Challenges vs. opportunities

Interview by Beata Socha
Source: Warsaw Business Journal, Number 11/12 (42), November/December 2017

With historically low unemployment, employers are hard pressed to find the talent they need. Not only do they have to use innovative candidate-sourcing techniques, but they should also pay more attention to employer branding and increasing employee loyalty. Which industries are facing the biggest talent shortage? Will salaries continue to increase at the current rate and which jobs are headed for full automation? WBJ sat down with Charles Carnall, Managing Director at Hays Poland, to discuss the realities of the Polish labor market.

WBJ: Poland is seeing record low unemployment these days, below 7 percent. Do you think Poland will lose its attractiveness in the eyes of foreign investors if unemployment continues to decrease?

Charles Carnall: The stream of investors that are interested in Poland hasn’t slowed down. So it hasn’t had any particular effect. What we have observed is that there’s a growing stream of migrants coming into Poland from the Eastern countries like Ukraine and Belarus. What’s also interesting is that Poland is becoming more attractive for people from Western Europe looking to relocate. Also, Poles who moved across to the UK now see Poland as a country with great opportunities for higher paid work and they’re moving back and resettling with their families. Because of higher unemployment levels in Spain and Portugal, people are also coming to explore opportunities here. But unless they have strong English language skills it’s really hard for them to come and find work here. If their English is good enough, they can find jobs in companies that use English on a daily basis, e.g. in new technologies, IT and engineering.

Which industries are facing the biggest problems when recruiting new people?

It’s the highly skilled, highly digitized businesses like IT and engineering.

What about shared service centers?

The industry is growing very quickly and is constantly facing a talent shortage: people with good language skills, analytical skills etc. The modern business service sector is currently the fastest growing area of economy, and the largest provider of employment. In addition to the most common positions in finance and IT, these often also include jobs related to HR, logistics and data management. The SSC/BPO industry is still growing and we start to observe the shortage of talent pool. Candidates with the knowledge of at least two foreign languages receive many job offers, even though they are not actively looking for a new employer. Candidates can choose from many career opportunities and often increase their financial expectations. The business services sector is still a very attractive place of work for graduates. However, employees with some professional experience usually aspire to find new challenging opportunities outside of the industry. As a result, companies in business services sector face recruitment needs all the time. We’ve also got a shared service center in Kraków, which sources candidates internationally. There are about 20 different languages spoken there.

What are the realities of companies recruiting in Poland these days? Has the recruitment process become longer because of the talent shortage?

The recruitment period is actually getting shorter. It has to. It’s because we recruit mainly among the younger generation, who want to see instant results. When they apply for a job they want it to happen quickly. We’ve had experience with companies where the recruitment process wasn’t efficient. They were losing candidates because of that. As a company, we have a wide pool of candidates and through our internal capability and partnerships with the likes of Google, Hays is investing actively in data science, machine learning and AI, to help us serve our clients better and faster.

How many stages are there?

Depending on the level of the vacancy, there are usually two stages, and there are up to four in top-level positions. The initial stage is the CV, although young people expect the recruitment process to be digitized as much as possible. Candidates expect recruitment processes to be short, one- or two-stage only with fast decisions, and to receive constant support from recruiters. The efficiency of recruitment processes is even more important in a candidate market. It is not rare that candidates simultaneously take part in multiple recruitment processes. Therefore, if an employer delays the decision about who to employ, when the final decision is made, it often occurs that the best candidate is no longer available. Employers need to accept and adapt to the expectations of candidates as they simply cannot afford to lose the talent they need, especially in the industries where candidate market is observed.

The tables have turned.

Yes, they have. It’s now the employer who needs to look after its image. People increasingly search for jobs using social media. They look for companies that have good employer branding, which is becoming incredibly important. What is essential for employers is to build a profile to attract especially the candidates representing the younger generation. We understand at Hays, how important it is to have a good brand. When a candidate comes to us looking for a job, we need to give them a good service because one day they will be the client looking for employees. That said, candidates’ online presence is also very important. As a recruiter our role is to remind people to be careful about their profiles in social media. I haven’t seen that in Poland, but back in the UK when I did recruiting I saw job offers pulled because the employer researched the candidate’s Facebook page and found there content that might be considered unprofessional.

There’s a lot of talk about automation as the key driving force in the labor market. Will it bring about a sudden revolution or rather a gradual change?

It’s a gradual change. Jobs that don’t require people engagement, creativity or ideas can be replaced by automation. Within the office environment we’re seeing data processing and document-processing jobs being automated. These algorithms are being improved all the time. Anywhere you can replace a job digitally, it’s probably a wise investment. Twenty years ago in the automotive industry we saw many manual labor jobs replaced with robots. Automation increases efficiency, which leads to new investments, and in turn creates more employment. It also encourages people to focus on their education because it’s only the most repetitive jobs that will be replaced with automation.

