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Slovaks still wary of temp labour

Temporary employment, the building block of some of the world's most successful economies, has still not managed to catch on in Slovakia - a cold reminder of the underdevelopment of the Slovak economy.
Although temping agencies have existed in Slovakia since the early 90's, their growth rate has remained flat and their presence on the Slovak market relatively minor in contrast to western economies. In the United States and western Europe, where the mobility of the workforce has both demanded and created temporary employment and allocated market labour resources, the practice has become a permanent and important feature.
However, in Slovakia, even the largest human resource firms have been surprised at how slowly Slovaks have reacted to the concept of employment contracts that carry an inherent lack of permanence.

Temporary employment, the building block of some of the world's most successful economies, has still not managed to catch on in Slovakia - a cold reminder of the underdevelopment of the Slovak economy.

Although temping agencies have existed in Slovakia since the early 90's, their growth rate has remained flat and their presence on the Slovak market relatively minor in contrast to western economies. In the United States and western Europe, where the mobility of the workforce has both demanded and created temporary employment and allocated market labour resources, the practice has become a permanent and important feature.

However, in Slovakia, even the largest human resource firms have been surprised at how slowly Slovaks have reacted to the concept of employment contracts that carry an inherent lack of permanence.

Gerard Koolen, co-founder and managing partner of Lugera & Makler, Slovakia's largest head-hunting firm, said that when his firm first started out in 1996 there was only a small demand for temping services. This, he said, hasn't changed.

"Companies are still trying to settle their workforce here in Slovakia. The only reason we offer this service is so that we will be the leaders when it [eventually] takes off," Koolen said. He added that money made from temping services only accounts for between 5 and 10% of his company's turnover.

Temp agencies collect job offers from companies for limited periods of time - anywhere from weeks to several months - and then recruit people to fill those jobs. Firms pay temp agencies 160% of the salary, from which the agencies are expected to cover the employee's salary and any other taxes or costs related to his or her employment. The agency's services are attractive because they spare companies the administrative hassles of finding and hirings an employee for uncertain job openings. For the temp agencies themselves, the practice can have a high profit margin if the costs of finding people are kept low.

The relative obscurity of temping in Slovakia, analysts have said, is both a supply and demand issue. On the demand side, the economy is simply not developed enough to provide a significant number of temp jobs. "I know of only a few companies that provide this service in Slovakia," said Marta Hrábičkova, a coordinator at the Department of Labour Politics at the Ministry of Labour. "Before it can grow, the economy has to develop and create more and different kinds of working opportunities."

On the supply side, the idea of moving from job to job has less appeal in Slovakia than in western countries, where temping is often seen as attractive work, especially among younger members of the workforce, because of the freedom of movement and lower job responsibility it affords.

In many more developed economies, young people often move to a new city and temp while looking for a more permanent job and deciding whether or not to settle in.

With unemployment in Slovakia one of the highest in Europe at just under 20%, some analysts have said that the example of somewhere like the United States, where temporary employment has helped develop the world's most mobile labour force, or the EC's law allowing any EU citizen to work anywhere else within the EU, would be good ones to follow as the country's labour market readies itself for European Union entry.

Professor Robert Smith of the labour economics department of Cornell University in Ithaca, New York, explained why temporary employment has been so important to the world's largest economy.

"The phenomenon of temporary employment started in the United States after WWII but has really grown significantly over the past two decades," he said. The professor added: "Temp services improve the efficiency of an economy. Agencies specialising in temporary employment facilitate a transaction that is difficult for the individual parties involved by collecting the buyers and sellers of short-term labour.

"Every firm has to decide on how to fill its labour needs. Jobs that require a high level of skill and training are never going to be filled on a temporary basis because turnover costs are too high for companies. Temping is an inevitable part of any economy."

In Slovakia the workforce is much less mobile than in other western nations, bogged down by the high cost of rent and low housing vacancies in Bratislava - the most fertile job market in the country - the high cost of car ownership and the uncertainty of finding a job.

"People here still don't see the advantages of temping. In Slovakia, because the economic situation is more precarious, the idea of taking a job knowing it will end can be scary for people. Also, there is the risk that something else more permanent will come along," Koolen said.

However, there is a growing hope that this may be changing as a new generation of Slovaks becomes more interested in travel and freedom and less fixed to the idea of economic security.

"The idea of temping definitely appeals to me," said Lenka Kršková, a 23 year-old Slovak who studies business in Vienna. "Most companies in Slovakia want you on a full-time and long-term basis. Since I plan on doing a lot of travelling, it would be great if I could leave the country knowing I could call a temp agency when I get back [for work]."

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