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Lublin as Eastern Poland’s leader of business services sector

Lublin remains the leader of business services sector in Eastern Poland. The city maintains the rapid pace of growth regularly attracting new investors who join a wide range of businesses from a multitude of different countries which already operate in Lublin. Let’s take a look at some statistics from the “Business Services Sector in Poland 2020” report by ABSL to get a grasp on Lublin’s current landscape of professional services.

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The city’s economic growth is increasingly driven by the activity of BSS companies. According to ABSL, Lublin, which together with Bydgoszcz, Rzeszów and Szczecin is classified as a tier III city, registers the largest increase in the significance of business services sector in the total employment within this group of cities (1.03), which means this segment of economy becomes the city’s specialisation. What is more, the existence and activity of businesses from this industry allow other companies to focus on their core business and thus deliver value and bolster local economy. As the report says, Lublin takes the fourth position in Poland in terms of the number of business centres per 100,000 citizens, with Wrocław, Cracow and Tricity making the podium, while the average headcount in BSS centres in Lublin in 2020 stands at 120. That represents a 24% increase as compared to the 2017 figures.
Interestingly, with 50.6% Lublin boasts the second biggest share of companies with the Polish capital in the employment structure among other cities. When it comes to companies with foreign capital, around 30% of business service centres are of French origin, followed by American (over 15%) and UK capital (3%). In other words, Lublin is proud to be called home by 29 international companies from the following 12 countries: USA (10), France (4), Germany (3), UK, Austria, the Netherlands (2 each), Denmark, Norway, Italy, Switzerland, Ukraine and Malta (1 each).

The total employment in the BSS industry in centres of over 10 employees in Lublin sits at around 9,600, including businesses which deliver services in the Polish language only. When we add micro-sized enterprises and sole proprietorships it turns out that the estimated number of people working in the business services sector exceeds 12,000. Interestingly, there are 4 centres in Lublin which employ over 500 people, 15 centres of over 200 people, and 24 centres which give job to more than 100 employees.

It is notable that in the years 2016-2020 the employment in the BSS sector in Lublin grew by 62%, exceeding the country’s average of 58%.

From 2019 to date, 10 new investors representing the BSS industry decided to open their offices or branches in Lublin, including Capgemini, Lingaro, PwC IT Services, PDK Sp. z o.o., Dovilo Services, Sparkbit, Onet, Cheepro, Reality Unit and ProService Finteco. The names of two new investors are still confidential and will be announced soon.

What is more, ther ABSL report presents the most important factors investors take into account when deciding about locating their businesses in specific cities. There are notable differences in what they consider when choosing between tier I and tier III cities like Lublin. In case of the latter, key aspects include the overall perception of quality of life, cooperation with local universities, pay level, availability of transportation and quality of universities.

What is interesting in the ABSL report, tier III cities are characterised by the lowest share of women in the total employment in the BSS sector (42%). It does not surprise, however, when we take into account that the business services industry in Lublin and Bydgoszcz is dominated by IT, where just slightly over 30 % of staff is female.

It is often said BSS is a people business. Lublin offers the talents companies need to thrive, also because the pool of professionals is supplied by graduates and students of 9 local universities and university colleges. With 61,588 students and 16,685 graduates in academic year 2018/2019, Lublin ensures that new investors may benefit from the availability and quality of young talents. More specifically, 4,376 people studied IT and ICT (translating into 894 graduates), 2,903 pursued linguistic courses of study (807), 11,541 business, administration and law (3,415). What is more, there were 5,689 students of technical and engineering courses (2,228) and 2,800 students of architecture and construction-related fields of study (781).

The growth of the business services sector would not be possible without the supply of modern office buildings. Currently in Lublin, which is the seventh largest regional market in Poland, the total stock of A and B class office space sits at 207,874 sqm, and 3 new premises are in the construction pipeline. CZ Office Park D, Wojciechowska 9A and G7 Inter Office will deliver 16,000 sqm, 6,700 sqm and 16,000 sqm of modern space respectively. In total, these new buildings will offer 38,700 sqm to tenants by the end of September 2021, while the first stage of CZ Office Park (7,000 sqm) is scheduled for completion in Q4 2020.

Finally, the report casts a light on salary differences, and in Lublin the wages are 11.5% lower than the country’s average, which to a great extent is determined by significantly higher salaries offered to BSS professionals in Warsaw (19.9% above the country’s average). This shows that Lublin is an interesting alternative for companies which seek high-quality, but still cost-efficient locations to expand. This attractiveness has substantially grown with the completion of S17 express road which shortened the travelling time between Lublin and Warsaw to 90 minutes. The official opening of the last section of the road is scheduled for autumn this year.

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