COMPANY INVESTMENT PLANS IN 2017

Transcription

1 PARTNERS COMPANY INVESTMENT PLANS IN ST EDITION ANTAL STUDY

2 TABLE OF CONTENT FOREWORD... 2 KEY INFORMATION... 3 INVESTMENT PLANS... 4 NEW JOBS... 6 PLANNED INVESTMENTS BY CITY... 7 INVESTMENT INDEX... 8 SECTOR LEADERS IN EACH INVESTMENT CATEGORY... 9 COMPANY INVESTMENT PLANS BY COMPANY SIZE INVESTMENT PLANS BY YEARS OF PRESENCE IN THE MARKET AVERAGE RATING OF INVESTMENT FACTORS IN POLISH CITIES METHODOLOGY COMPANY INVESTMENT PLANS IN 2017

3 FOREWORD The Business Environment Assessment Study is a broad project with the goal of providing insights on the business environment in which companies operate. We asked almost 500 directors of companies that operate in the Polish market to share their opinions. This report, which outlines the market sentiment and investment choices made by decision-makers of Polish companies, is the first publication released as part of the project. There will be a series of subsequent reports published in the future. They will provide an in-depth look at the Polish market from the perspective of businesses and outline the most important company growth trends. Our partners provided extensive support and expert knowledge in all areas of research. Antal was the labour market expert, CBRE advised on the infrastructure and real estate markets, whereas BPCC, ASPIRE and Adaptive shared their insights on the factors that determine future investments. We hope that the our findings will prove to be a valuable tool that will help in explaining the intricacies of the Polish market. Poland is one of the world leaders in SSC/BPO investments and has the perfect conditions for the industry to grow, i.e. an engaged, educated workforce with foreign language skills; competitive costs, especially employment costs (which are the biggest cost category for BPOs/SSCs); availability of modern office space and investment incentive packages. Future investment decisions are also based on the past choices of investors. Because many global leaders have already outsourced their processes to Poland, we may be sure that more SSC/BPO companies will follow in their footsteps. Projects in this industry, regardless of the doubts that may accompany them, span many years and are directly tied to the strategic plans of corporations that invest into cutting-edge technology and employee development, both of which have a direct impact on the technological and advanced management process development in Poland as a whole and in the specific regions/cities where the projects are located. The labour market is also positively affected - worker competencies are broadened and the best practices in management become more widespread. ARTUR SKIBA ANTAL CHAIRMAN OF THE BOARD OF MANAGEMENT MICHAŁ BIELAWSKI PARTNER & CFO ADAPTIVE SOLUTIONS & ADVISORY GROUP The inflow of new companies, both foreign and domestic, and their constant expansion are important factors that contribute to the growth of the Polish economy. Investors create jobs, educate workers, introduce the newest trends, foster urban, business and industry development, increase Poland s economic and social competitiveness and attractiveness. Being aware of corporate investment plans is important for assessing the state of the country s economy and the business owner sentiment, especially in the face of political turmoil. This report paints a relatively positive image of the Polish business reality, with hopes of maintaining growth and shrugging off possible economic crises. DANIEL BIENIAS MANAGING DIRECTOR CBRE 2 COMPANY INVESTMENT PLANS IN 2017

4 KEY INFORMATION 83% of companies are planning new investment projects. Antal Investment Index the average coefficient of investment plans based on 4 variables: investments in technology, investments in human capital, investments in product / service development, investments in regional expansion. Poland has an index of 45%. 60% 78% of The most popular destinations for regional expansion investments are: Most of them plan to invest in human capital. decision-makers plan to create new jobs. Most of them in the IT and Telecommunications, Internet and e-commerce and SSC/BPO sectors. The Antal Investment Index presents the average investment level in specific regions and industries based on the opinions of company representatives. By taking several key aspects into consideration, i.e. new technology, human capital, regional growth and product/services development, the index provides the necessary information to reliably assess and compare the growth potential of specific regions and industries. The following sectors have the highest Antal Investment Index coefficient: Insurance (56%), IT and Telecommunications (55%), Banking (53%), Manufacturing (53%), Internet, new media, e-commerce (53%), FMCG (50%), Retail (48%). Poznań Warsaw 7.0 decisions Poland s average rating of factors that influence on new investments on a 0-10 scale. Wrocław Łódź 3 COMPANY INVESTMENT PLANS IN 2017

