Hr and Education 2017

HR&EDUCATION P ri c e: H U F 9 9 0

EXECUTIVE SEARCH | SPECIALIST SEARCH

2017

B publication

WORKING

TOWARD A BETTER FUTURE

INTERNATIONAL EXECUTIVE www.humanfield.hu | humanfield@humanfield.hu | +36 1 413 7145

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WE POWER THE WORLD OF WORK FOR 10 YEARS IN HUNGARY Learn more: hays.hu

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CONTENTS INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 HIPA: Working with investors for the betterment of Hungary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Recruitment and Retention: The Twin Challenges Facing HR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 The Recruitment Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Though Increasingly Popular, Career Change is no Cake Walk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Hungary yet to Fully Embrace the Benefits of Interim Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 The Minefield of Succession Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Have Computer, Will Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Fierce Need for Foreign Labor Haunting the Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Boosting ‘Candidate Experience’, Making Recruitment Faster . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Making Education fit for Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Practical vs. General Knowledge: Dual Education in Hungary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 AmCham Language and Career Ambassador Schemes go to Next Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Training their own staff: Apollo launches dual training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Navigating the Labor Shortage, Wizz Air Inks Uni Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Springboard to the Skills of the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Making Knowledge a Tool, not the Goal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 For Hungary’s Roma, Bridging the Education Divide Must Start Young . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

HR&EDUCATION | A BUDAPEST BUSINESS JOURNAL PUBLICATION BBJ Editor-in-chief: Robin Marshall • Editorial: Sonja Bence, Levente Hörömpöli-Tóth, Christian Keszthelyi, Robin Marshall, Ágnes Vinkovits • Sales: Csilla Lengyel, Bernadette Oláh, Erika Törsök • Layout: Norbert Balázs • Publisher: Business Publishing Services Kft. • Media representation: AMS Services Kft. • Address: Madách Trade Center, 1075 Budapest, Madách Imre út 13-14., Building A, 8th floor • Telephone: +36 (1) 398-0344 • Fax: +36 (1) 398-0345 • ISSN 2560-0486

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INTRODUCTION

Human Resources and Education, working hand-in-hand.

Education and HR have always been linked; the former, after all, leads to the latter. Given the peculiarities of the Hungarian labor market, the two fields seem even closer, but while education has always had an effect on the workforce, here there is a very deliberate attempt for businesses to have an effect, or at least an influence, on education. The labor shortage the country faces across all sectors has only served to add focus to the process. Much stems from the Hungarian approach to education, which has always seen the attainment of knowledge as a goal in itself. Hungarian school (and university) lessons are famously (my daughter, a student here, uses a different adjective) content heavy. That has its virtues, and it is not by accident that Hungary

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has turned out so many great scientists and engineers and Nobel laureates. But with such a premium placed on the acquisition of hard facts, soft skills have suffered. And while the businesses of Hungary, and indeed the world, all want smart, well educated workers, they also need people with a practical approach to life, who can think for themselves and apply the knowledge crammed into their brains, and who can socialize with fellow workers and the wider world. The complaint from businesses and chambers in Hungary has long been that the graduates the system turns out are clearly intelligent, but almost completely lacking in practical experience

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and often with poor social skills. Little wonder, then, that firms with a German background began developing dual training and then dual education (where students get a theoretical background based on practical, hands on experience) programs similar to those used across Germany for decades. And the German firms were not alone. The Hungarian Chamber of Commerce signed an agreement with the Fidesz-led Hungarian government back in 2010 on the development of the system in Hungary. The government remains a fan; the national curriculum is being overhauled, and dual education will have a major role. Meanwhile, it is no longer just the German multinationals who are dedicating so much time and energy to workers, graduates and students; Indian tire maker Apollo (see page 45) and Hungarian low-cost airline Wizz Air (page 50) have recently announced their own programs with local schools and colleges. Such major changes to the system do not come without risks. There were already worrisome signs for Hungarian educationists; in the comparative international PISA tests, the

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results of Hungarian 15-year-olds have been deteriorating since 2009 (see page 54). The government says this is just one metric the new curriculum will address. But some economists and teachers’ unions fear the government will swing the pendulum too far towards vocational schools, to the detriment of traditional grammar schools. Such specialization, they argue will mean fewer students with a good basic general knowledge, a pre-requisite for getting into university, and potentially creating a social gap between those who can reasonably aspire to higher education, and those who will have little chance of getting there (see page 40). This, then, seems like the ideal time to produce our first special publication looking at these and other aspects of the twin worlds of HR and education here. We hope you find it a useful insight into the making of today’s students, and tomorrow’s workforce, and the trends affecting the Hungarian work place.

Robin Marshall, Editor-in-chief, Budapest Business Journal

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HIPA: WORKING WITH INVESTORS FOR THE BETTERMENT OF HUNGARY With regard to unemployment data, the current value around 4.5% represents a challenge for investment promotion in Hungary, but also in the V4 countries. Although unemployment is low in Hungary, the country still has labor reserves on a regional level. As a clear and positive recent trend, which is supported by the government, rural municipalities and regions are becoming increasingly attractive to foreign investors. Since unemployment is higher in these regions, greater workforce and better conditions are available to investors. Moreover, there are university cities in the eastern part of Hungary that may serve as an excellent knowledge basis for large investments. Over the past period, several measures favorable to the labor market have been taken at government level. They have certainly contributed to the fact that, based on the HIPA’s results in H1 2017, investment promotion in Hungary has broken another record. How can HIPA reassure investors they will find the workforce they are looking for? Based on new investors’ inquiries and our negotiations with companies already established here, we see that investor confidence is unbroken in Hungary; the elements of the investment promotion package (e.g. mobility and housing tax advantages, reduced social contribution tax) and the dual training system have a positive impact on the investment activity. As regards labor issues, investors stress the following points: • • • • • Róbert Ésik, president of HIPA

The news is full of stories of labor shortages across CEE. How do you try and encourage foreign investors? When individual investment decisions are made, companies consider all the factors that influence the selection of location one by one in a comprehensive analysis. According to HIPA’s experience, the factors influencing primary decisions have included the qualifications and availability of the workforce. The number of employees has increased by about 700,000, to 4.4 million, in Hungary over the past seven years.

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the productivity of Hungarian labor is outstanding; Hungary has exceptional talents in the STEM (Science, Technology, Engineering and Mathematics) fields; the proportion of English and German-speaking university graduates is highest in Hungary in the region; the proportion of people speaking “exotic” languages is also high in Hungary; the number of skilled workers keeps increasing (while it has decreased in other V4 countries).

HIPA’s main task includes not only the promotion of new investment and reinvestment, but we also hold the hands of our partners beyond the preparation of projects, even in the implementation, and then operational phases. As a management consulting agency, HIPA is responsible for forwarding the messages of companies aimed at improving the investment environment to the government. We are proud of the fact that we have achieved a number of successes over the last few years in the area of government measures facilitating capital imports. The reduction of corporate tax is one of the most important

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CEE Shared Services Gala winners

cornerstones of a tax system that supports the movement of foreign working capital, creating a highly predictable and attractive tax environment in Hungary. In addition, it is important to mention that making individual investor decisions is a complex business decision-making process, whereby investors usually evaluate general taxation issues once the infrastructure and skilled workforce are available. This is why an ‘investment promotion package’ has been created, which makes the country more attractive to investors as a whole (such as simplified administration, promotion of labor mobility, reduction of the social contribution tax and reduction of VAT on internet access services). Are there labor market reserves in Hungary? In the public sector, a spatial distribution similar to that of the unemployed can be observed, thus about 100,000 people can be involved in the primary labor market by promoting mobility. In addition to active people who are not employed in the primary labor market, there are considerable reserves among the inactive. Established at the end of last year, the eight-member National Competitiveness Council has made a number of proposals to increase the competitiveness by finding labor market reserves in addition to making favorable tax policy changes. For example, in the fall, we will make a proposal for further facilitating the employment of pensioners, but encouraging the employment of women, young people and foreign workers has also been suggested. What sort of mobility allowances are available to help the unemployed move to where the work is? In order to boost labor mobility, the following legislative amendments came into effect from January 1, 2017: If a passenger car is used as a means of travelling to work, the tax-exempt reimbursement of costs may reach HUF 15/km compared with the former HUF 9/km rate. The Act on personal income tax allows employers to provide tax-exempt company housing or tax-exempt accommodation at

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company hostels for employees. As a result of the modification, tax-exempt accommodation can be provided even if only one employee is staying in a room designated for accommodation. In order for labor mobility to be boosted, a certain portion of the financial assistance provided by the employer to boost labor mobility can be granted tax-free. Of the monthly amount of the accommodation assistance aimed at boosting mobility, the following portions are tax-exempt: • • •

40% of the minimum wage during the first 24 months of the employment; 25% of the minimum wage during the second 24 months of the employment; maximum 15% of the minimum wage in the fifth year of the employment. Criteria for the tax exemption include the fact that the employer employs the employee under an employment contract for an indefinite duration, the employee works at least 36 hours a week and the employee’s place of residence is at least 60 kilometers from the place of work, or daily commuting takes longer than three hours.

The amount of the accommodation assistance aimed at boosting labor mobility granted in the relevant tax year (equal to the amount of the pre-tax profit at most) and the costs of and expenses on the establishment, maintenance and operation of a company hostel (equal to the amount of the pre-tax profit at most) can be used to reduce pre-tax profit/loss. The Ministry for National Economy is currently operating several mobility support schemes: •

Housing allowance: on the basis of the support scheme, jobseekers may also accept a job, where the place of work is at a remote distance from their permanent address (at a distance of more than 100 km, or involving travel of more than five hours). As a general rule, the amount of the

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•

•

allowance may not exceed HUF 100,000 a month for the same residential property for a period of up to one year. Intercity travel allowance: Travel expenses related to commuting may be reimbursed in part or whole for up to one year, if the employer undertakes the employment of the registered jobseeker. Group passenger transportation: an allowance may be provided to an employer who organizes round trip travel between the residence of its employees and their workplace through group passenger transportation. As a condition for the allowance, round trip travel is not possible with public transportation or only with unreasonable difficulty (with travel of more than two hours).

Aid can be also provided for the construction of workers’ accommodation supporting mobility on the labor market. This involves the introduction of a new form of aid that serves the promotion of the construction of accommodation establishments serving the long-term accommodation of employees. The introduction of this new active employment policy instrument allows the provision of aid for the development of workers’ accommodation directly to local authorities or to local authority partnerships. It serves the objective of transferring the mobile workforce to regions struggling with a labor shortage through the availability of appropriate accommodation. As a condition of aid, the applicant local authority and employers need to conclude an agreement in advance that sets out the undertakings of the employer. Funds necessary for aid are provided from the central budget of the National Employment Fund within the framework of the central labor market program.

What role does HIPA have to play in helping tailor Hungaryʼs education system to the needs of modern businesses? Are there incentives available for foreign companies who set up their own dual-training programs? To serve the needs of industry, the Hungarian government introduced the dual education system in 2012, based on the German model. The system is to train more skilled workers, technicians, engineers and other professionals, to strengthen practice-oriented knowledge, to improve the quality, effectiveness and efficiency of the training. In the 2016/2017 academic year, 24 higher education institutions offer 41 bachelor programs, 11 master programs with the cooperation of 593 partner organizations. The number of students in the dual education system has doubled in the last few years. In addition, the government is seeking to bring even closer the needs and capacities of the education system and companies by creating new industrial university centers for higher education. The first Higher Education and Industry Cooperation Center (FIEK) will be established with a one-year construction project (three buildings on a total floor area of 4,700 sqm) within the campus of Széchenyi István University in Győr. This center will provide space for joint projects, logistic studies and research work related to engines, electric motors and turbochargers between the university and industry, as well as for development activities required for the international presence of SMEs operating in the region. Hungary’s economy is based on the automotive, electronics and IT industries acting as pioneers in the development of new business technologies. One of the keys to future success

Meeting of the National Competitiveness Council

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is the availability of a sufficient number of professionals who will be able to meet the requirements of the new era. The eight FIEK facilities to be constructed in the first round are expected to train engineers with the highest automotive skills in Europe and, at the same time, Hungary may become an R&D hub in the field of automotive research. Furthermore, the relevant collaboration and research efforts will increase the competitiveness of SMEs that plan to enter the international market. Hungary is moving from a “Made in Hungary” to an “Invented in Hungary” philosophy. How does HIPA support this? The proportion of more complex, higher added-value projects is increasing more dynamically in Hungary. Our goal is to establish or expand as many development centers as possible in the country. To this end, in addition to the ‘Made in Hungary’ concept, HIPA has formulated the ‘Invented in Hungary’ principle and wishes to support all projects and developments that will result in significant technological progress and growth during the companies’ activities. As of January 1, 2017, special emphasis has been placed on technology intensive projects and research and development among the activities that may be supported by individual government decisions. Unlike previously, support for the installation of research and development capacities may also be provided in Budapest. In addition, a completely new support category has also been introduced, thus technology-intensive projects that do not create jobs, but install new technologies may also receive cash support. What about your strategy? Will be there any new directions? This year we would like to continue to increase the number of projects with high added value. In this effort, in addition to Budapest, rural cities and towns will also play a prominent role, since they have shown constant development in the competition for investments over the past years and have been transformed into internationally recognized knowledge centers to a very high standard. Debrecen is a good example; it won the ‘Emerging CEE City of the Year’ title at the CEE SSC Gala organized in Warsaw. We believe that Hungary has the potential to become the Innovation Hub of the CEE region, and this is in line with the latest prestigious international recognition Hungary has received: based on the remarkable IBM Global Location Trends 2017 report, from among the three most important categories, Hungary ranked among the world’s top ten in two. According to the report, thanks to foreign direct investments (FDI), 18,900 new jobs are being created in Hungary based on 2016 investor decisions, which is the ninth best result in the world per inhabitants. However, what is even more important is that Hungary ranked fifth based on value of new jobs created, ahead of countries such as Switzerland, Japan or Sweden, in addition to competitors in the region. IBM-Plant Location International (PLI) started to develop the Global Location Trends database in 2002. This database tracks the announced decisions of companies to local new operations

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Minister of Foreign Affairs and Trade Péter Szijjártó signs an agreement on FIEK at the Széchenyi István University

in regions outside of their HQ region/country on an ongoing basis. Additional investment project data is received and integrated from other specialized FDI databases, investment promotion agencies and economic development organizations around the world. IBMPLI screens almost half a million announcements and projects on annual basis. The analysis of volumes focuses on job creation, which is the best indicator of the local economic impact of the investment. IBM-PLI project value assessment is an approach that allows an understanding of the potential monetary value of an investment project for a location. The assessment method integrates such project specific factors as: project sector value-added and productivity, project sector knowledge intensity, and project’s occupational profile composition, represented by wage and skills. Based on the recently published database data for 2016, Hungary has achieved outstanding results in all three categories: as a result of FDI investments, Hungary ranked 15th in the world in creating new jobs, ahead of such countries as France, Turkey, Indonesia and Ireland. In the subcategory of monitoring European metropolitan areas, also based on creating new jobs, Budapest ranked fourth, ahead of Dublin and the Krakow-Katowice area. According to IBM-PLI’ʼs findings so far, the total of 18,900 new jobs that are being created has been Hungaryʼs best result since the financial crisis. In the second category, in which the created new positions are proportioned to the number of people in the country (new job/inhabitants), Hungary has achieved the prominent ninth place. The extremely intense regional competition is well illustrated by the fact that Hungary was preceded by Slovakia, a country with a lower population. Based on the result of the report’s only category that, instead of quantity, examines the added value of the created jobs from the perspective of the national economy, Hungary created the fifth highest added value jobs in the world in 2016. In this respect, Hungary is preceded only by Ireland, Denmark, Singapore and the Netherlands.

