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Slovak corporate managers come into their own

Getting the right person in the manager's chair has always been a challenge for major corporations. And now that Slovak managers have had eight years of training in market economy philosophy, foreign companies operating in Slovakia are rethinking their policy of bringing in talent from abroad.
The new hybrid company, which combines foreign capital and know-how with Slovak employees and business culture, is also starting to raise the wage ceiling that young Slovak university graduates can expect for top managerial positions.
"The time when international companies accept Slovaks as directors and managers of their branch offices has already come," said Martin Novotný, principal advisor with Management Consulting Jenewein, one of the biggest human resources (HR) companies in Slovakia.

Getting the right person in the manager's chair has always been a challenge for major corporations. And now that Slovak managers have had eight years of training in market economy philosophy, foreign companies operating in Slovakia are rethinking their policy of bringing in talent from abroad.

The new hybrid company, which combines foreign capital and know-how with Slovak employees and business culture, is also starting to raise the wage ceiling that young Slovak university graduates can expect for top managerial positions.

"The time when international companies accept Slovaks as directors and managers of their branch offices has already come," said Martin Novotný, principal advisor with Management Consulting Jenewein, one of the biggest human resources (HR) companies in Slovakia.

Vanda Šinková, marketing manager with PricewaterhouseCoopers, confirmed that the number of ex-patriots in Slovak branch offices is falling. "In the majority of cases, you will find that some foreigners have started the business. They would at the same time lecture some Slovak, who would later take over the post," she said.

An example of such a change is IBM Slovakia. After six years of operation, the company headquarters decided to have a Slovak director for their Slovak branch office. Accordingly, in March 1998, Miroslav Majoroš replaced Espen Ramsbacher of Norway. "The corporation came to the opinion that a foreign manager is no longer an advantage for IBM Slovakia," said Majoroš, adding that his Slovak background enabled him to communicate with customers better than a foreigner in the same job.

Novotný noted that the reverse situation was not common. "It sometimes happens that a Slovak founds a company, and then some foreigner arrives to take over his position," he said. "But this is not so frequent."

A vast discrepancy in salaries is one of the possible reasons that Slovaks are eager to take over managerial positions with foreign companies while foreigners are loathe to accept top jobs in Slovak firms.

Two business consulting companies operating in Slovakia - KNO Slovakia and a branch of PricewaterhouseCoopers - recently completed their sixth annual Slovak wage survey for 1998. The survey focused on companies with foreign capital behind them.

Šinková explained that there has been a general increase in managerial wages in Slovakia. "From all positions, the biggest increases have been noticed in marketing and project manager positions," she said, declining to reveal exact numbers, because "the analysis is a product we sell."

Management Consulting Jenewein, which does the same kind of survey for internal purposes, was more than willing to give their 1998 results to The Slovak Spectator (see chart this page). According to Jenewein's analysis of May 1998, the highest-paid manager in the local office of an international corporation gets approximately 220,500 Sk ($6,125) a month. The average monthly salary in Slovakia in the same period, according to Slovak Statistical office (ŠUSR), was 9,444 Sk ($ 262).

These international company salaries tower over their Slovak equivalents. According to the statistical office, directors of large Slovak corporations make 32,424 Sk ($900), which is almost seven times less than they would make with an international company (see chart this page).

Despite the hefty difference in salaries, Slovaks who get jobs with foreign companies are almost assured of a wage above prevailing market levels for Slovak employers. "From the analysis we made, it's clear that these companies would never pay under the market level," said Šinková, adding that wages have become closely tied to the value of the labour the corporation thinks it is getting.

"Yes, in the case of managers, foreign companies are willing to pay more to get quality work," seconded Novotný. "It's just a natural trend."

So which Slovaks are getting these prime jobs? "It's not so easy to fill managerial posts," said Šinková, noting that companies recruit new people most frequently through advertisements.

"Today, a foreign language has become a must," began Novotný. "Managers should also have international experience, but with some very specific fields, it's just impossible," he said. Because of the experience factor, he added, foreign companies still occasionally preferred to use an ex-patriot to fill a crucial post. "However, in this case companies take the risk that the foreigner doesn't know the Slovak people and culture so well, which might be a kind of a handicap," added Novotný.

Among other requirements, companies favour candidates who have been educated abroad. Often, Slovaks who studied 'only' at a Slovak university (for instance, the Economic University in Bratislava), are passed over in favour of applicants with MBAs from abroad.

"There is very low chance that a freshly-graduated university student will get a top post. What he needs as well is experience," said Šinková. Novotný agreed, and added that foreign employers are well aware of the fact that people who graduated from university before 1989 were not given a strong business education. "But as far as the credibility of Slovak universities is concerned, they have a very good reputation, especially the technical schools," added Novotný.

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