THE SLOVAK economy is showing clear signs of recovery and that is being reflected as well in the labour market and in more interest among firms in various forms of temporary employment. The Slovak Spectator spoke with Ľuboš Sirota, chairman of the board of directors and CEO of Trenkwalder in Slovakia, Erik Hudák, sales manager of the Slovak arm of Manpower and Peter Paška from Proact People Slovensko about personnel leasing and other forms of temporary employment.
The Slovak Spectator (TSS): How would you assess the current interest of companies in Slovakia in personnel leasing? How has the situation changed in comparison with the crisis period?
Ľuboš Sirota (ĽS): The situation has radically changed when compared with the crisis period. This is because employers in Slovakia, contrary to western EU countries, were quickly getting rid of agency workers because cutting labour in this way was the cheapest for them. The low flexibility in labour legislation in Slovakia also was responsible for this. However, since mid 2009 this trend has turned around and Slovak companies have begun to take back terminated agency workers. The reason is that during the crisis they realised that this form of employment enabled then to react flexibly to their production situation and the development of orders. As a consequence, the number of agency workers has more than tripled. Currently, within Trenkwalder, the number of leased people working full-time exceeds 3,000 people.
Peter Paška (PP): During the current time we are registering an increased interest in new workers on the part of our partner companies. Compared with the same period of 2010 our performance has increased by 38 percent. The increase oscillates from some tens up to some hundreds of newly-filled positions, depending on the individual companies. But this reflects especially the current start-up of manufacturing companies, which are returning to full production after a period of reduced orders.
With regards to anticipated developments, we see an increasing interest in qualified workers and experts. This means that companies are welcoming the possibility to get workers who are ‘ready’ and that, on the other hand, does not play in favour of recent graduates who have not yet had the chance to obtain the necessary practical experience.
Erik Hudák (EH): The interest of companies is growing. Moreover, prior to summer holidays companies are also interested in finding short-term replacements. Compared with the crisis period, the number of leased people is increasing.
TSS: Which economic sectors show the most interest in personnel leasing? For how long are people usually leased?
ĽS: The highest demand is for blue-collar positions in the automotive, electro-technical and machine industries. The average period of temporary employment exceeds nine months and that depends primarily on a client’s production orders.
PP: Manufacturing companies mostly from the automotive, electro-technical, food and printing industries, and also IT services, use the services of personnel agencies the most. Generally speaking, temporary employment is used everywhere where employers must deal with a fluctuation in their labour force.
If we divide the activities of our agency into blue collar and white collar segments, blue collar positions generally do not require any extra specialisation. These include work positions with a higher degree of manual work. For white collar positions, we currently search for sales managers, accountants, administrative workers, office managers, production engineers, process coordinators, and similar positions.
The Slovak labour market still lacks craftsmen – that is linked with the direction of society and education policies.
The duration of many working contracts now is up to the end of the high season of 2011 but with a promise of possible continuation.
EH: Companies from the automotive and electro-technical industries, as well as IT companies (service-shared centres, developers and so on), use personnel leasing the most. The duration of these assignments is very individual. Some of our people work on one-month assignments but some also have two-year contracts.
TSS: What impacts did the economic crisis have on your businesses as temporary employment agencies?
ĽS: The crisis established the institution of temporary assignments as a standard type of legal labour relationship. It became an essential part of personnel policy of modern companies.
PP: With regards to the absolutely distorted labour market in Slovakia caused by the abuse of employment via ‘na dohodu’ employment contracts [based on which an employee can work for one employer up to 10 hours per week but not more than 350 hours per year], the trustworthiness of temporary employment was harmed in an exceptional way and a remedy will be neither easy nor fast. In this respect the Association of Personnel Agencies of Slovakia, which was launched especially with the goals of standardisation of the personnel-consultancy business and participation in developing labour legislation, failed completely. Employers prefer employing people via ‘na dohodu’ contracts which means lower costs for them and higher net earnings for the workers. Under the impact of the crisis, a large number of standard employment contracts were replaced by ‘na dohodu’ employment contracts. This has distorted the labour market and simultaneously created big risks for the fiscal stability of the state. According to official statistics, Slovakia has about 400,000 jobless people but at the same time about 600,000 people are working based on ‘na dohodu’ contracts, while a large percentage of these people are simultaneously receiving various social benefits.
EH: Those agencies which depended on one or two clients often were attenuated or ceased to function completely or reduced their branches. Bigger agencies and international agencies have been keeping their positions. During this post-crisis period some new agencies have already emerged and competition among personnel agencies is very vigorous.
