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CONTENTS INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Bridging the disconnect between educational attainment and commercial needs . . . . . . . . . . . . 6 Key to Success: Flexibility, Responsivity, and Building Strategic Alliances . . . . . . . . . . . . . . . . . . 10 Workplace Trends Highlight Importance of Healthy Hungarian Offices . . . . . . . . . . . . . . . . . . . . . 12 Millennium Gardens: An Astonishing Location on the Danube . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Increased Participation Rate, Returning Expats to Ease Labor Shortages, Says Colliers Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Building a Brand Without Main Street . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Advent of Automation and Digitization Demands Practicality From Education . . . . . . . . . . . . . . 34 Making a success of health and wellbeing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Help For The Homeless Could Ease The Labor Shortage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 HR meets WELL designed workplaces: Enhancing the employee experience through healthy buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Need for Skilled Labor in Real Estate and Construction Industries . . . . . . . . . . . . . . . . . . . . . . . . 48
HR&EDUCATION | A BUDAPEST BUSINESS JOURNAL PUBLICATION BBJ Editor-in-chief: Robin Marshall • Editorial: Kester Eddy, David Holzer, Christian Keszthelyi, Robin Marshall, Gary J. Morrell, Ágnes Vinkovits • Sales: Csilla Lengyel, Bernadette Oláh, Erika Törsök • Layout: Zsolt Pataki • 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
INTRODUCTION Building the Academia-Industrial Complex I have always held education in high esteem; although I never had much interest in becoming a teacher, my brother carried on a family tradition so deeply entrenched that my nephew has become certainly the fifth (and possible the sixth) generation of the Marshall family to take up the profession. When my father â&#x20AC;&#x201C; who apart from a period in the British Army doing his National Service had been a teacher all his professional life, most of it as a headmaster â&#x20AC;&#x201C; took early
retirement, it was partly because the regulations around education were in a near constant state of flux; he felt he was spending more time keeping up with the latest legislation and regulation than he was concentrating on running and developing his school. I mention this because it feels like Hungarian education is going through something similar right now. And the truth of the matter is that, viewed from the perspective of the business world, it needs to.
There are two drivers for educational change right now. The first is the dire need for useable workforce. No matter what sector you look at, there are shortfalls. This is not the fault of the education system, but the result of a booming economy, and record low unemployment. It is, as government ministers like to remind us, a good problem to have. There are some reserves in the potential-working population, as this publication examines, but they are finite. It seems unlikely
that the labor market will get any less tight any time soon. And in the meantime, there are an estimated 40,000 IT positions open, to name just one field. Businesses and organizations such as the various chambers of commerce have long been asking the schools and universities to turn out more students with a STEM (science, technology, engineering and math) background. Increasingly, major employers are getting involved with developing the curricula of local universities and even schools, and in the case of many of the auto or major component makers, even running their own Dual Education programs. That aims to get around another problem with the graduates produced by Hungarian education: a preponderance towards theory and
facts, and a scarcity of soft skills and practical education. The second force at play in Hungarian education – and, indeed, education across the world – is a need to future proof pupils, at least as much as you can. My children already inhabit a vastly more digital world than that which existed when I was going through the school system (though my eldest daughter’s insistence that we must, surely, have used clay tablets back then overstretches things a little) and first joining the heroic world of work. Being so-called digital natives, the latest generations, mine included, have taken quite happily to it, but the system needs to give them a mix of skills – soft skills, creativity, team work and problem solving alongside digital competence – to enable them to find value added jobs that won’t be automated.
Ever since President Dwight D. Eisenhower first referred to the military-industrial complex in his farewell address on January 17, 1961, it has existed as a negative, even sinister term. What we need now is a more positive academia-industrial complex. Here in Hungary there are signs of academia, government, and industry coming together, not least through programs run by the American and German chambers of commerce. It is by working hand-in-hand that the education system can best turn out well rounded individuals for HR departments to hire, ready and able to take up the most challenging and rewarding of careers. And it needs to be happening now. Robin Marshall Editor-in-chief Budapest Business Journal
BRIDGING THE DISCONNECT BETWEEN EDUCATIONAL ATTAINMENT AND COMMERCIAL NEEDS A survey of business leaders reveals the commercial world needs more “autonomous, entrepreneurial” graduates capable of taking the initiative, just as government policy is downplaying the role and need for ‘soft-skills’ in education, says Sándor Takács, head of the Department of Organizational Behavior, Institute of Management, at Corvinus University, Budapest.
Natasha Gjorevska, a PhD candidate and lecturer at Corvinus University (far left) and Sándor Takács, head of the Department of Organizational Behavior, Institute of Management, at Corvinus University (near left).
By Kester Eddy Hungarian businesses need graduates who are “self-initiating, autonomous, entrepreneurial … with problems solving skills”, but the schooling system is falling short, leaving universities with the job of changing students’ capabilities, Takács told a conference at the IEDC Bled School of Management, Slovenia, in June. “At the university, we are receiving people produced by an educational system that is not really following these principles. We try to change them, to convince them that they can be creative, initiating and entrepreneurial. Of course, there are [exceptions], but these are not the big masses in our experience,” he said, adding that undergraduates also require training in problem solving, team work and practical project work. The deficiency means “higher-level executives […] have the feeling that universities and business are working on two different tracks. We are not really approaching each other,” he said. Takács was speaking after leading the Hungarian section of an “exploratory study” to assess the management development needs
“In the classroom, I include topics that I find relevant [such as] the stakeholder approach and ethics, and I see that many students are surprised, because they don’t hear about these issues often enough in business schools.” across Central and Eastern Europe. In the study – part of the so-called “Lead4Skills” project, sponsored by the European Union’s Erasmus+ Program – university and business school researchers quizzed corporate executives on their professional needs and concerns. In all, some 145 companies in 11 countries from the Baltic states and Poland to Slovenia and Croatia took part in the project. (The cross-country report on the study is expected to be published on lead4skills.ceeman.org shortly.) GREATER AWARENESS NEEDED While other conference participants were more muted in criticism of their respective school systems, most reported that executives emphasized the need for greater awareness of “soft” or “people” skills, such as how
to work in teams, motivate staff and understand ethical values. “In the case of Poland, soft-skills was one of the most mentioned challenges [by respondents], especially in the context of young people versus more experienced employees. Young people have different needs: they require a different work-life balance,” said Anna Gorska, of Kozminski University, Warsaw. Yet in contrast to this, the Polish government is cutting spending on social science teaching. “It’s very visible right now, because social science and humanities programs are going to be closed all over Poland, and there is going to be a greater emphasis on [...] hard skills,” Gorska said.
STUDY PROMOTES MANAGEMENT REFLECTION ON REPRESSED ISSUES One of the unforeseen outcomes of conducting the manager study in Hungary was the almost therapeutic effects on company leaders, who, having allocated time away from the immediate needs of decision making, found themselves pondering more intractable issues with the interviewees, Sándor Takács said. “Doing the interviews and talking to senior executives was also really helpful for them to focus on issues that they are somehow aware of, but they rarely think about, [such as] business challenges, organizational challenges, and the needs for new talent and new professionals coming into their business,” professor Takács observed. The interviews, typically lasting 90 minutes “were really useful for them to find things that were below the surface, not so obvious”. In some cases, Takács felt that executives had suppressed concerns they were unable to deal with, possibly in part
The situation is similar in Hungary, where, as Takács put it: “Our government thinks that technical competences are more critical, and that’s why research money, and financing [is being] withdrawn from business education and legal education. At the masters’ level, it’s clearly visible.” SOFT SKILLS AND ETHICS Today’s students certainly respond positively to discussions on soft-skills and subjects such as the role of ethics in business, says Natasha Gjorevska, a PhD candidate and lecturer at
because they have to maintain the image of decisive, knowledgeable leader. “Sometimes they even had to admit there are issues and problems in the world and they don’t know the answers to. They feel ambiguous or in difficulty, but they have to show and screen out those feelings for the organization; that’s their role [they feel].” COACHING SESSION In some cases, the interview became more of a “consulting or coaching” session than a purely academic question and answer. Moreover, even if they were unable to solve these more repressed issues at the time, managers still realized they could not delay making decisions ad infinitum. “They discovered that talking to higher education [faculty] was a positive advantage,” Takács argued. “At the university level this [kind of] conversation is not happening enough. We need more such talks.”
Corvinus University, who assisted in the Hungarian study. “In the classroom, I include topics that I find relevant [such as] the stakeholder approach and ethics, and I see that many students are surprised, because they don’t hear about these issues often enough in business schools,” she told the conference. Gjorevska, who teaches both Hungarian and international students, says their response is invariably positive, generating appreciative emails.
Yet somewhat perversely, these same students appear skeptical, if not cynical, as to whether such topics will enhance their personal career prospects. “During class, one student asked: ‘How will this help me to get a job?’ So, you can tell they are saying okay, this is nice, I like it, but business [will not value it],” she said. Regardless of whether current students value soft skills, an enhanced sensitivity towards
“At the university, we are receiving people produced by an educational system that is not really following these [soft skills] principles. We try to change them, to convince them that they can be creative, initiating and entrepreneurial. Of course, there are [exceptions], but these are not the big masses in our experience.”
employee needs is essential for business managers if they are to recruit and retain newcomers to the jobs market, Takács argues. “The Z generation just entering the labor market are really different. They don’t want to work in a stone office: they are living in a virtual reality. The older generations are not living in that environment, and it’s very, very difficult to meet this generational gap, to meet each other’s worlds,” he said.
KEY TO SUCCESS: FLEXIBILITY, RESPONSIVITY, AND BUILDING STRATEGIC ALLIANCES HumanField has been on Hungary’s executive recruitment market and the sharp-edged labor market seems to serve as a good basis for the company’s further growth. Dr. Patrik Molontay, the managing director of the country’s biggest Hungarian-owned headhunter office tells the Budapest Business Journal the background of its intense development, what companies should do to ensure successful recruitment and also what top managers miss the most. By Ágnes Vinkovits You have degrees in economics and law, and started your career at a Big Four-company as a transfer pricing consultant. How did you finally end up in HR, more specifically in the headhunting business? Patrik Molontay: Honestly, it was a complete coincidence that I applied here as a junior HR consultatnt six years ago. I fell in love with the industry immediately and the manager at that time also saw the potential in me right at the interview. So I started from the very bottom of the stairs, taking one huge step after another, burning the candle at both ends because this profession and HumanField has become my passion. For example, I haven’t had a day-off since last June and I worked throughout all the weekends in the first half of the year. I believe that our results prove that it was worth it. You became the managing director in January. Do you think good leadership is learnable? PM: All competencies can be strengthened through training or books but, to my mind, abilities and attitude count much more. Still, I often see that our clients are still more focused on finding someone who has applied
exactly the same technology in exactly the same industry than choosing a motivated and talented person with a bit of a different background. Sadly, abilities are often underrated. It is time to overcome this approach since motivation – as you can see in my example – can bring you anywhere. Are companies not becoming less picky, given the current workforce situation? PM: Even though companies try to adapt to the new situation, this process seems to go slowly, not to say, ponderously. Many businesses still try to apply recruitment methods from three, five or ten years ago, unsurprisingly with less and less success. Those companies who consider headhunters as a strategic partner, instead of looking at them as an improved job website, can fill their open positions with good candidates. We are there to catalyze the entire recruitment process through our advice about how to optimize the process, how to reframe the profile in order to make it matchable, or how to get expectations closer to market realities. We see that those companies who are open to this type of close cooperation can get good candidates quickly even in the current, very difficult labor market.