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RECRUITMENT AND RETENTION: THE TWIN CHALLENGES FACING HR The labor shortage and the new generation of job seekers are putting employers and recruitment agencies in a difficult position. Retaining recruited employees is equally hard as competitors always seem ready to offer more. By Sonja Bencze Less than a decade ago, if someone changed posts every two or three years, they were labelled a job hopper and could expect some tough questions at their next job interview. Nowadays, candidates take a strange look at anyone lingering at a position for more than five years. And it is not only the young generations – Y or Z – who are moving more often, but anyone with skills in demand. “Due to the mismatch of supply and demand, anyone who has stayed in a position for a year can become the target of recruitment firms,” István Rácz, managing director of Állás.hu, a recruitment site, told the Budapest Business Journal. “Not so long ago, recruiters focused on those who spent at least two or three years at their post,” he added. The level of salary that will prompt someone to move has also changed. While two years ago a 10-20%-rise was enough for someone to switch jobs, today people are asking for at least a 30%-bump, and sometimes even 50%, Rácz said. Many employers are slow to react and offer salaries according to the budget. The more flexible ones ask the candidate what extra work they are willing to put in to bridge the gap between the offered and the demanded sum.

András Mármarosi, senior manager, People and Organization at PwC Hungary

TURNING THE TABLES The above are all good examples of how the labor shortage has turned the tables in the job market. The shortage is no longer limited to information technology, medicine or engineering, but affects all sectors from hospitality to construction. Neither is it about finding the very best candidate; employers are after anyone with experience in the required field. Companies still expect a high degree of engagement, but because the new generation of job seekers plans in the short-term, the rate of fluctuation is also high. Positions remain open for longer and HR departments have a harder time filling them.

Mármarosi, senior manager, People and Organization at PwC Hungary told the BBJ.

“Many of these firms are managed by people of Generation-X who simply cannot understand the new generation,” András

This feature makes them extremely difficult to inspire. Money itself does not motivate them. Giving them the chance to succeed

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The company recently surveyed 13,000 young people aged 16-24 about their preferences: unsurprisingly the drivers are entirely different from those of the older generations. For the latter, loyalty used to be an asset, for today’s job seeker, similarly to all walks of life, short-term goals and instant gratification are the main engines. These young people don’t want to accumulate goods and possess, they just want to earn enough to finance their next “adventure”, Rácz said.

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HR&EDUCATION in the short run and have ownership of an assignment are good tools, so are flexibility with working hours. Employers who are willing to hire people for projects and give them the freedom of (sometimes) working from home stand a better chance of attracting these new types of employees than those sticking with rigid corporate structures.

“A CV is like a snapshot, a static image of someone’s skills, but it is unable to show the dynamics of a career.”

But first, companies have to find their future employees. Unlike previously, when job seekers found companies, now it is HR-firms and departments that reach out to candidates, many of whom are passive job seekers, that is they are already in a position. As a result, recruitment methods have been modified a great deal. Placing ads are a thing of the past, replaced by profiling and talent matching carried out by algorithms.

To find the best match the system tracks digital footprints. “A CV is like a snapshot, a static image of someone’s skills, but it is unable to show the dynamics of a career,” Rácz said. Since internet penetration is high, they have no difficulty creating profiles out of these digital tracks.

PERFORMANCE-BASED The background economic reasoning has also changed. HR has become performance-based. “Companies used to place an ad on a career site and paid for the duration the advertisement was published. Now they pay for the contact information of the most relevant candidate – so there is a return on finding a relevant person,” Rácz says.

For those who purposefully avoid the net, such as top managers, recruiters often use headhunting techniques or build databases and invite them to register. IT professionals who use ad blockers therefore do not come across advertisements, are also hard to attain, Rácz said. Yet even they can be reached by publishing an article that raises their attention. If they comment on it, which usually requires registering, their digital tracks can be read as well.

On Állás.hu, there are no job categories: people have to upload their experience into the system and it shows them relevant positions. This way both sides can save time and money: the job seeker won’t apply to a position that matches their skill only 10% and employers need not thumb through hundreds of unnecessary profiles. Should someone’s skill match a post 90%, but that person doesn’t visit the site very often, the company will call them.

If hiring someone is difficult (and expensive), retaining them is even harder. Mármarosi advises that PwC’s clients gain a good knowledge of their target group, and assess precisely what their needs are. To reach them, companies have to apply modern marketing and communication strategies and build an attractive employer brand.

Recruitment too has gone through a technology shift: today it is about researching, data mining, screening social media platforms.

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“But they have to be careful not to promise or sell something they cannot fulfill. It is similar to dating; you may promise the moon, but if you can’t deliver on it, you’ll lose,” the consultant said.

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THE RECRUITMENT PARTNERSHIP Not so very long ago, the relationship between recruitment consultancies and their clients was a simple one; clients needed staff, be they temporary or permanent, and agencies found them. Now things are much more complex, and that relationship has become a partnership, says Ottó Vég, country general manager for ManpowerGroupTM Hungary . By Robin Marshall That is a general, worldwide trend, but one that applies perhaps especially to Hungary, where the labor crisis is putting a premium on finding and, just as crucially, retaining staff. Recruitment agencies would not previously have been involved in the latter, but they are increasingly so today, says Vég, who had been in leading positions in recruitment for more than nine years, before joining ManpowerGroup TM eight months ago. “Previously it was a simple service provision relationship,” Vég says of interactions with clients. “It has become much more of a partnership. Since the labor crisis really began to hit, which is one-and-a-half, if not two years ago now, companies have been much more open, we are much more involved. And that is a good thing; a partnership has more added value.” At the time of writing, ManpowerGroup TM was about to release its Q4 Manpower Employment Outlook Survey (MEOS). “This shows Hungary in a leading position, even within EMEA [Europe, Middle East and Africa],” says the country manager.

Ottó Vég, country general manager for ManpowerGroupTM Hungary.

“We are seeing an emergence of a Skills Revolution – where helping people upskill and adapt to a fast-changing world of work will be the defining challenge of our time.”

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The MEOS survey, which is carried out in countries across the globe every quarter, is deceptively simple, but provides an invaluable snapshot into the health of the economy. Some 750 companies are asked whether they intended to take on staff in the next quarter, decrease headcount or remain at the same level. Early adjusted figures seen by the Budapest Business Journal showed 18% of employers in Hungary expect to increase staffing levels in the next three months, slightly down from 20% in Q3. The unadjusted figures show 21% of companies planning to take on extra staff; for 72% there is no change planned, and only 5% plan to axe jobs. A numerically insignificant 2% said they did not know. ROBUST GROWTH Vég believes the robust jobs growth is down to two key factors, both of which are positive for Hungary. “The number is high

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part of the service we offer to support candidates and clients is finding accommodation and providing transportation.” One recent development in the Hungarian market may help somewhat to alleviate staffing challenges, and that is the creation of pensioners’ cooperative associations, through which retired people can return to work if they wish without losing their pension. This will undoubtedly bring a lot experience back to the workplace, but, as ever, the devil lies in the detail. Some jobs, perhaps in an SSC with their typically low average age dynamics, might not be appropriate. The level of computer literacy such returnees possess will also be an important question. But that leads to another key trend, and one ManpowerGroup TM is deeply involved with: learnability and employability.

Drill down deeper into the figures and you find that 31% of companies in the manufacturing sector plan Q4 hires, 27% in construction, and 22% in financial and business services. “The skills required for these positions are still driving the focus on sourcing not only blue collar, but specialized IT and engineering talent in what remains a skills-short market. Under our ExperisTM brand, we dedicate a team of experienced and well-trained consultants to our clients – specifically those who are facing challenges in finding the right employees – in order to deliver professional candidates, within appropriate timing, which is one of the biggest challenges now in the labor market in Hungary.” Leisure & Wholesale &

“It has become much more of a partnership. Since the labor crisis really “Some 65% of Generation Z will began to hit, which is one-and-a-half, perform jobs that do not exist yet,” Vég says, before revealing if not two years ago now, companies another striking statistic. “Automation&will replaceWholesale 40% of Leisure & & Professional have been much more open, we activities within jobs, and 5% of Hospitality Retail Trade Hospitality Retail Trade Business Services ManpowerGroup It is one thing for employers to are much more involved. And that is full jobs. And this isn’t just blueEmployment be looking for staff, of course, collar jobs; this is all jobs.” and quite another to actually a good thing; a partnership has Outlook Survey find them. There are shortages Given that, the need for continual Other Other & Professional Leisure Leisure & Wholesale Wholesale &Prof Leisure & Wholesale & & Education & & Government value.” in just about every field of work Government more added education is becoming vital. But Services Services Health Services Hospitality Retail Trade Hospitality Retail TradeBusi Hospitality Retail Trade Business Services

HUNGARY

in Hungary, but employment rates are not evenly spread across the country. Most jobs, and the highest number of those in work, are in central Hungary, Budapest and the western part of the country. The east has higher unemployment and Government fewer jobs, although the government isManpower encouraging development in the region through subsidies (it also qualifies for higher EU support). There Employment are some bright spots – “northeastern Hungary is developing very well,” Outlook says Vég – but for the rest, a peculiar national tendencySurvey comes into play; Hungarians seem unwilling to moveQ4/2017 in search of work.

+18

%

21%beofvery employers in Hungary to blue“It can hard to persuade a skilled expect or unskilled collar worker tostaffing relocate from Békéscsaba Győr [athree distance of increase levels in theto next approximately 320 km from eastatodecrease west], for approximately months, 5% forecast and 72%EUR 500 a month net, for example.” no But the same can apply to much anticipates change. higher level white-collar jobs. “We had a great deal of problem convincing a high-level engineer to relocate from Budapest to Székesfehérvár, and that’s only 45 minutes away. At the same time,

Q4/2017

that is a doubled edged coin. Employers need to offer regular training and skills development to staff as part of their efforts to retain talent (it is one of the things demanded by Millennials in particular). But it is also Other& Other Other Education Government Government beholden on individuals to keep themselves “employable”, as Services Services HealthServices Services TM Vég says. To that end, ManpowerGroup Hungary is involved with supporting an IT school, helping students develop their soft skills, writing CVs and getting them prepared+20% for job interviews. “We introduce them to the recruitment market in the IT field and help them to find a position, where both parties, employer +18% and candidate, will be satisfied.” +17% +17%

2016 Q4

Q1

2017 Q2 Q3

Q4

Perhaps nothing is more important, in Hungary or the wider world. Vég quotes Jonas Prising, the chairman and CEO of TM ManpowerGroup : “We are seeing an emergence of a Skills +11% Revolution – where helping people upskill and adapt to a fastchanging world of work will be the defining challenge of our time.”

750 Hungarian employers were asked: How do you anticipate total employment at your location to change in the next three months compared to the current quarter?

21% Increase workforce

21% 5%

21% 5% 72%21% 5% 72% 2% 5% 72% 2%

72% 2%

2%

Increase Decrease Increase Decrease Plan noIncrease Decrease PlanDon’t no Decrease PlanDon’t no workforce workforceworkforce workforce changes workforce workforce changes knowworkforce changes know

PlanDon’t no changes know

Don’t know

Source: Q4 Manpower Employment Outlook Survey

ManpowerGroup Employment Outlook, Hungary Q4/2017 HR_and_EDUCATION_2017_OK.indd 13

Manufacturing

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+31%

Edu Hea

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HR&EDUCATION

THOUGH INCREASINGLY POPULAR, CAREER CHANGE IS NO CAKE WALK Switching careers is growing in popularity in Hungary, but people tend to underestimate the burden that comes with it, and their ambition to get out of the rat race or start afresh is still rather frowned upon. By Levente Hörömpöli-Tóth In the United States, it has long been common place that people, typically at the age of around 40, decide to change careers. Accordingly, the corporate culture has also been very tolerant towards those that bring a fresh perspective to their new positions. By contrast, as Tamás Fehér, senior vice president of permanent placements at Trenkwalder Group says, domestic selection procedures clearly give preference to candidates with a background matching the area of the vacancy. “In Hungary, it is mostly larger multinational corporations that tend to provide their employees the chance to take up a new position from time to time, often at one of their member companies in a different country,” Fehér says. “This way a broader insight can be gained by the persons concerned with respect to the entire operation of the enterprise, and such shifts sometimes result in a final change of position and area of expertise.” In Hungary, a surprising number of workers are toying with the idea of a radical career switch. According to leading global workforce solutions company Kelly Services, almost two-thirds of all Hungarian respondents say they expect to switch careers within the next five years. The main cause, cited by 35%, is the need for higher income, followed by changing personal interests (25%), and the need for an improved work-life balance (19%). In spite of those ambitions, the proportion of those who do manage to start afresh in Hungary is still relatively low. For starters, many underestimate the transition period that is needed to build something new from the ground up, so savings are depleted faster than expected, career consultant and coach Éva Kránitz tells the Budapest Business Journal. “Ultimately, you have four career options to choose from: to be an employee, an entrepreneur, a dependent or an investor,” the expert says. “It is up to you to decide which one you want to be.” TWO DIRECTIONS Typically, there are two main directions for those striving for a career change. For many, a new area of expertise is chosen, switching from finance to HR, for instance, with the person remaining an employee. Alternatively, employee status is traded for becoming an entrepreneur.

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Éva Kránitz, career consultant and coach. This latter is more flexible as it is not age-bound, whereas employees will find work ever harder as they grow older. “The key is to know yourself, your own skills and strengths,” Kránitz stresses. The problem she often encounters is that her clients quit their job without having any idea what should come next. “You need to identify where your skills and your dream activity meet the demands of the market.” The process to find this out often lasts longer than thought. The usual plan to become an entrepreneur doesn’t necessarily go that smoothly, and this is the time when people realize that they are on their own to generate revenues. “Setting up a working new money-making structure might take as long as three years,” the expert adds. “But since the right entrepreneurial skills and mindset are often missing, many fail at the attempt.” An alternative is to pick up some marketing knowledge by enrolling in

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HR&EDUCATION online marketing courses or programs tailor-made for entrepreneurs run by renowned experts such as Attila Pongor Juhász or Gábor Wolf.

in a new position might be a realistic option, as long as they keep their employee status.

The bulk of those considering a total shift, however, lack the courage to get started and keep delaying the decision, which only makes their situation worse.

“An assistant or a marketing specialist may successfully venture into HR, for instance,” Kránitz says. “However, this scenario is relevant only in a big corporate environment, definitely not among SMEs.” The latter would never start investing in a person with a totally different background, regardless whether they have the academic qualification or the desired ambition.

“One popular target area is esotericism, like becoming a yoga teacher, but in this case, you also need to have basic business skills,” Kránitz warns. “It will be your responsibility to figure out how to get customers after all.” New competences are needed to pursue such activities, and if you can bring some relevant practical knowledge from your previous job, such as marketing, business development or sales, you will be ahead of the game.

People are often forced to return to what they may deem the “rat race” if things don’t play out as planned. And that can be painful, especially for those that had some authority in their former positions and who may well find it difficult to get a job at a similar seniority level. Not to mention the fact that executives are becoming ever younger, which causes generational and communication-related gaps.

TWO DIRECTIONS Disappointment is most typical for those who quit their family business or their job in the public sector and wish to succeed in the business world. If you cannot undertake a realistic self-assessment, the lack of knowledge of corporate culture or required competences can undermine your efforts tremendously.

“The problem is that there aren’t that many human-centric workplaces around here, and people simply get so tired of it all that they give it a shot anyway to start afresh,” Kránitz explains. The ideal situation is to plan ahead for the next ten years, and that is exactly what she advises her clients in executive positions to do.

