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Hungary’s shortage of workers goes beyond IT and engineers

As the economy heats up, and foreign placements lure workers away, SSCs struggle to find people who speak more than one language and factories are looking for a variety of skills, according to local recruitment experts.

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IT specialists and engineers are still the most sought-after types of employees in Hungary, but as the economy heats up and the pull of the West reduces the labor pool, other types of jobs are going wanting, according to local HR experts. 

Professionals working in recruitment, for both temporary and permanent employment, said the labor market in Hungary is tight, and getting tighter, making certain positions more challenging to fill. These experts told the Budapest Business Journal what types of workers are the most sought after. But despite the tight market, the local recruiters said they still have the ability to find the job candidates employers need.

“As in previous years, engineers and IT people are within a candidate driven market, so basically they can choose from many different offers,” said Tammy Nagy-Stellini, managing director of Hays Hungary, one of the country’s largest recruitment agencies.

Gabriella Ruff, a co-founder of Karrier Hungária, another major local recruiter, maintained that these kinds of workers are even harder to find in Hungary if they can work in an international context. “Generally speaking, it is very difficult to recruit experienced engineers who speak foreign languages,” she said.

But both Nagy-Stellini and Ruff noted that the shortage of workers is not limited to the engineers and IT specialists. Other recruitment specialists agreed that many open positions are more difficult to fill.

Noting the “long-lasting shortage of certain professions in the labor market, like engineers, IT professionals and skilled workers,” Attila Molnár, managing director of Pannonjob Humán Szolgáltató és Tanácsadó Kft. added: “Since last year, those positions that were easy to fill before – like simple machine operators, storekeepers or manual laborers – are more difficult to recruit today, and we receive many requests for these positions as well.”

According to Csaba Greguss, permanent placement director at the Hungarian recruitment agency Adecco Kft., growth in the Hungarian economy means his firm is needed more often to help in hiring for all positions. “There is a boom in the labor market in 2016. Our number of vacancies in permanent placement has increased by 18%. Our main focus is IT and engineering positions, but blue collar workers are also challenging to find these days,” he said.

And Zsuzsa Gárdus, managing director of JOBSgarden-ITjobs Kft. said that, while “the most painful shortage” involves IT workers, shared service centers (SSCs) are also having a hard time finding people who speak several languages, especially those with finance or accounting expertise. As for engineers, the most difficult kind to find are electrical and chemical engineers, or anyone who speaks more than one language, she said.

Long-term trend

The current labor shortage has been a long time coming, according to Molnár of Pannonjob. He noted that Hungary’s own “baby boom” came between 1950-56, when Anna Ratkó, Hungary’s welfare minister, sought to reverse Hungary’s wartime population decline by outlawing abortion and taking other steps to encourage births. The so-called “Ratkó” children born then are now reaching retirement age, while those now reaching working age were born in the early-to-mid 1990s, at a time when Hungarians were having fewer children.

“As a result, each year there is a negative gap of around 100,000 workers between those entering and those retiring from the labor market.” Meanwhile, Molnár added, many of those who are of working age are being tempted out of the country.

“Over the past decades, ageing Western European societies have filled their workforce shortages with workers emigrating from Central and Eastern European countries,” Molnár said. He noted that, with European Union membership making it easy for Hungarians to move to higher paying markets, this exodus of workers has increased.

Imre Papp, the managing director of recruiters HSA Kft. said that Western employers are more often coming into Hungary, to poach workers away.

“I feel that the presence of Austrian and German recruitment companies has become stronger in Hungary recently,” he said. “These are very active in recruitment, offer good conditions, and help workers to travel abroad, find accommodation, manage their problems and also represent their interests. That is why so many skilled workers move and work in Western Europe and are missing from the Hungarian labor market.”

Sándor Baja of Randstad Hungary Kft., currently the biggest recruiting firm in this country, said that demographic trends are not completely stacked against employers.

“The demographic situation of Hungary is complex,” he said. While he acknowledged that the overall population of the country is dwindling, Baja noted that certain population centers are going against the grain: “Budapest (and some other big cities like Győr and Debrecen) attract more and more people,” he said. “Budapest and Pest County grew to almost three million in the last decade.”

Booming demand in factories

Along with long-term demographic changes and the pull of jobs abroad, Hungary’s labor market is also impacted by internal economic growth, especially in the area of automotive manufacturing and other types of industrial production.

Experts interviewed said it is harder to fill jobs in manufacturing, including, of course, engineers. According to Gárdus of JOBSgarden-ITjobs, her company sees a shortage of a variety of engineers, including: “Hardware developers in electronic development, reliability engineers, test engineers, technology development engineers, quality/safety engineers, energetics engineers and lean engineers.”

Róbert Csákvári of Work Force Kft. said that the shortage of engineers and IT developers is due to a mismatch in available talents and open positions. “University degrees in science and arts are more popular among students then engineering,” he explained.

