The post-COVID aftermath brought about a significant jump in the local BSC sector, both in terms of employment and the number of centers. However, given that the Hungarian economy has been struggling for growth for three years now, that previously crisis-proof segment didn’t remain unscathed. As confirmed by István Lenk, president of the Association of Business Service Leaders in Hungary, the BSS here is experiencing a significant transformation, even if its growth rate has slowed in recent years.
“There has been a shift in the market, and according to the latest numbers, we are looking at around 120,000 employees and roughly 230 centers,” he tells the Budapest Business Journal, emphasizing that transformation, rather than pure volume growth, is now shaping the sector. As he explains, companies are moving toward higher-value roles.
“This has always been the vision, but now it is actually happening. Simply put, because it has to,” he says.
This transformation involves developing employee skills, competencies, and knowledge to support future-ready roles. Businesses are investing in higher-value positions to create a stronger foundation for long-term growth. At the same time, the hub feature is gaining significance, serving as “orchestrators” within corporate structures.
“The GBS [Global Business Services] hub itself will sit at the center, with various functions connected to it. These hubs retain high-value roles, meaning many functions exist only there and nowhere else in the business,” Lenk notes. These include finance, HR, technology engineering, cybersecurity, and digital marketing, functions that can be centralized while maintaining cohesion in a large GBS ecosystem.
The sector’s evolution marks a shift from traditional, cost-focused BSC models, once known as shared services centers, where labor arbitrage dominated, to ecosystems integrating technology and human expertise.
“These two elements, technology and knowledge, create a domain that is a mixture of expert-level knowledge and resilience,” says Lenk.
Service centers are moving from transactional processes to end-to-end operations. Transactional tasks are either automated, reorganized, or outsourced, while repetitive work may be automated through software solutions, outsourced via business process outsourcing models, or relocated to regions such as Asia.
“In certain respects, India is no longer cheaper than Hungary. At the leadership and expert levels, in fact, it can even be more expensive,” the ABSL Hungary President adds.
The labor market shows a dual trend: a relatively large talent pool exists, but there are shortages in certain specialized positions. This means that continuous reskilling is essential for employees to fill emerging roles created by transformation.
Asked whether the phenomenon of “quiet cutting” (where people are placed in roles for which they are overqualified to encourage them to quit), Lenk notes that roles are being transformed no matter what; if someone is open to learn, they won’t run the risk of being put into awkward positions against their will.
BSC employees are, in any case, used to change management. This is critical because, in Hungary, staff turnover is very high, which is partly why companies are forced into salary bidding wars despite sluggish growth and stagnant revenues.
Another key issue is how Hungary fares compared to its regional counterparts. Overall, Hungary’s business services wages are among the lowest in the EU. Generating some 3-4% of the country’s GDP, the BSC sector has massive potential. And with a well-crafted strategy, that figure could crawl up to the two-digit realm, Lenk believes.
“After Poland, Hungary is the second strongest in this competition,” Lenk states. Yet new competitors are emerging, including Spain, Portugal, and especially Egypt. The latter is “developing rapidly and investing heavily in government-led initiatives. Egypt’s advantage is delivering services more cheaply, with robust language skills and European time zones.”
What is important is to showcase what the Hungarian BSC sector has to offer, the expert notes. This could be achieved, for instance, through cooperation with the Hungarian Investment Promotion Agency and the Central Statistical Office (KSH) to make accurate reports available for the public and potential investors. The emergence of Generation Z introduces new dynamics as well.
“Generation Z has different expectations: they demand output and flexible work arrangements. Employers must take this into account,” says Lenk. Young professionals communicate quickly, prioritize career growth over loyalty, rapidly adopt new technologies, and are unafraid of AI. As Lenk puts it, they “cannot imagine life without finding digital solutions for everything,” including AI-powered tools.
Furthermore, young employees just can’t imagine their jobs would be endangered by digitization in any way. Moreover, the BSC sector is their natural habitat, as the segment offers a terrain for synergies between capability and willingness.
“Business services lead in technology and digitalization because they can quickly adopt new practices related to resilience and change management,” according to Lenk. The role of GBCs is also changing, though. Digital hubs are sure to customize solutions from major tech providers, including ChatGPT and other AI technologies.
“The noise is big,” admits Lenk; therefore, it is hard to identify what best suits any given process.
Training, therefore, should provide clarity on what to use for which purpose. In many cases, AI’s worth has already been proven. Take AI-related IT roles, speeding up the review of legal opinions or automating accounting tasks. The key is to free up time by taking over repetitive tasks, provided decision points remain where the “human in the loop factor” is still the determinant.
“Certain elements can be sped up, but process management itself must stay within the responsibility of humans,” Lenk concludes.
This article was first published in the Budapest Business Journal print issue of November 14, 2025.
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