5 INVESTMENT PLANS 83% of decision-makers plan new investment projects. The results of the study show that 83% of decision-makers are planning to make new investments in Four types of investments were distinguished in the Business Environment Assessment Study: Investments in technology - purchasing of new technology, e.g. software, equipment, manufacturing machinery. Investments in human capital - employees, raises and bonuses, more attractive office space, trainings, perks. Investments in product / service development - rolling out new products or services that broaden the company s portfolio. Investments in regional expansion - opening new branches, production plants, etc Investments in human capital 60% Investments in product/service development 58% Investments in technology 47% Investments in regional expansion 16% Market insight ASPIRE: Ongoing investment into new business service lines with ever greater levels of complexity is characteristic of the Business Service and IT industry in Krakow. This trend is naturally accompanied by investment in the industries workforce technologies used as well as an ever greater geographical scope of service delivery as Krakow establishes itself more and more as a global centre for Business and IT solutions. The majority of decision-makers plan to invest in human capital (60%). Investments in products and services are planned by 58% of respondents. A high percentage of companies plan to invest in technology (47%). 16% of respondents have regional development plans. 4 COMPANY INVESTMENT PLANS IN 2017

6 The willingness to invest in human capital sends an important message which says that whether or not a company succeeds in the market depends on the competencies of its employees. As recruiters, we often see that the success of a business development strategy depends on drawing in the right talent. Recruiting and new jobs are one thing, but since we now have an employees market to deal with, you have to take care of the needs of your workforce. You should keep up with salary and perks trends. ARTUR SKIBA ANTAL CHAIRMAN OF THE BOARD OF MANAGEMENT The so-called era of participation and the emergence of a sharing economy have a significant impact on the changes that are taking place in companies and in the ways in which individuals become engaged in their jobs. The new possibilities, coupled with new expectations, have led to the shaping of the so-called holistic employees. People want to combine their professional and private lives, they wish to have active influence on their activities and live in accordance with their views and the concept of environmental preservation. Such employees are motivated by more than just financial needs and simple incentives, e.g. swimming pool passes. They have to encouraged and convinced to commit to a given activity and believe in the mission of the company. The environment and office in which employees spend most of their time are an important factor. Investments in those areas are crucial for success in today s conditions. JOANNA MROCZEK SENIOR DIRECTOR RESEARCH & MARKETING CBRE 5 COMPANY INVESTMENT PLANS IN 2017

7 NEW JOBS New investments go hand-in-hand with the creation of new jobs. Will your company s growth lead to the creation of new jobs? (Answer: yes) 78% of decision-makers plan to create new jobs. Investment plans lead to the creation of numerous new jobs - not only vacancies, but also new professional profiles that used to be called jobs of the future. Individuals who specialize in those jobs are among the most sought after. Examples include Big Data, UX robotics and artificial intelligence specialists. We have observed that the demand for security professionals is also growing. Information is today s most valuable currency. Companies (regardless of sector) are making increasingly conscious investments in cutting-edge data security, global access, process automation and information management systems. Implementing intelligent IT solutions make it necessary to take on IT professionals who create and maintain such systems. IWONA GREGOROWICZ ANTAL IT SERVICES CONSULTANT MARKET ADVISOR 91% 89% 87% 83% 81% 80% 79% 78% 75% 75% 73% 71% 71% 52% 50% 50% IT and Telecommunications Internet, new media, e-commerce Shared services and outsourcing centres (SSC/BPO) Retail FMCG Transport, freight forwarding, logistics Insurance Real estate and construction Marketing, advertising, PR agencies Banking Manufacturing Consulting Automotive (manufacturers and suppliers) Healthcare and pharmaceuticals, medical devices Energy, fuel, extraction, chemicals Law firms 6 COMPANY INVESTMENT PLANS IN 2017