Conversely, the chances are best for those aspirants who can make the switch happen within their existing workplace. In such cases they are already known by the employer, and for them a different set of tasks

“If you start planning well ahead, you will always have alternatives,” she says. “Having a solid job provides you with the liberty to weigh your options, so when the time for a change comes, the transition can go very smoothly.”

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HR&EDUCATION EXPERT OPINION

The “A-ha! Experience” Bondweaver: A “Google maps” for Organizations Friisberg & Partners International interviewed top managers regarding the main financial data of their firms. They knew every single indicator, up to three decimals. But when asked about the person most disliked by others, the one who cannot relate to colleagues the way he or she should, or about the reason why sales management is underperforming, or who might be the next colleague to quit – these were questions they had no immediate response to. One of the three most frequent reasons why high performing individuals quit is to be found in the relationships with their managers. provide adequate answers. The reason behind this in certain cases is that senior managers don’t want to deal with issues they believe they do not have control of.

Zoltán Pethő, Partner Friisberg & Partners International Diagnostics vs. Audit There’s nothing more natural before a routine dental treatment than a panorama X-ray. It takes less than two minutes and costs almost nothing. Patients do not normally question the necessity of such an examination, and in turn few doctors would proceed with a treatment without one. No dentist was present when your teeth first appeared, or you had your first cavity, but they are able to assess their condition upon examination and draw some conclusions as to their history. Implementation vs. Onboarding From a survey among the clients of Friisberg & Partners International, we learned that most senior executives do not possess a deep enough knowledge of their organizations, their colleagues, their subordinates – although they thought they did. Some lack an understanding of the dynamics of their organizations, the strengths and weaknesses, the ability to realize potential threats, and thus they are unable to

Visualizing the Unknown Friisberg & Partners International has introduced a new tool to help show and analyze the structure of social and work relationships between colleagues within an organization. This structure is the organizational knowledge, of which approximately 85% is based on informal relationships. With Bondweaver, networking theory is combined with aspects of sociology, social psychology, human ethology, anthropology, and business knowledge and experience. The collected data is processed by means of artificial intelligence and is thereafter visualized in order to bring to the surface social and work relationships and enable decision-makers of the firm to understand them. Example Let us suppose that an outside senior manager is hired by an organization, which is completely new to him or her. This organization may be functioning well, reaching the necessary figures; seemingly, everything is all right, and may even really be all right. Nevertheless, this is a person for whom, usually, it could take a couple of months to become familiar with the organization. In terms of his/her integration, or suitability, the first 90 to 100 days may be decisive. But, for large organizations, this time may not be sufficient for the appointed manager to get acquainted with every single colleague. This process can be considerably shortened by Friisberg & Partners International’s Bondweaver method, by making visible and comprehensible

the “invisible” structure of the organization in just a few days. In addition to speed, precision is another of Bondweaver’s advantages. Within a few days, the manager referenced in this example can learn who the real opinion leaders are, whose experience and knowledge is judged by the majority to be most useful, who are the informal leaders; and on the other hand, he or she may also learn whose departure could potentially be expected and be able to prepare for it. Basically, the hidden organization is made transparent by the Bondweaver tool and, like the X-ray at the dentist’s, it makes precise and exact intervention possible when necessary. It can be used in cases where new colleagues need to be integrated into a mature organization or even if a new leader steps in. The knowledge offered by Bondweaver not only supports integration of new people, but also makes it simple for the organization to be prepared for such changes. Put simply, Bondweaver is an X-ray for firms and enterprises. It makes visible any problem hidden under the surface. But, at the same time, it’s more than that: it proposes an efficient therapy with the help of which the given organization can continue on the right track.

Zoltán Pethő, Partner at Friisberg & Partners International. Since 1977, Friisberg & Partners International has been a leading provider of executive search on the European market. In 24 offices, more than 100 specialists serve client needs throughout Europe.

www.friisberg.com

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EXPERT OPINION

Beware the legal background for bonuses How do you keep and motivate a skilled, talented workforce that was hired after a long recruitment phase? This is a common question asked by HR specialists, not only in Hungary but throughout the world. Are bonuses or incentives good solutions to encourage and motivate employees? How should bonuses be addressed in employment contracts or bonus plans? bonus eligibility and the payment thereof. These bonus policies and incentive plans are unilaterally implemented by the employer for a defined term – typically for one business year. If a policy is introduced for an unfixed term, it may be amended to the employee’s detriment or may be terminated only in the event of major changes in the circumstances of the employer, whereby fulfilling the bonus terms and paying the bonus amount would no longer be possible or would result in unreasonable hardship. Dr. Katalin Varga, Partner Sándor Szegedi Szent-Ivány Komáromi Eversheds Sutherland Attorneys at Law First of all, it is important to note that a bonus as a special type of remuneration is not explicitly regulated by Hungarian employment law, so the applicable rules can only be derived from the general rules of the Labor Code and from relevant court practices. A bonus is deemed a special performance-based wage which could be enforced by the employee if the bonus criteria are met. In contrast to a bonus, the so-called “ex-gratia payment”, which is provided without any target setting and solely at the discretion of the employer, is not enforceable.

Accordingly, if an employer decides to set higher bonus targets or reduce the bonus amounts for the future, the above criteria should be met if there are bonus policies which are introduced for an unfixed term. However, it would be feasible, without further legal requirements, if these changes were implemented in a new policy following the expiry of the previous fixedterm policy.

If the bonus entitlement is stipulated in the employment contract, the employee may claim that the employer has set bonus targets to be achieved. Should the employer fail to meet this contractual obligation, the employee may claim the bonus through the courts.

Bonus policies usually consider both individual and company performance (revenue etc.), and eligibility typically depends on the archived percentage of the targets. Based upon unambiguous court practices, the bonus target cannot be withdrawn if the fulfilment of the targets has already commenced. However, employers have the ability to modify or withdraw these terms – if they previously maintained the right to discretionally assess the circumstances of the entitlement subsequently. Needless to say, the principle of equal treatment should also be considered when setting bonus targets or assessing the results.

Employers usually introduce bonus policies that regulate the terms and conditions of

Bonus entitlement is always an issue when the employment contract of the eligible

employee is terminated during the bonus period. The termination of employment does not automatically cause the bonus entitlement to cease, even though some employers usually stipulate that no entitlement is due if the employment is terminated before the end of the bonus period. If the policy provides for a proportionate bonus, then it could be due upon termination. Otherwise, if the targets are only partially met, no pro-rated bonus entitlement may be claimed. Employers tend to include in the bonus policies that no bonus entitlement is due if disciplinary measures were implemented against the employee (e.g. the employee received a written warning in the bonus period). The enforceability of this rule is rather questionable, as such a condition of the policy could be deemed as a detrimental legal consequence upon the Labor Code, which would be valid only if the additional statutory requirements are met (such legal consequence shall be agreed upon in the employment contract or stipulated by collective agreement, and strict deadlines would apply to the enforcement of these consequences etc.) Accordingly, we advise employers to proceed carefully with such requirements, as these could be successfully challenged in the labor courts. This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice.

www.eversheds-sutherland.hu

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HR&EDUCATION

HUNGARY YET TO FULLY EMBRACE THE BENEFITS OF INTERIM MANAGEMENT According to those involved in the specialist field, interim management is still far less wide-spread in Hungary than it could be, considering the structural boost it offers and what often amounts to a cut in costs. By Ágnes Vinkovits While global tendencies show the growing popularity of interim management, especially in its motherland, the Netherlands and in AngloSaxon countries, Hungarian companies are still only now getting familiar with this type of temporary employment. Such laggardly take up in realizing the benefits of hiring highly experienced professionals for non-permanent tasks has cultural and economic roots. “Here, everyone wants to be permanently employed and companies want permanent employees,” Györgyi Kristóf, an interim management specialist and managing director at one of Hungary’s three interim resourcing companies, Hammel & Hochreiter tells the Budapest Business Journal.

“They have no more mortgages to repay or young kids to support, while they have also enough savings for their retirement years. Still, they have a hunger for new challenges.”

Many of the heads of local SMEs have not even realized the necessity of professional management thus far. “The average company owner founded their business 20-30 years ago but, in their souls, they are still closer to being engineers or innovators than businessmen,” Kristóf explains adding that spending on machinery makes more sense to these people than investing in intangible things like workforce skills. “Filling up their companies with friends and colleagues from their circle of trust, these owners have never had a proper management structure in place, and even though they have exceeded their competencies long ago, letting control go and starting to spend on people is still not an option.” SME TRUST ISSUES Annamária Rigler, senior consultant at Interim Management Resourcing Kft. agrees that SMEs have still not been conquered yet. “The real need for state-of-the-art management skills must be much bigger than it appears in the number of contracts,” she points out, adding that the reason behind this phenomenon is probably trust issues, and not the lack of financial capacity. Therefore, interim consultants “have to focus on our clients’ ‘ego-management’,” she admits.

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Little surprise, then, that when interim managers are involved, they are mostly put into “A-level” positions to fight fires and manage the most urgent tasks, and are rarely used to oversee lower parts of the company structure. However, according to Péter Dávid, chief operating officer of Interim Kft., a new trend of using interims on “B” and “C” company levels has recently appeared in Hungary, too. Another reason for not taking full advantage of interims here might simply be that Hungary has no more than a 25-year-long history of hosting multinational companies, while a good interim manager should have at least 10-15 years of multinational experience. To get fully established, they have to go through the company hierarchy. “Those who become top managers at the age of 40 might not make a good interim later on,” Kristóf says.

“Quick decision making, good adaptability and high tolerance towards frustration and unpopularity are also key skills,” says Dávid in explaining that the major difference between a regular and an interim manager is that the latter does not want to be a permanent member of the company structure, and so does not have to please anyone. COME TO LEAVE “They come to leave,” Rigler agrees. Good interims are independent both financially and mentally, she adds. In addition to their outstanding professional knowledge: “They have no more mortgages to repay or young kids to support, while they have also enough savings for their retirement years. Still, they have a hunger for new challenges,” she says. Yet, despite all these difficulties, the market players are optimistic and all the three companies expect to keep growing in 2017. One of the reasons for this confidence is that no matter how strongly averse some companies are about rethinking their employment habits, sooner or later it becomes inevitable. One emerging trend, due to the aging circle of owners, is that businesses more and more often call on the help

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Annamária Rigler, senior consultant at Interim Management Resourcing Kft.

Györgyi Kristóf, managing director of Hammel & Hochreiter.

Péter Dávid, chief operating officer of Interim Kft.

Startups, unsurprisingly, have few problems with involving interims, and often need them to help to manage the company’s international expansion or to face technological challenges.

The strongest sectoral demand for interims come from production, meaning car industry, agricultural processing, pharmaceutics and FMCG, which more or less reflects the general trends of the country’s economy. Interim resourcing companies do not particularly rely on technological innovations, and given Hungarian business culture, social networking sites such as LinkedIn are even considered as competitors, as companies can find and contact interim managers directly and so try to skip the involvement of consultants. However, according to Rigler, finding the right match is only the very first step. “The real work starts here. We have to help the parties to find a way to fit and manage the project,” she says.

PROJECT MANAGEMENT Still, as tasks cannot be so strictly separated, in general it can be said that most interim mandates cover project management. Interim Management Resourcing Kft. says 60% of its work in 2017 falls into this category, while about 30% is so-called gap management, when immediate assistance is needed to help with illness or maternity leave, and only 10% is turn-around or crisis management, which often means complete company restructuring.

Hammel & Hochreiter has developed a database that follows the activity of about 6,000 professionals, as well as an application that gives updated information on every project and is accessible on cell phones, too. “We harmonize administration and communication,” Kristóf says, adding that as the entire success of the job it does depends on how well it analyzes the problem and draw-up the tasks, having up-to-date information and close communication is the key.

of interims to oversee the change of generations. That said, though, the usual process is still to try and handle the issue themselves unless “there is a tragedy”, meaning either the company founder suffers some serious health issues, such as a heart attack, or the company itself does, perhaps due to a bank cutting finances unless there is a professional management team put in place, Kristóf explains.

19

Global trends (%) Years of experience as an interim manager

Gender

Could be interested in a permanent position

15 years

Famale

14.6

Commitment

12.3

1-2 years

10-14 years

12.6

33.7 57

85.4

23.1 5-9 years

Male

43

18.4 3-4 years

Are committed to interim management

Source: International survey of interim managers 2016, conducted by SMW

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HR&EDUCATION PROMOTION

JOBGROUP: GROWING WITH THE LABOR MARKET From a company founded in the University of Technology and Economics, JOB Személyzeti Tanácsadó Kft./JOBGROUP has become a dominant player in the Hungarian recruitment industry. The company’s strongest pillar is temporary workforce recruitment, but it also provides services for everyone from young graduates to senior management and is present in specialized fields such as pharmaceuticals. Over the years, JOB has adjusted its business model to better address changing market demands. Beyond the use of new technologies and search methods, what distinguishes it from its competitors is its human-centered service provider approach. Compared to the goals you set at the start, how far have you got?

Temporary work is still not widely known among job seekers.

My colleague László Hadi founded JOB in 1992 when, after the change of the regime, multinational firms started to take a foothold in Hungary and were on the lookout for young, language-speaking economists. Hadi came up with the idea of “selling” his classmates and started the business in college – he received phone calls on the phone in the dorm’s corridor. Those who could launch a recruitment firm then were in an excellent market position; assignments abounded, business ran smoothly. We opened our first office in Ráday utca, then moved into Váci utca to a block of offices. Growth was constant in the first ten years.

It is more typical in blue-collar jobs such as manufacturing where, for example, a large order requires companies to employ additional workforce. It is less prominent in white-collar positions – which is our focus – where companies usually use this type of employment to manage headcount problems. When they cannot hire new staff, they take employees from us for a longer term. “Try and hire” is another method, when companies hire people on a temporary basis to test them more indepth before employing them as staff. This option allows for an extended probationary period, lasting for three months, to six months, to a year. Flexibility is the main advantage of these atypical employment methods; they adjust to the needs of the client. Similarly, remote working, or recruitment of disadvantaged workers, allows for flexibility in the market.

JOB Kft. was, in the first place, a recruitment agency for young graduates; we focused on young professionals from all fields. I joined the firm at the end of 2001. The firm lacked temporary consultancy work then, so I launched what has since become our strongest pillar.

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Are candidates willing to apply for temporary positions? Recruiting temps may be somewhat harder than recruiting for a staff position, but we never had any problem with that. We have always strived to manage our operation so that employees feel

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“The economies of scale we achieved through these moves allows us to handle more projects with the same staff. We are proud to combine the flexibility and service providing attitude of SMEs with the professional approach and regulated processes of large firms.” a group of consultants. Our staff consists of either young graduates or seasoned professionals coming from multinational firms. We recently hired a high-caliber professional who started her career at our firm, then moved to the United Kingdom and helped Hungarian jobseekers in the local labor market, before returning to us. How have you adjusted your business model as market conditions changed?