So, do clients usually turn to you right after opening the position? PM: I can say that more and more companies realize that losing time means losing profit, so they call us in the first place. Fortunately, we are rich in satisfied past clients who keep recommending us and so HumanField could become a strong brand. HumanField has been on the market for 12 years. What were the milestones? PM: It might look immodest, but I think my arrival at the company and then soon becoming an operative and strategic manager was a milestone. I created a brand new methodology while also insisting on working only with the best professionals. The numbers proved the changes: our 2012 revenue at HUF 50 million climbed up to HUF 130 mln by 2014, reached HUF 300 mln last year and is expected to go beyond HUF 500 mln this year. Our intense growth is also rooted in the fact that, as a Hungarian company, we can react to market changes in a much more flexible way than a multinational company that needs international approval to change its standards. In today’s market, what was true yesterday is fully outdated today. You have to be very quick.
HR&EDUCATION What are the new trends in executive search? PM: In several industries, the labor shortage already affects the top managers’ level too, which requires more effort from headhunters. As I said, our support is needed throughout the entire process and it is equally essential that we build a trusting relationship – not only with the companies but also with the candidates –, maintain permanent communication and give feedback in both directions. It is noteworthy that both clients and candidates are more honest with us than with each other, so if there is any minor thorn in the flesh for either party, we can act like a mediator. Communication misunderstandings can occur at any time, and it is our task to help with these. If a top executive is unsatisfied at their work place, and so becomes available for you, what is the most common reason? PM: I think it is a general problem on both executive and employee levels that people do not get feedback about their work. It might sound strange, but even a top manager needs their regional manager, for instance, to appreciate their results and draw attention to what could possibly be improved. Still, in the everyday rush and under the compulsion over productivity, even those people who themselves suffer from the lack of response often forget to give feedback. It is often hard to break patterns. PM: A closed mouth doesn’t get fed; that is even truer in a work environment. A good boss has to be able to articulate their expectations, because success depends on very tiny things. Another thing I see is that, no matter how well a manager is paid, if they do not have the independence of decision-making they feel comfortable with, they are often ready to make a step back regarding their salary to get this freedom somewhere else.
Dr. Patrik Molontay
Leaders prefer to have a heavy word in professional issues instead of working under unnecessary bonds. In an earlier interview, you mentioned that in HR you can find very good and very bad service providers. How is it possible that the market is not clearing? PM: This service should never be given through tenders, since in that case people mostly focus only on the price, an approach that shows its disadvantages already in the medium-term. We do not produce candidates but we find them, therefore productivity is not easily measurable. Of course, you can measure the time needed to find the candidates, the size of the pool the clients can pick from or the success rate of the new colleagues provided by us, but all these indexes
are quite intangible and often depend on the company’s openness too. So, since accurate comparisons are not possible, HR companies providing poorer services can also survive for a while, or even return later under a different name. This is why it is so important to go for good brands instead of a seemingly low price. It has to be accepted that this is an expensive service, but companies can save much more with good-quality headhunters because they do not lose huge profits via vacant positions or bad choices.
WORKPLACE TRENDS HIGHLIGHT IMPORTANCE OF HEALTHY HUNGARIAN OFFICES Thereâ&#x20AC;&#x2122;s been a major move back to the office this year, according to business pundits. This suggests that prioritizing work in offices and workspaces over remote working is going to become even more important in future.
Zsuzsanna Emri is the Director of Human Resources for KPMG (far left) and Éva Bresztyenszky, human capital leader at PwC Hungary (near left).
By David Holzer For the past few years, remote working has been promoted as the trend of the future. It’s been romanticized and mythologized to the point where most of us define working heaven as being able to sit outside a café on a sunny day, sipping a glutenfree latte while tapping away on our laptops. Or working from home in our underwear all day long, occasionally putting on a smart top to take part in a video meeting. This trend is set to continue. An Upwork Future Workforce Report quoted in a Fastcompany.com article earlier this year found that U.S. hiring managers expected “up to 38% of their full-time staff to be working remotely in the next decade”. But, although this may well turn out to be true, the number one workplace trend this year, according to a February 2018 article on Forbes. com, is that “companies will continue to promote their workspaces and design them to facilitate interpersonal relationships between employees”. It seems we simply can’t do without offices or shared workspaces of some kind or other.
“In Hungary, especially in Budapest, the trend towards healthy workplace environments is well underway. Newly built offices in particular are being designed to provide much healthier physical workspaces. Many companies have realized that the wellbeing of their employees is critically important because of the impact it has on their productivity and the bottom line.” Remember when Yahoo CEO Melissa Mayer banned all her 12,000 employees from working at home back in 2013? So-called visionary business thinkers of the caliber of Richard Branson queued up to tell her she’d made what online magazine Slate.com called “a terrible mistake”. Forbes.com even suggested Mayer was taking Yahoo back to the stone age. But Mayer proved her critics wrong. ‘ENGAGEMENT IS UP’ Just a few months after Mayer made the much-maligned decision, Yahoo’s senior director of real estate and workplace Julie Ford-Tempesta was
reporting that “employee engagement is up, product launches have increased significantly, and agile teams are thriving. The workplace has become a catalyst for energy and buzz.” This is, of course, only what offices are meant to be, but all too often aren’t. Looking back on Mayer’s decision, it seems that she was simply more nimble than other CEOs. In the wake of the Yahoo return to the office, more business giants have gone on to do exactly the same thing. Chief among them is IBM which, in late 2017, stopped its remote-working program for thousands of employees and sent them back to the office.
“They [Gen-Zers] want to be part of a work environment that aligns with their culture and values, which puts a premium on health, wellbeing and community.”
Why, in the face of all the advantages of remote working for employers and employees alike, are the smartest companies rethinking their relationship with the workspace? It all comes down to the fact that, as a Huffington Post article pointed out, “People are the most valuable resources of an organization, typically accounting for 90% of business operating costs, so even a 1% rise in productivity can have a major impact on the bottom line and competitiveness of any business.” Companies that have sent their employees back to the office know
that human contact in physical environments leads to greater productivity. To give just one example, research carried out by Mahdi Roghanizad and Vaness K. Bohns and published in the Journal of Experimental Social Psychology found that “one face-to-face conversation is the equivalent to 34 emails”. OFFICES AND SECURITY It isn’t just older employees, who could be accused of being stuck in their ways, who prefer information rich face-to-face contact. Millennials and Gen Zers – the generation born after 1997 – are exactly
the same. They would rather work in a corporate office than telecommute. In the case of Gen Z, this may well be because they associate offices with security. All the signs are that they’re far more realistic about their finances than millennials because they grew up in the global financial crisis. But, as American architect Ray Warner points out in an interview with U.S. magazine Commercial Property Executive, “They want to be part of a work environment that aligns with their culture and values, which puts a premium on health, wellbeing and community.” Another intriguing reason why people prefer to work in offices comes down to the power of touch. In an office, you can count on some kind of interpersonal contact. When we touch each other by shaking hands, slapping each other on the back or high fiving, we release oxytocin. Continued on page 16 ► ► ►
HUNGARY’S LEADING HR SERVICE PROVIDER BELIEVES THAT THE LABOUR MARKET STILL HAS RESERVES Csongor Juhász, the head of Prohuman work service company ensuring the placement of nearly 10,000 employees yearly, believes that the labour market has some more reserves. He thinks, brand-new solutions may reduce labour shortage in industry and manufacturing. Their results are impressive as they have recently transferred approximately 3,000 public workers to the production sector.
They say that in almost every business segment there is a lack of professionals. There are not enough doctors, IT specialists, bricklayers and factory workers. What do you think about the labour market in the country? Regarding only the figures, I cannot share any novelties with you. Based on the most recent data for the second quarter of 2018 published by the Hungarian Central Statistical Office, the labour shortage has broken another historical record in Hungary: employers could not find employees to fill 83,600 advertised positions between April and July; this indicates an increase of 27% over a year. However, this does not mean that there are no more reserves in the labour market. As for me, in some segments – primarily in the production industries – there are certain effective methods that may partially solve the problem of critical labour shortage. All things considered, I am optimistic despite the alarming statistics. What fuels your optimism? Of course, I am not saying that there will be more IT specialists, doctors, drivers
or plumbers in Hungary all of a sudden. However, we can observe that for example the fields of industry and administration have some potential. At the same time, it is also true that in order to exploit such static potential, HR specialists and companies have to demonstrate substantial improvement, provide different solutions and, in certain aspects, change their way of thinking. What do you mean exactly? Today it is generally true that it is not the employees who are competing for a position in the majority of cases, but rather the opposite: companies are competing with each other to attract and retain the workforce. If you will, nowadays it may be more effective to resort to the approach of “thank you for applying to us” instead of the attitude of “thank you for calling me for an interview”. We have to make significantly more effort to find an employee for a given position. The traditional recruitment methods are no longer sufficient. New and fresh methods are required that are more creative than they have ever been. If I understand correctly, you have introduced new methods to be able to keep up with the increasing staffing needs of your clients. What is your secret? Which areas have you changed? We realised in time – maybe I can even say that even some time before anyone else did – that we had to find other ways of recruitment. Fortunately, the ways we chose have led us in the right direction. In the last few years Prohuman has conducted a more thorough recruitment process and, using various tools, acquired access to those places which had not been included in the company’s palette earlier. In addition, it is not only visiting and being present in several settlements that have been excluded from the labour market so far, but also endeavouring to help the local people understand better the job offers. We tried to advertise and demonstrate a position so that it has a real message and is easy to understand. As a result, we have already managed to transfer approximately 3,000 public workers to the world of work. We helped them to fill positions with higher payments that are also much more meaningful for the national economy. How can a public worker be transferred to companies in the market?
