Market Talk: Temping Never Goes out of Style

Balázs G. Nagy, of Trenkwalder.

Not surprisingly, temp agencies have been super busy in the past year, and they can count on more of the same. The permanent labor shortage has been a key factor driving dynamic growth in the sector. As Csongor Juhász, managing director of Prohumán 2004 says, its solutions have been in bigger demand than ever.  

“Not only existing partners showed an elevated interest for our services, but even companies that had not used this form of employment before became customers.”

Typically, businesses in the field of manufacturing are most in need of temporary workers. In the case of many of them it is a policy to have a certain portion, often around 10-25% of total headcount, employed on a flexible basis, Gábor Goszleth, sales director at Adecco, says of one of the main reasons behind strong market demand. But a great number of other companies are also hiring, which requires constant recruitment.

“This can be managed by relying on temp manpower, which also allows you to add tested staff to the internal team or to compensate for fluctuations,” he explains.

More Complex

The whole sector is becoming more complex too. “Recruitment alone won’t do; main clients, especially, expect us to take over the largest possible number of tasks such as onboarding, training, health and safety tasks, as well as making travel and accommodation-related arrangements,” Goszleth adds.

“This is an evolving process; therefore, high volume temp work services could turn into outsourcing within the next few years.”

Trenkwalder’s managing director, Balázs G. Nagy agrees that receiving a complex set of services is increasingly important for their clientele. That includes digital and other accessory service support.

“Soaring wages makes it tough to keep costs down, therefore industry solutions are getting popular for companies,” the expert says. “Businesses are starting to realize that they don’t necessarily need to get new people on board, but rather boost the efficiency of the existing workforce.”

What about previously rather inactive groups of the labor market? Could they come to the rescue of temp agencies and their clients?

Róbert Csákvári, managing director of Work Force, believes reintegrating pensioners and public workers into the labor market is gaining in importance. “Students are very much welcome for seasonal work, and companies are ever more open to employing motivated workers from across the border,” he says.

More Foreigners

Speaking of foreigners, their number has tripled in the past two years, according to the data of the Hungarian Central Statistical Office. Their presence has grown visible, primarily at large multinational companies in western Hungary and in northern Transdanubia. Shared service centers and manufacturing businesses tend to employ them in particularly large numbers.

The latter bet on Ukrainian and Serbian workers mostly, but Goszleth believes that this won’t be a permanent phenomenon. Many employers have problems with such workers as their conflict resolution skills tend to leave much to be desired. On the other hand, many simply use Hungary as a spring board, and once they find better paid work further to the West, off they go in droves.

“For this very reason, certain mother companies oblige their subsidiaries to employ Hungarians only or get existing Serbian or Ukrainian staff replaced by locals since this kind of uncertainty carries enormous business risks,” says Goszleth.

“Imagine what happens if 50-100 workers are gone overnight from manufacturing. That’s a lot of penalties right there.”

Csákvári stresses, in turn, that many foreign workers are truly motivated, and if this is the case, even the fluctuation is not a major challenge. Putting them on payroll can also be accelerated by temp agencies.

Full Admin

“We are managing the full admin process, including payroll services and registration with the authorities, travel arrangements and finding accommodation.To facilitate the onboarding process and integration, we are providing a bilingual native interpreter as a dedicated point of contact supporting them on a daily basis.” Csákvári says.

The question remains what actually motivates people to sign on for temp jobs. The experts agree that the bean bags and office foosball table combo alone won’t seal the deal.

“Offering an employee a wellbeing package is now considered a very basic thing. It is corporate credibility and support from the management that will strengthen commitment and stop fluctuation. It matters a lot as well to what extent an employer keeps the promises it made beforehand,” says Csákvári.

Trenkwalder’s managing director stresses the importance of decent payment. “There is no way around it, you need pay up. At the same time workers are ever more confident, you can’t lure them over by ‘tricks’,” says Nagy. “It’s also good to know that fluctuation has seasonal dynamics, therefore it makes sense to fill in vacancies in September.”

In Adecco’s experience, dangling very high wages and bonuses is the only way to attract people for work over a determined period.

“This can go up to 50% more wages compared to that paid for work performed under an undetermined contract,” adds Goszleth. Money talks, as always.