Attila Dobár, CEO they have two superiors – one is the company – our client ¬– and the other is us. This structure brings certain benefits with it. Since we provide a service for employees as well, we are much faster at dealing with requests, should they ask for an advance on salary, an employment certification, etc. Our aim is to make them feel better than they would, should they be employed by the client only. This strategy works for us – it is something that differentiates us from other market players. Our largest pool of temporary workers is at Citibank. One of our temporary workers, who had been looking to become a staff member from the beginning, when offered the post, started to hesitate, because he was so satisfied with our services, he wrote us in a letter. Another advantage to this form of employment is that candidates can land a job at a company more easily. Do you address jobseekers differently? We have a communication department whose job is to devise the best strategies to reach these target groups. Communication is of special importance since the labor shortage today is significant. The technology used to target an executive is different from that applied to a call center agent. For every consultant we have a researcher who mines databases and screens social media platforms to apply the best headhunting strategy possible. It wasn’t always like that: researchers helped

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Up to 2008, the business was thriving. The crisis arrived at the beginning of 2009, when recruitment activity dropped by 75%. This prompted us to change our strategy: we started new divisions like REHABJOB (now MINDATWORK), which focuses on integrating disadvantaged workforce into the labor market and prepares employers to hire them. We launched BRANDJOB, specialized in building employer brand and creating communications to reach both active and passive job seekers. We merged with Telescope Kft., a rival company in 2011, to improve efficiency and break into new markets. We acquired Contract Kft., a company working exclusively with Citibank and more recently merged with Ventiv Health, specialized in the recruitment of professionals in the pharmaceutical industry. In a relatively small market, we can advance by taking strategic decision. The economies of scale we achieved through these moves allows us to handle more projects with the same staff. We are proud to combine the flexibility and service providing attitude of SMEs with the professional approach and regulated processes of large firms. We have consciously built a business – our CFO has been with us for 21 years – and have always planned long-term. We are longdistance runners, not sprinters. Some of our rivals may get ahead of us in the short run, but in the long-term we are doing better.

jobgroup.hu

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THE MINEFIELD OF SUCCESSION PLANNING With the change of system in 1989 from a command economy to a free market, there was an explosion of new businesses founded by Hungarian entrepreneurs. Many have long since disappeared, but others have thrived. Now, almost 30 years later, such businesses face a new challenge: succession planning.

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David Young,managing partner of Amrop Kohlmann & Young’s Budapest office.

Gergely Parti, Hays response team leader.

By Robin Marshall “It is demographics,” explains recruitment specialist David Young of Amrop Kohlmann & Young, and managing partner of Amrop’s Budapest office. “Successful Hungarian entrepreneurs who founded their companies soon after the Wall came down are now approaching retirement age and are faced with the important questions of ‘How do I go forward with my company? Who should be leading it in the coming years? What will my role be as we make this transition?’” Others in the profession are seeing the same phenomenon. “The first generation of entrepreneurs of the market economy are retiring now, and the international experience is valid in Hungary, too: only 16% of family companies could pass the management with success to sons or daughters,” says Sándor Baja, Randstad’s managing director for Czech Republic, Hungary, and Romania. Among the few success stories, says Baja, are Hungerit and Bonafarm. AGE PREJUDICE Hays response team leader, Gergely Parti, says there are number of reasons that come into play in that low success rate, and ironically the age of the founder is one them.

Sándor Baja, Randstad’s MD for Czech Republic, Hungary, and Romania.

difficult and complex questions for the owners. ‘Who should take my place? A family member, someone brought in from outside? Is the family member the right person? How can I integrate a manager from outside into my family on structure?’ And again, the key question: ‘What will my role be in the new structure?’ Trust, change, adapting to a new situation are all important themes here.” For a family business, the children of the founder might seem the obvious choice, but in many cases, those children simply aren’t interested (in extreme cases, some entrepreneurs have better relationships with their business than with their children Young says, only in half-jest) or, frankly, are not up to the job. But then again, bringing in an outside professional is not always the answer, either. ‘SUPERHERO ATTITUDE’ “Most of the successful Hungarian companies have tried to hire a manager to run the company, but – mainly due to the lack of trust – most cases failed,” says Baja. Parti agrees: “If there’s an attempt to train a candidate for the role of chief executive, it’s often results in failure; older and experienced executives don’t handle well the ‘superhero’ attitude of the younger generation. And the generations have to face with a huge clash of views according to how they work; for instance, the X generation cannot effectively deal with delegating.”

“The first generation of entrepreneurs of the market economy are retiring now, and the international experience is valid in Hungary, too: only 16% of family companies could pass the management with success to sons or daughters.”

“Over the age of 50 it is really hard to find a job in the Hungarian market because of age prejudice. Therefore, entrepreneurs are insisting on keeping their position, even if it is not so profitable for them anymore. And if there is no offspring who would be able to do their roles professionally, they don’t trust anyone else to do so as they did.”

Young, who is a long standing and active member of the American Chamber of Commerce in Hungary, confirms trust is a major factor in a trend that has been “growing in importance” over the past several years; remember, not every entrepreneur in the early 1990s was a fresh-faced university graduate. But it is now gathering pace. “I believe this is just the beginning and more and more companies and their owners will be faced with this challenge,” Young says. “Succession consulting will be a growing business for some time.” The issue is sensitive and can be stressful, Young warns. “These are very

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That has, in turn, led to a trend of its own, what Parti calls “dismemberment or sale”. “Most common now is selling the company, such as happened with Szentkirályi, Heyho, Fornetti, and Waberer’s,” Baja says.

There can be no one-size fits all solution; each case is different, but perhaps the key determinant to success is the role the founder will play after he or she leaves the business. “The owner of a Hungarian IT related services company decided he needed an international CEO to help expand his international network,” Young recalls. “He recruited an expatriate, but continued to semi-manage the company himself. In this example, the owner had real difficulty in finding his future role within the company. Later, having learned many lessons, he recruited a new CEO and gave him a much freer hand, while moving to a more strategic position on the board.”

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The daredevils of HR Prohuman, once a three-man start-up, has become Hungary’s leading HR service. Almost 20 years ago, two young university students, Csongor Juhász and Béla Ignácz, were thinking about how to make a big splash after leaving the world of education. Throwing caution to the wind they jumped into the deep end, choosing a type of business still in its infancy in Hungary with no properly regulated system. They became a three-person HR service with a computer and one telephone passed around from person to person. Though they conducted their business activities as part of the Prohome Group, these young professionals were interested in developing their own branding from the start. The ambition and energy invested was repaid earlier than they could have expected: in 2005 they began working independently as Prohuman, with HUF 400 million in revenues. Through their leadership, the company has now become – with 100 times more income – the country’s 16th biggest employer and the largest HR company.

Think globally, act locally Alongside a presence in Budapest, one stated goal of the company was to develop in Hungary outside of the capital. When they first got an opportunity to do so, the surrounding circumstances made the mission appear virtually impossible – but not for them, of course. The opportunity came in the Hungarian town of Fehérvár, with the condition of doing business being that they find 50 people for a Fehérvár factory in less than a week. What’s more, they had to do the hiring over a long Easter weekend. They accepted the challenge and did it successfully: the company has been active across Hungary since 2005. Since that time, the company has continuously expanded its presence outside of Budapest, with a special

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emphasis placed on providing nationwide coverage. This has meant that in 2016, 14 offices enabled the company to provide nearly 18,000 adults and students with work.

company forced to adapt flexibly to its continual growth both in terms of clients and the domestic market. The two company leaders have both said this is currently one of their hardest challenges.

Growing success

New milestone

Flexibility and client-centred: ever since the opening of the first office, these two magic words have been the key to success, with the company’s leaders confirming that this is the spirit which has pushed them forward. One unforgettable scene is often recalled which occurred after they had suddenly grown so fast that when one client arrived and tried to find one of the company’s directors, the lady on reception asked: ‘Who is Csongor Juhász?’ This dynamic growth, however, necessarily led to another big challenge. In 2008, before the financial crisis arrived, the company had grown in a sector which was less affected by downsizing than the auto industry, for example. This meant that the onset of the crisis didn’t affect the company’s main areas of business, and by the end of the year it stood in 5th place in the Hungarian market. Its image as a family company now belongs to the past, with the

2011 saw the development of a new area of business: Prohuman started working with student cooperative market. It was a great advantage to have formed an organisation from a comprehensive HR service provider, meaning it could rely on proven operational principles and an existing customer base. It is now rated in the TOP THREE services for educational co-operatives in Hungary.

Polish Hungarian friendship The owners of Prohuman dared to dream even bigger than ever before, and reached an agreement which would push them inexorably to the top of the list of Central European HR services: the big merger with the Work Service group. The history of this global company had begun and been developed in a very similar way to Prohuman’s – though their Polish colleagues had started playing on a bigger field.

The many similar features and the comparable company philosophies became a breeding ground for fruitful collaboration: in 2014 Prohuman entered the international market as a member of the Work Service group. It was an important, necessary step, as an international presence was a must in order to keep moving forward. This fortunate coming together didn’t reduce Prohuman’s capacity to make independent decisions, meaning it could retain its autonomy with no change to its operative management and the uniqueness of its services. Prohuman became Work Service’s southern HUB, something which was treated with unbridled enthusiasm rather than unease. As part of the WS group, the Hungarian firm could finally carry out its own acquisitions. It was successfully able to acquire a Slovenian HR service in the Balkans, meaning it was now operating in four different countries. One of Romania’s TOP FIVE HR services was then also acquired.

Labour migration as opportunity After its expansion, Prohuman also became involved in supporting Hungarian people relocating to work abroad. It was able to successfully acquire one of the largest outsourcing companies in Hungary, and at the same time the first registered Hungarian outsourcing companies in Germany, with international outsourcing now the new medium of growth. It’s still “those old guys”, now with a team of nearly 300 people operating across international markets. The windowless office is gone, but the dreams have remained the same – the only difference being that they have now become reality.

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HR&EDUCATION EXPERT OPINION

Workforce Retention Under Employment law: the law and HR in Partnership Hungary is suffering from a serious shortage of all kinds of workers, from the unskilled to high-level professionals. Employers are on the front lines, facing the problem of deficits in the workforce, and are discovering that higher salaries alone may not solve their problems. Other steps, including the development of human resources, providing a better work environment and special incentives are crucial to effectively tackle the problem. In this situation, employment law has a significant role to play.

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Barnabás Buzási, Senior Associate Faludi Wolf Theiss In the following we will highlight the legal aspects of some retention techniques. Employers know that they can begin to prepare to manage negative consequences of fluctuation even as early as at the hiring process by building a database of applicants. However, the use of that database gives rise to several data protection requirements, such as an obligation to register them with the national data protection authority. The probationary period is a frequent feature of employment agreements. It also has huge potential to protect the employer’s financial interests: e.g., if an employer ensures that an employee participates in valuable training programs at the beginning of the period of employment, the employer cannot require the employee to repay the related expenses in the case of termination. The solution is to define a proportionally lower salary for the probationary period by using the appropriate provisions of the labor law.

As a temporary solution, the deficits in the workforce can be compensated for within an organization by temporarily reassigning employees to jobs and workplaces other than what is contained in the employment agreements. Conversely, the employer can also use this as an opportunity to motivate employees to test themselves in other positions. The employer can also assess the employee’s suitability to, and abilities in, the temporary position; thus, this solution serves as another probationary period, which otherwise would not be applicable. If the employee meets the employer’s expectations, the parties can modify the employment agreement, even for a definite term. Ensuring employee satisfaction: the most well-known instruments are an appropriate salary and a safe working environment. However, these are short-term solutions, and do not motivate employees to be productive. On the contrary, the actual motivators are the factors used to bring out the full potential of the employees’ abilities and increase their commitment to the company. Among these motivators, education is of exceptional importance. An adequately drafted study contract is essential in this respect, as such an agreement can also increase the ties between employees and employer. The longer notice period is useful in positions where the transfer of knowledge is crucial, such as when training is carried out by the departing employee. It also provides enough time to find the new employee for the position. However, it is advisable to insert the longer notice period into the employment agreement anyway, because it may be difficult to amend after it has been concluded. Upon both parties’ agreement,

the longer notice period may be applied only in the case of termination by the employee. If employment is terminated, an exit interview may also reveal the factors that led to this development. The employer, acting in accordance with the data protection law, can build a database of these employees regarding their knowledge, expertise and practical results in order to contact them in the future with job offers. Non-compete agreements are frequently used. However, it is not always clear that they are subject to particularly strict rules, and the breach of these rules may invalidate the whole non-compete agreement. The employer shall carefully consider the list of prohibited activities, the scope of application and the compensation payable for such undertakings as the list of prohibited activities, and the temporal and territorial scope of application must be defined in accordance with the employer’s lawful economic interests, and the compensation must be consistent with the actual restrictions, also having regard to their impact on the employee and the exposure of the individual employee’s situation. Summarizing the above, we can state that the employer has appropriate means to protect its interests from the beginning of the employment relationship. However, most of these solutions and legal possibilities require additional preparation. We at Wolf Theiss, with our extensive professional expertise in all aspects of employment law, provide tailormade legal solutions and advice.

www.wolftheiss.com

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HAVE COMPUTER, WILL TRAVEL There is an increasing trend of people not wanting to work in an office cubicle. Or even an office. Rather, they would happily work from home, or from the bank of a river. As long as they have their laptop with them and a wireless connection, they can work from anywhere. They are called the digital nomads, and their office is the world. By Christian Keszthelyi The internet is changing, indeed in many ways has already changed, the way we think about work. A great slice of the employment pie features jobs that are performed using a computer, and essentially that computer does not necessarily need to physically be in an office, provided it is connected to the internet. With the increasing quality of Wi-Fi and mobile networks, the infrastructure has paved the way for the appearance of digital nomads. That their work, as web and software developers, online marketing managers, designers, copywriters and so on, is chiefly executed on a computer enables them to work remotely, independently and flexibly. “Innovative and cost-conscious companies can save rent by giving up the ‘1 employee-1 desk’ mentality,” Bálint Drahota, the co-founder of coworking

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space UP center, tells the Budapest Business Journal. “I see an increase mostly in workers who can use the internet in a smart way, therefore they don’t actually need an office. If the team can communicate well through digital channels, such as Slack and task management systems like Trello or Asana, why should you – and your employer – make additional efforts to force you to work from a defined place?” Drahota believes employers are becoming increasingly aware of this tendency, and open to such solutions. ‘ABORIGINALS’ OF STARTUP ECOSYSTEM Kata Klementz, co-founder of coworking space Loffice, tells the BBJ: “Digital nomads are the ‘aboriginals’ of the startup ecosystem and since Budapest is often described as the ‘Startup Capital of Europe’ it is natural that the scene and the society interiorize the lifestyle.” Drahota argues that as long as deadlines are kept, communication is provided and the employee can produce quality work, it simply does not matter “whether you are at home, in a coworking space or in Indonesia, which is the famous heaven for digital

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nomads”. Furthermore, he believes the notion of the digital nomad describes not only an individual, but also a lifestyle. “They travel the world while working on projects. This is a lifestyle, not only a type of work,” he says. According to Áron Levendel, CEO & founder of coworking space KAPTÁR, Hungary has seen a growing demand for coworking spaces in the past five years. “When we first opened in 2012, the concept of a coworking space was fairly new for the Hungarian audience; eight out of ten people who wandered into KAPTÁR had no idea what it was, but by now this ratio has reversed,” Levendel says. Others have seen demand rise too. “We are definitely seeing an increase in members, both international business people travelling around Europe and Hungarians working for foreign companies remotely,” Shayna Prunier, one of the co-founders of the Impact Hub Budapest, tells the BBJ. “I think working at a coworking office is also more desirable than a coffee shop, because it has more amenities and more of a community. I have also heard that some companies are seeing a value in having employees work at coworking offices as a 1break1 from the office,” she adds. SOCIAL NEEDS While the idea of home working is clearly gaining popularity, it may not always offer the best solution “I think home office is not a preferred way of [remote] working,” Klementz of Loffice says. “Yes, if someone decides to start their own business, the first step is usually home office. But everybody has social needs, nobody likes to be lonely all the time, even while working. It’s human nature. So, our experience is that the self-employed and freelancers always switch from home office to coworking,” she adds. Drahota of UP center estimates that only 10-20% of companies are currently prepared to take the coworking plunge, but Klementz, of Loffice, thinks that will grow, and with it so will the 30 coworking spaces in Budapest. “We also put an emphasis on cost efficiency,” she underlines. “Freelancers and entrepreneurs share one work space, infrastructure and host service, it is efficient because the use of a coworking space based on

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pay-per use, so you only pay for the time spend at work, which can be a day, a month, or a year. It’s flexible because you can decide which coworking package you need and for how long and we support companies’ growing needs in-house, to make sure that they develop and expand within their community. And, as I said, cooperation always finds an answer to every problem,” Klementz adds. Prunier of Impact HUB Budapest also sees a growing company use, driven by a need to save costs. “We have many small companies that want to have an 1office experience’ but do not want to pay the fees associated with their own office. In addition, sharing office expenses, services, resources, etc. is more financially beneficial, environmentally responsible, and more efficient for a lot of companies. This is also encouraging a variety of coworking spaces to offer different styles and community events to suit a specific industry or have common interests with members,” she says. Klementz of Loffice believes freelancing is a natural fit for the Magyar mentality. “Hungarians have been always famous for their entrepreneurial attitude and, thanks to many creative and innovative ideas, we have acclimatized well in the startup world. Freelancing is also an up-and-coming trend in Hungary; this work form also gives wider freedom from employers. Young Hungarians have the desire to prove their talent on international markets and to achieve this goal they’re ready to focus all their resources on a great venture. According to some experts, by 2020, 40% of the workforce will become freelancers, entrepreneurs and independent advisors.” At the same time, Budapest has been marked on the international digital nomad map. “Many foreigners choose Budapest as a checkpoint of their professional journey,” Klementz notes. The tendency is also observed in KAPTÁR. “Digital nomads are flocking to Budapest, the rising number of self-employed Hungarians, and pioneering multinational corporations together create a growing need for coworking spaces,” Levendel acknowledges, adding that they expect the trend to keep up, and are therefore eyeing expansion again, having already doubled floor space twice in the past year.