I do not say that every public service worker is suitable for or willing to work for an industrial company, but many of them are happy to be employed by market participants. We primarily aim at facilitating their decision-making. We have observed that if we visit the employees, address them “in their own language” and provide them with quality transport services, many of them are willing to engage in permanent employment even far from their place of residence. So, if the mountain will not come to Mohammed…? It is a fact that in order to achieve success we had to tackle the transportation-related obstacles of attending work. Therefore, Prohuman – in cooperation with its clients – operates more than 200 own bus lines and provides travel opportunities for 4,000 employees daily between their place of residence and workplace. We encourage employees to work willingly in distant places by offering them convenient bus services adjusted to their needs and schedules. We also try to make their bus travel more comfortable by offering them refreshing beverages and free Wi-Fi is available on most bus lines. It is also typical for the factories and companies to coordinate the start of shifts after consulting with the employees to make attending work more convenient. In cases where the place of residence and the workplace are at different ends of the country and using the bus service is not an option, it is more and more common to organise quality accommodation programmes or offer rented housing in cooperation with the client companies. How much does the Hungarian labour market still have in reserve? It is hard to say exact numbers, but in my opinion there may be several thousand people both within the country and abroad who may be involved in various segments of the labour market over the following years. The success rate depends on many factors, but we will be working harder and more creatively than ever to find the professionals requested by our clients. As for us, we will do our best…
Juhász Csongor ügyvezető igazgató
“Employee health must be an integral part of any HR strategy, beyond just meeting legal requirements. I personally give it a very high priority.”
Sometimes called the “cuddle chemical”, oxytocin promotes the feelings of attachment and trust that make us enjoy collaboration. The more oxytocin that’s triggered, the more we want. Now that business has been reminded we’re all human and that working in the same physical space as each other makes sense, the workspace is being reimagined. And, although this is being presented as an appeal to those highly desirable millennial and Gen Z employees, it also makes sound business sense. Take Google’s on-campus cafes and micro-kitchens. Cynics would suggest that offering employees free food is a great way to keep them at work longer. But the real reason, as Laszlo Bock, Senior Vice President of People Operations explains in “Work Rules: Insights from Inside Google That Will Transform How You Live and Lead”, is far smarter. AMAZING IDEAS Google’s watering holes are strategically placed between two separate work teams. This is intended to create the conditions where people can potentially fall into conversation, collaborate and perhaps come up with amazing ideas. Offering healthy food and drink is only one way Google is transforming life at work. The company also pioneered introducing aspects of mindfulness into the workspace. When Chade-Meng Tan was made the company’s Jolly Good Fellow, the more cynical sectors of the
business world sneered but, as ever, Google was ahead of the curve. Chade-Meng Tan announced that his job was to “enlighten minds, open hearts, create world peace”. He was inspired to make Google a happier place through meditation by the example of Matthieu Ricard, the author of books that include “The Quantum and the Lotus” and a Buddhist monk. In a Google Tech Talk in 2007, Ricard suggested that changing your mind through meditation can change your brain. Ricard gained a degree in molecular genetics so we can assume he knows what he’s talking about. Increasingly, science and the business world is accepting that Ricard is right. Mindfulness does change your brain. A study by Johns Hopkins University “showed that mindfulness meditation reduces symptoms of depression, anxiety and pain, equal to or greater than the effect of an antidepressant”. Today, more and more companies are appointing Chief Happiness Officers. As the name suggests, a CHO’s job is to make sure employees are happy. Because happy employees are more productive. I wondered how companies in Hungary were responding to this emphasis on promoting employee wellbeing. Rather than chat with funky media companies or switched-on, groovy hi-tech people who I’d assume to be on-trend, I talked to representatives of audit, tax and advisory giant KPMG and multinational professional services network PricewaterhouseCoopers.
KPMG Zsuzsanna Emri is the Director of Human Resources for KPMG. She is convinced that “Employee health must be an integral part of any HR strategy, beyond just meeting legal requirements. I personally give it a very high priority.” As a responsible company, KPMG gives a good deal of thought to creating healthy office spaces and helping employees stay fit and well. When it comes to meeting health, environment and other standards, the KPMG office in Budapest is categorized as “A+”. The company supports corporate sports teams and invites employees
to take part in running and rowing competitions that happen several times a year. It also takes employee health very seriously, offering free screenings on its annual Health Day and providing various diagnostic, preventive and specialist examinations. This proactive approach to employee health appears to be working. As Emri explains, “People appreciate our various programs and are keen to take part. We’re seeing a general improvement in health consciousness.” In line with trends worldwide, employee health and maintaining a good work-life balance are part of
KPMG’s brand values, both externally and internally. “Working in a modern, healthy workplace is high on the priority list of candidates,” Emri says. The company’s annual People Survey also addresses “Well-Being” as well as “Work Environment and Enablement”. These are part of 11 engagement strategies designed to attract and keep the best people. PWC For Éva Bresztyenszky, human capital leader at PwC Hungary, “In Hungary, especially in Budapest, the trend towards healthy workplace environments is well underway. Newly built offices in particular are
being designed to provide much healthier physical workspaces. Many companies have realized that the wellbeing of their employees is critically important because of the impact it has on their productivity and the bottom line.” PwC Hungary itself has a long, impressive history of taking measures to help employees stay healthy. “We pay lots of attention to the physical space,” Bresztyenszky says, “making it comfortable, ergonomic and, of course, a very safe place in which to work.” As far as employee health in general is concerned, PwC prides itself on being
“People are the most valuable resources of an organization, typically accounting for 90% of business operating costs, so even a 1% rise in productivity can have a major impact on the bottom line and competitiveness of any business.” enlightened and forward-thinking. Bresztyenszky adds, “We have a company doctor, ophthalmologist and masseuse. There are regular health check-ups that are very popular. To encourage employees to stay healthy, we have a weekly fruit day. When we order catering for any activities, we really try to consider healthier options.” Sports are also a key part of the PwC corporate culture. As Bresztyensky explains, “We believe sports should be part of a balanced lifestyle. We support all kinds of sporting opportunities for our employees. These include Pilates and yoga in the office, sports club memberships, inhouse soccer and volleyball. Every year we organize a corporate sports day where our employees can take part in individual, relay and team competitions. Employees can also buy discounted Bubi passes for the Budapest public bicycle fleet.” Looking to the future, Bresztyensky believes that there’s no question that employee wellbeing and the need for healthy offices will become even more important. “What we see,” she says, “is that the younger generation is much more conscious of the need to live a healthy lifestyle. We’ve recognized that a company’s approach to offering and maintaining healthy working conditions is also a differentiating factor when recent graduates are deciding where they’d like to work. Our experienced employees have also become more aware of the need to stay fit and be able to
revitalize at work. They appreciate it if an employer makes an effort.” At this point, if you’re an employer, you might be saying to yourself: “It’s all very well for people like KPMG or PwC to offer all these great perks but I don’t know where to start when it comes to helping my employees stay healthy. In any case, I’m not sure if I have the money.” But, as I’ve discovered, improving workspaces and employee health doesn’t have to involve vast sums of money. You simply have to want to make a positive change. THE HEALTHY OFFICE REVOLUTION I’m the co-author of a book called “The Healthy Office Revolution: a true story of burnout, a wakeup call and better working through science”. THOR, as my co-author Elizabeth Nelson and I call it, begins by telling the story of how Nelson burned out. The second part of the book details a remarkable research project she carried out in the Amsterdam offices of commercial real estate colossus CBRE. She was supported by the departments of Neurocognitive Psychology and Biomedical Engineering at the University of Twente and Vrije Universiteit Amsterdam. Nelson’s research project was the first to prove that creating healthy office environments results in people becoming more productive. It measured the effect of environmental
and healthy lifestyle changes in the 124 people in CBRE’s Amsterdam offices over seven months. She used surveys, experiments, biological data, movement tracking, daily ratings and interviews. Five changes were made, divided into environmental adjustments and healthy choices. The environmental adjustments related to natural space and lighting. People taking part in the project didn’t have a choice over whether they were in the adjusted environment or not. The three healthy choices were optional. They were healthy nutrition,
mental balance and physical exercise. The physical exercise aspect was triggered by introducing an element of gamification using wearable technology. Nelson set people taking part a target of taking 10,000 steps a day which, naturally, obliged them to move around a lot. Especially as 10,000 steps proved to be impossible to achieve at work – 6,000 was about the limit. As part of the project, CBRE introduced stationery bicycles and active seats – chairs with pedals – and raised conference tables so people were obliged to stand. They also invested in creating a human centric lighting
environment that used timers and changes in lighting to be sympathetic to employees’ circadian rhythms. Circadian rhythms are driven by our 24-hour internal clock. They cause us to change between being sleepy and alert at regular times of the day. Although they’re inbuilt, they do adjust to external cues such as light and temperature. For Nelson’s project, lighting was warm in the morning when most people were naturally more alert, very strong and bright in the early afternoon when employees had less energy and dimmer in the afternoon when they were preparing to leave the
office. Light also changed from blueish to yellowish over the course of the day. Making such significant changes to any working environment involves quite an investment, which is probably beyond most businesses. But it’s surprisingly easy to make changes that impact on employee health and wellbeing. CREATING YOUR OWN HEALTHY OFFICE Over the past few years, our consumption of caffeine has increased dramatically, and it’s been normalized by the arrival of gourmet coffee chains such as Starbucks or Costa. More sophisticated coffee machines like
Nespresso have made it possible to drink good coffee in offices without having to be a barista to do so. But, no matter how delicious it might be, caffeine is just not good for us. For a start, it increases the amount of circulating cortisol – the stress hormone – in our bodies. This can lead to health issues that include impaired cognitive functioning – that’s not thinking straight to you and me – and high blood pressure. There’s no question that it makes sense to restrict the consumption of coffee and caffeinated drinks like colas in your office. You might want to offer free tea and water livened up with cucumber or lemon as an alternative. These also have the advantage of being much cheaper than a state-ofthe-art coffee machine. Sugar is another one of the most toxic substances most commonly found in offices. On one level this makes sense. Sugary items like chocolate, biscuits
or cakes are comfort food so the thinking is that people offered them will feel indulged and relaxed. This is true, because sugar makes dopamine levels spike. Dopamine is a neurotransmitter released when dopamine neurons are active. It influences our desire for pleasure and is released by sex, food and drugs. One of the most shocking revelations of Nelson’s research is that sugar activates almost the same parts of the brain as does cocaine. And people on cocaine are not known for making great decisions. They also want more, more, more. For some people, having a packet of biscuits or a box of chocolates around is an invitation to eat the whole lot. Replacing sugary snacks with things like nuts, bananas or very dark chocolate that raise energy without flooding our bodies with a tidal wave of seductive sugar is straightforward to do and not at all expensive.