“Half of the Hungarian companies complain about the lack of experts in Hungary and there are more than 240,000 unemployed,” Csákvári said, adding that geography is part of the problem. “There are a lot of workers who look for new opportunities, and a lot of companies who need skilled and semi-skilled workers. However, exact demand and exact location of supply and demand do not necessarily meet.”

In addition to engineers, Csákvári, whose firm handles temporary placements, said that the industrial sector needs many other types of workers.

“Our firm is busy looking for new factory workers to fulfill the needs of our customers located in Hungary, especially around this time of the year,” he said. “The largest demand is for semi-skilled laborers, usually production operators, CNC (computer numerically controlled) operators, locksmiths, foundry workers, carman drivers, welders, electricians and metal-working machine operators.”

Papp of HSA said that factory hiring is no longer something that builds as school closes.

“Demand for trained workers has grown at large factories all year long,” Papp said. “There is permanent, insatiable demand for CNC workers, millers, locksmiths, welders and chippers.”

SSCs in need

As with manufacturing, Hungary’s ability to provide a trained workforce that is more affordable than that of Western Europe has made this country a magnet for SSCs and business process outsourcing (BPO) offices. Workers in these hubs can handle all the back-office administrative needs of major corporations, but those workers must be able to speak more than one language, so they can communicate with their head office or customers. If potential SSC workers have special training in back-office functions, like IT or accounting, it can increase their value, and make them that much more precious on the labor market.

“As for SSC workers, multi-lingual candidates are able to choose between several opportunities,” said Nagy-Stellini. “Nowadays, most candidates speak well in English, though this is no longer a plus but rather a must – along with another one or two languages. There is currently a high demand for German speakers, though this comes in waves – the next wave may be French speakers. And, funnily enough, it seems that SSCs pick the same time to look for the same language speakers.”

Along with the right language abilities, Nagy-Stellini said, having finance qualifications makes an SSC candidate very valuable.

Ruff of Karrier Hungária also noted the demand among SSCs for candidates with two or three languages who can handle finance: “It is very difficult to find, for example, an accountant with Dutch knowledge, although it is still possible.”

She added that it is important for SSCs to make themselves attractive to these candidates, so they can hire them and keep them. “In SSCs, the average rate of fluctuation is 10-15%,” Ruff said.

In the experience of Gárdus from JOBSgarden-ITjobs, the range of financial professionals, including accountants and controllers, are all in demand at SSCs, as are experienced procurement experts, handling “all levels: operational, tactical, strategic sourcing”.

Emese Nagy, branch manager of CPL Jobs Kft., said that, after IT workers, SSC workers were the most common kind of employee that her customers are hoping to recruit. She said language combinations, especially Scandinavian languages, could make an SSC candidate more desirable. “SSC employers are typically looking for candidates with rare languages or with scarce language combinations,” Nagy said. “Salaries offered for these roles are usually around 10% higher than salaries for similar roles, without difficult language requirements, as incumbents compete to attract much needed talent from rival firms.”

Handling the tough competition

So what can a company do in a market where many firms are after a small pool of talent? Nagy suggests looking around the greater region.

“In order to mitigate against this destructive competitive cycle, SSCs and BPOs operating in Hungary should look to hire talent from abroad,” she said. “Focusing mainly on neighboring countries, employers should entice candidates to move to Hungary through the offer of relocation packages that provide practical assistance and encourage worker mobility.”

Ruff mentioned the importance of building a reputation for being a good employer. “Companies should understand that finding talent requires a different approach from a few years ago, and all companies should differentiate themselves from their competition,” Ruff said. “They should also be able to communicate this difference through their employer branding strategy and they should work out long-term programs for serving employees.”

Nagy-Stellini of Hays emphasizes the importance of being agile enough to hire in a hurry. “The advice I give is you need to be fast,” she said. “If you identify talent, snatch them. You may have to challenge internal policies, but if you don’t act quickly, someone else will.”

Of course, one solution offered by all these experts is that companies should get in touch with them. As professionals in recruitment, they said they can give employers an edge in a tight market.

“At Hays we have alternative ways of finding candidates – especially using social media channels,” said Nagy-Stellini. “It is no longer the situation where you post an advert and wait. Long gone are the days!”

Baja of Randstad said his firm is busy, but they can handle the rush.

“We have more assignments than at any time before, from hundreds of companies – from the biggest ones to SMEs. We take the jobs in only when we think we can deliver,” Baja said. “If a client proposes impossible criteria, let it be salary, language and other skills, experience, or location, then we try to consult them to fine-tune the expectations, to see if these criteria are really needed.”

Csákvári, of temporary specialist Work Force, maintains that there are inventive ways to bring together workers and employers. He cited the example of the town of Oroszlány, where American car parts maker Borg Warner in December completed an expansion that required construction and is expected to create 600 jobs.

“Work Force was the first that established and financed mobile homes in Oroszlány for workers from other regions,” Csákvári said. “The situation is not hopeless, there are still people who want to work within our reach. We have to be creative, if we want to move the market.”