Changing Mindsets, Widening Horizons

Deals

The CEO of IT Services Hungary sees a golden opportunity for the Hungarian workforce to make the most of their European culture and embrace their inner ambitions.

Erik Slooten

Dutch national Erik Slooten says ITSH, having built up an excellent reputation with parent company T-Systems International GmbH in the past decade, has now reached the level of maturity where, rather than waiting to have positions assigned to it, it needs to go out and grab them. It must move from being reactive to proactive.

“This represents a paradigm shift from ITSH’s point of view,” says Slooten, who joined ITSH in January 2018. The new approach of deliberately going after value added work was introduced in the last financial year “but we have already started to focus much more on what we do, from a cost savings and value added perspective.”

ITSH is a cost center; it exists to offer savings to the international group. That makes it an interesting company when it comes to measuring success. “Our EBITA needs to be as low as possible for us to be effective,” Slooten points out.  

ITSH opened in Budapest in 2006, but it has since expanded across the country. Its second biggest site opened in Debrecen in 2007, Pécs was added in 2012 and then came Szeged. Overall, it employs 4,500 people in Hungary.  

In staffing terms, the highlight of the year was moving into it brand new, purpose built Budapest head office in Mill Park on August 30 (see ‘Outstanding’ ITSH Moving in and Moving On for more on this). But that sort of investment in staff is not unique to Budapest.  

Modern Offices

“On last Wednesday we finished a move in Debrecen from two buildings into one. It is not as new as this [Mill Park], but it is a very modern, open space.” Salaries have also been increased, the CEO says. “We want our people to understand that we understand the cost of living is rising in Hungary.”

Better salaries and better offices are all part of the process by which shared services centers such as ITSH look to find and, just as importantly, keep staff. Slooten says the attrition rate for staff turnover at his company is 12%; enough to ensure new life is brought into the workforce without it becoming a problem to fill new places or backfill old. He puts the industry average for Hungary at around 15%.

“Recruitment will continue to be a point of focus because it is our lifeline,” he says, simply. The approach includes everything from using headhunters to social media such as Facebook and LinkedIn. But the targets aren’t limited to those in Hungary.  

“We are looking at what we can do to bring Hungarians back to Hungary. I am having dinner with the head of one of the SSCs that has been very successful at attracting Hungarians back from abroad. Some have done well at this, others, such as ITSH, not so well. I will learn from anyone I can. Part of the opportunity we have is making it financially possible for international people to come back and also giving them leadership possibilities here.”

And since ITSH has three countryside centers beyond Budapest, it can also attract emigre Hungarians from those areas who might want to return for family reasons. “We should definitely tap into that opportunity.”

Slooten makes the point that the SSC sector hasn’t always been great at telling potential hires what it does, let alone what the opportunities for career development are. He thinks companies like ITSH need better branding to reflect their values, but also the opportunities, and “to be more specific about our ambitions”. ITSH has 500 job types; a person could find new high level challenges every couple of years without ever leaving. T-Systems International’s European-based cloud platform, for example, is operated from Hungary.  

Language Matrix

SSCs often say that one of the things that attracts them to Hungary is the availability of a workforce with good language skills, which can appear counterintuitive considering Hungary’s low position in language learning league tables compared to almost every other state in the EU. But Slooten points out that language skills form part of a particular matrix in Hungary: cost, education and languages.

“We offer lower costs because we are near shore, a high degree of engineering skills, and language skills. If you just wanted language skills, you might go to Scandinavia, but the costs are much higher there, and there aren’t so many engineers. Hungary has all three, but it is that balance that we businesses, as well as the government, must focus on keeping as healthy as possible.”

It is well known, however, that IT skills are at a premium in Hungary’s ever tightening labor market. That has prompted ITSH to get creative. “We are now looking at how we can make language students into specialists in some IT areas. If we take fluent German speakers – we are talking C1 level, near native speakers – and give them six months training, they can start working in beginner jobs in ITSH; not full IT engineers, but with specific engineering skills.”  

Put crudely, it is quicker to find gifted language students and teach them IT skills than to give programmers language lessons. “This isn’t a dream, we are already doing this in Debrecen. In Szeged and Pécs we are talking with the universities right now.” The idea is to find students at the end of their second year of studies, and then to give them specific IT training, provided by ITSH, alongside their language lessons. Students have to keep up their language ability, but if they graduate they will be offered a guaranteed a job at ITSH for a couple of years.

Slooten says he is offering the students an opportunity to join an international organization, with all the international opportunities that go with that. But they have to embrace that. There is a wider world out there, and Hungarians have every chance to be part of it.

“They should not forget that Hungary’s USP is that it is part of European culture and has been for hundreds of years. It is not an island but is connected to these cultures.” That’s true for ITSH staff as well. “It is time to take on more responsibility, particularly where we can see we can solve problems. It will take effort, but it is a change of mindset, and that is what we are working really hard on, making them see that and believe in it.”

Bio Box

Erik Slooten
•    Chief Executive Officer, ITSHJan 2018 – Present
•    Chief Information Officer, eircom IrelandAug 2015 – Jan 2018
•    Regional VP Processes and Systems, T-Mobile, Czech RepublicOct 2014 – Jul 2015
•    Group IT Director, GTS Central Europe, Czech RepublicDec 2011 – Oct 2014
•    VIVACOM, Sofia, BulgariaDirector IT (Aug 2010 – Nov 2011) and Director IT Applications (Nov 2008 – Aug 2010)
•    Earlier roles with Slovak Telecom, Wistar, Czech Republic;Czech Telecom, Galileo Management Consulting BV, Enertel, Netherlands

Education
Bachelor’s degree in International Law and Legal Studies (1990–1995) from University of Groningen, one of the oldest universities in the Netherlands (founded in 1614, the university ranks amongst the top 100 in the world).

ADVERTISEMENT

Pandemic has only moderate impact on big companies Analysis

Pandemic has only moderate impact on big companies

Parl't to vote on groundwork for commercial accommodation ra... Parliament

Parl't to vote on groundwork for commercial accommodation ra...

Duncan Graham reelected as BCCH president Appointments

Duncan Graham reelected as BCCH president

Budapest re-launches airport shuttle bus City

Budapest re-launches airport shuttle bus

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.