THE NEW SMOKING In 2014, Huffington Post christened sitting the new smoking. Among other things, sitting for long periods of time can increase the chances of developing type two diabetes and even increase the risk of employees suffering from depression. You may not be able to offer your people yoga or Pilates, but you can encourage them to take walking meetings outside in the fresh air or at least suggest they get up and move around twice an hour. To the uninitiated, practicing mindfulness can sound complicated and intimidating. But all you need to do is take time out to close your eyes and focus on regulating your breathing for as little as five minutes. Something anyone can do at any time. Nelson also found that introducing greenery, real or fake, into the workspaces at CBRE helped promote a sense of wellbeing among CBRE employees. This is in line with a study
HR&EDUCATION of 3,600 workers in Europe, Africa and the Middle East referenced by Karen Higginbottom on Forbes.com. The study showed that workers in environments with natural elements like plants have a 13% higher sense of wellbeing and are 8% more productive than those in offices without greenery. It’s easy to add more plants into your office space. You can even buy fake one or add a mural of a nice, peaceful forest scene or something similar. Fake plants and pictures of greenery are proven to be just as effective when it comes to creating feelings of serenity as the real thing. Strange but true. Whatever you do to help improve the health of your employees is a step in the right direction. Nelson’s research project proved that what business had guessed at all along was true. Physically active, mentally relaxed people who eat and drink in a healthy way perform better. For instance, she found that 78% felt more energetic, 66% felt happier and 52% felt healthier. RIPPLE EFFECT It didn’t end when people left the office. Employees took the habits they learned at work home with them. And, because they did so, their families began to appreciate the benefits of moving around more and eating healthier food. Nelson’s project had a ripple effect. The implications of this are enormous. We spend on average a third of our lives at work. So, if we behave in a healthier way while we’re there, as well as taking steps to become happier and more fulfilled, the impact on our overall health has to be profound. For a start, there will be a positive knock-on effect on the state of our seriously strained national health systems because healthier people cost less to look after. If you’re the owner of a business, a manager of some sort or even an
“What we see is that the younger generation is much more conscious of the need to live a healthy lifestyle. We’ve recognized that a company’s approach to offering and maintaining healthy working conditions is also a differentiating factor when recent graduates are deciding where they’d like to work.”
employee who cares about your own wellbeing, you can help to make offices healthier places. By doing so, you’re contributing to a healthier society. Demonstrating that you’re committed to helping to keep your workforce healthy and to providing a pleasant, energizing office environment is also going to help you attract those wonderful millennials and Gen Zers. I have to say, though, that there’s one aspect of our book and business culture in general that I haven’t addressed. Burnout caused by stressful working conditions continues to be a serious problem across the developed world. Hungary is one of nine countries in Europe where burnout is classified as an occupational disease. While it’s fantastic to make your office a healthier place to be, it’s hard to know how to deal with the dangers of burnout caused by an ever-increasing emphasis on working longer and longer hours.
working hours, less contact between companies and their employees outside of work and what he calls “active rest”. He means exercise. Soojung-Kim Pang argues that countries that have longer working weeks like Mexico or South Korea are demonstrably less productive than the Scandinavian countries, France or Germany where employees don’t spend as much time at work. If you’re an employer, it comes down to being brave and determined enough to break all those bad habits and lead by example. If you’re an employee, you’ve got no choice but to do everything you can to persuade your employer to join the healthy office revolution. But your mind, body and perhaps history too will thank you.
LESS MEANS MORE Or maybe it’s just as simple as accepting that working less and taking more rest actually makes all of us more productive. In his excellent “Rest: Why You Get More Done When You Work Less”, Silicon Valley consultant Alex SoojungKim Pang argues in favor of shorter
THOR To find out more about The Healthy Office Revolution, visit www. thehealthyofficerevolution.com.
MILLENNIUM GARDENS: AN ASTONISHING LOCATION ON THE DANUBE TriGranit’s newest development, Millennium Gardens, which is the final element of the two-time FIABCI Award-winning Millennium City Center in Budapest, can accommodate tenants from 2020 on approximately 37,000 sqm of GLA. The two-winged building with unique architecture is constructed next to MÜPA Budapest, the National Theater and the K&H Headquarters on the banks of the Danube, offering
Mónika Takács, Leasing Manager of Millennium Gardens, TriGranit WHAT IS SPECIAL FOR YOU AT MILLENNIUM GARDENS? • institutional quality building • sustainability • Millennium Gardens offers a special way of working and living • reputable completion of Millennium City Center • contemporary architecture and design • cultural dynamism of the neighborhood • spectacular Danube view
a remarkably spectacular view for its future tenants. The concept for the complex, with its modern architecture and overall glass surface, joined by a compelling glass bridge over the ground floor, was conceived by Finta Studio to suit a uniquely located area with an outstanding neighborhood. The white, blade-shaped elements situated between each level and along the sides not only make the four-sided facade extraordinary, but also enable a clarity of design and unique dynamics for the building. This design solution supports both natural shading and comfort, in accordance with the building’s energy-saving operation. ADAPTING TO LATEST NEEDS WITH SUSTAINABILITY Adapting to the newest city utilization trends and to the Millennial employee’s needs, the ten-story “Class-A” office building will offer facilities for more than 200 bicycles including changing rooms and showers. Additionally, the office
complex will have electric car chargers, facilitating environmental awareness. The spacious, green garden with water surface promotes recreation and a healthy work-life balance as well as work at an alternative location, and can also function as a public space, a meeting point and a place for employees to have lunch. Green, open spaces on the ground floor will be accessible for pedestrians, while the large garden, to be constructed on the rooftop, will provide comfort just for employees. The office complex will also provide a place for a restaurant on the ground floor, with seating for 300 people, alongside further service units. The building’s design was planned in consideration of sustainability, using modern architectural solutions secured by the developer, TriGranit, as well as in correspondence with the BREEAM “Very Good” certification. OFFICE, OR HOTEL, OR BOTH? Despite the intensive office development boom of last years,
HR&EDUCATION new office stock is still required in Budapest. The Millennium City Center with its good accessibility and good infrastructure is a popular and proven destination among tenants. This continuously growing submarket, with thousands of international companies, creates a real demand not only for further office space, but also accommodation opportunities. In addition to this, considering the growing importance of Budapest as tourist and cultural destination, the neighborhood’s intense cultural life makes the Millennium City Center on its own an especially attractive location. Due to the lack of quality hotels around the development, TriGranit is constructing the building in such a way that it can suit both office and hotel purposes. Wanna try? LOCATION, LOCATION, LOCATION The location of the building is excellent in terms of public transport. Four tram lines, several bus routes, two suburban rail lines and the prospective fifth metro line are situated nearby. Through these,
the city center can be reached within 15 minutes, and long-distance commuters also have a wide variety of options available when reaching the complex. CITY IN THE CITY In addition to all of this, Millennium City Center has become a real town inside Budapest over the past decade: accessible nearby facilities include cafés, restaurants, fast food restaurants, kindergarten, fitness centers and even a health center. Thanks to service units in the neighborhood, employees can arrange several of their everyday tasks as well. The office building will be located in a uniquely maintained green area along an almost 1 km long green promenade on the banks of the Danube with a spectacular view, well-protected from car traffic and offering plenty of places nearby for relaxation, leisure and recreational activities, while the adjacent MÜPA Budapest, National Theater and the nearby Budapest Park support cultural re-charge.
After almost 20 years of intense rehabilitation work, the area has become a popular, secure and comfortable residential, office and cultural area. And there are still places and detailed plans for further projects in the close vicinity of the project to be realized: mixed-use, residential and institutional. TriGranit in other countries Besides Millennium Gardens, one of the biggest office development projects in Budapest to be handed over by 2020, TriGranit remains active abroad as well; the company’s pipeline projects, together with Millennium Gardens, reach 107,000 sqm GLA in the CE region, including the construction of 77,000 sqm of GLA office space that will start within the coming 12 months in Budapest, Krakow and in Katowice.
INCREASED PARTICIPATION RATE, RETURNING EXPATS TO EASE LABOR SHORTAGES, SAYS COLLIERS STUDY A recent report by Colliers suggests six solutions to what the property agency terms the “riddle” of the labor shortage across Central Europe, but a closer look suggests the options for Hungary are even more restricted and problematic.
HR&EDUCATION By Kester Eddy It may come as a surprise to harried HR managers in Hungary as they struggle to fill vacancies in Budapest, Győr and Miskolc, but it could be worse. Indeed, in Czech Republic, it is.
% OF WORKFORCE EMPLOYED IN PUBLIC ADMINISTRATION, SOCIAL SECURITY AND DEFENCE IN Q1 2018 12 0%
“In Czechia, the number of vacancies exceeded the unemployment count by a factor of 1.78 at the end of Q1 2018,” according to a study dubbed “The Labour Force Riddle”, published recently by Colliers. A decade after the global economic crisis resulted in economic recession across most of Central Europe, the region is booming. So successful is the recovery that the CEE-6 (Bulgaria,
4 0% 2 0% 0 0% Poland
Source: Eurostat, Colliers International
Czech Republic, Hungary, Poland, Romania and Slovakia) have been reporting that labor shortages are restricting potential economic growth. As the study notes, official quarterly surveys reveal a 70-90% of Hungarian industrial companies have repeatedly stated of late that staff shortages are “acute enough to arrest plans to expand output”, a percentage that Colliers describes as “staggering”. In total, the study estimates vacancies totaled some 569,000 across the CEE-6 at the end of March this year, of which 79,000, or 14%, were in Hungary. Colliers suggests six solutions-cumscenarios that are likely to alleviate the problems to a greater or lesser extent across the region. These range from increased productivity and returning expat workers (i.e. positive trends) to inflation and recession (i.e. somewhat negative in most people’s books). Asked for key trends regarding the Hungarian labor force, Mark Robinson, the researcher at Colliers who authored the report, cited further increasing the participation rate as
the most likely source of manpower, further building on a process that began in 2010 supported by “wage hikes, infrastructure investments and government programs”. “The four-year rate of increase [between] 2013-17 was 265,000 people. Assuming half of that in terms of continued momentum arrives at an estimated 130,000 by 2021,” Robinson told the Budapest Business Journal. (A figure, coincidentally, which equates almost exactly with the total employed on the public works scheme during the first half of 2018.) Robinson estimates some 48,000 returning Magyar expats will return to the motherland by 2021 to assist recruitment, largely due to economic growth supporting higher wages. The Prague-based analyst also foresees what he terms “improving labor quality”, achieved by improving education levels and reducing the number of public-sector workers. With 9.6% of Hungary’s workforce employed in the public sector (compared to an EU-28 average
of 6.9%), trimming this figure by just one percentage point by 2021 would boost the labor pool by another 42,000, he says. Considering countries such as Denmark (with 5.1% of workforce in public administration) and Estonia (5.5%) have slimmed their bureaucracies, mostly via investment in technology, this should not be hugely difficult challenge for the government, posits Robinson. “Generalizing, this workforce is shifting papers around. If they have to move into the private sector, they will probably retrain and be able to do jobs with modern technology. Merely that will make them more productive,” he argues. With increased robotics and automation increasingly likely to reduce the need for semi-skilled and skilled manufacturing jobs (although Robinson sees this trend largely applying after 2021), Colliers appears
relatively upbeat on how Hungary will manage its labor shortages. Others are less confident, and question several of his assumptions and scenarios. “The results expected from the reallocation of labor from the public sector to the private sector have been completely illusory,” counters Gábor Karsai, deputy chief executive of GKI economic research company. “The overwhelming majority of the 700,000 people – that is excluding those involved in public work schemes – currently employed in budgetary [state] institutions work in healthcare, education and similar public services in important jobs. These are characterized by labor shortages!” he says. True, the government intends to trim ministry and background institution headcounts by 20%, but such a move
– even if enacted fully – would “only amount to a few thousand people,” Karsai argues. “Moreover, the high number of staff members is the logical consequence of the state-centered, marketrestricting Hungarian model. In order to reduce the number of staff, the tasks should be rationalized first, and we should rely much more on the market,” Karsai argues. The GKI economist is similarly pessimistic on Hungary’s ability to lift educational standards of those joining the labor supply, an opinion seemingly backed by deteriorating results in the last two rounds of European Union “Pisa Tests”. “Hungarian higher education [standards] are falling due to the withdrawal of money, the decline in university autonomy and the falling status of lecturers. Public education and
HR&EDUCATION vocational education are constantly deteriorating as well,” he says.
