%
0 20 40 60 80
0%10%20%30%40%50%60%70%80%90%100%
Job sharing
Flexible working hours
Part-time work
Home working
23 languages are supported from Hungarian shared services centers. The most commonly supported languages are in frequency order: English, German, Italian, French, Hungarian, Spanish, Dutch and Portuguese. These languages are supported in more than 50% of the companies.
Potential growth of the industry has also been evaluated. The average estimated increase is more than 16%, which converts to more than 2.300 new jobs in the industry in the forthcoming two years, not-considering any new SSCs to be established in this period. One of the participants reported to increase its headcount by 500 FTEs.
Supported languages
0
2
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12
0% 10% 20% 30% 40%
4%
8%
13%
25%
29%
38%
0%
10%
20%
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40%
50%
60%
70%
0%
20%
40%
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100%
0%
20%
40%
60%
80%
100%
0
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90
45
14
0
20
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60
80
100
2,80%
2,90%
3,00%
3,10%
3,20%
3,30%
3,40%
3,50%
0 20 40 60 80
0%10%20%30%40%50%60%70%80%90%100%
— Supported languages
Engl
ish
Ger
man
Italia
nFr
ench
Hun
gary
Span
ish
Dut
chPo
rtug
uese
Swed
ish
Polis
hRu
ssia
nSl
ovak
Finn
ish
Cze
ch
Dan
ish
Turk
ish
Ara
bic
Cro
atN
orw
egia
nSe
rbia
nJa
pane
se
About HOA The Association’s mission is to promote the country’s economic development by supporting the business services sector, through spreading opportunities to increase efficiency offered by organizational innovation and in particular through uptaking the concept of outsourcing.
HOA is an open, independent, professional organization. It’s common organizing principle is to participate in service activities provided to the stakeholders of the economic and public sector. We act in the interest of the outsourcing sector and our Members. www.hoa.hu
Hungarian Outsourcing AssociationH-1061 Budapest, Andrássy út 17.Phone: +36 (1) 205 3317 E-mail: [email protected]
Copyright HOA, 2013This document is protected by copyright. Any part of this document may be used for non-commercial purposes with referencing the source for free of charge. The prior written permission of HOA is required to any other use of the document.