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Growing Challenges and Better Care in the HR Market

If finding labor was challenging last year, it is getting close to impossible in some cases now. HR agencies have to reach out to the market to fulfill workforce needs and the competition is acute. Yet the crisis is also bringing a more humane attitude to the labor market, the Budapest Business Journal finds.

“The market has become very candidate driven,” Tammy Nagy-Stellini, CEO of Hays Hungary tells the Budapest Business Journal; every word we heard from the biggest market players in the HR field seems to support her statement.  

The intensification of Hungary’s labor shortage will come as no surprise to our regular readers, yet while for some areas such as IT and engineering sourcing workforce has already been an issue for several years, now other areas such as SSCs, technical sales and online/digital marketing are experiencing difficulties as well.

Fulfilling workforce demands in such circumstances requires a complex range of solutions. One still strengthening trend, is RPO (Recruitment Process Outsourcing) projects. Within these, the entire HR management of a given company is taken over by an HR agency with a global network to provide on-site solutions.

But international tendencies can be seen in other aspects too. “More big tenders are won by foreign agencies instead of Hungarians,” says Éva Paulovics, general manager of JobsGarden. The reason behind this is often that the client has a foreign HR manager who wants to work with an agency he or she knows. However, “the efficiency of such foreign agencies is doubtful as, without local knowledge, they cannot rely on the recommender system, for example, which is still a top tool for recruiters,” Paulovics points out, referring to the process of existing colleagues getting an extra payment for attracting friends or family to work in the same company.

Recruiters have to be much more proactive. “We need to reach out to the market ourselves, identifying the right talent and approach them with the right opportunity,” Nagy-Stellini says.

“Basically, there is a growing need for higher value-added recruitment activities both from the corporate HR and agency side: deeper understanding of roles expected from recruiters, working closer with hiring managers, more flexible salary ranges, faster recruitment processes, better and more focused database management and more onsite presence needed towards recruitment companies,” she adds. Creative and innovative on-line platforms have also become increasingly widespread, along with career days, open days and gamification.

Total Recruitment

Sándor Baja, CEO of Randstad agrees. “As I see it, ‘total recruitment’ is the solution now: job portals topped with our own databases, but social media groups are also on the rise as well as internet searches and recommender systems, etc.,” he says.

While IT specialists are more responsive to creative or direct searches, according to Ádám Hoffmann, managing director of Exact Solutions, managers can still be found effectively via LinkedIn.

At the same time, the way to Generation Z is completely different, Paulovics points out. “I am 43 now and I prefer pure design and content to a party atmosphere,” she says. “The other day we checked a website which I liked a lot but finally our professional conclusion was that it would not work with a ‘Z’.” They can better be reached through websites like DreamJo.bs which are very cool and go beyond classical recruitment with creative job and company descriptions. “This is a matter of marketing,” Paulovics says.

In order to not only find the talent, but also reduce fluctuation which is now 5-10% higher than before, a good salary is only the minimum. “Many years ago, candidates needed to leave an impression whilst making an interview – now it’s the company who has to do so,” Nagy-Stellini says. Ever more companies organize site visits for applicants in last rounds. This allows them to meet employees and walk around the place of work; this is basically selling the company and the position to the applicant to get them engaged.

With employer branding, which is now inevitable for both attracting and keeping people, companies want to give a clear picture about the social principles pursued by the business such as home office opportunities, team builders, family days, dog and child friendly days.

“Some companies already look like an amusement park with a full kitchen and a very well-designed office, which also holds bigger and bigger weight,” says Paulovics, adding that the most important thing about employer branding is still to make it genuine.

Feedback Culture

The deepening labor shortage has some positive consequences too, from a humane point of view. “Candidates always have to be treated fair and square as they dictate the market now,” says Orsolya Dózsa, Grafton’s operations manager. “Anyone can become a colleague or an employee later and since bad news spreads much quicker than five or ten years ago, the way people are treated can mean a disadvantage or an advantage at anytime.”

A survey conducted by Hays last year seems to support this idea. It showed that 82% of candidates had gone through a significantly bad experience during recruitment processes and a whopping 80% of those people would never again apply to that company.

“Companies have to consciously build up their image also through their recruitment processes,” Tímea Harnisfőger from Job.hu agrees. Eight-round interviews should be avoided and a quick reply has to be given. Moreover, personal experiences about a company like the receptionist being kind or rude or the professional boss arriving at the interview on time or late all leave an impression and are shared with hundreds of people immediately.

“In the world of social media, it matters what people publish on their timelines,” Harnisfőger points out. “I hear it more and more often that above a certain age and experience, people don’t choose a company but they choose a boss.”

Also, while it used to be a very common thing in Hungary to leave rejected candidates without any type of feedback or even a reply, this cannot be done anymore. “Feedback should always be given, whether it is positive or negative. Should this not take place, it would spoil the brand,” Nagy-Stellini stresses adding that once a bad image is created, it is very difficult to fix.

“A strong feedback culture is very much needed,” Paulovics agrees and adds that all processes have to be as transparent as possible. “There is a clear demand for glass-door policies from the side of employees,” she says and tells the story of one of the main rating companies that, when arriving to Hungary in the mid-2000s, had a very aggressive recruitment process focusing on IT-workers. People put a lot of effort into their applications, went through several rounds of interviews and spent long hours sitting and waiting and were finally rejected in a one-sentence email. “They were extremely disappointed which made it very hard for the company later to recruit or rebrand itself in general.”

Exact Solutions’ Hoffmann agrees. “As for me, this has always had to be kept in mind since such news can reach future potential employees. Those who start paying attention to this only in the current market conditions are probably at a severe competitive disadvantage.”

Compromises Needed

Given the struggle for talents, the quicker often takes it all. Companies need to understand that while a four or five circle interview is organized, a candidate can get an offer from up to three other companies in the meantime, Nagy-Stellini warns.

In addition to speeding up, companies have also become more flexible. “We can definitely see compromises on labor shortages,” Nagy-Stellini says. “Companies are more open to hire 70-80% job scope matching candidates and invest in training them rather than wait for the candidate fulfilling the role 100%, which may take much longer or more often does not exist.”

Randstad’s Baja agrees: “Compromise exists. Success depends on what type of compromise it is. Some companies are ready to employ all and sundry despite the risk of ruining employee morale and the results, while others give in only in nice-to-have skills and rather help to catch up with training.”

Paulovics adds: “Soft skills are usually taken very seriously but technical skills can be compensated by training.” According to Harnisfőger, in sectors with the most suffocating labor shortage, it is a trend to make do with juniors instead of seniors.

However, there are still many companies not lowering the requirements, even if they cannot fill a vacancy for a year. “For them, it is still more bearable to have a position open than tying up a team member by fixing the new colleague’s shortcomings,” Hoffmann notes.

Building up HR

In reaction to the labor shortage, many companies are building up their own HR department though they might never reach the capacity of a specialized agency. “Here, 40 people keep calling people all day and we are able to offer several positions, meaning that it is also more beneficial for the candidate,” Paulovics says.

However, in some cases it is impossible to meet the expected demands, no matter how professional the HR contribution is. “We reject assignments more and more often because we see it is unattainable, because other companies also seek the same position and offer higher wages or have a better location,” Paulovics tells the BBJ. “In such cases, we speak openly at the very beginning.”

Apparently, finding talents is a growing challenge and as such has an increasing price. “Recruitment companies have to use more resources, tools and efforts to ensure the roles are filled successfully,” Nagy-Stellini says.

Most HR agencies expect to grow in 2018, yet they are careful about saying by how much. As Randstad’s Baja says, “the first quarter has been an absolute record. The rest we will see.”