“I observe and expect much higher wage growth in Hungary than in Poland and Slovakia – perhaps at 30-40% higher in three years’ time. Thus the economic incentive to return is seen as stronger.”
HUNGARY AND ITS REGIONAL ETHNIC POPULATIONS Just as Western Europe has attracted millions of central Europeans seeking better employment conditions, enterprising Ukrainians (and others from the former Soviet Union), seeing the growing job opportunities just across their borders, have moved into Czech Republic, Slovakia and, especially, Poland, to make up numbers on the jobs’ market. The Colliers study cites local media sources suggesting that the number of expat Ukrainian workers in Poland hit two million by the end of 2017, and could reach three million by the end of 2018.
riddle,” it states. And there are more to come, from Ukraine, Russia and Belarus, as long as wages in the CEE6 keep rising. As the study agues, “the comparatively good quality of life on offer is an attractive proposition,” not least because the common Slaviclanguage roots makes such moves westward relatively easy.
“Ukrainians are helping to drive Poland’s economic performance, and solve its demographic and labor
Hungary – with a vernacular belonging to a different language group – does not enjoy the same advantage as its
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northern neighbors, and has “the least ability in the CEE-6 to tap into a ‘hinterland’ of potential immigrants who could integrate easily into society,” the report states. Strictly speaking, with ethnic Magyar minority populations in all the surrounding countries – most particularly Romania – this is debatable. Indeed, Hungary has proved attractive to immigrants from Romania, Slovakia and Serbia ever
HR&EDUCATION since the borders were redrawn with the Treaty of Trianon in 1920. Colliers researcher Robinson acknowledges the Hungarianspeakers “sitting outside the country”, but argues that today, with both Romania and Slovakia in the European Union, most would-be migrants will simply head directly to Western Europe and higher wages. While he accepts that increasing wages in Hungary might still tempt some over the borders, he says the situation is not clear cut. “Romania’s wages… are growing just as fast,” Robinson told
the BBJ. “I would guess Zakarpatia [western Ukraine] is an easier target, if it is not depopulated already.” Eastern Slovakia remains one potential labor source for Hungary, where a “pool of unemployed” might be tapped “if the Slovaks do not develop jobs in Kosice fast enough”. Robinson also points to Vojvodina, in northern Serbia, as another possibility “in view of the higher unemployment prevalent there”. But overall, the days when Hungary could rely on topping up its labor force with kin from neighboring states
appears largely over: most will simply aim for western (or possibly southern) Europe. “Wage differentials would have told them to do so,” he says. PROGNOSIS ON MAGYAR RETURNEES MAY PROVE DIFFICULT TO FULFILL The shortage of labor across CEE is not all down to economic activity within the region: as is well known, part of the problem is down to emigration from the CEE-6 since EU accession in 2004/2008, when millions have left their home states for better pay and conditions, mostly in Western Europe.
HR&EDUCATION Colliers argues that this pool, now estimated at 7.5 million in total, constitutes a major resource to fill jobs back home. The property agency study predicts some 412,000 ex-pats will return to their CEE-6 homes by 2021, lured by a combination of factors, not least rising wages and home sickness. “We believe that both economic and emotional/social factors are shifting such that the tide of migration [is turning],” the study states. Mark Robinson, author of the Colliers report, now predicts some 48,000
POSSIBLE RETURN RATES TO CEE BY 2021
% of pop. In W Europe in 2017 % of migrants Boomerang-ed back by 2021 % of overall population returning by 2021 Absolute numbers in W Europe in 2017 (million) Absolute numbers returning by 2021 (thousand)
190,400 31,500 17,500 48,000 92,400 32,000
Source: Eurostat, Colliers International
Magyars currently abroad will head home by 2021, which, given that many will have picked up an enhanced skill set, with greatly augment the Hungarian labor pool. That number, however, is barely 50% of the 90,000 he predicted to the BBJ in 2017, begging the question: why the sudden reduction? “The factor that has changed since last year is that I took into account that wage inflation in Europe is spreading, which means that the economic incentive to return for the marginal Hungarian sitting in the Western countries is reduced compared to Hungary’s [expected] wage rises,” he told the BBJ. “In the end, wage inflation in both geographies is a key factor. I’ve reduced estimations for most of the other countries as well.” Indeed, Robinson is still bullish on Hungary within the region: 48,000 represents 10% of his estimated 480,000 expat Hungarians currently in Western Europe, a proportion second only to the Czech returnees (at an expected 15% return rate) of the CEE-6 ex-patriate populations. The Colliers researcher again points to relative wage differentials as the basis for estimates.
“I observe and expect much higher wage growth in Hungary than in Poland and Slovakia – perhaps at 3040% higher in three years’ time. Thus the economic incentive to return is seen as stronger,” he said. If realized, the “Labor Force Boomerang” as he terms it will surely be of great benefit to the Hungarian economy. But the question remains: how realistic is this prediction? Lacking any professional surveys, I began a mini assessment, asking some two-dozen Hungarians living in Western Europe about their reasons for leaving, staying and if they are likely to return in the next five or ten years. Thus far, this attempt to gauge opinion cannot be considered “scientific” or statistically of merit: only eight persons (five in United Kingdom, one in Ireland, two in Germany) have responded, and in terms of education, all have at least a bachelors university degree. Current professions varied enormously, from finance and university professor, to a priest, to a duty manager at a hotel. Nonetheless, the limited answers are revealing. All were either “very
happy” or “largely happy” with their moves (including one who had moved to Great Britain, back to Hungary and then on to Germany). Asked if they were likely to return within the next five years, seven of the eight said “no”, with one “maybe”. Particularly illuminating were responses to a question on tax, meant to emphasize the financial positives of Hungary. The question reads: “Does the favorable personal
income tax (PIT) situation make a return to Hungary more appealing to you?” (Since coming to power in 2010, Prime Minister Viktor Orbán has made a point of reducing PIT. It is now a flat rate of just 15%. This, coupled with generous child allowances, means young families with children enjoy very low effective tax rates.) To this, one female, 33, originally from Kecskemét, answered (slightly edited for grammar errors):
“The income tax situation is indeed favorable; however, I think it might be implemented at the wrong time. The gap in wages has constantly been growing since Fidesz has been in power, the lower income tax is really favoring those with a higher salary, whereas people with lower or minimum wages aren’t actually better off with the new tax system. Therefore it is only making the already existing and growing gap worse. Plus, considering the uncertainty of the future and all the worrying
Hungary – with a vernacular belonging to a different language group – does not enjoy the same advantage as its northern neighbors, and has “the least ability in the CEE-6 to tap into a ‘hinterland’ of potential immigrants who could integrate easily into society,” the report states.
things I’ve mentioned before (the political situation, the eroding of democratic institutions and values, the deteriorating quality of education, the nepotism and corruption, the encouraging of discriminative and xenophobic thinking by the government) are to me just too significant: tax relief is just not enough to offset all of that.” Another female Hungarian, an academic now in the United Kingdom, simply responded: “No”.
BUILDING A BRAND WITHOUT MAIN STREET When BT decided it needed to look again at its employee branding three years ago, it faced two major problems. The award-winning strategy it came up with is a case study in how to turn around the way the world views you.
By Robin Marshall Problem number one was brand awareness. BT did not have a bad image by any stretch of the imagination. In its home market of the United Kingdom it is best known, in the public consciousness, at least, as the legacy phone company, the British version of Magyar Telekom. In Hungary it provides services through its SSCs at Budapest and Debrecen, and has done so more than a decade, but those are for international clients, most of them multinationals. It has no Main Street recognition, because it has no Main Street customers. “We had a very good reputation with those that know the brand; the problem was that they were very few in number,” explains Máté Fazekas, head of employer branding for BT in Hungary, who was hired two years ago to help put that vey fact right.
Problem number two was separate, but connected. Everyone in the shared services sector faces the same challenges around staff recruitment and staff retention, a factor that is only exacerbated by the increasingly tight labor market.
strategy capable of turning those figures around. His team came up with a holistic approach that tackled the two principle problems simultaneously. By necessity, it was (and is) complex and multifaceted.
“One of the larger recruitment companies does an annual employee branding survey. Three years ago, BT was 47th on the global list out of 75. There were seven SSCs listed for Hungary; we came seventh,” recalls Fazekas. And remember, BT is not a small company. Three year ago it had already been in the country for almost a decade and had a headcount of 2,000 staff. The message was clear; more people needed to know what the company was, and what it stood for.
“It is important to note that, as head of employee branding I own everything that feeds into it: external communications, internal communications, corporate relations, academic relations. I have ownership of all those surfaces needed to impact the employee brand in the country.” That is increasingly the way employee branding is going, though few have that level of control today, and fewer still had it two years ago. Fazekas had one other thing in his favor.
