Poland’s Emergence as a Nearshore Hub

• Article by BRUIN Financial

Poland’s Emergence as a Nearshore Hub

Having recently returned from a business trip to Poland one of our Consultants was taken with how much it has evolved in recent years as a prime location for banking, technology and professional services firms. Also this is not confined to one location but has three main hubs, Warsaw, Wroclaw and Krakow. Keen to find out the reasons behind this,  BRUIN spoke with a variety of companies and their reasoning was as follows:

In 2017 Poland GDP stood at 520 billion USD, ranking it 24th in the world and is growing at a rate of 3.3% per year, average over the last three years. Poland population currently stands at 38,119,000 with a median age of 40.1 years and very slow growth, in fact is has declined slightly in recent years. Not only does Poland have a strong workforce it has in recent years been able to attract skilled migrants from within the wider Central European region, notably Ukraine with now more than 2 Million Ukrainians forming part of the populous. Productivity is high and most employers have stated that their relocation centres have performed well or above expectations. Many financial firms have established or are growing existing operations in the key financial centres including Credit Suisse, Goldman Sachs, JP Morgan and Bank of America Merrill Lynch.

The country benefits from reasonable and improving transport infrastructure including road and rail links as well as a good airport network. Additionally modern office space is being rapidly created, such as Warsaw Spire, (pictured above). Linguistically English is widely spoken and culturally the country has tried to position itself increasingly as a Western one

In terms of cost savings versus other locations this is a composite of both salary levels and office real estate costs being competitive to accommodate new large teams of staff. Recent analysis suggests a USD 70,000 -80,000 per capita saving compared to London for an Associate level candidate

Macro-Economic Factors

Brexit comes to mind when considering this option, but actually a lot of roles moving to, or being created in Poland, were planned before this. The convenience of a nearshore location for European, and potentially Eastern European companies, together with a productive work force and reasonable costs made this a location that has been emerging probably for the last 5 years, initially driven by technology companies, telecommunications and management consultants.

Since October 2015 Poland enjoyed its first majority government in the past 25 years. The conservative Law & Justice (PiS) party now controls both houses of Parliament and its programme focuses mainly on domestic issues: increasing social transfers, lowering the retirement age, and supporting domestic industries. On social issues PiS is conservative, but on economic policy the party has positioned itself to the left. Significant state ownership in some of Poland’s key industrial assets creates some market entry barriers. Bilateral relations between Poland and the UK/US remain strong and have evolved into a close strategic partnership in recent years. This again promotes job creation from international business. At a recent Business Forum in Warsaw which was hosted by Minister of State for Trade Policy, Greg Hands, and Polish Minister of Entrepreneurship and Technology, Jadwiga Emilewicz. Minister Hands stated during the Forum: ‘Since 2005 Polish exports to the UK have tripled and UK exports to Poland have doubled – that is a trading relationship worth £17 billion a year between our 2 economies’

If employers or candidates are considering this location, please contact one of our Consultants for further information, we have a team now dedicated to serving mainland Europe.