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HR&EDUCATION EXPERT OPINION

Office Space as an Employer Branding Tool? The Answer Is a Big Yes

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What can make a company successful on today’s labor market? And how can providing the right working environment contribute to this success? suitable for meetings and presentations but also for informal gatherings, small parties, football games watching. Skanska undertakes initiatives supporting the work-life balance for employees, including the possibility to work from home, flexible working hours, and encouraging colleagues not to make a habit of working overtime,” Ms. Erdélyi added.

Emőke Erdélyi, HR business partner of Skanska Hungary “Employer branding is not just a trending concept among HR professionals. It plays a crucial role in a company’s recruitment strategy, especially in a sector where labor shortages rise challenges for the organization. When talking about employer branding, it all starts internally, with engaging the employees. The second step is to strengthen the brand awareness, externally, emphasizing on the unique selling propositions of the organization.” says Emőke Erdélyi, HR Business Partner of Skanska Hungary. “It is not enough anymore to just have a strong brand. The company values should be a driver of the organizational culture, and the employervalue proposition should be a long-term foundation for embracing current - and also future - employees. There are certain tools that a company can utilize in order to strengthen employee engagement. Nowadays, the most important one is creating a highquality working environment that serves the company’s mission and objectives best and provides growth opportunity for both business and people.” – add the HR expert. Ms. Erdélyi continues: “The environment, in which we spend the majority of our time, has a huge impact on our well-being and productivity. When we feel that the space we are working in is comfortable and fits with all the needs that our type of work requires, it can both be inspiring

Marcin Łapiński, managing director of Skanska Property Hungary and can increase efficiency. Companies can improve the sense of well-being of employees in their headquarters by paying more attention on proper air quality, convenient lighting and temperature, and low noise volume - just to list a few things. Designing the interior of the office with ergonomic, customizable office furniture solutions, such as height-adjustable tables, or creating opportunities for activity based working to minimize the negative effect of all day sitting can all contribute to the sense of well-being of the team. These ideas can truly make a significant difference. Finding an office building that is easily accessible, in a good location, with great access to public transportation and offering a big variety of amenities, provides employees with more comfort,” she said. “We have moved our headquarters to the Nordic Light office complex, our most recently delivered project. The building was inaugurated in 2016 and it is located only 15 minutes away from the city center, with direct access to all means of transportation. Our aim with the new office was to bring also in our premises the innovative approach that we used in the entire complex. Therefore, we created a working environment based on well-being initiatives and sustainable solutions, always having in mind to facilitate the good collaboration of our team. We made different types of work stations, have lots of green areas, designed a “heart” of the workplace

“Skanska, as one of the leading global real estate developers, has a comprehensive understanding of what role an office building has to fulfil not only today, but also in the future.” Marcin Łapiński, Managing Director of Skanska Property Hungary and Romania says. ”Well-being of the employees at the workplace has become an essential factor. Most of the companies today are consciously doing their best to create an innovative, comfortable and above all healthy working environment. In Hungary, we are experiencing a huge demand from tenants for various types of solutions facilitating this aim. Skanska’s upcoming Mill Park office project – which we are inaugurating in 2018 – is a great example of how innovation, creativity and sustainability can make a difference in the time spent in the office. At Mill Park, we are customizing every office space to the needs of our tenants, using building management systems to make sure our building is energyefficient. In addition to this, end-users will benefit from 5.500 sq m of multi activity interior garden, outdoor working pavilions with electricity and WIFI, different types of outdoor furniture, depending on each ones needs – from tables and chairs suitable for meetings and working to colorful swings to make the breaks more fun and cheerful.” he said. Mr. Łapiński added: “At Skanska we are dedicated to creating futureproof workplaces with a great focus on the employees’ needs and comfort. We believe that only like this we can help our tenants in shaping their successful future.”

www.skanska.hu

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FIERCE NEED FOR FOREIGN LABOR HAUNTING THE ECONOMY Despite the labor shortage, the number of workers from abroad has been steadily dropping in Hungary, and there is no sign that dynamic will change switch any time soon. The wages available and administrative burdens do not help. By Levente Hörömpöli-Tóth Public opinion in Hungary tends to be concerned about the number of fellow citizens leaving to work abroad. However, the critical labor shortage in the country is now shifting the focus to foreigners employed here, as their services are needed more than ever to make up for those who have left in search of a better life in the West. But attracting foreign labor here has its challenges; in the European Union, only Bulgaria offers more meager wages than Hungary. Little surprise, then that according to the European Union Labor Force Survey (LFS), as of 2015, Hungary was among the EU member states with the lowest foreign worker ratio, with just 0.6% of the work force coming from abroad. Only Slovakia and Poland (0.3% each) scored less, although in Bulgaria, Croatia, Lithuania and Romania the levels were so low that they fell below the publication threshold of Eurostat. For the record, foreign citizens made up 7.4 % of all persons in employment in the EU in 2015.

in that case money is not the only factor that matters, but the chance to build a career and personal development are also key,” Csákvári says. The number of foreign workers in the labor force has been dropping in Hungary in the past decade or so. And that still holds true, even though in 2016 20% more work permits were issued than the year before. Between 2005 and 2016, the number of valid work permits plunged from 46,000 to some 7,000 according the statistics of the National Labor Service (NFSZ). During the same period, valid registrations, which suffice in cases where a work permit is not required for foreign workers, have also dropped from nearly 19,000 to around 10,000.

“Attracting foreign labor here has its challenges; in the European Union, only Bulgaria offers more meager wages than Hungary.”

Several industries are crying out for manpower, and the most obvious way to ensure the smooth running of business seems to be to import labor. As Róbert Csákvári, CEO and Founder of Work Force Kft. explains, an increasing number of local companies have, indeed, recognized the power of the work force from across the border. MANUAL LABOR “Strong labor ethics and a fluctuation rate far below the domestic average are expressly lucrative,” he says. “It is mostly manual labor that is registering a growing influx of workers from abroad, and it is to continue in the same direction in the short-term.” White-collar work is a more complex matter, the expert notes, since wages are similar in neighboring countries. “Therefore,

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The declining trend is self-explanatory, even if the true number of foreigners employed in Hungary can only be estimated because of the lack of data on EU citizens entitled to free movement and residence. The lack of records on people running private enterprises or employed illegally make producing exact figures even more difficult. TRANSPORT AND TRADE Processing, transportation and trade are the sectors that absorb the most helping hands from other countries, as more than 50% of legal aliens are engaged in those three industries in total. The Chinese make up the most populous foreign group, followed by Ukrainians and Serbians. The latter two have been especially active lately in applying for work permits. “There are two typical kinds of migrant worker,” explains Sándor Baja, managing director at Randstad. “One is a university or college graduate who normally works in shared service centers (SSCs) in Budapest and spends several years in Hungary, whereas the other type is a bluecollar worker employed in the countryside and commutes between Hungary and their home abroad over the weekend.”

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Róbert Csákvári, CEO and Founder of Work Force Kft.

Sándor Baja, managing director at Randstad.

Unfortunately, the employment of foreigners presupposes additional burdens in terms of organization and costs. Work permits are normally arranged by employers, but the story doesn’t end there. In the case of blue-collar workers, transportation and accommodation add to the expenses, not to mention arranging a group leader who speaks the language of the newly arrived workers. White-collar folk can usually count on a relocation package and assistance to find a home, whilst top executives may even have the rent and all costs related to the schooling of their children paid for them.

SSCS: A GLIMMER OF HOPE One area that could potentially be a magnet for foreign skilled labor is the SSC sector. According to Deloitte’s Hungarian Shared Service Survey 2017, most respondents have stated that roughly one-quarter of their employees are foreign nationals. Deloitte predicts that “this trend will increase significantly in the near future because of the continuous narrowing of the Hungarian labor market and the increasing need for workforce with foreign language skills”.

“Employing foreign workers with an EU citizenship is very easy, but now the government is promising that third-country citizens, such as Serbians or Ukrainians, should be granted a work permit under a fast-track procedure,” Baja adds.

Baja agrees that the SSC segment holds the promise to attract more highly qualified staff from abroad. “When it comes to manual labor, the majority of employers have not reached the ‘whatever it costs’ point yet, and they are reluctant to intensify recruitment abroad because of the inherent extra costs,” he says.

But the generosity of the administration pretty much ends there. The Hungarian government doesnʼt facilitate the employment of foreigners beyond allowing a faster application for work permits. Meanwhile, for those doing manual labor the language barrier is a major obstacle.

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“However, Hungarian SSCs, being higher up on the value chain might be, and actually already are, attractive for junior foreign professionals, not least since at such places the language of communication is English.”

Number of legal aliens working in Hungary

2005 2007 2010 2013 2016

Valid working permits* Valid registrations by Hungarian employers of foreign employees* 46,391 18,907 39,822 10,614 17,854 131,98 19,348 7,937 7,283 10,553

Total 65,298 50,436 31,052 27,285 17,836

*As of the end of the reference year

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EXPERT OPINION

Rock Solid Data Protection May 25 is the day when the European Union’s strongest ever data protection regulation comes into force. The GDPR (General Data Protection Regulation) affects all companies. One of its key objectives is that employees should obtain control over their personal data, meaning that they can look at their own personal data held by their employer.

s data protection, thereby enhancing trust in online and outsourced services. NEXON’s near 30-year history has always been about being constantly ahead of trends and changing requirements. From the beginning, strict protection of personal data and access to this data for the individuals concerned was fundamental within our products. Our latest generation of solutions has been designed to make HR administration simpler and more efficient through the involvement of employees, and to make the role of HR as service provider more decisive. Szilárd Ocskay, NEXON, CEO

Enforcement of the regulation will be strict, with heavy fines for those who fail to comply. Time is running out, the regulation is highly complex and everyone had better start the necessary preparation. But what exactly is GDPR and why was it important to create it? The General Data Protection Regulation of the European Union was issued in May 2016, providing two years for preparation by all concerned. The creation of the new regulation was required because 20 years has passed since the creation of the directive presently in force. There was a need for a strong, rigorous set of regulations common to all the EU member states, which complements the rapid development of information technologies and services such as cloud-based solutions, social media and web based services. GDPR provides individuals with

An important criterion for GDPR is to provide employees with the right to access the personal information held about them by their employer. The technology and IT conditions needed to ensure this must be provided by all employers from May 25, 2018. All employers have to implement the necessary systems and be able to provide access for all employees – of course, while remaining in line with data security criteria. The world is moving toward openness, and this process is being driven by technology, for example by the mobile devices that are in our pocket. But what is even more exciting is that not only the world but also the organizations within it can become interoperable. HR systems of the future have to develop in this direction, and the NEXON_PORT employee self-service solution is all about leading this trend! But what is the situation if an employer has outsourced its HR activity to an external service provider? Data protection is of paramount importance in this

event, because service providers such as NEXON handle the personal data of tens of thousands of employees. Thanks to cloud technology, access to outsourced data can now be both easy and secure. However, ensuring this requires that the service provider has a rigorous IT and operational background. NEXON is wellprepared for GDPR, as its NEXON_PORT solution also provides a state-of-the-art solution for outsourcing customers. NEXON_PORT is a new generation of e-HR solutions that simplifies administration while providing new opportunities for internal corporate communication. It inherently involves employees into HR processes, enhancing HRʼs business and service role. And, not by accident, every employee can access and monitor their registered personal information, and even initiate changes to their records. All this without paper, and also through use of mobile devices. There is still a lot of uncertainty for companies about the coming GDPR regulations. This is evidenced by the fact that the NEXON IT-Harbor conference, the main topic of which was preparation for GDPR and was held on September 12, created such outstanding interest that seats had already run out in July. In the area of ​​HR IT, we are already fully prepared for May 25, 2018. What can we do to help you?

www.nexon.hu

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BOOSTING ‘CANDIDATE EXPERIENCE’, MAKING RECRUITMENT FASTER Human resources software is becoming a common tool in the Hungarian recruitment sector. Good HR software can significantly raise ‘candidate experience’, which is becoming important more than ever. By Christian Keszthelyi Human resources software does not merely help in making processes faster, but can also ensure that the best candidate possible is chosen from the applicant pool, and offers assistance not only in the recruitment process, but also in the documentation at the start of employment. Still, HR firms need to follow a process. “When introducing an HR software, corporate needs must be assessed first,” Dorottya Sámson, branch manager of CPL Jobs Kft., tells the Budapest Business Journal. As she explains, basically there are two types of software: one that is integrated into your own IT infrastructure and stores data locally, or operated from a cloud and storing data remotely. Sámson notes both types have their pros and cons. While a cloud-based service is regularly updated by the operator, the risk of the service provider halting services always hangs above the companies like the sword of Damocles. Should such an event take place, important and sensitive data could be jeopardized. At the same time, while integrated and locally stored software could be more secure, it is not automatically updated, thus both financial and human resources are needed to stay up-to-date. One other option, of course, is to develop your own software. “Here at Grafton we have an internally developed software to

manage candidates, clients and the whole recruitment process from first step to billing,” Orsolya Dózsa, operations manager at Grafton Recruitment Kft. told the BBJ. “To be honest, this has been the best [software] I have ever used as a recruiter and manager during the years.” CANDIDATE EXPERIENCE Essentially, good HR software is used not only for recruitment, but also for handling employment processes. “A good applicant tracking system (APS) can significantly raise ‘candidate experience’, which is becoming important by the day,” Sámson underlines. She says APS software is now commonly used in Hungary, even in smaller companies. She adds that companies in Hungary place a special emphasis on the candidate experience, as with the help of a good HR software both the recruiter and the candidate can learn a lot about the other party, which makes the applicant feel secure, and enhances trust. As Sámson describes, changing a job can be intimidating due to risks, and this uncertainty can be eased with a good HR software. Therefore, “passive” candidates can be sent automated messages from time to time if there is a job opening that could suit them. “Receiving such messages provides the applicants with security, which they greatly appreciate, and is done automatically, so the HR professional does not need to send emails one by one,” Sámson explains. Additionally, good APS software can, once a position has been filled, automatically send out the necessary documentations to the respective branches in a company and to the newly employed staff. Dózsa also mentions automation as a key element of HR software. “If possible, choose software that has automatic control functions in order to support the administration staff, as humans are not that good in administration,” Dózsa says. Still, when asked what makes HR software really good, both Sámson and Dózsa mention the search engine. “A good and efficient search engine is very important to navigate in a massive database, for one simple reason: time is money,” Sámson says. “Search function is always the most important, as well as historical data,” Dózsa adds, but warns that all data must be recorded with great care. “Even if a software is extremely user-friendly and well-functioning, if people don’t use it properly and miss record data in it, it can be of no use … Also, the reporting function is a key part as recruitment is a sales-driven business and KPIs are essential to manage,” she adds.

