Executive Search in Poland– 2017 Outlook

POLAND OUTPERFORMS EU AVERAGES

Immediately after the national-conservative Law and Justice (PiS) party prevailed in the October 2015 elections, the new administration launched controversial policy initiatives, such as trying to reorganize Poland’s constitutional court, seizing direct control of the state broadcasting channels and the security services, and purging the heads of state-owned companies. This has triggered mass demonstrations in Poland, and a review by the European Union as to whether those moves violate EU statutes.

Economic growth picked up in the second quarter, but the economy is vulnerable because of this domestic policy deterioration and fallout from the UK’s Brexit vote. We expect some economic slowdown in 2017, but to rates that will remain strong for the EU.

Poland’s new Government also targets inclusive economic growth with a focus on the poorer segments of society. Its new policy measures include generous family spending under the Family 500+ program and the introduction of an hourly minimum wage.  The additional social spending is to be funded from improved tax compliance and the introduction of sectorial taxes on financial institutions and large retailers.

In 2016 the Polish economy lost momentum in the third quarter as GDP expanded at the weakest pace in three years.  Feeble investment likely hit growth due to lower EU development funds, despite the government’s fiscal easing measures. Business confidence sank to the lowest level since January.

In 2016, Polish GDP growth was 2,5 % and the unemployment rate 8,4 %. Poland has managed to keep the unemployment rate below the European Union average, with the majority of employed people working in Services.

Poland has reached a stage of economic development where efficiency gains and sustained growth are more difficult to achieve. Investment in high quality infrastructure, including for transport, communications and energy, is critical to sustaining Poland’s growth potential.

On the bright side, EY’s European Attractiveness Survey 2016 places Poland as the most attractive FDI destination in CEE (and 5th most attractive in Europe). Better scores were only attributed to Germany, UK, France and the Netherlands.

 

Major ”happenings” in 2017

The gap in living standards and employment between Poland and the EU average has narrowed significantly, but challenges remain. The overall economic outlook remains positive, but domestic risks are emerging.

GDP growth is projected to strengthen to around 3% annually in 2017-18, thanks to higher social transfers, low interest rates and rising disbursements of EU funds. The average figure for 2017 does not look worrisome, but the decomposition of growth rates across quarters shows a significant slowdown in economic activity throughout the year.

Foreign investors are worried about the anti-EU stance of the current government and its tense relationship with Brussels. International companies are delaying major investments waiting for the situation to settle. They are worried that growing hostility between Warsaw and Brussels could lead to EU funds being frozen by the EC.

 

Rate increase expected

The central bank is projected to start increasing rates towards the end of 2017, as inflation picks up. New social spending was mostly financed by one-off revenues in 2016. Plans to increase tax compliance are welcome, and scaling down exemptions and special rates would improve efficiency, but lowering the retirement age would decrease potential growth and public revenues, which are already likely to be curbed by population ageing.

According to the EU funds report, the biggest investment in Poland will continue to be: infrastructure and the environment, high technologies, knowledge, education and digital and technical development.

 

BPO /shared services

Poland is one of the most important countries on the European & Global Business Services map. In the “2014 Tholons Top 100 Outsourcing Destinations” report, Krakow ranked ninth in the world. By 2020 there are expected to be 30,000 employees in this sector. Key selection factors such as availability of multi-city options, cultural proximity to Western Europe, and the availability of a high-quality talent pool with distinct strengths in language skills continue to attract various investors to Poland, also allowing the Polish market to compete with the Indian market.

 

Local Business Development 

Cornerstone Warsaw remains active in Local Chambers of Commerce and promotional activities:

  • We continue our activity within the Polish-Spanish Chamber of Commerce and Spanish Embassy (promoting CIG members to foreign companies based in Poland)
  • We have joined the Swiss HUB in Warsaw / Chamber and Commerce and started building our relationship with Swiss companies planning their market entry in Poland.
  • As Member of BNI (Business International Network) we continue promoting CIG members to Polish companies planning their expansion abroad mainly within Europa.

 

 

 

 

Executive Search Consultant Poland - Iwona

Iwona Szybka

Cornerstone Warsaw


 

polish-flag

See Our Office in Poland:

 

See more in EMEA  Region >>