8 PLANNED INVESTMENTS BY CITY The majority of respondents who declared to be planning regional expansion projects want to branch out into Warsaw. However, practically each Polish city was listed by at least one respondent. The below table shows the cities where the most investments are planned. Tri-City 13% CBRE: The rapid expansion of Business Services (BSS) lessees led to the dynamic growth of the office real estate market not only in Warsaw, but mostly in other parts of the country. The total area of available office space in Polish cities has doubled in the last 5 years. As of June 2017, the total area of office space grew to 9.3 million square meters with an annual supply of 550,000 square meters (compared to 800,000 square meters in the previous year). That is the result of the enormous demand for office space in nearly all cities. At the end of 2016, total demand stood at 1.3 million square meters, whereas in the first half of 2017 there was demand for 630,000 square meters. Szczecin 6% 16% Warsaw 28% 16% 22% Gliwice 9% Katowice 9% Kraków 12% Rzeszów 6% The table includes only cities that were listed as a location for future investments by at least 5% of respondents 7 COMPANY INVESTMENT PLANS IN 2017

9 INVESTMENT INDEX All of the above factors must be taken into account to present a full picture of investment plans. Therefore, the report includes the investment index that takes into consideration all of the aforementioned types of investments. 45% In general 45% investments in technology, investments in human capital, investments in product / service development, investment in regional expansion. [ number of number of number of number of companies number of ANTAL companies companies that companies that that plan companies INVESTMENT = plan technology + that plan + regional + plan product ]: ]: included human capital and service INDEX investments expansion in the study investments development investments 4 The Antal Investment Index presents the average investment level in specific regions and industries based on the opinions of company representatives. By taking several key aspects into consideration, i.e. new technology, human capital, regional growth and product/ services development, the index provides the necessary information to reliably assess and compare the growth potential of specific regions and industries. Antal Investment Index by sectors The following sectors had the highest Antal Investment Index (above the Polish / intersectoral average): Insurance (56%), IT and Telecommunications (55%), Banking (53%), Manufacturing (53%), Internet, new media, e-commerce (53%), FMCG (50%), Retail (48%). 56% 55% 53% 53% 52% 50% 48% 44% 42% 42% 38% 38% 36% 35% 33% Insurance IT and Telecommunications Internet, new media, e-commerce Banking Manufacturing FMCG Retail Automotive (manufacturers and suppliers) Transport, freight forwarding, logistics Healthcare and pharmaceuticals, medical devices Real estate and construction Shared services and outsourcing centres (SSC/BPO) Consulting Marketing, advertising, PR agencies Energy, fuel, extraction, chemicals Antal Investment Index 8 COMPANY INVESTMENT PLANS IN 2017

10 SECTOR LEADERS IN EACH INVESTMENT CATEGORY Leaders: Investments in human capital: IT and Telecommunications 78% Insurance The SSC/BPO industry is one of the quickest-growing sectors of the Polish economy. Several thousand new jobs are created each year, mainly for candidates with foreign language skills. The sector seeks to draw in both young talent as well as experienced candidates and constantly expands their competencies by transferring increasingly complex processes to Poland. Employers compete against each other to draw in the best candidates and, therefore, are investing more and more into human resources, which leads to improving the standards and conditions of employment. At the same time, they are creating new opportunities by hiring students and individuals aged over % Banking DARIA STEFAŃSKA ANTAL SSC/BPO MANAGER 69% Shared services and outsourcing centres (SSC/BPO) 68% FMCG 67% Antal Investment Index 9 COMPANY INVESTMENT PLANS IN 2017

11 Leaders: investments in technology Manufacturing 76% Banking Manufacturing companies are expanding. Many of them decide to reinvest or start production and projects with a higher degree of automation. Research and development centres are being set up in Poland, many companies invest in cutting-edge machines. The Polish manufacturing industry is set to play a key role in the CEE region given the saturation of the German, Czech and Slovakian markets. This is caused by the increasing ratings of Poland s business environment. Highly developed economic zones, professional administration officials, improving infrastructure and broad competencies of professional staff have a direct influence on the decisions to invest in technology in the sector. 69% ROMAN ZABŁOCKI ANTAL ENGINEERING & OPERATIONS MANAGER Internet, new media, e-commerce 63% FMCG 63% IT and Telecommunications 58% Antal Investment Index 10 COMPANY INVESTMENT PLANS IN 2017

