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IBM bets on skilled, cheap labour

Doffing its cap to a skilled domestic labour force and the high reputation of its Slovak operation, American information technology giant IBM in June this year chose Bratislava as the site of a $5 million service and sales centre covering five central European countries. The investment increased the funds the firm has committed to the country since 1995 to $10 million.
Although IBM already has seven international service outlets here, the new Bratislava facility is its largest in the country, and the first in Slovakia to deal directly with customers. The centre provides information over the telephone to IBM clients in Slovakia, the Czech Republic, Hungary, Poland and Slovenia, offering information on IBM products and sales support. The centre supplements the firm's 24-hour web-based shopping service, and is one of four such operations IBM runs in Europe.
IBM chose Slovakia after studying the labour markets in all five central European countries the 'call centre' was to serve. The company found that Slovakia, with its 18% unemployment rate, was able to meet its immediate needs for skilled, language-proficient and cheap labour.


IBM says Slovakia's labour market fitted the bill for its new call centre.
photo: TASR

Doffing its cap to a skilled domestic labour force and the high reputation of its Slovak operation, American information technology giant IBM in June this year chose Bratislava as the site of a $5 million service and sales centre covering five central European countries. The investment increased the funds the firm has committed to the country since 1995 to $10 million.

Although IBM already has seven international service outlets here, the new Bratislava facility is its largest in the country, and the first in Slovakia to deal directly with customers. The centre provides information over the telephone to IBM clients in Slovakia, the Czech Republic, Hungary, Poland and Slovenia, offering information on IBM products and sales support. The centre supplements the firm's 24-hour web-based shopping service, and is one of four such operations IBM runs in Europe.

IBM chose Slovakia after studying the labour markets in all five central European countries the 'call centre' was to serve. The company found that Slovakia, with its 18% unemployment rate, was able to meet its immediate needs for skilled, language-proficient and cheap labour.

"Slovakia was number one due to the fact that its labour market was the best prepared to supply our needs at the call centre," said Boris Kekeši, general manager of IBM Slovakia.

"It's not that Slovakia is ahead of other countries in the region in its IT knowledge," said the call centre's project manager Markus Hediger. "However, the fact that foreign direct investment in Slovakia is lower than in many of its neighbouring countries means that relatively more skilled workers who have university education are available."

Total foreign direct investment to Slovakia stood at 199.7 billion crowns ($4.2 billion) at the end of June this year. The Czech Republic near the end of last year had already taken $23 billion, Hungary $21 billion and Poland $30 billion.

The IBM centre created 50 new jobs, 90% of them for multilingual Slovak university graduates. The newcomers increased IBM's staff in Slovakia to 320 people.

Representatives of other foreign firms who have previously launched call centres for their products in Slovakia said that the labour issue was and would always be the key decision-making factor for such investments as that of IBM.

Miroslava Kuchárová, manager of a Bratislava television call centre run by the Norwegian telecom company Telenor and internet provider Nextra, said that back in 2000, when the companies had been deciding where to found their facility, they too had been attracted by Slovakia's cheap and skilled labour.

The call centre serves expatriates living in western European countries, allowing them to buy TV packages which include their domestic channels, allowing them to follow programmes from home while abroad. The Telenor centre's 16 employees among them spoke Chinese, Mandarin, three Pakistani languages, Russian and English; 70% were native Slovaks, Kuchárová said.

"Their language skills and ability to adapt fast to work at the call centre, which is a relatively new thing for Slovakia, was the main reason we launched it here. We are already considering expanding."

Slovak government officials responsible for the development of the information technology sector welcomed IBM's decision to choose Slovakia over four regional neighbours, saying that foreign investment was central to hastening Slovakia's IT evolution.

"We have the labour, but we need the know-how of such firms as IBM because the rest of the world that we are targeting is ahead of us in IT," said Lucia Mušková, head of the information systems department at the Government Office.

Kekeši estimated that over 80% of people buying products through the internet needed personal assistance before they made purchasing decisions. He added that despite the relatively low level of computer and internet use in Slovakia, the domestic market had produced a respectable share of the new IBM call centre's trade.

"Customers are getting used to this call centre in Bratislava faster than they did in the case of our other three [around Europe]," Kekeši said. "Slovakia also provides 15% of all calls, which is fair given the small size of the country."

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