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EXPERT OPINION

Rising to the Challenge The new Mercedes-Benz plant in Kecskemét means new jobs and new challenges for HR: an interview with Lena Doll, senior HR manager. the other countries you’ve been active in? Since I started my career, I have worked in four different countries in Europe and Asia. Each of these have their own characteristics regarding personnel resources. In Hungary, an increasing shortage of professional workforce can be observed, due to the high employment rate and the number of investments in the country – with a significant effect on available business experience. At the same time, I see a workforce open to innovation, with a lot of dedication, motivation and intercultural curiosity. Lena Doll, senior HR manager Mercedes-Benz Manufacturing Hungary Kft. The long-term commitment between Mercedes-Benz Manufacturing Hungary Kft. and its Hungarian hometown of Kecskemét has not been a question for a very long time. But in 2016, it became even more obvious when the company announced its plans not only for the expansion of the existing facility, but also to establish a second unit at the site. And not just any one: With the investment of EUR 1 billion, a highly modern convertible factory will be established, fully meeting Industry 4.0 standards: it will consist of networked production systems and a fully digital process chain. Mercedes-Benz Manufacturing Hungary Kft. will also create 2,500 new jobs in the area, which means new opportunities as well as new challenges for the human resources department. Lena Doll, senior HR manager at Mercedes-Benz Manufacturing Hungary Kft., and project-leader of the second plant, talks about the current state of HR in Hungary, the role of the dual education and training programs in the factory’s growth, and how the company meets the new challenges that come with new success. How do you see the development of human resources in Hungary and

What are the biggest challenges in your work nowadays, in particular regarding the expansion of Mercedes-Benz Manufacturing Hungary Kft.? With the opening of our new factory in Kecskemét, our staff will grow rapidly and considerably. To impart the know-how and to ensure a high level of qualification for all our new employees is on the one hand the key to the high quality of our products and our lasting success, and on the other hand it is the basis for a motivated workforce, ready to meet the demands of their everyday work. What is Daimler’s method for ensuring this? Our main goal is to preserve the motivation and spirit of our staff as well as the firstclass level of qualification, despite the meaningful and sudden growth. Selection of the best fitting candidate for each position, organizational orientation and expectation management throughout the recruitment process is allied with the role of the executives on every level; they create a climate for a workforce ready to improve and for a culture of constant growth and transition. Our dual education and training program ensures the imparting of specific and key knowledge, that is tailor-made for the requirements of our factory, and it also provides our co-workers with opportunities to further develop their professional skills.

Additional cross-company measures emerge from the cooperation with the city of Kecskemét and the employment offices. Meanwhile, Daimler’s international Leadership 2020 program has been working on strategic projects since 2016 to support cultural change within the corporation, regarding employee development, decision making processes, organizational structure and work methodology. This global team has more than 200 members from different generations, nationalities and all levels of the Daimler corporation, who work together not only to be ahead of the changes to come, but also to shape them. Where do you think the strengths of Hungarian workforce lie? I came to Hungary two years ago and I was welcomed with much warmth and open arms. This empathy, a distinct passion for common goals, a strong willingness to learn and the input of one’s own, creative ideas are very exceptional features. What’s your personal view on the plans for overcoming the lack of workforce? In my opinion, the measures point in the right direction. I’m confident we’ll develop new approaches in the following years to make sure this gap is filled permanently.

Lena Doll was born in southern West Germany, on the German Wine Route, close to the French borders. Her interest in mathematics and social studies – among other things – led her to study finance and accounting and personal management, as a dual student at the company’s production site in Wörth 14 years ago. Daimler AG was her first choice: already in secondary school she had decided she would someday work for this broad international company. Spending so many years in the heart of the company as a HR professional, she says there is one especially important lesson she learned and likes to pass along: You are your only limit!

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HR&EDUCATION EXPERT OPINION

Executive search: Challanges and prospects for 2017 We, working in the HR sector, can clearly state that by 2017 the increasingly severe labor shortage has become a pressing issue, which also affects Hungarian economic growth prospects. Certain sectors have faced a serious shortage, even when it comes to the executives in the country. considered as minor costs compared to the loss of profit caused by a prolonged selection process and the appointment of a less appropriate executive. From the side of the enterprises, it is difficult to decide which agency is able to offer the desired quality of service. It is of utmost interest for all companies to hire a recruiting agency of the highest possible quality to ensure customized handling and treatment and to get flexible and sufficient resources for searching. Dr. Patrik Molontay, Deputy Managing, Director Head of Executive Search, HumanField Consulting

Companies are finding that candidates for executive positions are less motivated than before, because they have more opportunities to choose from. Nowadays, it is not considered exceptional for an executive to withdraw from an already accepted opportunity at the last minute. In HumanField, this year alone, we successfully managed to deal with the above-mentioned, otherwise seemingly impossible situation during two executive searches for multinational companies. More and more companies realize that, despite the higher expenses, it is worth hiring an external expert when looking for a new executive. With the help of an HR consultancy, the executive with the most suitable profile can be obtained within a much shorter time. Even the charges of top recruiting agencies can be

Strategic cooperation between companies and HR consultancies will become much more significant in the future. It is a tendency that executive searches can only be successful if the management of the company treats the recruiting agency as a strategic partner and there is close cooperation in the search and selection processes to make it as effective as possible. As recruiting agencies have to devote more time and energy to search and selection projects, an increase in charges of executive searches seems unavoidable. At the same time, building the employer brand comes with additional costs. The employer brand is not only essential in obtaining the best candidates, but it is also important in keeping the best executives and staff.

time and are able to apply innovative techniques in searching, motivating and keeping candidates can stay successful in the future. We are witnessing visible changes and rearrangements on the executive search market, as the actors are adjusting to the new challenges at varying speeds. In the following years, Hungary and all the companies in the country will face serious challenges, not only in searching but in keeping executives as well.

Dr. Patrik Molontay, Head of Executive Search: Economist, lawyer, HumanField Executive Search Group Manager. He has successfully managed executive search and selection processes for many multinational and Hungarian medium-sized and large companies. HumanField Consulting: HumanField Consulting has been actively engaged in HR consultancy and headhunting/ recruiting activities since 2006. With an office in downtown Budapest and principals at several locations nationwide, the company regularly participates in international projects as well. The company is a member of ISPA EXECUTIVE SEARCH (International Search Partners Association), which is an organization that specializes in high quality executive search operations.

Consultancy companies that perform executive selection also have to adapt to the new situation on the labor market. Only those recruitment agencies that can make changes in their methods in

EXECUTIVE SEARCH | SPECIALIST SEARCH

www.humanfield.hu

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MAKING EDUCATION FIT FOR BUSINESS Young Hungarians’ brains might be crammed full of information, but are they ready to please employers who also want practical skills? By Ágnes Vinkovits

11 youngsters will endeavor to spread their wings on BA’s ninemonth-long program.

The most often cited criticisms over the Hungarian education system are that it is not practical enough and does not reflect to labor market needs. The government is under pressure to address these problems, as a manpower shortage is already hindering an increasing number of sectors.

Most of the interns come from economics or engineering faculties and have to have a minimum of four fulfilled semesters. “We are strict in the selection process, but usually we have a good pool to pick from,” Takács says.

In an early reaction to what was already then an emerging problem, the dual education program kicked off five years ago. It allows students in secondary and higher education to gain realwork experience in the corporate sector (and in a few cases at state institutions) as part of their studies. This not only triples the future job-finding chances of the apprentices, but is also a good tool to give a more practical education, while also lowering the alarming lack of workforce.

The number of those applying for the internship program had been on the decline somewhat in previous years, but this year it went back up. “We are not fully sure about the reasons [for the drop] yet, or whether if it has anything to do with the dual education program. Probably we are competing more with Erasmus,” he explains, referencing the EU’s Erasmus Program (European Region Action Scheme for the Mobility of University Students), a scholarship-driven student exchange program established in 1987.

The number of companies and schools taking part in the dual higher education program has been on a permanent rise since the start of the program. According to data from the Ministry of Human Resources, 24 institutions of higher education and 593 businesses were involved in the program in the 2016/2017 school year, offering handson experience for those studying in agricultural, economic, IT, engineering, and – for the first time this year – science and social work faculties.

But, despite the competition, Erasmus has obvious benefits for the younger Hungarian workforce. “Their command of English is better and better,” Takács notes, adding that he believes it might be due to Erasmus, rather than the success of language teaching in public schools.

“Their brain is full of knowledge, but many of them don’t how to put an excel table together, or how a ledger should look like.”

As the students are paid for their work, usually about HUF 20,000 per month, one key concept is that they do not have to choose between working and studying. “This way, it becomes avoidable that students fall out of higher education in the second year and become ‘intellectual skilled worker’ as they do not have a degree,” economist László Csaba points out. FREEDOM AND FLEXIBILITY Yet, the state dual education system is not attractive for everyone. “Even though the obligatory period of employing the apprentices has been lowered [currently it is a minimum of 80% of the length of the entire school course], it still hasn’t met our needs. We love freedom and want flexibility,” József Takács, strategic human resource development manager at Budapest Airport (BA) tells the Budapest Business Journal. As such, the operator of Hungary’s main international airport has opted instead to maintain its own trainee program, which has been running for nine years. This year,

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Despite the fact that 20% of their trainees stay at BA as permanent employees and the airport operator “are happy with them”, more practical command would be welcome. “Their brain is full of knowledge, but many of them don’t how to put an excel table together, or how a ledger should look like,” Takács explains. The labor shortage is most severe in IT-related professions, HR experts agree. According to a recent survey by IT course provider Codecool, most employers, be they software developers or businesses without an IT profile, consider the situation very problematic. MOST WANTED Software developers are the most wanted, as 84% of those who answered said that they would hire even career entrants, noting that, due to the high demand for their expertise, the lack of professional experience would not impact on their monthly pay check. Software testers (65%) and IT support staff (42%) also find open doors at companies, even if only just finishing school (and in some cases still attending). Codecool’s survey concluded that the traditional public-school system is unable to keep pace with the rapidly growing needs; more courses and well-built adult

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Audi is among the biggest long-term employers of dual education apprentices.

education system are needed to teach the young, but also those career changers who are attracted by the increasing salary levels in these in demand professions. Partly due to manpower migration, Hungary is short in non-office workers, too. Anyone who wanted to renovate a flat in Budapest or build a family house in the past five-to-eight years would have noticed the shortage of reliable working hands in the building sector. According to the author’s own experience, those who would be available within a reasonable time frame are generally not worth working with, while good professionals are nearly impossible to contract without a delay of four or five months. Well-skilled blue-collar workers are wanted in other sectors, too. It took several months, for example, for BA to find a mechanic as most of the candidates “didn’t know which side to look at a circuit diagram”, Takács notes. BA, an employer of about 1,000 people, half of them blue-collar workers, says it has not experienced any increase in the practical skills of its newcomers that it could attribute to the dual education program.

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Simply because it is trying to make education more practical, dual education is welcomed by many. Trainees are wanted countrywide and, as the Hungarian Chamber of Commerce and Industry informed the BBJ, 79% of them are employed by local SMEs. The machine and auto industry, in particular, is taking good advantage of the program. Audi, Mercedes, Opel and Continental Automotive as well as Siemens, Robert Bosch Power Tool and CLAAS Hungary Kft. (agricultural machinery) are among the biggest long-term employers of apprentices and, therefore, those that benefitted most from the tax incentive structure of dual education. While the sector remains concerned about manpower issues, the automotive industry provides about 5% of Hungary’s GDP with an even growing weight. Hospitality, which is seriously hit by the immigration of workforce, is another sector making great use of trainees, although market players say they had not experienced major problems with the quality of their labor previously, just the quantity. That remains a problem: according to the Tourism and Hospitality Employers’ Association, there are simply not enough students to feed the needs of the sector.

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PRACTICAL VS. GENERAL KNOWLEDGE: DUAL EDUCATION IN HUNGARY Strengthening the system of dual education is a major element of the government’s schooling reform. The widening training system seems a good tool to ease the country’s current labor shortage, but is it able to provide sufficient knowledge longer-term for people in the changing workforce world of digitalization?

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HR&EDUCATION By Ágnes Vinkovits Hungary’s education system has been undergoing a major transformation in the past few years, putting bigger emphasis on practical skills. One of the main keys to this has been the strengthening of the dual education system, a process that has been underway way since an agreement was reached between the government and the Hungarian Chamber of Commerce and Industry (MKIK) about the main directions in 2010. The point is to closely involve companies in the training procedure and so to offer more real-life experience for apprentices. According to the data of MKIK, those taking part in dual education have three times better chances of finding a job than those whose education is conducted only within the walls of their Alma Mater. “While hairdresser students practice on their class mates or on dolls at school, if they have the chance to learn in real saloons, they first have to sweep up the hair on the floor, then they are sent out for coffee and then they can wash and finally cut hair,” the president of MKIK László Parragh gives a practical example of how trainees in dual education are socialized in a real professional environment, which definitely makes them more attractive for future employers, he explains. “You have to go through the hierarchy to become a valuable employee.” The idea of youngsters gaining experience at nearby businesses is, of course, not a novelty, even in Hungary. Both students and companies could benefit from such trainee systems back in the 1970s, but with the massive shuttering of factories around the change of regime in 1990, the majority of the training places were lost, while most local SMEs have never taken advantage of the opportunity. VET SCHOOLS Today, as many as 9,000 companies are involved in dual education and offer about 13,000 training places. In addition, there are about 700800 vocational education and training (VET) schools and according to educational reforms, their number is on the rise. Responsibility for supervising them has been transferred from the Ministry of Human Resources (EMMI, responsible for education matters) to the Ministry for National Economy (NGM) since 2015. All these tendencies fit into Prime Minister Viktor Orbán’s vision of Hungary becoming what he calls a “workfare society”, as the reconstructed education system is more tailored to the demands of the labor market. The government’s dual education strategies are mostly built on information gained from the market. “We need information directly from the companies,” says Deputy State Secretary for Vocational Training and Adult Education Annamária Áder Gáborné Pölöskei. The NGM sources corporate needs through online questionnaires and personal meetings. The ministries believes it covers most of the local business scene through its strong contacts with the Hungarian Chamber of Commerce, which mostly represents Hungarian SMEs, and also with the American and German chambers, which channel the demands and experiences of big multinationals active in Hungary. Dual education is also seen as a means of easing the country’s increasingly suffocating labor shortage, too. Businesses obviously get a degree of extra workforce from the schools, but perhaps more importantly they also get the chance to cover their future labor demands by training apprentices for tasks needed at that very company.

