Beata Socha: The Hays Global Skills Index suggests that the labor market is showing significant improvement. Is the worst behind us?
Alistair Cox: Poland is one of the very few countries in Europe which never suffered any recession. I think that some of the inherent characteristics in Poland, such as skills, cost base, attractiveness as a destination for outsourcing has helped it weather the storm much better than most other economies.
Courtesy of Hays
It offers something unique at a time when companies want to tap into that uniqueness. Despite a relatively low growth rate last year, this year the economic prognosis is much better, we can see increased levels of FDI coming to the country. We see a host of different projects in different sectors, whether they be construction projects, infrastructure, energy or a continuation of the shared service center wave.
One of the consequences of the economy and labor market doing well is that you start to see wage pressure. You start to see that in sectors which are hot, whether it is SAP programming, development languages, etc. You start to see wage pressure of up to 10-15 percent.
So are Polish IT specialists still attractive on the global labor market?
Michał Młynarczyk: In those niche areas the difference between Western Europe and Poland is not big really. If you are looking for an SAP developer it is sometimes better to get someone who is already working, for example, in France than hire someone with insufficient skills in Poland.
Today the wage pressure just reduces the margins of the companies. The offshoring trend to Poland is price-driven so far. You could argue that this increase in the prices of IT services will stop this off-shoring trend.
Alistair Cox: The world suffers from a lack of engineers. Whether they be energy and gas engineers, water engineers, civil construction engineers, these people are in great demand and there aren’t enough of them in the world.
Your report says that currently the long-term unemployment in Poland is at 3.4 percent. How does it compare with the rest of the world?
Long-term unemployment is individuals who haven’t had a job for over a year but want to find one. The score of 3.4 percent is quite low. And it is lower that the long-term average used to be. It used to be at 6 to 7 percent. It’s a sign that people who are laid off can find a new job relatively quickly.
How would you characterize Polish labor law compared to other countries’ legislation?
Michał Młynarczyk: The Polish government made a decision eight years ago to allow for freelance work and now statistically the share of self-employed people in Poland in the entire labor force is higher than anywhere else in Europe. Very often they work in the same way as they would on a standard employment contract. It was a really strong message to the market that we support flexible work and the trend will continue and there is a big battle that has been going on about it for years. But it’s inevitable, the whole market is going this way.
We still think in the old-fashioned way that a resume should be a list of employers, a list of jobs. Meanwhile these days a resume is becoming just a list of projects. People don’t even mention the company.
It’s a conscious choice. In fact people who do flexible work receive a higher hourly rate compared to those on permanent contracts as a compensation for the flexibility. So they earn more.
Alistair Cox: Some countries mitigate against temporary work contracts. But this is a valuable and valid part of the workforce to allow companies to tap into skills when they need them but then be able to let them go when they don’t – be it after some projects finish or depending on the economic boom and bust. Those more flexible workforces tend to be the most efficient ones where the talent finds the job and the jobs find the talent.
One thing the UK did well during the crisis was a dialogue between the employers and the workforce: Will you take a wage freeze? Will you work four days a week? Will you take half days? Will you take a month off unpaid and then come back to work?
Did people agree to this?
Alistair Cox: In previous recessions there was a huge standoff between employers and employees and a natural reaction was mass redundancies and people going on the dole. But this time around it was different. Probably 500,000 people in the UK kept their job because of that flexible attitude they both adopted.
Those who say it’s against the rights of the employees don’t realize that the choice is simple: Are you flexible or do you run the risk of being laid off?
Often temporary work is portrayed as second-class work, a lower quality job, because someone cannot secure a permanent job. We think it is just the opposite. And actually you have thousands of people who want that flexibility. They want to build their career around a series of interesting projects. They want to be able to move in and out of the labor force according to their needs.
The evidence does suggest that the markets that are more successful in creating the match between their people and their industries are those that promote that flexibility.
A study conducted a few months ago showed that the zł.1.2-billion government program to fund courses of study expected to be in demand, such as chemistry or environmental protection, turned out to be a complete fiasco. These groups of graduates now have the highest unemployment levels. Yet, your research suggests Poland’s educational system is efficient. How can that be?
Michał Młynarczyk: There’s more and more cooperation between universities and employers these days. Right now almost every single university has a body delegated to speak to employers. The employers often set up specific courses and in many universities you need an internship to graduate.
Also there are a decreasing number of students, which forces universities to compete. How do you compete on this market? You just make sure that your graduates have it easier to find a job. That’s how you compete with other schools.
Alistair Cox: Those markets that have a better match between talent and opportunity are those that have really looked harder at what it is that the universities are doing, linking up with business so that there is a common understanding and adapting their educational systems. If we need more of these and less of those, we will create new courses, and we’ll link with industry and we will motivate the youngsters to go down that route because that’s where the careers are.
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