MULTIFACETED Fazekas was charged with pulling together an employee branding
“Employee branding has a strategic position here at BT in support of the country business strategy. That is quite
HR&EDUCATION rare, but it shows how seriously the leadership takes employee branding; it is regarded as one of the pillars on which the business strategy is built.” The head of branding came to BT from the public sector, but prior to that he had done a similar job for an American SSC, so he was working on familiar territory. His team began by identifying the brand qualities BT stood for, but rather than deciding what those should be and then imposing them on the staff, they involved their employees in the process. Fazekas is very clear on this: he regards his colleagues as vitally important “brand ambassadors”. They have to understand what the values are, identify with them themselves, and believe the company puts them into action. “When our colleagues are down in the pub with their friends in the evening, and they start to talk about their work experiences, that is such an important part of brand building,” he says. KEY VALUES The first part of the strategy took 12 months to implement. It was built around external communication, based on the five key BT values identified. All of it was brand building, some of it was employee branding, and some of it was about employee recruitment. It was summed up by the slogan #next10. “Last year we celebrated our tenth anniversary in Hungary, but we did not want to talk about the past, we wanted to concentrate on the future, the next ten years; part of that was talking to our existing staff about what their future looked like, part of it was talking to potential employees about what a career here might entail,” Fazekas says. BT also decided it needed to do some research into its future workforce. A lot has already been done into Generation Y, but the service provider felt it needed to go one stage further. “The average age of our workforce is 31, but that’s not increasing, it’s
actually decreasing as more and more Generation Zers join the workforce,” Fazekas points out. So the company did an in-depth survey into Generation Z, which was shared with the world last year, looking at salary expectations, where they wanted to work, how they wanted to work and so on. “We found they wanted a salary of about HUF 500,000 a month. We also found that about 60% said they wanted to work abroad. So we were able to target our communications to them to say it is possible to earn that sort of money in an SSC, and you can do so without the need to move to another country and leave behind your home, your family and friends.” BRAND AMBASSADORS The first year’s employer branding campaign focused on external communications, but, before it had even ended, the second, current year’s plan had already been established. That was launched in April and concentrates on internal communication. Its goal is simple, but no less important for all that: ensure that BT employees know the company lives up to its own values in real life, so that they become more effective brand ambassadors.
“From September to December we are planning nearly 30 programs for our colleagues; that’s roughly two events every week at both Budapest and Debrecen. Last week, for example, we had a whole week of well-being programs, offering massages, free fruit, health checks, sport. We attracted 800 participants out of a total staff of 2,500.” Has the campaign worked? In last year’s employer branding survey, BT had become the most attractive employer in the services sector in Hungary, and had risen 40 places on the global list. “This year we were in the top ten on the global list for the second year running, out of what is now some 225 companies.” Not that Fazekas intends resting on those laurels; look out for BT adverts on the Metro at Kálvin tér and Deák tér from October, with more yet to come in November, messaging around family and children. The company is even beginning to look beyond Gen Z, and is starting to reach out to the so-called Alpha Generation at secondary schools. BT’s employee branding campaign isn’t finished yet, not by a long way.
ADVENT OF AUTOMATION AND DIGITIZATION DEMANDS PRACTICALITY FROM EDUCATION Automation and digitization are transforming our world at pace, and while this statement has become something of a clichĂŠ, when it comes to tackling the challenges of the labor market, experts unanimously tell the Budapest Business Journal that the education system needs fine-tuning in order to better prepare graduates for the labor market that awaits them.
HR&EDUCATION By Christian Keszthelyi While our HR professionals clearly determine the skills and areas for improvement, they are also proactive, ready and willing to get involved in education by establishing partnerships with schools and universities. Talking to Hungarian HR professionals over the past few years, it is clear that the requirements of the labor market have transformed so rapidly that freshly educated professionals leaving their schools lack certain skills and knowledge that companies need. This leaves companies needing to do more training of their new employees, as the education systems has been slow to adapt to the changes. That said, this is hardly unique to Hungary, or even the region. “In general we experience difficulties when our business needs do not necessarily correspond with the skills to be found on the job market,” Mariann Mészáros, vice president of human resources at IT Services Hungary Kft., tells the Budapest Business Journal. “We have a high demand in recruiting high profile professionals for the latest technological trends, like AI, cloud or IT security — the expertise is hardly present for us yet.” She also hints that insufficient knowledge of the German language — ITSH is part of the T-Systems group — further “limits potential pipeline”. László Ábrahám, CEO of National Instruments Hungary, says that the education system should concentrate on delivering an ability to cooperate and improvements in the so-called STEM skills (Science, Technology, Engineering and Math). “I think that proactivity, cooperation, effective teamwork are all welcomed by the industry (among many other skills). Therefore, it would be very important to teach students how to think, dare to ask questions and express opinion. In addition, STEM education should be further improved to provide enjoyable
“In general we experience difficulties when our business needs do not necessarily correspond with the skills to be found on the job market.” and exciting hands-on learning experience, instead of purely theoretical knowledge,” Ábrahám says. Service providers face similar challenges. “Young people entering our organization have a good basis, but there are things that today schools are not able to teach: flexibility, customer orientation and resilience, which are key,” says Andrea Tognetti, head of HR at UniCredit Bank Hungary. “Technical and functional skills being data driven is a must in every role and sector. English knowledge could further improve,” she adds Zsuzsa Beke of pharma company Gedeon Richter says that while training for some professions has stopped, or is being restarted in a new format (such as chemical technician or chemical engineering), the company
finds “that the training courses in many cases are not sufficiently practiceoriented and the training institutions unfortunately do not have the required equipment. In order to bridge this gap and help acquire practical skills, we provide training for students in our training facilities,” she adds. Audi Hungaria, like its German peer Mercedes Benz, aims to fill this hole directly by offering dual education. “As skilled and qualified colleagues are the key to Audi Hungaria’s success, we have been working since the beginning to make sure there is a continuous flow of labor,” says Réka Jakab from the HR department of Audi Hungaria. To ensure this, Audi Hungaria has two pillars, one being the school-level dual education system it launched in 2001, in which more than 1,800 young
“Training courses in many cases are not sufficiently practice-oriented and the training institutions unfortunately do not have the required equipment. In order to bridge this gap and help acquire practical skills, we provide training for students in our training facilities.” people have thus far gained vocational qualifications, the other university level dual education, which started in 2016. “We also cooperate with universities. As a distinctive initiative, the Audi Hungaria Faculty of Vehicle Engineering was established together with Széchenyi István University, Győr,” Jakab says.
Csaba Beck, associate director of HR at Israeli pharma firm TEVA tells the BBJ. As such, he underlined that TEVA Gyógyszergyár Zrt. has been in tight cooperation with vocational schools in Debrecen, as well as the University of Debrecen, in training and educating the professionals of the future.
Companies actively contributing to the education system has become one of the duties they have picked up in order to help solve their recruitment issues, it appears.
“The swift development of the economy in the past few years has set a high demand for knowledge acquired in higher education to meet the requirements of employers. Such an ideal situation can only be reached if educational institutions and companies offering jobs are in constant cooperation in the education,” Beck adds.
“Companies have a responsibility to turn the theoretical knowledge of fresh professionals acquired in schools into practical knowledge,” Daniel
Mészáros of T-Systems also note that the most important challenge for the education system to tackle is to help students acquire practical, marketready technical skills. At the same time, graduates will need the ability to quickly adapt and to be open to change as job lifecycles (and with them job stability) are expected to shorten further with the ever growing speed of technological developments, she adds. “As Hungary’s biggest ICT provider, we have contributed to the development of the education since the beginning. One good example is our external department at the Faculty of Informatics of the Debrecen University, which will celebrate its tenth anniversary in 2019. We work with a similar model in Pécs and in Szeged, in total nurturing around 20 practical courses entirely at different universities with the help of our own colleagues,” Mészáros explains. NI has also launched a STEM Mentor Program, which has been running since 2009, as proof of its strong commitment towards improving STEM skills. The program “aims to provide Continued on page 38 ► ► ►
HR&EDUCATION INSIDE VIEW
MAKING A SUCCESS OF HEALTH AND WELLBEING Office is more and more frequently treated as an employer branding tool. According to Emőke Erdélyi, HR Manager of Skanska Hungary, nowadays employees expect from their employer a range of wellbeing features. In the same time, organisations recognise their benefits both in attracting the best talents in current challenging environment and enhancing employee welfare and productivity.
Emőke Erdélyi, HR Manager, Skanska Hungary
How can commercial real estate developers support tenants in the war for talent? Can they improve their employer branding? Companies compete to attract and keep the talents and doing their best to create innovative, comfortable and healthy working environments. Developers can support tenants by providing a mix of collaborative and flexible spaces, as well as innovative areas for work and relax. We at Skanska are dedicated to create futureproof workplaces with a great focus on the employees’ needs, therefore implementing these features is in our office project’s DNA. In order to accommodate various activities, specific tasks that take place through the typical workday and week should be taken into account. The organization of space has moved from a world of cubicles to open, collaborative areas no longer restricted by barriers. Ways in which an
office can be optimized to encourage a constructive and inspiring work environment is an ongoing topic for companies. Increasingly, employers’ focus is to design workspaces specifically envisioned to help their teams thrive, collaborate and be more creative, taking into consideration the impact of light and space, temperature, air quality, window views, natural elements and biophilia within the office. Ergonomic and customizable office furniture solutions and opportunities for activity-based working can also contribute to the sense of well-being of the team. Selecting for a headquarter an office building in a good location, with easy access and offering a big variety of amenities also provides employees with more comfort. Happy, healthy employees contribute to company’s success. The most competitive workplaces will be those which are developed based on open discussions between developers, tenants and their employees as the world of work continues to evolve. Skanska will complete its Mill Park office development in Budapest soon. What wellbeing benefits are provided at this project? Skanska’s aim is to provide innovative and green solutions to create a sustainable growth for the tenants and their employees, as well as neighbouring communities. Mill Park has a 5,500 sqm inner courtyard where employees can bring the outdoor into their workday, have an informal meeting with a colleague or can switch off from work for a short break in the colourful swings,
play table tennis and table football. WiFi and workstations with plug ins and even an outdoor fitness corner are available in the garden as well. Skanska emphasize the importance of creating facilities that people actually find an added value in using them. For the active ones, Mill Park offers bicycle facilities such as bike storage with showers and the lockers, as well as a bike repair tool. Nowadays more and more people, especially the Millennials want to stay connected. Skanska’s new all-in-one building app brings services to the fingertips of the tenants, using their mobile phones they will be able to be connected with other community members, share a ride to or from the office, check in real time the public transportation, as well as create events. Mill Park is the first Skanska project in Hungary to implement the Building App, as a part of Connected By Skanska integrated operating system. In Mill Park we focused on a lot of wellbeing features, and the next step for our future projects is to also certify them according to WELL Building Standard. Nordic Light Trio, which is our recently started development, will be the first Skanska office project in Hungary already registered for achieving the WELL certification. WELL Building Standard is a performance-focused system for measuring, certifying, and monitoring features of the built environment that impact human health and wellbeing, focusing on the quality of air, water and light, as well as comfort, fitness, nutritional aspects and mental health.