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RAPID RELIEF As State Secretary for Labor Market and Vocational Education Péter Cseresnyés pointed out at a digitalization conference in April, with the widening of the training system and an expanded range of courses in adult education, the government aims to “provide rapid and efficient relief to digital professions that are suffering most from labor shortage”. Interestingly, even MKIK’s Parragh himself often stresses that, as an estimated 40% of professions will transform completely within ten years, it is uncertain how many of the skills currently studied at secondary schools will be of any use. While this fact points to the necessity for strengthening digital competencies at every level of education, it also outlines the importance of schools in providing enough general knowledge in order to enable life-long learning. Yet, economists and academics often worry that, while such an emphasis on vocational training can make youngsters fit for very current needs of the economy, without strengthening basic and key competencies, it will fail to provide the knowledge base needed longterm for a changing labor market. As Júlia Varga, economist at the Center for Economics and Regional Studies at the Hungarian Academy of Sciences (MTA) pointed out at a recent conference, the number of general knowledge lessons such as mathematics, environment, and history fell from by almost 20% between 2003 and 2016 at vocational schools, and by 15% at secondary technical schools. Education trade unions are also worried. While Hungary still spends less on education pro rata than the OECD average, the Teachers’ Trade Union (PSz) is afraid that the government’s ultimate aim is to highly increase the share of students in VET schools to the detriment of traditional grammar schools. This would sustain a social divide, they say, as only the latter provides a sufficient amount of general knowledge, and so a real chance for its students to carry on into higher education. They also argue that this will lead to fewer highly qualified employees and to the under qualification of society in the long run, pointing out that unemployment is lowest among highly qualified people. Specialization towards a given a profession, even at the young age of 14 is not necessarily problematic. However, experts warn that this can be true only if strong basic skills and competencies had been acquired in elementary school. Nonetheless, OECD’s PISA test results for 2015 indicate that the performance of 15-year-old Hungarian students has been steadily declining since 2009 in science, reading and mathematics (see separate story Making Knowledge a Tool, not the Goal on page 54). WORTH TAKING PART Taking part in the dual education seems like a good deal for businesses. In addition to numerous tax incentives, SMEs could apply to a dedicated funding scheme totaling HUF 7 billion in 2016 for establishing their own workshops and offering training courses, as part of dual and adult education. Big companies are also generously kept interested in training their own workforce. Companies that establish a fully equipped dual training workshop, increase the number of apprentices by at least 50 for two years running and commit to maintaining staff and operate the workshop for at least five years may receive on average as much as EUR 8,000 per trainee, or up to EUR 2 million.

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AMCHAM LANGUAGE AND CAREER AMBASSADOR SCHEMES GO TO NEXT LEVEL The American Chamber of Commerce is gearing up for another busy fall semester as volunteer lecturers of its Language and Career Ambassador Programs continue their mission to promote foreign language learning and soft skills in Hungarian high schools. By Zsófia Juhász and Péter Kovács Language skills are comparatively poor in Hungarian workforce: Eurostat data reveals that, in the EU, 66% of people in the 25-66 age group speak a second language; in Hungary, the equivalent ratio is only around 37%. AmCham Hungary says it came to the conclusion that the best

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way to deal with this issue is to act early and address those who are still in the language learning process, the future generation of employees: high schoolers. MINISTRY SUPPORT It therefore launched the Language Ambassador Program in 2011, with the support of the Ministry of Human Capacities, to raise

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HR&EDUCATION awareness among students of one of the European Union’s eight key competencies: the importance of communication in foreign languages. During a class, volunteers from AmCham member companies – the Language Ambassadors – pass on an important message to youngsters: that in order to build a successful career, it is absolutely indispensable to speak at least one foreign language (and nowadays the tendency is rather more towards two or three) with proficiency and confidence. “We all found it useful that a person from the world of business came to speak about the actual role and significance of languages at the workplace; it is a lot more credible for us students,” said a student from the Deák Ferenc Gimnázium of Kispest after one such visit. A year after its formation, the Language Ambassador Program received the “CSR Best Practice” award from the Hungarian Public Relations Association. Since 2011, some 250 volunteers from 60 companies have visited 97 schools across the country, reaching 12,000 students.

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STUDENT DIALOGUE As a byproduct, the dialogue with the students also led to the realization that teenagers in general do not know much about what companies do and how businesses work. This lack of information is a major problem for not only the young generations entering the job market, but for companies looking for fresh talent. To address this issue, AmCham decided to expand the Language Ambassador initiative and established the Career Ambassador Program in 2015 with the purpose of providing a deeper insight into the everyday operations of multilingual businesses for high school student groups and giving them the opportunity to utilize their language skills in the process. Since then, more than a dozen AmCham members have hosted more than 500 students from 24 schools. This fall, AmCham is re-evaluating the program, talking to key stakeholders in the process. “After seven years of running a successful educational program, we are ready to take it to a new level to provide valid answers to students and companies. We are very proud of our volunteers and would encourage others to join,” said AmCham CEO, Írisz Lippai-Nagy.

EXPERT OPINION

In Favor of Disadvantages - REDESIGNING In these accelerated, turbulent times, finding a balance between adaptability and an at all times sound, professional approach poses an overwhelmingly complex challenge to companies; utilizing well-established advisors may just mean the difference between win or lose in the world of HR. There is a conspicuous tendency in all areas where individuals i n c re a s i n g l y look for hand made products, homemade or “farmer’s Ákos Jáhny, CEO market” goods. Get Work Trend The same analogy goes for the “products” of the HR industry, the client’s needs in the middle, where off-the-shelf solutions no longer fit perfectly. (In truth, they never did.) Nowadays, it is becoming ever more frequent and natural to involve a professional HR consultant in the day-to-day business processes, as the consultant has the necessary toolkit and know-how, the recipe if you like, that can hugely contribute to achieving business goals and successfully face the challenges of the employment market.

That outsider has the necessary insight for redesigning thoughts, routes and goals, the complex background knowledge and alternative solutions for all kind of pains a client might have. We at Get Work Trend focus on our clients’ real pain points. We aim to define precisely the interconnections of the client’s needs, goals and where any obstacles lie on the route and why. Through that the pain itself is localized and therefore the solution can be long-term and sustainable, rather than just a temporary painkiller. Finding the proper perspective usually requires redesigning the approach as well. We can also buy time through redesigning the general view and approach and thus the working processes, but only if, simultaneously, cooperation with the client is straightforward and nothing but realistic risks are undertaken on the way. Our values, goals and business activity therefore go beyond the average temporary staffing, perm placement and payroll &

HR admin services. We provide unique and all-round solutions to our clients, further supported with employment market analytics and bench mark analysis, controlling and reporting activity, professional labor, and payroll & HR counselling, where the client and the client’’ pain points are front and center. Thanks to our dynamic growth in recent years, we are present at ten locations around Hungary and employ nearly 2,000 colleagues. Additionally, we coordinate the employment of more than 1,000 students and many hundreds of highly skilled professionals – executives, engineers, specialists etc. – were placed through our perm placement activity. We believe that the key to success is professional humbleness, dedication to our clients, embracing change and promoting continuous adaptability and “REDESIGNING”! www.getwork.hu

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CELEBRATING OUR EXPERIENCE HR is a profession for many. For us, it is a passion. We are happy to share it with you. #recruitment #temporary staffing #recruitment process outsourcing #HR outsourcing +36 1 239 9922 | info@job.hu | job.hu

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TRAINING THEIR OWN STAFF: APOLLO LAUNCHES DUAL TRAINING With many companies active in the Hungarian market are openly worried about the labor shortage making it increasingly hard to find the best workforce, Apollo Tyres in Hungary has started training their own personnel, and adopted the German model of offering dual training in the country, the Indian giant tells the Budapest Business Journal. By Christian Keszthelyi The tire manufacturer first appeared on the local market in 2015 when it started its recruitment program to find workers for its greenfield Hungarian plant, the construction of which was announced that year. As with so many other foreign companies hiring in Hungary, Apollo also praises the capabilities of locals. “Our experience with recruitment in Hungary has been good as we have found well-educated and Englishspeaking students,” Kannan Prabhakar, managing director of Apollo Tyres Hungary Ltd., tells the BBJ. “Their preparedness was a positive surprise for us,” he adds. Back in 2015, Apollo did not only make their applicants run multiple

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rounds to prove their professional experience and technical interest, but also cooperated with technical schools in Heves County, making scholarship agreements with fresh graduates, and supporting them with scholarship in their last academic year. Under the framework of that, students participated in a three-month-long theoretical training period – including a 120 hour English language course – and subsequently they went to the Netherlands or India for ten weeks to take part in the practical training. Once back in Hungary, these professionals took their exams to obtain an official “tire manufacturer” OKJ certification. Apollo adopted a similar mindset for people it hired from the labor market pool, and trained them in Gyöngyös (80 km northeast of

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HR&EDUCATION Budapest), where their technicians had a theoretical training course, during which they were also given full board and accommodation. The practical training took place in the Chennai (India) and Enschede (The Netherlands) facilities of the company, where they gathered up-to-date professional knowledge. FUTURE WORKFORCE It did not take long for the company to realize how important it was to train the minds of its future workforce. In November 2015, Apollo Tyres announced it was entering what has largely been a Germandominated dual education system in Hungary. In the fall of 2016, it launched Tyre Manufacturer and Tyre Technician courses at József Attila Technical School in Gyöngyös and at the Eötvös József Protestant Education Center (EJROK) in Heves, two institutions. Apollo says have a long history in the field of technical education.

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and practical knowledge can be acquired by students, which is also “highly appreciated” by other companies in the market too. The Indian company insists that, provided they finish their courses, the school students can hold a “competitive profession in their hands”. “The biggest challenge of the practical training is to provide an attractive and tangible picture for the future to those entering the training, which gives them a motivation for their studies,” Tamás Tarnai, head of human resources and corporate support at Apollo Tyres, tells the BBJ. “Apollo is already a part of their lives; the company offers them a concrete job and a life path. The results of the basic exam also show that we are on a good path, along with the schools,” the HR head adds.

“The biggest challenge of the practical training is to provide an attractive and tangible picture for the future to those entering the training, which gives them a motivation for their studies. Apollo is already a part of their lives; the company offers them a concrete job and a life path. The results of the basic exam also show that we are on a good path, along with the schools.”

Apollo claims that, through its training courses, up-to-date technical

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The tire manufacturer course is a three-year vocational training, in which the students can learn each part of the tire making process: from compound preparation through curing (vulcanization) to quality control. The tire technician, on the other hand, is a four-plus-one-year

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course that gives both a high school diploma and an advanced level vocational qualification. Apollo claims the students gain a wide range of theoretical and practical knowledge of basic materials and manufacturing technologies, which will enable them to implement development tasks and might even become a mid-level leader of a manufacturing unit. IN THEORY AND IN PRACTICE “For us, it is very important that future employees will be aware of all of the points of the factory and for this the Hungarian and the foreign training are essential. Of course, we pay attention to the fact that our new colleagues know the Apollo processes in theory and in practice,” Tarnai adds. Apollo offers financial support for students until the end of their studies, as part of the “student contract” signed in the beginning of the dual education program. Furthermore, Apollo is eyeing the launch of a scholarship program, and as part of this, the best students may receive further financial support. The company also works closely with its partner schools offering tutor and mentor pilot programs. Apollo has also recently made an agreement with the University of Miskolc (180 km northeast of the Hungarian capital). Under the agreement, students of the university have the opportunity to spend time in the Apollo factory in Gyöngyöshalász (close to Gyöngyös). With the industry evolving in the country, the university also plans to launch an engineering major in tire technology and could open opportunities for BSc and MSc engineers. Working closely with the university, Apollo will

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soon offer input for the institution, not only providing practical training places for students, but also providing opportunities in the future to participate in theoretical education and R&D activities, as outlined in the framework contract. GENDER GAP The Indian company is also doing its bit to bridge the gender gap; it has joined the “Girlʼs Day” initiative. The company says that women perform excellently in technological industries, which requiring high accuracy, and can bring fresh and new perspectives to what is a predominantly male industry. Apollo therefore says it is important that it employs more women in its team. At the macro level, Apollo says clearly the biggest challenge is the creation of a skilled workforce in the country. While the education providers are working hard to understand employers’ needs, companies should also work closely with education institutes and together design curricula that fits the business needs, Apollo believes. At the micro level, the company’s aim is always to find the right person for the right job, which will continue to be a challenge for everyone in the industry. “Good employer branding goes a long way in getting the right people for the company. However, creating a good employer brand is a slow and steady process, as it means that the company provides a competitive compensation, spending on training and development of the employees, offering adequate growth within and outside the company, providing a warm and caring work atmosphere,” Tarnai concludes.

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• •

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Prohuman provides jobs for more than

employees Prohuman - The leading HR service provider of Hungary • 15 Prohuman offices across the country • international background as a member of the Work Service Group, the largest HR service provider of the CEE region

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NAVIGATING THE LABOR SHORTAGE, WIZZ AIR INKS UNI PARTNERSHIPS Like many other sectors, commercial aviation is also faced with a labor shortage, both globally and here in the region. In response to that situation, rapidly-growing Wizz Air has just inked cooperation agreements with five major universities in the region on educating flight crew. By Christian Keszthelyi Hungarian low-fare airline Wizz Air, which celebrated its 13th anniversary on May 19, has shown robust growth in its short but active history. While national airlines appear to struggle to stay in business, low-cost carriers seem to be stealing the show. Wizz Air says it has now flown one billion kilometers, the equivalent of circling the Earth 25,000 times, and has carried nearly 135 million passengers. While the airline’s regular public announcements have chiefly been about the addition of another route to its already wide network, on May 9 the carrier announced it had agreed a new partnership with five universities in the region and signed a Letter of Intent on the cooperation with the Budapest University of Technology and Economics, the University of Nyíregyháza (both in Hungary), the State School of Higher

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Education in Chelm (Poland), Vilnius Gediminas Technical University (Lithuania) and the Estonian Aviation Academy. At the signing ceremony, executive vice president and COO Diederik Pen promised that students at the partner universities would be entitled to unique opportunities. PERSONAL TRAINING These include, for instance, personal training with Wizz Air pilots. Students will also be able to join the “Airline Preparation Program” during the last year of their studies, helping them to bridge the gap between the theory and practice of general aviation and airline operations, the airline promises. “Furthermore, Wizz will also offer direct access to the airline’s recruitment process: all students graduating from the respective

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faculties of these institutions, and completing the Airline Pilot Transport Program, will automatically be invited to join the Wizz Air pilot recruitment process. Providing this opportunity, Wizz aims to support the first career steps of the most talented cadets,” József Ujhelyi, chief flight operations officer at Wizz Air tells the Budapest Business Journal. As the company sees it, the cooperation is beneficial for all parties. On the one hand, students get a better understanding of airline operations and are able to launch their career with long-term prospects right after graduation. On the other hand, universities have more to offer to their students, while the cooperation also allows Wizz Air to recruit “ambitious aviation professionals trained at prestigious institutions”, as Ujhelyi puts it. Wizz Air stressed that the principle rationale behind the partnership was to invite universities providing aviation degrees together with Airline Transport Pilot (ATP) certificates. The company added that the location of the universities and their proximity to Wizz Air’s bases were also considered.

