Wiktor Doktór: Laisvis. Lithuania and other Baltic States are well recognized among BPO and SSC investors from Scandinavia. Is it the only investors source for Lithuania? What is the current size of BPO/SSC investments in your Country?
Laisvis Makulis: Investors from Nordic countries undoubtedly dominate in Lithuania’s SSC/BPO industry, accounting together for more than half of all centers operating here with Denmark (18%) and Norway (14%) in the lead. Close geographic proximity, similar work culture, and multilingual talent with can-do attitude are among main factors which make Lithuania an appealing place for Nordic investors. However, companies from USA and UK also take up a sizable part of the industry, 18% and 12% respectively. Investors from Luxembourg, Canada, France, Germany, Italy, Netherlands, Switzerland and elsewhere have found Lithuania to be an optimal location for a SSC/BPO center and have established operations here as well.
Wiktor Doktór: What is the main area of experiences in the operations centers located in Lithuania. Are those financial services, IT, customer service or others?
Laisvis Makulis: Finance and accounting operations, IT and HR services are the leading types of functions consolidated in Lithuania’s SSC/BPO market with F&A 58%, IT 50%, HR 39% of centers performing such operations respectively. It is worth noting that over the last couple of years complexity of functions performed in SSC/BPO centers have increased significantly. Absolute majority of centers in Lithuania are multifunctional. Centers that previously delivered single type of services have added new, more sophisticated ones. Significant share of centers here perform analytics, business transformation, anti-money laundering, R&D and other specialized, complex functions.
Wiktor Doktór: In most of the BPO/SSC locations the investors started in bigger cities and later were choosing smaller cities. I assume in Lithuania this is Vilnius, which is the largest BPO location, but what are the other cities where the industry is present at?
Laisvis Makulis: Vilnius is certainly an established SSC/BPO location in the region. Such international giants like Nasdaq, Barclays, AIG, Western Union along with many others have settled in the Lithuanian capital. At the same time over the past couple of years we have seen an increased interest in Kaunas, Lithuania’s second largest city. It has been named the best emerging city for shared service and outsourcing in the CEE in 2015 (Central and Eastern Europe Shared Services and Outsourcing Awards). Low level of saturation, progressive university community, and developing office real estate market are among the main drivers behind Kaunas’ recent business services sector growth.
Wiktor Doktór: Let’s take a closer look at the salary levels on the most popular positions in BPO/SSC industry. What is the average salary for people employed as accountants, call center agents or software developers? Are the salaries on the same level in all your cities or there are differences?
Laisvis Makulis: Salaries in the SSC/BPO industry vary significantly depending on the position, years of experience, language requirements, location of the centre and a number of other factors. Typically, salaries in Vilnius are around 10-15% lower than competing cities within the region (Krakow, Warsaw or similar) and Kaunas has additionally around 10% lower salaries than Vilnius.
Wiktor Doktór: As we observe currently in Europe there is a lack of IT developers and people with various IT skills. Some of the researches say there are missing already circa 200.000 IT skilled resources. Do you find it as a problem in Lithuania as well?
Laisvis Makulis: We have definitely seen an increase in demand for IT talent for the past two or three years. There has been a coordinated effort from governmental bodies and higher education community to satisfy this rising demand. This year IT, alongside with medical sciences, was the most popular study program choice among universities’ applicants. The growing popularity of IT studies comes together with a 50% increase in state funding for IT studies this year. Majority of higher education institutions are increasing the number of places on their IT programs as a result.
Wiktor Doktór: Let’s have a future view of BPO in Lithuania. In your opinion how the market will look like in the next 5 years in Lithuania?
Laisvis Makulis: There are a couple of main tendencies that, I think, are likely to strongly shape Lithuania’s shared services and BPO market in the near future. First of all, companies are increasingly skipping single/few-function center approach and are moving towards multifunctional center model, not only delivering services but shaping company’s processes. Secondly, international companies are already among the top and most desired employers in Lithuania. Western business culture coupled with high living standards and relaxed atmosphere is very attractive not only for Lithuanians, but also foreigners, who come to live and work in Lithuania. If this trend continues, we will see major cities in Lithuania becoming increasingly more multicultural and diverse.
Wiktor Doktór: Final question. If any BPO or SSC company would like to invest in Lithuania. What should they do?
Laisvis Makulis: It’s simple – just get in touch! I can assure that we will support you every step of the way!
Wiktor Doktór: Thank you
Pro Progressio Business Talks is the cycle of interviews with global key managers. Interviews are run by Wiktor Doktór, the CEO of Pro Progressio Foundation. In Pro Progressio Business Talks there are covered current business trends, analysis of business cases, hits and tips as well as discussions concerning process development of European and Global companies.
Laisvis Makulis is the Team Lead for Business Services with significant experience in site selection, project implementation, business and financial analysis, negotiations and operational performance. Within Invest Lithuania Agency Laisvis works with a diverse, multinational corporate client base and provides advice on how to configure business operations in Lithuania.
Invest Lithuania is Lithuanian Agency supporting businesses to start and develop their operation activities in Lithuania. With team of expert advisors, Invest Lithuania give the knowledge, help and support to local and international investors. Services provided by Invest Lithuania are completely free and dedicated to foreign investment promotion in Lithuania. http://www.investlithuania.com/
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