Knee-deep in Recession - Where is the Job Market Heading?

Katarzyna Molas of Bigram Personnel Consulting examines the impact of the recession on employment in Poland.

The economic recession reached Poland later than many western countries. Poland’s job market, which meant that the signs were visible by the autumn of 2008, which is normally the time of year when the recruitment process of many companies gains momentum, and the number of positions advertised reaches its peak.

In October 2008, however, all major recruitment websites noted a significant decrease in employer activity. The Polish Minister of Labour announced in December that there was no need to panic though, as the unemployment rate was still the lowest it had ever been in the last five years. She anticipated a quick change in this situation. The argument was supported by the fact that seasonal work in the construction and tourism industries as well as agriculture had finished for the year. In May 2009, the number of vacancies started to increase while the rate of unemployment fell slightly, which again was explained by the seasonal rise in activity. Nevertheless the rate of unemployment reached 11% and certainly started to cause anxiety especially in small cities and villages.
 
There are, however, some social groups that can feel some positive effects of the recession. Among them are most of all the employers, whose companies are not directly affected by the crisis and the students, especially those without work experience.
 
Students Required 
 
A lot of companies implemented quite drastic cost-cutting policies at the beginning of the recession. Their main problem now is the lack of workforce to perform basic tasks that do not require much experience – assistant positions, administrative work, handling correspondence and so on. Many employers have created paid or unpaid internship programmes in which such tasks are taken care of by students. Young people can hardly benefit financially, as the salaries offered to them are rather low, however they can gain some valuable experience that will give them a significant advantage in their future careers. Having worked in an office before, they can negotiate higher salaries and better employment conditions when they graduate and the recession is over.
 
Stable Companies Reap Benefits
 
When times were good, many companies struggled to find qualified engineers and IT specialists, who were one of the most in-demand and best paid groups of workers. The cost of recruitment and employment of such professionals constantly grew and even though many companies offered competitive salaries and a wide range of perks, they still were not able to find the right people. The recession brought some changes into this area – as it hit the automotive and manufacturing industries, many employers were forced to lay off staff. This, however, did not seem to cause massive unemployment among the engineers. According to a survey conducted by BDI, a company dealing with recruitment of technical specialists, only 4.7% of engineers were apprehensive about their future careers. Furthermore,  43.5 % of them were absolutely sure that the crisis would not affect them at all. 15% believed that when faced with job loss they would find a new one instantly, and 33% anticipated some difficulties before they will be able to get a new one.
 
Companies in a stable position quickly seized the opportunity to employ some laid off specialists, and due to the crisis were able to offer them lower salaries, and the average cost of employment fell. Many companies looking ahead decided to employ some new people so that they will have a competitive advantage once the recession is over.
 
Lower Cost of Recruitment
 
The recession halted a lot of recruitment processes for many companies, and personnel consulting companies lost a lot of projects. They needed to start coming up with less expensive and more effective services, which resulted in many of them wooing their clients back offering and them some good deals. Employers made the most of the situation once again – not only they could have the same specialists for less money, they could take their pick from new services. Many consulting companies put more emphasis on outplacement, which became a very popular way of helping the laid-off workers. Many consulting companies started advising employers on their long-term recruitment strategies and internal communication.
 
Government Assistance
 
After long discussions, the Polish government decided to introduce a so-called anti-crisis package. It included several solutions which were created with the aim of benefiting employers, for instance by introducing initiatives such as flexi-time and allowing staff to stay at home while there is no work for them, on the condition that they make up for it at a later stage without having to pay over time.
 
Where is the Job Market Heading?
 
The crisis has caused a great shift in the balance of power in the job market; in 2008 the employees were very much in a strong position. They were able to demand growing wages, more perks and bonuses, better working conditions and training. They changed their jobs frequently, especially in large metropolises like Warsaw, and thus the employers lived in constant fear of losing their qualified workforce. Due to the difficulties in finding the right staff the personnel consulting companies thrived and headhunting became one of the most profitable services.
 
Once the recession hit Poland, a lot of employers needed to lay off some staff, cut their salaries and reduce the perks. Fewer recruitment processes slowed down the rotation and lowered the demands of many employees. At the same time the personnel consulting companies lost a lot of business and needed to start offering new services to satisfy the new type of market.
 
The future is still uncertain – the Polish economy is trying to deal with the recession. Employees are unlikely to regain their advantage in the short-term, as many companies are reluctant to take on new people and offer them long-term contracts. Therefore staff are less likely to change jobs as quickly as they used to. New initiatives are being developed and implemented including hot-desking, tele-working and flexi-time. This might lead to a completely new way of way perceiving the employer-worker relationship in the future.
 
Katarzyna Molas
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2010

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