NOTE: ALL AR TICLE S M ARK ED INSIDE VIE W ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPE S T BUSINE S S JOURNAL DOE S NOT TAK E RE SP ONSIBILIT Y
HR&EDUCATION exciting hands-on learning experience in the fields of robotics, engineering and sciences to children from kindergarten to higher education with the help of our company mentors. So far, the program has reached more than 130 schools and educational institutions, both nationally and internationally, and we are proud that approximately 6,000 students are expected to be reached by the program this semester,” László says.
GAME-CHANGERS: AUTOMATION AND DIGITIZATION The picture painted by HR professionals is clear: demands on the labor market are changing, and new requirements from the labor force are on the rise. The main factors of such a transformation are automation and digitization. “Technologies like AI and IoT [Internet of Things] are rapidly changing our
digital landscape. The first to-dos here seem to be the adjustment of the corporate environment to be able to really exploit the advantages of these technologies,” Mészáros of ITSH notes. “Here I mean not just the adjustment of technology, but also procedures and even culture. Employees must realize that they need to have the ambition to continuously develop themselves further, as in the
CASE STUDY: HOSPITALITY STRUGGLES TO FILL NO-SKILL JOBS While filling high-skill jobs seems to be a piece of cake in the hospitality sector and low-skill jobs are another matter altogether, as Balázs Csidei, director of human resources at Kempinski Hotel Corvinus Budapest tells the BBJ. Csidei is happy with the fact that the five-star hotel continues to receive a great number of applications, which he says is itself a good feedback that it is reaching potential employees. Although an average of 20 applications come in that are answered within 24 hours, typically only five of the applicants can actually be gotten in touch with, and out of three interviews usually only one candidate proves to be adequate. “Interestingly, we have more difficulty filling positions that don’t require specialized training or education,” Csidei confirms. “Filling high skill positions such as chefs or pastry chefs takes about 30 days. By contrast, we have open no-skill jobs such as housekeeping maids, housemen, or stewarding staff that we’ve not been able to fill up fully for three months,” he adds. On the top of this, other industries can easily try to tempt employees, and Csidei mentions losing staff to multinational corporations.
Still, Csidei believes that the salary expectations are converging with the wage levels of skilled jobs, and also Western European wages. And there are obvious benefits to working with an organization such as his. “We are a reliable employer, we register our employees in legal status and provide social security, plus we provide a range of benefits such as uniforms, meals, training, language courses. We guarantee the payments at the end of each month, right on time.” EDUCATION: CONCERNS, BUT SOME RAYS OF HOPE Csidei says the length of vocational training is one of the biggest issues. “The question is that nowadays who can afford to invest three years in learning to become a waiter? For example, there are foreign companies that offer eightmonth cruise ship waiting staff courses.” The Hungarian system also lacks “solid language training”. What makes finding good labor force even more difficult is that schools appear to be using outdated technologies, for example in cooking and patisserie. “Classrooms seem like they were 100-years-old and half of the teaching materials are approximately 50-yearsold,” Csidei says. He adds that higher education also has issues. While
the pressure grows on modernizing schools, the courses keep delivering the same material as 30-years-ago. “There’s no yield management, sales, and they only teach the basics of event management without any practical benefit. The teaching approach is more theoretical than practical. Fortunately, we are seeing signals of change and we’re optimistic,” Csidei says. While automation and digitization are expected to radically change some sectors, Csidei believes his profession, reliant on human interaction, will be less affected than many others. “I could hardly imagine replacing human work with machines and equipment in our luxury industry. The real luxury will be in a short time to be served by people and not by machines.” That’s not to say that the work of humans cannot be aided by developing machines. “Obviously, there are cases like the state-ofthe-art dishwashers in the back of the house: the employees load these dishwashers and they require only one person to unload and put away the dishes in the end. Of course, this is not something we would be able to do in outside catering.”
HR&EDUCATION future low added-value jobs will be overtaken gradually by technology. We might not know exactly which jobs will be affected and when, but the trend is obvious,” she warns. If companies wish to stay competitive, they cannot avoid exploiting the advantages that automation and digitization can offer, according to TEVA’s Beck. “As the labor force
FINDING THE WAY In order to tackle the challenges of filling positions in the current labor market, Csidei has quite a few tactics up his elegant sleeve. “We are actively recruiting [Hungarian] workforce from abroad. Many of the applicants are attracted by a good position at a reputable company, with long-term career prospects, and good livelihood in their home country. We have some successful cases already.” At the same time, turning to youth, as well as the more elderly, also helps fill holes. “In addition, we offer student work for those who would like to
available is shrinking and expansion is not anticipated in the short-term, companies are forced to exploit the opportunities lying in digitization and automation, and introduce them as soon as possible,” he points out. In his sector he says automated or digitized work processes are complementing human work in ever more fields, and this tendency lays the bed for a new type of knowledge,
work on school days or holidays. We’re also trying to employ pensioners for positions that require less loads,” Csidei notes. Then there is Generation Z, which bringing another challenge. “They want to and can work hard, and they speak languages. They are looking for ‘trendy’ jobs but they demand promotion and change much sooner,” Csidei explains. Peeking into the future, Csidei expects that roles will become more versatile and require staff to think and act outside the box when dealing with their daily tasks. “Job diversification is another aspect of employment in the near future: an employee has
which poses further challenges for the education system. Following the swiftly changing trends, NI has taken immediate action. “National Instruments is already a significant and active part of automation with great efficiency and success via its profile and products, but robotization might bring only moderate results in our internal processes — mainly in
to be prepared to do several jobs, in accordance to the requirements of the employer. For example, someone who would do office jobs may have to also perform operational tasks.” Csidei vouches for some changes in the legislative environment, which could further aide keeping staff happy and occupied. “We would be in a much better position if there were more ‘tax-relief’ jobs that we could offer. For example, the introduction of the service charge helped tremendously in motivating and retaining waiting staff. We would need similar initiatives in other positions at the hotel,” he says.
“I think that proactivity, cooperation, effective teamwork are all welcomed by the industry (among many other skills). Therefore, it would be very important to teach students how to think, dare to ask questions and express opinion. In addition, STEM education should be further improved to provide enjoyable and exciting hands-on learning experience, instead of purely theoretical knowledge.” logistics — due to our manufacturing strategy,” says Ábrahám.
market challenges the pharmaceutical industry has to face,” Beke says.
While automation and digitization are seen as key to filling labor shortages by many, Richter Gedeon feels it will not help in the here and now. “In the long-term, automation will certainly have a beneficial impact on the optimization of our work processes and on increasing our efficiency; however, we believe that for the time being, it will not be able to solve the fundamental labor
This vision is echoed in a statement UniCredit sent to the BBJ. “Automatization and digitalization will not solve these needs, but will emphasize furthermore the need for data-driven skills, and security skills. New trends will create new jobs and competency needs. On the other hand it will simplify things, with automatized basic tasks freeing up energy and time for customer advisory.”
EVERYBODY NEEDS TO CHANGE In order to come to terms with the rapidly altering circumstances and demands, change needs to be embraced by all the players in the game. Students need to be ready to renew their knowledge every day, the education system needs to adapt, and companies must get involved in aiding the education process. “If I can give a couple of hints to young people entering the job world: be curious, positive, resilient and courageous. Especially at the beginning, look to the contents, search for a meaningful job and craft your development,” Tognetti of UniCredit says. Ábrahám agrees: “Education is a crucial investment in the future of a country’s economy and society; therefore, it has to be approached and handled according to its importance. In my view, some of the key ingredients to a successful education system are: reasonable expenditure (investment) spent on education as a percentage of GDP; a modern, reformed and hands-on National Core Curriculum at all levels of education; competitive salaries for teachers with a promising career path; and committed and well-trained educators,” the NI boss sums up.
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HELP FOR THE HOMELESS COULD EASE THE LABOR SHORTAGE
Former homeless man László Murányi (far left) and Vera Kovács leader of Utcáról Lakásba Egyesület (the FromStreets-to-Homes Association NGO) (near left).
Pressure groups say homelessness is both a moral and an economic issue. More and better directed support for the homeless would allow more to effectively engage on the jobs market. By Kester Eddy They invented “ruin pubs” in Budapest’s District VII: in neighboring, unfashionable District VIII, they’ve invented the “ruin office”. In a cramped room, full of donated clutter and with a desk that looks like it was probably a best seller in the era of Party Secretary Mátyás
Rákosi (Hungary’s answer to Josef Stalin), Vera Kovács is at work, unperturbed by her hand-me-down surroundings. Kovács is a woman on a mission: the leader of Utcáról Lakásba Egyesület (the From-Streets-to-Homes Association NGO), that mission is to get the homeless off the streets, out of the metro stations and away from
the makeshift shacks in the woods at Budapest’s extremities – and into decent, if basic, housing. “Hungary doesn’t have proper, official ways out of homelessness. They have a homeless shelter system, but not an [affordable] social-housing system for homeless people,” she says. It also has a mere 2.5% of dwellings in public ownership,
low even for the region, and far below the average in Western Europe.
“Hungary doesn’t have proper, official ways out of homelessness. They have a homeless shelter system, but not an [affordable] social-housing system for homeless people.”
This means that once on the street, the way back for anyone to “normal” living is excruciatingly difficult. This is not just a moral issue, argues Kovacs: in times of labor shortage, such as today, the homeless population is an untapped human resource. And with an estimated 30,000 lacking a permanent roof in Hungary, the numbers are not insignificant.
admits, “would really need a lot of intensive social care”.
