In an interview for CorD, Tomasz Hanczarek, Co-Founder and Vice-President of the Supervisory Board of Work Service, discusses the major changes in the job market driven by globalization and innovation.
What do you see as the major developments when it comes to labour supply and demand in our challenging economic circumstances?
According to the International Monetary Fund, 20 million people have migrated out of Central and Eastern Europe within 25 years, representing more than 6% of the working-age population.
Many nationals of Poland, Hungary, the Czech Republic, Slovakia and Balkan countries are looking for better-paid jobs and a higher standard of living. For example, a Pole who works in Germany can earn three times as much for the same job as in his home country. Record-low unemployment levels in Central and Eastern Europe augment the situation.
The conditions on the job market in the region have been very good in recent months, in stark contrast with other European countries. This is corroborated by statistics: according to the Eurostat, unemployment stands at 10.3% in the European Union and 8.9% in the eurozone.
This is much more than in Poland (6.8%), the Czech Republic (4.1%) or Hungary (5.9%). As a result, the job market operates in favour of employees, while employers face the challenge of recruiting and hiring the best talent both for lower-level and senior positions. This is why the Czech Republic is working to attract migrants from Ukraine while Hungarian employers are looking to hire Slovaks and Serbs who speak Hungarian.
What are the major characteristics of the CEE market in terms of demand for HR services?
The main challenge is how to meet the expectations of employers in view of the shortage of candidates on the job market. From 2015 to 2060, Poland’s working-age population is expected to shrink by up to 40%. The working-age population will decrease by 34% in Slovakia, 31% in Hungary, and 25% in the Czech Republic. The gap will be hard to fill, and this will the key challenge to employers as well as HR service providers.
Until recently, Central and Eastern Europe competed with the West mainly by means of low labour costs, but today successful competition is increasingly based on quality human capital
Which factors contributed the most to successful results of your group?
Demand in today’s economy is very volatile, affecting orders and production in the industrial and service sectors. The volatility is driven by very tough competition as well as the low predictability of business processes. This creates a natural demand for flexible employment. Since the crisis, companies have faced constant uncertainty about the pipeline of orders. If their products don’t sell within a month, they will be replaced by newlines or models. It is the buyer who drives the sales, the main objective of economic processes.
Due to sales peaks and the mismatch between order pipelines and production timelines, the best solution for employers is to use flexible employment. The Work Service Group is the Central and Eastern European market leader because we bring the best solutions developed in the local market and implement the same strategy in other countries. Our resources provide employers with qualified employees who are available during times of peak demand before they are redeployed in other sectors where production is starting.
Last year, within two years of the acquisition, our Hungarian company Prohuman became the local temporary job leader. Its revenue has increased by 600% since 2010, and its sales improved by 38% year on year in 2015 alone.
Prohuman hired 17,000 temporary workers in total, the best performance in the peer group. Low unemployment and a mounting HR gap drive demand for services of companies like Work Service.
What are the European experiences that you have gained which might be useful for HR professionals in our region?
Western Europe faced a new phenomenon even before we did: a new generation of today’s 20 and 30-year-olds who have very high expectations of the job market. These young people are confident, quick to adopt new technologies and speak foreign languages. Their aspirations include personal development, life passions, collaboration, as well as life-long learning. They want to improve their competencies and skills and to strike a good work/life balance. They appreciate flexible working hours, a collaborative organisational culture, as well as training opportunities.
For employers who need to look for the best solutions and implement custom incentive systems, meeting their expectations is a major challenge. In ten years’ time, Generation Y will account for 75% of the world’s working population. Meeting their demands will be a precondition for employers to hire the best talent.
Our resources provide employers with qualified employees who are available during times of peak demand before they are redeployed in other sectors where production is starting
How does globalization change the nature of HR services, and which good practices stand out as the most successful ones?
In the age of globalisation, people are free to choose where they want to live and work. These choices are enabled by our political system, open borders, and the freedom of movement. This leads to foreign investments, which support the job market. Investment creates and grows new local companies, which supply subsystems and provide services to international corporations.
Less developed economies benefit in the process. International corporations relocate. As a result, people are on the move. Until recently, Central and Eastern Europe competed with the West mainly by means of low labour costs. However, this is changing, and successful competition is increasingly based on quality human capital.
How do HR companies, prone to seasonal changes, maintain good business results?
Business is under the high pressure of volatile market factors. It is therefore instrumental to have the right strategy ensuring a stable revenue flow in spite of unforeseeable market developments. The key measures include geographic and business segment diversification, as well as a balanced approach to growing business in those sectors that provide expected revenue under prevailing market conditions. This is exactly why our group has such a diverse scope of business.
What is today the ideal model of an employee in terms of knowledge and other capabilities in the CEE region?
Growing innovation in the economy is intrinsically linked with building human capital, which will increasingly contribute to the competitiveness and market position of companies. This requires a well-designed long-term HR strategy and policy supporting the development of employee competencies and driving the efficiency of HR processes. People, talent and skills are the key success factors of business as jobs evolve from products and services towards research and creativity.
In which areas should HR companies invest in order to live up to the market demands?
The HR services sector is changing with the evolving job market. HR service providers must align with these developments. The key challenge now is to establish and develop a recruitment structure, attract the best talent in the market, and provide companies with the right HR resources. Fluency in new technologies is increasingly instrumental to the process as technology helps to reach the best candidates.
In addition, the activation of senior citizens in the job market will also become increasingly important. The next 25 years will see a revolution in senior citizens’ employment. In the future, professional life will be all about life-long learning rather than waiting for retirement.