12 Leaders: investments in product / services development Internet, new media, e-commerce 79% Insurance 77% The obvious leaders, i.e. Internet, new media, e-commerce and IT, are accompanied by companies from the pharmaceuticals and medical devices sector, which requires a word of explanation. Pharmaceutical and medical devices companies are at the forefront of development. Thanks to investments in R&D and clinical research, they are able to roll out groundbreaking products that save the lives of patients. The clinical research departments of many pharmaceuticals companies are located in Poland and take part not only in Polish projects but also multinational ones. Therefore, we should not be surprised that investments in the development of products and services are very high in this sector. The life sciences sector has been rapidly growing in Poland for a number of years with many companies running research projects on genetics, and lately we have been witnessing growing employment in the area of computer-aided chemistry. Therefore, medicine ventures beyond biology and embraces cutting-edge technology. IT and Telecommunications 63% JOANNA KUZIOŁA ANTAL SALES & MARKETING MANAGER Healthcare and pharmaceuticals, medical devices 62% Automotive (manufacturers and suppliers) 61% Antal Investment Index 11 COMPANY INVESTMENT PLANS IN 2017

13 Leaders: Investments in regional expansion Retail 42% Healthcare and pharmaceuticals, medical devices We should say a few words about the somewhat peculiar shared services centres sector. Such companies often specialize in a certain area, e.g. banking or finance. Therefore, when interpreting the results of the study in the context of sector-wide regional development plans we cannot rule out that respondents who represent companies from the insurance or banking sectors, for example, have plans to open outsourcing centres in other regions of the country. AGNIESZKA WÓJCIK MARKET RESEARCH MANAGER ANTAL 24% Insurance 23% Internet, new media, e-commerce 21% Banking 19% The biggest investments in regional development are being made in the retail sector, which does not come as a surprise. Expanding sales networks increases the sales capacity of retail companies and that gives them an edge over the competition. However, other solutions are also used in the sector, such as investing in the development of franchise networks and e-commerce, to supplement traditional sales. There are a lot less regional development investments in the pharmaceuticals sector. That is caused by the dropping efficiency of extensive regional sales teams which are being replaced by multichannel solutions where traditional albeit much less numerous teams are supported by digital solutions. JOANNA KUZIOŁA ANTAL SALES & MARKETING MANAGER Antal Investment Index 12 COMPANY INVESTMENT PLANS IN 2017

14 Currently, companies from the finance, insurance, business services, professional services and the broadly-defined telecommunications and IT sectors are the most active in the real estate market. The latter sector is growing at a very rapid pace, especially when it comes to HI- TECH and the so-called Creative IT companies. Companies that are operating solely via the internet, creators of applications, social media websites, consulting services, communication systems, e.g. Google, Facebook, Uber, IBM, Accenture, are investing in growth, taking on more employees and, thus, need more space. Numerous start-ups and small companies, which are becoming a creative force of business thanks to public (Smolna Entrepreneurship Center) and private (Google Campus) subsidies, additionally contribute to this trend. Many of Europe s capital cities, such as London or Madrid, have entire business zones designated solely for start-ups. This trend is only starting to take root in Warsaw, but Kraków and Wrocław have been focusing on small, family-owned business for a number of years now. The biggest demand in regional cities is created by business services companies (SSC/BPO). Because these often are the world s biggest corporations, such as IBM, Shell, HP, Google, CapGemini, State Street, etc., they have certain standards regarding the offices that they lease. These corporations are what shapes regional markets. JOANNA MROCZEK SENIOR DIRECTOR RESEARCH & MARKETING CBRE 13 COMPANY INVESTMENT PLANS IN 2017

15 COMPANY INVESTMENT PLANS BY COMPANY SIZE Bigger companies are more likely to have investment plans for Companies with more than 500 employees are the leader in this category. 100 employees or less 43% Market insight ASPIRE: The ASPIRE Headcount Tracker annual human resource study shows that the percentage of employees who work in the business services and IT sectors is growing across the country. This is true for both the biggest players with thousands of employees as well relative newcomers to the Polish market, with several hundred employees, and IT start-ups employees 39% employees 45% employees 48% employees 55% more than 1000 employees 50% Antal Investment Index 14 COMPANY INVESTMENT PLANS IN 2017

16 INVESTMENT PLANS BY YEARS OF PRESENCE IN THE MARKET The biggest investments are planned by companies that have been active in the market for less than a year and, on the other end of the spectrum, the most mature companies that have been operating in Poland for the last 11 years, which may signify the necessity of introducing changes. Less than 1 year 49% 1 year - 3 years 46% 4 years - 6 years 42% 7 years - 10 years 42% 11 years and more 47% Antal Investment Index 15 COMPANY INVESTMENT PLANS IN 2017

