The attractiveness of central and eastern Europe as a location for corporates’ shared service centres (SSCs) continues to grow. Emre Karter, deputy head of global transaction services for CEE at Citi, estimates that there are 338 in CEE. “Many serve the CEE and some also serve EMEA or even perform global functions,” he says.
Kai Grosse, head of CEE, cash management and international business at Commerzbank, also confirms that “the eastward shift of SSCs is still occurring”, with Bratislava in Slovakia favoured by companies such as Deutsche Telekom because the country is a euro member and it remains relatively cheap. “It is increasingly suffering from a shortage of skilled labour, however, and could start to lose business to Ukraine if the political situation there remains stable,” says Grosse.
Euro membership, skilled labour and cost are the principal drivers for SSC location. However, more than one factor must be present to make a location worthwhile, according to Grosse. “Prague, for example, has the skills but [the Czech Republic] is not a euro member and has labour costs close to western Europe. Romania and Bulgaria are cheap but don’t have the necessary infrastructure,” he says.
Karter adds: “Decisions on location are based partly on incentives from governments but ultimately it comes down to the availability of talent as well as overall location cost.”