Human Challenges

Recently we did an HR team meeting in Krakow. Why Krakow? Because our outsourcing partner built up their European Hub there. Krakow is one of Poland's biggest cities in the south of the country. I had never been to Poland before although Germany has a pretty long boarder with Poland. I lived three years in Dresden (starting up AMD Fab30) which is about a good hour drive from the polish boarder but never made it there.

Business with western European countries has become easier for Poland since it has been integrated into the European union. With each eastern European country added to the union more competition for western European countries is created. Some companies, even some industries really feel threatened about this competition as do the unions and the government. It is all about low cost competition from these emerging economies. The polish companies can offer better deals as in Poland wages and cost of living are still much lower than in Germany. The german government is trying to protect local companies and workers. The unemployment rate is pretty high and there is a lot of pressure to boost the economy and create new jobs.

I personally do not think that protection is the right answer to something that over the next decade will not be able to be stopped anyway. The economies of many eastern European countries are growing at rates beyond 5% per year. They are very competitive due to lower labor cost and a well educated, very motivated workforce. The only chance for the „old“ economies in western Europe is to reinvent themselves, find new specializations and niches, reform their social systems and deregulate the labor market. Some eastern European countries learned quickly through consequently implementing reforms to establish a free market economy, like Slovakia, today with 1 Million cars produced each year one of the most favored locations not only by car manufacturers. The economic environment there is set up in a way to both encourage people to work hard and earn much money and companies to hire people and make money too. Let's see how things will evolve in Slovakia where a new government has been elected in summer and generally in eastern Europe (read this article in the Herald Tribune for an outlook).

This already answers some part of the question, why our outsourcing partner built up their service center in Krakow/Poland. Krakow has more than one million inhabitants, out of them around 100,000 Students! There are plenty of Universities. Krakow has the oldest university in Poland which made the city the cultural and scientific center of eastern Europe in the past. Nicolaus Copernikus who became famous through the first modern formulation of a heliocentric (sun-centered) theory of the solar system studied there. As a result there is a big well educated, young workforce that interestingly has a high affinity to speak foreign languages.

The tour we had through the service center was very impressive. From the nearly 100 people working there more than half were working for ourselves dealing with all the incoming HR queries from 26 different countries in our EMEA region (Europe, Middle-East, Africa). Employees had cards with their names on it on their cubes and flags below showing the languages they spoke. I rarely saw only one flag (and polish was not part!). They are well organized, working very process oriented with appropriate tooling to keep track of the status of incoming queries. The tooling also permits to put in place a knowledge database. Additionally there are specialized groups dealing with Staffing, Compensation & Benefits, etc. I think we can all imagine how complex it is to deal with 26 different countries and in many cases with 26 different processes for one and the same issue and additionally do it in several foreign languages. I was truly impressed about the customer focus, motivation and engagement of this team!

The city itself is really beautiful with on old center grouping around a main square (Rynek Glowny). You feel the vibrant life lingering around the small streets or sitting in one of the many bars and restaurants that are arranged from stylish to cosy with attention to detail. The parks along the city walls invite for a walk (more info on Krakow).