What about jobs that involve human contact, like cashiers and call center workers?

I think they will be replaced to a degree, but not entirely. Cashier desks have been replaced with telebanking to some extent. In shops we have self-service checkouts. However, there is still a need for a person in a supervisory position; someone who can answer clients’ questions and give advice.

Poland has a comparatively low labor force participation rate. What kind of impact does the 500+ social benefit program have on women’s labor participation? Do you think the participation rate will increase or decrease in the coming years?

There’s this fear of demographic change in Poland. There are fewer working-age people every year because of aging population. In Poland, the percentage of women actively participating in the labor market is still lower than the European average. However, I think that will change over the years. In the EU there’s a program that encourages women to go back to the workplace and it has worked tremendously well, to a point where there are more women working than ever. Research shows that a majority of women are the caregivers in families and this has affected many women returning to work. I think it’s important that men and women share the caregiver duties. It’s positive to see that the government is also creating a lot of support for affordable childcare for families.

What do you think of the current Polish policy on maternity leave?

I think that 12 months is a reasonable amount of time. It’s important that employers help women transition back to work after maternity leave. One of the effective solutions is organizing ‘Keeping in touch’ days. This is put in place so women do not feel out of the loop during leave and the contact with the workplace is still present. This makes the adjustment back to work a lot easier. A lot of employers are also looking into offering part-time jobs and flexible working hours to parents who want to return to work. Reduced working hours are possible. Working from home is another option that is gaining popularity and helps to balance work-related and parental duties.

Salary reports reflect the fact that employers are hard pressed to find employees. How quickly are salaries rising? In which industries and at what level are they increasing most rapidly?

Salary increase is related to talent shortage. So it is most noticeable among IT specialist, engineers – any business requiring a high level of qualifications. Salaries rose by about 4-5 percent last year, although the rate is slowing down slightly. I don’t think it’s sustainable to have a 4-5 percent salary increase each year, it becomes unproductive and unprofitable for companies. What we are also seeing among the younger generation is that because of their wide access to job opportunities they are more likely to change jobs for a slightly better salary.

Would you say that job loyalty among the younger generation is weaker?

It depends on the employer and their employee engagement practices. We focus very much on training and development of our people. If they feel they are being developed, they will want to stay. We provide soft benefits, anything from fresh fruit delivered to the office, a nice working environment, a games console room, or foosball tables to make people feel that they are enjoying their work.

Do you think these soft benefits make people more loyal?

I think so. They are designed to make people happy. As soon as they stop feeling happy, they have immediate access to plenty of vacancies elsewhere and they will move very quickly. But I think that training and development is key. People want to feel that they are continually learning. High employee turnover is obviously undesirable from the employer’s perspective.

What about from the employee’s point of view? Do you think people change jobs too frequently these days?

My belief is that the longer you stay with one company, the more you can learn and develop. As mentioned previously, younger people want to work for a well-known brand with good benefits, they also want a good work-life balance and will quickly move jobs if they are unhappy. It’s important that employers offer attractive benefits to source the talent they need and this will help to retain staff. There is also the view that financial pressure to start work is no longer what it used to be for previous generations, because their parents are wealthier and they continue to support their children well into their twenties. In the meantime, young people have more opportunities to search for the best career path and because of that sometimes start making money later.

How is working in Poland different to working in the UK?

People in the UK take work a little bit more seriously. Poles are good workers, but they have good work-life balance as well. It is a standard in Poland to employ people on 40-hour-a-week contracts and after work they go home, enjoy their family life and their leisure time. In the UK, and especially in the US, work means everything to people sometimes.

Do you think there will be pressure to shorten the working week, to say 35 hours like France did?

I think Poles are happy the way things are. Shortening the working week to 35 hours hit the French economy quite hard. Investment in France went down for a period of time.

What are your forecasts for the labor market in Poland?

We’ve seen 20 years of growth, providing employment opportunities, and I don’t see it stopping. According to the Hays Global Skills Index 2017, the Polish economy is expected to grow faster in 2017 than in the previous year, which could increase demand for skilled labor. The challenge will continue to be that candidates will be in short supply. So candidate attraction will remain key, not only nationally, but also internationally. Big investors are still coming to Poland, which will require of employers to source vast numbers of specialized professionals. It’s going to take innovative candidate sourcing techniques to find these people. There is only a finite number of people in the local market, so international sourcing will probably gain even more importance.