17 AVERAGE RATING OF INVESTMENT FACTORS IN POLISH CITIES The Business Environment Assessment Study distinguished the most important factors that influence investment decisions. Respondents were asked to rate the quality of their business environment. By combining several indices for each of the areas included in the survey, the report presents a complete rating on a 0-10 scale, where 0 is the lowest possible rating and 10 is the highest possible rating. Poland s average score of all indices combined is 7. Infrastructure - 7 consists of: Air transport - 7,7 Road transport (inter-city) Rail transport - 7.6; Urban mass transit Ease of commuting by car in the city Bicycle infrastructure CBRE: When faced with a rapidly changing labour market and the ever-strengthening position of employees, a convenient location is the decisive factor when choosing suitable offices, especially when the main reason for their opening is cutting expenses. Before making a decision, analyses of employee commute times are made. Diversity is also important, therefore the office should not only be convenient for those who reach it by underground or car, but also for those who take the bus, tram, suburban trains and ride bicycles to work. According to the 2016 lessee preferences survey carried out by CBRE, 73% and 68% of respondents respectively stated that the convenience of reaching the office via mass transit or private means of transport are among the most important factors that determine the choice of office location. The Polish inter-city and international transport infrastructure is rapidly improving. Each new expressway or air link increase the attractiveness of a given location. However, there still is a very noticeable lack of expressways that would connect the capital to other big cities (e.g. Kraków, Rzeszów and Tri-city). Office space - 7,2 consists of: Office space lease pricing Office space availability Quality of additional services in the building or in its close vicinity Mass transit access Quality of office space CBRE: The Polish office space market has undergone vast changes over the last 20 years. The inflow of multinational corporations has led to rising needs not only in Warsaw but, more importantly, in smaller cities as well. Poland not only follows international trends but often is pioneers cutting-edge technological, architectural, environmental, wellness and smart office solutions. Office lessees require there to be numerous stores, services, cafeterias, restaurants, cafes, bicycle parking and after-work entertainment spots in the close vicinity of the office. The modern office has ceased to be a place where the employee provides labour to their employer and has since become a place around which people spend most of their lives. Along with the changing needs of lessees, landlords rent out some spaces to private medical, fitness and spa centres, kindergartens, conference and training centres, dry cleaners, shops and other services. This gives employees convenient access to all the services that they may need and makes them more content with the location of their workplace. There are some unique green services being set up, such as the Veturilo bicycle renting network and electric car charging stations. The above approach, which resembles the way in which hotels have been operating for many years, will irreversibly change the way we think of offices in the future. The concept of placemaking, i.e. creating public spaces around buildings, changes the role of architects and real estate developers in shaping cities and the public life. 16 COMPANY INVESTMENT PLANS IN 2017

18 On the other hand, the percentage of class B or below buildings in Polish cities remains high (only about half of the modern office spaces can be considered class A). There are a lot of opportunities for development and renovation. However, large investments are required if landlords wish to remain competitive against newly built office buildings. The availability of modern offices is crucial for new investors and may hamper the development of smaller cities, such as Opole, Bydgoszcz, Toruń and Kielce. JOANNA MROCZEK SENIOR DIRECTOR RESEARCH & MARKETING CBRE Public administration support consists of: Communication with public administration bodies (availability of experts, online contact) Support of public servants New business-oriented initiatives and projects Education opportunities understood as the supply of future employees consists of: Higher education institutions (number of institutions, quality of education) vocational and middle schools (number of schools, quality of education) Employers gave high ratings to education opportunities in their cities. This means that they are happy with the number of higher education institutions and the fields of study that young people can choose from. It is worth noting that companies take the supply of young candidates into serious consideration when planning new investments, especially when setting up R&D or SSC centres. The general opinion, however, is that the quality of education is dropping. The main reason behind it is thought to be the student per professor ratio. There are approximately 4 times as many students per professor today than there were 25 years ago. Therefore, the notion of consolidating higher education institutions, which is considered to be the solution that will improve the quality of education, is gaining ground. MONIKA DACZKA ANTAL FINANCE & ACCOUNTANCY MANAGER Public administration bodies are among the most important business environment institutions. In recent years, we have been witnessing a big change in the way public administration works. Organizations that used to be passive are adopting a proactive approach to the needs of businesses and make a direct contribution to creating a business-friendly environment. However, this is not always the rule, therefore there is still a lot of work to be done to improve the approach to businesses and the image of public institutions. AGNIESZKA WÓJCIK MARKET RESEARCH MANAGER ANTAL 17 COMPANY INVESTMENT PLANS IN 2017

