“Between finishing the run of a product and starting the next one, the volume of production fluctuates. That is why we have to use temporary hiring,” explains Benedek Fluck, HR director of the Hungarian subsidiaries of the Robert Bosch group, the world’s largest automotive component supplier. Bosch is present in Hungary with four of its manufacturing subsidiaries, and it has factories in Hatvan, Miskolc and Eger. The Hungarian units together employ 1,500-2,000 temporary workers, with a permanent workforce of more than 6,000, discloses Fluck. (Both sets of figures would be even higher, if the Bosch-ZF steering system joint venture’s local units were added.)
Temporary staffing was introduced to provide flexibility for businesses that have to manage fluctuating demand – and the quintessential representative of this is the manufacturing sector. “The order for temps is usually in the thousands, both at the biggest automakers and at their suppliers,” Fluck says.
Blue-collar
With one exception, each of the top Hungarian temp agencies supplying data to the Budapest Business Journal’s list (see next pages) places the majority of its workers in blue-collar jobs. The share of such placements is at least 60% at these agencies, of which almost all supply most to the industrial sector. The estimation of Balázs Köves, marketing manager of the leading temp agency Trenkwalder Kft and vice president of the temporary staffing section at Hungarian HR association SzTMSz, underlines the BBJ’s survey. According to him, 60-70% of temps work in blue-collar jobs, of which 60-70% are in manufacturing.
So it seems that the current growth of the temp market – a 42% increase in the domestic temp pool since 2009 until the end of 2010 according to Köves, while there is also 42% growth in the agencies’ databases since last October according to the BBJ’s list – could be due to manufacturing, on the rise again thanks to Hungary’s revived exports. But does this mean that the acceleration of the temporary market will continue happily ever after, or at least as long as exports continue to do well?
Köves believes that the ratio of temps in the private sector’s total workforce will remain high for a while as companies have became more cautious due to the crisis, and are sticking to less risky, more flexible temp staffing. For the present, if they are gaining orders, they call in temp workers to supply the extra demand, he says. The Bosch figures confirm this tendency.
But Bosch, as well as Elcoteq, Danone and one other manufacturer (one of Hungary’s largest hirers of temps, an exporter who asked to remain anonymous), agreed that temporary hiring has some disadvantages that probably mean it will keep at the level where it is today.
Added-value challenges
“When we settled in Hungary, we started with cheap mobile phones. Now we have contracts for making smart phones,” says Zoltán Krippl, the managing director of electronic manufacturing services (EMS) company Elcoteq Kft highlighting the evolution of his company’s manufacturing activity. The share of temporary workers at Elcoteq’s two Pécs-based factories used to be two thirds of the total workforce, but is now only one third, Krippl says. “The higher added-value work we have, like our life cycle services for high-tech products, the less relevance temps (who generally lack qualifications) have for us,” he says, highlighting an obstacle to increasing the share of temps in the EMS industry.
The head of the anonymous electronic manufacturer also listed this as the number one disadvantage of temps for his company.
Other problems derive from the fact that temps do not really belong to the company that hires them. Losing what they have invested in education when the given production (and hiring) cycle ends was named as a problem by the manufacturers, as well as the lack of loyalty of temporary workers.
Paolo Maria Tafuri, managing director of Danone Hungary, mentions that temps have little or no knowledge about company processes and culture, which is also a problem for a hirer. At Danone, the number of temps is approximately 10% of the total workforce. The company uses temp staffing because it helps it react quickly to changes, as well as to meet fluctuating volume demand which is driven both by the seasonality of consumption and by projects, such as the launch of a new product.
None of the manufacturers who spoke to the BBJ are planning to quit hiring temps though, because their production will always require flexible staffing solutions, and will always have processes that can be done with the minimum professional knowledge. Even the most complicated electronic goods need packaging and assembly, so manufacturing will be always open for temps. But only on a limited level.
This article was published in BBJ’s HR special edition on April 8, 2011.
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