The IT and business services sector in the Czech Republic has reached 200,000 employees. The creation of new jobs is slowing down, while the value that employees can create in collaboration with AI is growing

The IT and business services sector in the Czech Republic currently employs approximately 200,000 people and, according to the latest survey by the ABSL association, is expected to grow by another 14,000 workers by 2026. Although the planned five percent increase is a slowdown compared to growth in the previous two decades, the productivity of centers is still growing. This is mainly due to the collaboration between people and artificial intelligence. Already 80% of centers actively use AI, which is roughly four times more than the Czech Statistical Office’s average for the Czech Republic.

Stable growth and strong economic contribution

IT and business services are now one of the most important segments of the Czech economy. Two hundred thousand jobs generate annual wage costs of approximately CZK 210 billion. At the same time, employees in the sector spend around CZK 90 billion in the Czech economy each year and pay approximately CZK 24 billion in personal income tax. In addition, the activity of the centers indirectly supports approximately 140,000 other jobs in related industries.

“These figures indicate that the IT and business services sector has become a truly important pillar of the Czech economy. In addition to creating highly skilled jobs, it also has a significant multiplier effect on other industries and public budgets,”

says Jonathan Appleton, director of ABSL, an association of companies operating in this field.

From employee growth to value growth

Significant changes are currently underway within the sector itself. After a period of rapid expansion and growth in the number of employees, a phase of more stable but qualitatively more demanding growth is now beginning. A full 80% of centers say they are focusing on increasing productivity while maintaining their current number of employees. The same proportion of centers are betting on technology, especially artificial intelligence, which has become the most widespread technology across the industry.

“We are moving away from simply increasing the number of employees to the question of how much value people and technology can create together. Artificial intelligence is not a substitute for people, but a tool that allows them to focus on more complex, creative, and strategic activities,”

adds Jonathan Appleton.

Today, centers are increasingly implementing advanced tools with integrated generative AI that can work with context, analyze structured and unstructured data, and independently manage selected processes. A typical example is Siemens’ Bionic Agent solution, which received the ABSL Diamonds award for its extraordinary contribution. This platform, which uses generative AI and large language models, has already processed more than 1.4 million customer requests and saved over 70,000 hours of human labor. Instead of simple robotic automation, intelligent digital assistants are now being put into practice, capable of independently evaluating requests, initiating processes, and preparing responses.

Global sector, local rules. Change will ensure the Czech Republic’s sustainable competitiveness

Business services are, by their very nature, a global industry. More than 40% of employees are foreigners, centers serve international clients, and operate in English and other languages. Processes are shared across continents, and teams routinely collaborate virtually.

At the same time, the Czech Republic remains in the sights of other investors in this segment, with dozens of major international companies considering establishing new or expanding existing business service centers in the Czech Republic each year. This trend is also confirmed by data from CzechInvest, according to which the structure of foreign direct investment in the Czech Republic has shifted over the last fifteen to twenty years from predominantly manufacturing projects to activities with higher added value, such as advanced technologies, research and development, and business services.

However, the international aspect of the field is hampered by local legislation. Restrictions on long-term work from abroad due to tax rules, complex and lengthy processes for obtaining visas and work permits for third-country nationals, and the growing administrative burden are factors that may reduce the attractiveness of the Czech Republic for both investors and applicants from abroad in the future.

“If talent is global but the rules remain purely local, tensions arise that can lead to an outflow of people and investment. The Czech Republic has an excellent reputation and a high-quality workforce, but in order to maintain this position, the regulatory environment must keep pace with the reality of the digital economy,”

warns Jonathan Appleton.

 

ABSL (Association of Business Service Leaders in the Czech Republic) is an association of companies operating in the shared business services sector, which represents a strong generator of employment in the Czech Republic. ABSL was established in 2013 to foster companies in the business services sector, share best practices and help to develop the activities of its members and other entities operating in this segment. At the same time, ABSL provides support to foreign investors who want to establish their business services centres in the Czech Republic. Currently, there are nearly 400 centres in the Czech Republic employing 160,000 people. For more information, please visit www.absl.cz.