19 Business potential Employment potential consists of: Competition in the local market (where 0 means that there is no competition, and 10 means that all competitors are active in the local market) Business potential is directly related to the maturity of a given market. Poland s average rating of 7.1 means that it is a perfect location for start-ups and new business initiatives. Markets with a rating of less than 5 do not have the necessary knowledge, experience and infrastructure, or even methodology, that would allow to quickly start a business and absorb knowledge. Markets with ratings of 5 to 8.5 are high-capacity markets with relatively plentiful knowledge that have not yet been spoiled by high prices and the expectations that result from an employees market. They still crave business and success. However, we recommend looking into the maturity of specific sectors before making investment decisions. KAROLINA KORZENIEWSKA ACCOUNT EXECUTIVE EUROPE ANTAL SSC/BPO consists of: supply of lower-tier employees supply of middle and senior employees with engineering competencies supply of middle and senior employees with IT competencies supply of middle and senior employees with foreign language competencies supply of administration and HR employees supply of middle and senior employees with analytical and financial competencies - 7 supply of middle and senior employees with sales competencies - 7 The employment potential received a rating of 6.8 on a 0 10 scale. That is a good rating, especially when compared to those received by Poland s neighbours. That is, without a doubt, good news for the employee market in Poland. However, there may be some negative consequences to it as our neighbours may snatch up candidates from our market which, at the moment, is an employees market for middle and senior professionals and managers in many sectors. The supply of administration and HR employees, which are gaining importance in organizations, received a very positive rating of 7.2. The supply of middle and senior employees with analytical and financial skills received a slightly lower rating of 7, which is good news for a large part of SSC/BPO companies in Poland. The results of the survey also show that we have a relatively good supply (rating of 7) of middle and senior sales employees. Competition is often a positive and motivating factor. Moreover, it attests to the broad talent pool that is available in a given location and the increased number of competencies, which means that there is no need to relocate employees. IWONA GREGOROWICZ ANTAL IT SERVICES CONSULTANT MARKET ADVISOR The supply of candidates with foreign language skills was rated at 6.9, whereas the supply of candidates with broadly-defined IT competencies was rated slightly lower at 6.6. Respondents see the least potential in the supply of candidates with an engineering background and low-tier employees (6.5). The above rating may still be considered good and it reflects the employees market conditions, especially in entry-level jobs. SEBASTIAN SALA ANTAL FINANCE & BANKING MANAGER 18 COMPANY INVESTMENT PLANS IN 2017

20 Quality of life rating - 7,3 consists of: Cultural offerings Safety Quality of the natural environment Shopping facilities Healthcare - 7 Education Market insight ASPIRE: Access to a well-educated multilingual workforce was a prerequisite for Krakow s emergence as a hub location of choice for Global corporations. Now as these enterprises continue to expand the range of services they deliver often employing 10% or more of their global workforce additional factors such as quality of life and infrastructure are ever more important. These factors will shape cities ability to consolidate Poland s emergence as a Global centre for business. 19 COMPANY INVESTMENT PLANS IN 2017

21 METHODOLOGY The Antal Business Environment Assessment Study was carried out in May and June of 2017 on a sample of 489 decision-makers, including chairmen, members of the board and department directors, of companies that operate in the Polish market. The study was carried out using CATI and CAWI. Partners of the study: CBRE, BPCC, ASPIRE. The study was also carried out in the Czech Republic, Slovakia and Hungary over the same period. 20 COMPANY INVESTMENT PLANS IN 2017

22 CONTACT For more information please contact: Agnieszka Wójcik Tel.: Tel.: OUR OFFICES IN EUROPE Warszawa Wrocław Kraków Poznań Gdańsk Praga Bratysława Budapeszt