“a strong start to FY2018 due to the timing of Easter, which leaves us optimistic for the year ahead and group net profit is currently expected to be in a range between EUR 250 mln and EUR 270 mln in FY2018.” TRAINING CENTER In Hungary, Wizz Air employs more than 1,000 people in flight crew, cabin crew, office and supporting functions. Based on 2016 figures, the airline’s operations support more than 2,800 indirect local jobs this calendar year. Overall, Wizz Air’s team consists of more than 3,300 aviation professionals, the company tells the BBJ. In order to keep its staff’s skill levels up to date, Wizz Air’s training center in Hungary features two simulators: a fixed-base and a fullmotion simulator, both operating at close to full capacity. Having its own simulators gives the airline more flexibility to ensure that its flight crews and cabin crews “receive their training at consistent and rigorously high standards”. It also allows additional scheduling options to continue to meet the training requirements for Wizz Air’s continuous growth, Ujhelyi adds.

The low cost carrier currently has 28 bases, two of which are in Hungary at the international airports of Budapest and Debrecen, and operates a fleet of 83 aircraft flying to more than 140 destinations in 42 countries (data as of July 7). Total revenues of Wizz Air increased by 10% to EUR 1.571 billion in its 2017 financial year, ending on March 31, while IFRS was a record EUR 246.0 million, a 27.5% year-on-year increase.

At the end of June, Wizz Air promised it would further expand Budapest capacity in the upcoming year, with the addition of two new aircraft, two new routes and increased frequency on 13 services. As of the summer of 2018, the airline will be adding a total of 32 weekly flights to its Budapest schedule, growing its seat capacity from the Hungarian capital to more than 5.3 million, which will constitute an increase of 20% year-on-year.

“Growth will continue as a top priority for us and we plan to increase capacity by around 23% and carry nearly 30 million passengers in FY2018,” CEO József Váradi stressed, adding that his company had

In 2016, 3.7 million passengers flew with Wizz Air to and from Hungary, which the airline claims is more than any airline has ever carried on its Hungarian routes, and represents 23% growth year-on-year.

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SPRINGBOARD TO THE SKILLS OF THE FUTURE

Under a recently launched program, local students have the chance to master key soft skills that are not taught at school, yet badly needed by companies. edUcate is dreaming big. By Levente Hörömpöli-Tóth It has long been known that the Hungarian education system excels at equipping students with hard skills, namely lots of factual knowledge and a broad world view. However, future workplaces will require key soft skills, critical thinking and an entrepreneurial mind set as well. Now a brand-new initiative, edUcate strives to close this gap by offering a skill development program in Hungary. It is targeted at those who are just about to dive into their career, namely students who are about to finish, or have just finished, their business studies. “The idea is to create a win-win situation for young job seekers and top companies we make a partnership with,” Dániel Nőthig, co-founder of edUcate tells the Budapest Business Journal. “We provide a platform not only to learn, but we also serve as a matchmaker where corporations can find highly motivated candidates to choose from.” Nőthig himself was confronted first-hand with how badly soft skills are

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needed in today’s fast-paced economy − and how they are taught a lot more efficiently in the United States, during a post-graduate program at Columbia University. However, he found the high costs of the overseas business education model a large minus. “Our purpose was to offer a competitive program that is affordable to the widest possible audience,” he explains. “We wanted to avoid having fees that would repel talent.” Accordingly, a 40-hour so-called springboard course is available for HUF 30,000 that prepares for the specialized master classes meant to help participants further build their strengths. GROWING CORPORATE BACKING The interest is clearly there, not least thanks to an information campaign reaching out to some 70,000 potential applicants with degrees from Hungary’s top economics departments, from Corvinus to CEU. In fact, in February two courses were launched simultaneously due the large number of applications, and a third one began in June. A series of workshops further fueled the demand.

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“We teach core skills that are not covered at universities in Hungary, but which companies are looking for.” “Our tour had many stops, including universities and student organizations such as Budapest Business School, Corvinus, AIESEC, MCC and more where we managed to reach out to hundreds on the spot,” Enikő Hegedűs, also a co-founder adds. The summer boot camps turned out to be equally successful. One of the reasons for this popularity is certainly the ever-growing number of corporate partners. “We have signed several new names for 2017, so KPMG, Microsoft, Vodafone and Coca-Cola are all on board now,” Hegedűs notes. “Many more partnerships are in the negotiation phase as we speak.” More corporate backing generates greater credibility, that in turn attracts more talent. And as companies are more desperate than ever to find talent, it is also in their best interests to be closely associated with programs that could solve their HR problems.

Enikő Hegedűs, co-founder of edUcate.

“We teach core skills that are not covered at universities in Hungary, but which companies are looking for,” Nőthig says. As he highlights, problem solving, project management, feedback provision, team work and public speaking are all expected to be mastered by employees nowadays, whether they be working in consulting, at a startup or in a corporate environment. “Our curriculum is inspired by globally recognized MBAs, which gives students the peace of mind that they have signed up for the right thing,” Nőthig says. Indeed, participating in the program means you can enjoy presentations of top industry experts and get invaluable feedback from a jury of experts on your own solutions. EXPERTS ON BOARD Networking also becomes easier as you can mingle with senior executives of leading global companies or visit those firms. A certificate of completion after the course, in turn, will look great in your résumé if you apply for a job at one of the partner firms or any other leading corporations. More graduates are realizing that they need the personal attention and workshop teaching concept in order to meet employer expectations, while on the employer end demand is fed by several factors. Companies that don’t have a standardized training program to start with can rely on the framework provided by edUcate. But even those that do have their own program might be attracted, as corporate training can be really expensive, especially if they engage big names from the business world.

Dániel Nőthig, co-founder of edUcate.

“We aim to strike a balance here, as we firmly believe that it is possible to remain cost-effective and yet have a line-up of renowned experts,” Nőthig explains

advisory board has been extended by key experts such as Miklós Sárváry, professor at Harvard, Stanford and Columbia Business School, serial entrepreneur and startup accelerator specialist Imre Hild, and Gergely Gacsai, associate partner at McKinsey, to name but a few.

Global influencers, corporate guest speakers, and leading HR professionals are all represented among the teachers, and the

“We are happy about how it has all started, and regional expansion is high on our agenda for the mid-term,” Nőthig concludes.

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MAKING KNOWLEDGE A TOOL, NOT THE GOAL Less theory and more practice in the classroom are key to improving Hungarian students’ reading and problem-solving skills, which have declined in the last few years according to the international comparative PISA survey.

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HR&EDUCATION By Sonja Bencze Since 1997, every three years students aged 15 around the globe sit similar tests that assesses their science, math and reading skills. The results of the Program for International Student Assessment (PISA) are than standardized and ranked. Since 2009, Hungarian students have scored poorly across most area and in 2015 their performance further declined compared to 2012. What accounts for the results is, obviously, the educational system, which has not changed substantially in the past few decades. And while tests like PISA may focus ever more on students’ ability to apply the knowledge they have acquired, teaching has not become any more efficient at improving their competencies. “Although we find the PISA survey and other tests very important, Hungarian students’ competences must improve so that they can better adjust to labor market conditions”, Péter Horváth, chair of the Nemzeti Pedagóguskar (National Pedagogic School) told the Budapest Business Journal. The methodology in Hungary has remained largely unchanged for years; it still places a strong emphasis on theory over practice, knowledge over skills. “Teachers continue to rely heavily on books – this should be changed to make teaching more effective and have students make the most of their time spent in school,” Horváth explains. “Knowledge should be a tool [rather than the aim] of enhancing students’ problem-solving skills, helping reading become understanding, writing become content-creating.” Similarly, ICT and language skills are supposed to be developed to be used in classes, and not the aim of learning, he added. ENORMOUS CONTENT The content element of Hungarian education is so enormous that the majority of teachers focus on conveying that. This leaves little time for practice, individual work, skills training – all of which could help convert knowledge into applicable skills. “The [national] curriculum needs to be changed in a way that a student of mediocre abilities could acquire it using 60-75% of the teaching time,” Horváth says. The more talented should also be given a chance to master their skills – it is no use teaching the same material to students applying to the university of medicine and those aiming to become a technician. Nemzeti Pedagóguskar believes it would be useful if students did an exam at 10th grade and specialized afterwards. The difference between schools may be marked, but within schools they are subtler, so more homogenous study groups could actually be easier to create. The pace of teaching should be adjusted to the needs of the class/ school, which assumes more freedom for teachers, adequate time and much higher quality professional training. Although teachers are required to participate in professional development every seven years, schools are barely given funds to finance this. As a result, most end up attending free courses often irrelevant to their disciples. The same applies to equipment. Digital logbooks, smart blackboards and the like are becoming ever more widespread in the eider world, but most schools lack them.

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ONE OF MANY The PISA results are just one of the many considerations the new national curriculum, currently under creation, will take into account. “When devising the new national curriculum (NAT), the results of the PISA survey will be taken into consideration, together with other indicators and competency test results. That is, the PISA survey results will be only one of the several other data to be considered,” the Ministry of Human Resources (EMMI, whose remit includes education) wrote in response to a question from the BBJ. The national curriculum is basically a regulation, EMMI said. The ministry has a preparatory, developing role which can result in the creation of a complex set of proposals on every element of the curriculum such as the basic principles, aims, tasks, content and competencies to develop. NAT describes the duties and theoretical content of education, along with the principles and procedures of education, but not the teaching methods used to create the applicable knowledge (which PISA surveys test via a digital platform), EMMI said. NAT’s impact on the domains tested by PISA, such as applicable knowledge and competencies in use, is indirect. Still, by pairing general, specific and transversal competencies and content and by increasing the time to be used freely [in class], progress may be made. The improvement of results is linked to teachers’ knowledge of content and methodology, competence and autonomy. All of these depend a great deal on teachers’ professional and further training. Of equal importance is the content and quality of books, the availability of state-of-the-art methods and the fulfillment of the goals set by the digital education strategy, including the development started by the Digital Teaching Methodology Center, the ministry wrote. “It is important to emphasize, however, that one of the most important areas is the definition of creating and constantly improving solid basic skills (such as reading, reading comprehension and interpretation), and also the clear definition of the content and competency requirements of ‘learning [how] to learn’.”

Run by the OECD, the Program for International Student Assessment (PISA) was launched in 1997 and it is repeated every three years. The latest, sixth comparative data collection was made in 2015. The PISA average is around 490 points. With 472 points, Hungary ranked 38th in 2015, behind countries like Poland (19th) Slovenia (11th) and Estonia (fifth). Hungary’s scores have been dropping since 2009 (496), and were 487 in 2012. According to the PISA website (oecd.org/pisa), in 2015, more than half a million students, representing 28 million 15-year-olds in 72 countries and economies, took the internationally agreed two-hour test. Students were assessed in science, mathematics, reading, collaborative problem solving and financial literacy. The results of the 2015 assessment were published on December 6, 2016.

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FOR HUNGARY’S ROMA, BRIDGING THE EDUCATION DIVIDE MUST START YOUNG It is almost a cliché that the most direct way out of poverty lies through education. Yet, when looking at the schooling figures of Hungary’s most populous and poorest ethnic grouping, the Roma, the possibilities for leaving the social periphery seem unclear. By Ágnes Vinkovits The Roma are by far the biggest ethnic group in Hungary; their exact proportion of the overall society can be only be roughly guessed, however. While the government estimates their number to be between 700,000 and 1 million, which means about 7-10% of the Hungarian population, the European Roma Rights Center’s approximation of 800,000 -1 million (8-10%) is somewhat higher. Yet, in the last population census in 2011 only 315,583 people (3.2%) identified themselves as Roma. It might be reasoned that the majority of Hungarian Roma would rather withhold their ethnicity as a result of their full assimilation or by a successful social integration that has made ethnical origins less important throughout the decades. But that would seem wildly optimistic; when looking at the statistical figures for Roma education and welfare, it seems more likely that being a Roma still feels like a serious disadvantage in Hungary.

For Hungary’s Roma, a brighter future means a more complete, better education, from kindergarten onwards.

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The Roma are generally considered as the social group that lost most during the change of regime in the early 1990s. Most sociologists and historians agree that a combination of Hungarian society’s historically low capacity to integrate ethnic groups and the Roma’s traditional nomadic lifestyle, which more or less forced them to maintain themselves as craftsmen or entertainers, contributed to the Roma population’s low education rates down the ages.

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HR&EDUCATION HARD TO REINVENT As such, with the breakdown of full employment after the collapse of the command economy, most Roma found it very hard to reinvent themselves in the restructured economy, and from the early ’90s onwards have ever more rapidly and visibly fallen into long-term unemployment and so to the periphery of the society than ever before. Hungarian statistics – as with so much of the rest of the world – prove that the higher someone is educated, the easier it is for them to find a job and stay employed. Accordingly, experts concur that the most important tool for the social integration of the Roma should be education. The figures here, however, are unpromising. Unlike that of the Hungarian non-Roma majority, the Roma population pyramid is young, according to sociologist István Kemény: about 30-33% of Hungarian Roma are under 16 and so of school-age, and another 43% is between 15-39. Although the proportion of Roma and non-Roma children attending kindergartens are basically the same on a countrywide scale (68% and 69% respectively), a survey by sociologist Dr. Kinga Szabó-Tóth revealed that as many as two-thirds of the villages in the less developed regions such as Borsod-Abaúj-Zemplén County (where the proportion of Roma to Magyar is higher anyway) do not have kindergartens. As poor families commonly have difficulties in travelling to other villages on a daily basis, Roma kids often tend to spend long weeks on sick-leave. Experts warn that this phenomenon could not be altered even by the government’s 2014 initiative that reduced the age limit of obligatory kindergarten to the age of three from the previous five. SOCIALIZATION BRIDGE Since educational specialists say that kindergarten is an important socialization bridge to elementary school and teaches skills that are later essential for a successful education, this tendency is far from helpful. While bigger cities might do better than the national average in this sense, kindergartens are often unavailable for Roma kids exactly in the areas where they are most needed.

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When it comes to the proportion of kids starting elementary school, Roma still have similar figures to non-Roma (94% and 97%, respectively). However, there are soon big differences in performance. According to the data of the Central Statistical Office (KSH), 23% of Roma above the age of 15 have not even finished elementary school, let alone secondary school. As a general tendency, the experts warn, 10% of Roma attending elementary schools today are likely to drop out before completing it. Ironically, according to Richárd Kispál, a Phd student in Ethnic politics, these figures are better than those from before the change of regime. Troublesome tendencies appear more obviously at the level of secondary education. While 85% of the non-Roma in the age group of 16-19 attend high school, this proportion drops to around only 58% among Roma. Moreover, a detailed survey on the class who were born in 1991, conducted by social research institute Tárki in 2014, revealed that while only 9% of non-Roma were likely fall out of high school or finish it without graduation, almost half of the Roma youngsters (48%) were predicted to start their adult life with just this severe disadvantage. Tárki’s survey also pointed out that, today, only 18% of Hungary’s entire Roma population has a high school diploma. While prior to the change of regime it was basically impossible for a Roma student to enroll a college or a university, there is some advance in this. Still, while almost every second non-Roma youngster goes to higher education by the age of 20-21, only every fifth Roma does so. Most experts suggest that the roots of the low level of successfully completed secondary education among the Roma lie in the lack of basic skills that elementary education provides them. That, the experts go on to say, suggests the phenomenon has a lot to do with school segregation. The Budapest Business Journal asked the Ministry of Human Resources, the super ministry whose remit includes education, to comment on this opinion and its strategy, but it had declined to do so by the time this publication went to print.

School qualifications of the Roma population above the age of 15 100% 90% 80%

5 17

5 10

70%

Secondary school with professional certificate, but without high school diploma

60% 50% 40%

59

0%

56 Elementary school:

30% 20% 10%

Secondary school with high school diploma

19

27

Male

Female

Less than 8 grades

Source: Central Statistical Office, 2011 population census

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