By MOTIFE Insights, 7 November 2023
This comprehensive guide explores the nuances of satellite offices, specifically tailored for IT companies focusing on Poland as an example of a growing market. Whether you're grappling with talent shortages, aiming to tap into new markets, or trying to be closer to strategic vendors, this article provides insights and examples that can guide your next big decision.
A satellite office refers to a smaller office that operates separately from a company's main headquarters but remains under its overall governance and brand. Unlike branch offices, which primarily offer the company's standard services in different locations, satellite offices often have specific purposes, such as tapping into local markets, accessing regional talent, or focusing on specialized projects. For IT companies, satellite offices can act as centers for research, innovation, or regional customer support, providing flexibility without the need for full autonomy like a subsidiary would require.
Check out also: Krakow IT Market Report 2024
Growth and talent shortage. As a company undergoes rapid growth and expansion, the requirements for talent can often outpace the availability in its primary location. Opening a satellite office in a new market allows the company to serve its growing customer base more effectively and provides an opportunity to access a fresh, local talent pool.
Need for specialized skills. Certain regions may be recognized for specific expertise. For instance, if your IT company requires experts in artificial intelligence, it might be beneficial to set up an office where there’s a notable concentration of professionals in that domain.
Addressing logistic problems. Collaborating closely with specific partners, vendors, or clients can be pivotal for a company's success. Having a satellite office in regions known both for their strategic partnerships and advanced technological infrastructure facilitates improved communication and ensures more efficient operations.
Regulatory or policy advantages. Certain regions offer specific incentives to IT companies, from tax breaks to research and development grants. For instance, some countries in the European Union have established special economic zones where IT businesses can benefit from reduced corporate tax rates or exemptions from import duties on certain technological equipment. Moreover, ease of business operations, streamlined permit processes, and protection of intellectual property rights can make these regions attractive for IT businesses considering expansion.
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Market expansion. Satellite offices can help companies enter new markets, allowing them to tap into local clientele, better understand regional demands, and tailor their offerings accordingly.
Talent acquisition. By establishing a presence in different regions companies can choose areas with educational institutions and tech hubs. Thanks to this they can attract a diverse range of professionals and access specialized skill sets that might be scarce in their main location.
Operational costs. In many cases, companies can capitalize on lower operational costs in certain regions. This includes potentially lower salaries, real estate costs, and taxes.
Improved collaboration. Having a physical presence in different time zones or strategic locations can facilitate collaboration with partners, suppliers, or clients. This can lead to quicker decision-making and faster project execution.
Risk diversification. Spreading operations across multiple regions can reduce the impact of local economic downturns or political instability on the overall business.
Enhanced company culture. By integrating diverse teams from different backgrounds and cultures, companies can foster a more inclusive and dynamic work environment. This diversity can lead to innovative ideas and solutions.
Local brand presence. Operating in multiple locations can significantly boost a company's brand visibility and reputation within local communities, leading to increased trust and business opportunities.
Location. Consider the city or region's infrastructure, transportation links, and proximity to clients, suppliers, or your main office. Ensure that the location aligns with your business objectives, be it tapping into a new market, sourcing talent, attracting talent for relocation, or reducing operational costs.
Talent and labor market. Research the local talent pool. Does the region have the skilled workforce you require? Look into local universities, training institutions, existing companies to acquire talent from, and the overall job market. Also, understand local labor laws, regulations, and cultural working norms.
Technology and connectivity. Ensure the area has robust internet connectivity and technological infrastructure. This is important, especially for IT companies, to ensure seamless communication and operation.
Culture and work environment. Every region has its own work culture. Familiarize yourself with local customs, holidays, and work ethics. This will help integrate the satellite office with the main office more efficiently.
Legal and compliance issues. Each country or region will have its own set of business laws and regulations. It's essential to be aware of local corporate laws, taxation, data protection rules, and any industry-specific regulations.
Growth potential. Consider the scalability of the location. As your company grows, will this location be able to accommodate expanding teams, technology, and infrastructure needs?
Local support and services. Research available local support services like business consultants, local chambers of commerce, or industry-specific associations. They can offer valuable insights, connections, and assistance as you set up and grow.
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Office spaces. In 2017, Krakow stood out by having over 1 million square meters of modern office space. That number has now grown to 1.7 million square meters with the average lease per square meter in Krakow at the level of 13.50€ and 15.50€. As an alternative, flexible office space, is largely available in Krakow with a monthly rental cost per desk of 350€ in average. Besides new office buildings, there are many older, historic buildings that companies can rent for a unique office environment.
Talent. Krakow has a strong IT talent with 55,000 professionals. This number grows about 10% every year, with new graduates and professionals coming from other places for better job opportunities.
IT presence. There are over 500 IT companies in Krakow. Many big names have offices here because of the skilled workforce, cost savings, and the fact that many employees tend to stay with a company for a long time.
About the city. Krakow is Poland’s second biggest city. About 1.5 million people are estimated to live in the Krakow region. Over the past few decades, it's become a key place for businesses, with big companies like HSBC, Cisco Systems, or Motorola Solutions setting up here.
Education. The main three universities AGH University of Krakow, Jagiellonian University, and Cracow University of Technology together with other higher education institutions provide a steady supply of around 2,550 ICT graduates every year.
Location: Krakow is strategically located in the center of Europe. Traveling to and from Krakow is easy, with many direct flights to cities across Europe and the world.
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Many companies begin their journey in Poland by setting up in Krakow. However, as they grow, some companies decide to open offices in other Polish cities, despite the costs involved.
Wider talent reach. Krakow has a lot of IT professionals, but other Polish cities also have a lot to offer. By setting up in different places, companies can access a range of skills and experts.
Maintaining office culture. Even though many people now work remotely, many companies still value the traditional office setting. By having offices in different cities, they can offer employees a physical place to work, which can help keep the company culture strong.
Encouraging office returns. Some companies want to help employees, especially those hired all across Poland during the pandemic, transition back to on-site or hybrid work model. Having a physical space closer to their homes can make this easier.
Flexibility. Not all companies are just opening permanent offices. Some are offering flexible office spaces in various cities. This way, employees have a place to work when they need it but can still work from home if they prefer.
Multiple city strategy. Some companies choose to set up in more than one city right from the start, like both Krakow and Warsaw. This allows them to tap into the benefits of multiple locations at once.
Learn more about what international companies have achieved with their Krakow tech labs by downloading our Krakow IT Market Report 2024
If you are interested in setting up your own engineering hub in Poland, contact us at MOTIFE to learn more.
If you are looking for interesting job opportunities in tech companies in Poland, check out open roles at motife.com/jobs.
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