Labour Market Trends in Hungary

1
Labour Market Trends in Hungary

• IT and Customer Service in Focus
• Budapest, 15 October, 2008

2
Grafton in Hungary

• GRAFTON RECRUITMENT branch established in 1996
• Specialized Divisions Sales Marketing, Finance
  Accounting, Banking,
• Legal, HR Office Administration, Business
  Support Centers,
• Pharmaceutical Healthcare, Hospitality
  Catering
• 20 consultants
• GRAFTON TEMPORARY STAFFING branch established in
  1997
• Specialized in white collar workers
  (receptionists, assistants, etc.)
• and temporary solutions
• 4 consultants
• GRAFTON TECHNOLOGIES branch established in 2000
• Specialized Divisions IT Telecom, Engineering,
  Logistics, Construction Real Estate
• 10 consultants
• GRAFTON DEBRECEN branch established in 2007
• - Providing recruitment solutions in
  Eastern Hungary
• Completed over 950 permanent assignments in 2007

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Grafton Divisions Placements

• Permanent Placements in 2007 950
• Business Support Centers 27
• Finance Accounting 20
• Information Technology 18
• HR/Admin/Legal 15
• Engineering/Logistics 11
• Sales/Marketing/Pharma 9
• Nr. 1 in Hungary in 2007 based on study
• of Budapest Business Journal

4
Education in Hungary

• Before 2000
• Specialized secondary education
• (Grammar Schools, Vocational Schools, Secondary
  Schools)
• Post-Secondary Education
• (Technicians, 1-2 year professional studies)
• College
• (3-4 years, practical skills, highly
  specialized)
• University
• (5-6 years, specialization during last 4
  semesters)
• Strengths Languages, Technical Skills, Sciences
• Highly competitive admissions to
  College/University

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Education in Hungary

• After the Reforms
• Main Objective Increase Ratio of University
  Educated Population
• Vocational studies get less emphasis
• Post-Secondary Education restructured, but less
  valuable
• Introduction of 2 level higher education (BA,
  Msc)
• Number of 18 year old student decreased by 30
  (1993-2006)
• Number of university seats increased by over 150
  (1993-2006)
• Language studies not supported during university,
  
• BUT! 1 or 2 specialized language exams needed to
  graduate
• The split of area of studies is not fully
  adjusted to the economy needs
• (IT, Doctors, vs Law, Communication)
• RESULT Higher employee expectations,
• Scarce resources in certain sectors,
• Less secondary educated population,
• Teachers in McDonalds

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Top Motivators of Employees

• Professional development possibility
• Rotation
• Professional trainings
• Professional and people management career
  opportunities
• Training abroad, international career
  opportunities
• IT Challenging and changing problems to solve
• Benefits (cafeteria type HUF 400 000 tax free
  per year)
• Food voucher
• Travel Voucher
• Public Travel Season Ticket
• Health Found Membership Wellness, Fitness
  Voucher
• Language courses
• Work environment/culture
• Friendly, colourful interior, plants, ergonomic
  furniture
• Team building, team - and company events
• Stable and predictable organisation

7
Labor Market Trends

• Focus of Investments (last 5 years)
• Government supports knowledge based industries
• Business Support Centers (over 20.000 jobs)
• IT Development Centers
• What is expected from employees
• Languages (typically English 1 on a high level)
• Multinational attitude to work
• No or low level of ambition to make a career
• Low compensation expectations
• Increased value of management
• Expatriates are no longer dominant in management
• Local manager with international exprience highly
  valued

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Recruitment Challenges

• Unique Languages High salary level, Long
  recruitment time
• High expectations Schools You are the leaders
  of the future
• Extremely high competition for talent
• High number of people leaving their area of study
  
• How to convince them? How to keep them?
• IT the most difficult sector Employee or
  Contractor?
• IT Shortage of qualified candidates
• Fresh Graduates Lack of experience,
  interviewing routine

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Recruitment Timeline Depending on Languages
Swedish Slavic Turkish Greek
Portuguese Russian
Request
week
German English Spanish
French Italian Romanian
10
Shortage of IT professionals
11
Growing nr. of specialist IT jobs

• IT jobs vs all jobs
• 2006 - 7
• 2007 - 16
• 2008 - 17

• Majority of IT searches
• 2006 network engineer
• 2007 programmers
• 2008 programmers
• (2nd place fresh grads)

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Growing salary expectations
13
Attrition Rate in Business Support Centers

• Business Support Centers being on the market for
• 1-2 years 10-20
• 2-4 years 20-30 - AVERAGE
• 5-8 years 30-50

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Managing Attrition

• Average attrition in Hungary 10-25
• Business Support Centers 10-60
• FMCG 10-15
• Manufacturing 8-15
• Banks 5-10
• Most fragile group
• 2 yrs seniority accelerate career
• 4-5 yrs seniority most competitive
  compensation increase
• 7 yrs seniority target of headhunters
• Tools of retention
• Career path, assignment planning
• Internal promotion structure, top talent program
• Frequent trainings and education support
• Performance related compensation, valuable
  benefit package
• International assignments

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Competition for candidates- the recruitment
dilemma -

• Business factors
• Where do I find the rightskills?
• How long can mybusiness wait?
• How much time can Isacrifice for finding
  theright people?

• Attraction factors
• What compensation willbe attractive?
• What else motivates theright people?
• Does my businessattract the right people?

What recruitment approach should I use?
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Corporate Recruitment- pros and contras -

• Pros
• Brand Value
• Personal connection
• Direct communication
• Trainee programs

• Contras
• High cost of the recruitment staff
• Expensive marketing
• Single channel of sourcing
• Small database of applications

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Recruitment Agencies- pros and contras -

• Pros
• Large database
• Applicants can be redirected
• The right match
• Preparation of applicants
• Cheaper advertising
• No organisational cost
• Success fee
• Guarantee

• Contras
• Extra step in process
• Not 1st hand communication
• Weaker control on process
• Good for bulk recruitment but unpredictable
  success for finding very special skill
• All threats may be minimized by setting clear
  expectations and process of cooperation
  beforehand.

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Headhunting- pros and contras -

• Pros
• Directed market mapping
• Finding not active jobseekers
• Special skills
• Strong networking
• Long-term guarantee
• Total confidentiality

• Contras
• Retainer fee structure
• Only effective for single position recruitment
• Longer lead times

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Recruitment Process Outsourcing- pros and
contras -

• Pros
• Direct and instant info sharing
• High level of credibility
• Performance based cost
• Accountability
• Corporate branding
• Access to large pool of candidates

• Contras
• Long-term engagement (service contract)
• Cost of operations (office space, workstation,
  phone usage, etc)
• HR has less control over outsourced staff

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Thank You for Your Attention!
Tamás HOLCZER Tamás FEHÉR Country
Manager Branch Manager holczer.tamas_at_grafton.hu
feher.tamas_at_grafton.hu 36 1 235 26 29 36 1
235 26 35