Kovacs argues that given the right conditions – in essence, a properly prepared social care program, with affordable accommodation – “maybe two-thirds” of the homeless (i.e. 20,000 people) could make it back to normality “without an extreme struggle”. The remaining 10,000, she
ABANDONED ACCOMMODATION Utcáról Lakásba does its part: negotiating with municipalities and private owners for the right to renovate once decrepit, abandoned accommodation, the association manages a network of “20-something flats” housing around 50 formerly
homeless people, mostly in families, who in turn pay agreed rents for the privilege. It also helps individuals, like László Murányi (see From Bug-ridden Street Shelter To A Home: A Case Study) back to a “normal” life on a case-by-case basis. Such efforts, however, pale before the overall task. The irony is that Hungary has an estimated 500,000
empty dwellings in both private and municipal ownership – but the barriers – formal and informal, social and financial – keep them that way. Not that the homeless are idle: contrary to popular perception, many work, albeit in the informal economy, casual jobs or in public work schemes. Indeed, Hungary’s economic recovery since the global crisis of 2008 has made it easier to find some kind of employment, but, says Kovács, for the homeless, mostly lacking an official residence for obvious reasons, permanent jobs remain out of reach. Moreover, that same economic recovery has seen rents on the free market double in the past decade, making the transition to private housing ever more formidable.
“You get HUF 54,000 as a public welfare [works] participant. You might be able to find something for HUF 110,000 in Budapest, in the outskirts. You still need to pay for utilities,
“Being homeless is a trap, it’s horribly difficult to get out.” around HUF 20,000, and […] you’ve still not fed yourself,” says Bálint Misetics, a sociologist and activist with A Város Mindenkié (The City is For All), another pressure group for the homeless. For both Kovács and Misetics, a solution to the homeless issue needs more resources and a change
of attitude from the authorities. “It is really unreasonable to argue that homelessness is solved by dormitory shelters, or to argue homeless people can resolve their lives by going to the workfare program,” Misetics says. FROM BUG-RIDDEN STREET SHELTER TO A HOME: A CASE STUDY 2014 was not the happiest of years for László Murányi. Then 37, he was judged guilty of a driving offence and he was tasked with paying off a fine of “HUF 200,000 and something” in monthly instalments. Then, he was made redundant: unable to make his court payments, he was sentenced to 114 days in prison. Released just before Christmas, Murányi made his way to Budapest for work. For a few nights he lodged with friends, but, not wanting to outstay his welcome, he moved into
the only accommodation his purse could afford – a free shelter for the homeless in District VIII. “It was awful. There were crowds of men, maybe 200. And bugs, bed bugs,” he recalls. Murányi spent the winter nights warm and dry, but restless, his skin constantly irritated by bugs. Come spring, he opted to live in a tent, camping wild. REGULAR WORK Meanwhile, determined to restore some semblance of a normal life, he had found regular work as a laborer at a brick works and began plotting a way out. This was tougher than it might seem. “Being homeless is a trap,” he says, “it’s horribly difficult to get out.” Hungary has no social housing
policy, and finding the money to rent even a small flat – along with the deposit invariably demanded by landlords – plus buying some basic furniture and utensils, is a financial hurdle most homeless simply cannot overcome, even those with a regular job. He tried once: “It was a waste of time,” he says. Murányi, however, had also found helpful friends, specifically Utcáról Lakásba, an activist group that aims to get the homeless back into a home. Utcáról Lakásba put together a financial package – enough to cover the initial rent payment, plus deposit, to rent a flat and purchase some basic furniture – to kick-start Murányi’s route back to normality. “This was not a donation, it was a loan,” says Vera Kovács, the
group’s leader. “He had two years to pay it back.” Three and a half years on, and Murányi has not only paid off his debt, but gained permanent employment (with the same brickworks) and moved into a regular prefabricated “panel” apartment in Kispest. He married this summer – his bride a former long-term acquaintance from Szolnok. Financially, life is now relatively stable, but even with his wife’s income, buying a home remains only a “sweet dream”. Still, he never wants to return to the street. “It was terrible,” he says. “I’ve finished with that.”
To learn more about Utcáról Lakásba, check its website at utcarollakasba.hu/about-us/
HR MEETS WELL DESIGNED WORKPLACES: ENHANCING THE EMPLOYEE EXPERIENCE THROUGH HEALTHY BUILDINGS WHAT IS WELL CERTIFICATION? The WELL Building Standard (WELL) marries best practices in design and construction with evidence-based medical and scientific research, harnessing the built environment as a vehicle to support human health and well-being. The WELL Building Standard sets performance requirements in seven concepts relevant to occupant health in the built environment: air; water; nourishment; light; fitness; comfort; and mind. WELL certified spaces can help create a built environment that improves the nutrition, fitness, mood, sleep patterns, and performance of its occupants.
AND WHAT HR CAN DO? Human resource professionals see firsthand the benefits of promoting health and wellness in the workplace. This is a great tool to build employer branding, but let us see how it works. We spend about 90% of our time indoors, and a lot of that is spent at work. HR departments are always experimenting with new approaches to enhance employee health and wellness, and now leading research is demonstrating how better buildings can help make people more productive, reduce absenteeism and create more enjoyable, healthful work environments.
WELL certification empowers HR professionals to play a larger role in the design and operations of the physical workspace, to have more influence on culture and change management decisions, and to align the brand experience with the employee experience. Here are some of the ways in which HR professionals are using WELL to transform the office experience and build employer brand in the same time: 1. Advocating for change management. HR professionals are using WELL as a catalyst for transforming workplace
HR&EDUCATION strategy. Through value assessments, HR professionals are able to identify existing needs, challenges and occupant experiences and begin to lay the groundwork for advocating for change. 2. Playing a more active role in building design and construction. By bringing WELL to their companies, HR professionals are able to actively engage with corporate real estate teams to make office design decisions, product selections and specifications. 3. Shaping office policies and protocols. The WELL certification process gives HR professionals the opportunity to lead other change efforts that could be launched alongside it, such as home office support, or going paperless. Each company is unique, and insight from HR can lead to innovative and customized approaches to improve employee health, happiness and productivity. 4. Telling a more engaging brand story. Once companies have achieved WELL certification, HR professionals are empowered to work hand-in-hand with their marketing and communications team to communicate their achievement and help create a more compelling and engaging employment brand. This can help attract and retain top talent when hiring. 5. Making the business case for wellness. By tracking ROI metrics such as productivity, job satisfaction, engagement, attraction, retention, and healthcare costs before and after certification, HR professionals are able to use data to make the case for investments to leadership and more efficiently budget workplace wellness related costs. In a well-managed WELL certification project, the local HR, the management board and the WELL consultants create a strong team to support the whole process.
The major steps are the following: • Registration • Documentation Requirements • Performance Verification • WELL Report • Award and Continued Engagement • Innovations and Alternative Adherence Paths • Curative Actions and Appeals • Precertification • Recertification • Use of Project Information During the certification protocol, the team will examine, consult and support all major processes in the company related to the working environment and HR policies. During the verification and certification phase, authorized WELL advisors will audit and consult each important part of your real estate-related contracts, lease agreement, and service level agreements. Interior design consultants will set up new ergonomic standards, and offer solutions not only in furniture, but also covering acoustics, lighting and other ergonomic issues.
At the end, each company will receive a detailed protocol tailor made to its own organization and the present office. The service also includes communication and change management support, which will result in a continuous high level of environmental comfort. Europa Design, as an expert in furnishing work environments for more than 25 years, has the experience to support you during this journey. We are also proud to present to you the first realized and complete WELL office interior project in Hungary, our own office building, which was refurbished according to WELL standards in 2017! For further information visit our website: www.europadesign.hu
NEED FOR SKILLED LABOR IN REAL ESTATE AND CONSTRUCTION INDUSTRIES A shortage of skilled labor from real estate professionals to construction workers to property and FM professions and the resulting rise in construction costs are acting as an obstacle to property development in the face of high demand in all sectors of the commercial real estate market. FEWER SKILLED WORKERS “Recently we have observed a significant decrease in the availability of skilled blue collar workers, as well as construction materials like steel, insulation, mineral wool and concrete,” comments Mariusz Wieczorek, projects director of Skanska Hungary. “Construction costs have increased by 10-15% on average for the last two years; for example the price of a concrete structure has grown by somewhere between 20-30%. It has an impact on the on-time delivery of the projects and results in the increase of the construction costs.”
By Gary J. Morrell “There is a strong labor shortage in the construction sector in Hungary. The real estate development sector suffers from lack of skilled workforce and for this reason, construction times have increased as well as construction costs,” says Tamás Steinfeld, head of valuations at Colliers International Hungary. “Investors and project managers are also faced with labor migration and an aging workforce, which causes challenges for all parties in real estate development: developers, tenants, project management and construction companies as well.” The shortage of labor is a factor often cited as a constraint on the development of the office market in Budapest. “When assessing the space under construction in the city relative to total commercial stock, we find that the space under active construction ratio in the office sector has slipped from 13.9% of total modern stock in June 2017 to 9.4% in June 2018,” says Mark Robinson, CEE research specialist at Colliers. “The space under construction in absolute terms stood at 330,000 sqm in June 2018, down from the peak of 464,000 in June 2017. The present 330,000 sqm and 9.4% ratio are not low when compared with a complete real estate cycle, but
Nikolett Püschl, development and leasing manager at Atenor Hungary.
the reduction compared with a year ago could be cited as evidence of a constraint. So, statistically at least, the supply of new commercial space via development in Budapest’s office sector is somewhat constrained by a shortage of labor.” One side effect of this is that construction costs for developers are continuing to rise as time schedules become more unpredictable.
He adds: “These two latter factors negatively affect the predictability as well as the constructability of the projects. The lack of foreseeability of the delivery of projects on-time and within the budget can be hard to deal with, and on a long-term basis it may have unfavorable consequences on the real estate sector.” According to Steinfeld, the main negative effect experienced in the market is the delay in a number of projects, due to the lack of construction capacity. Furthermore, the shortage of construction supply combined with strong demand and a significant rise in construction costs, with the expectation of a further rise, has caused some developers to postpone their projects.
HR&EDUCATION From the developers’ perspective, Nikolett Püschl, development and leasing manager at Atenor Hungary, argues that it is getting almost impossible to find experienced real estate professionals with four or five years of experience, and in the construction industry it is even worse. “Labor costs [for real estate professionals] have increased by approximately 20-25%, labor [construction workers] by approximately 40-50% and construction costs by approximately 40-50%,” she says. WELL-BEING ESSENTIAL “To attract labor, it is very important for a company to operate at a high moral level and build a reputation of being committed to ethics and transparency,” explains Emőke Erdélyi, HR manager of Skanska Hungary. “Well-being of the employees at the workplace has become an essential factor as well; most companies today are consciously doing their best to
“I don’t think that the education system has significant problems. Of course it has to be developed. The problem is the level of salaries versus the cost of life in Hungary. Salaries are still very low and everything is getting more and more expensive (like real estate, food, holidays, etc.)” create an attractive, comfortable and healthy working environment. The greatest resource within any organization are the employees, the ambassadors of the companies.” With regard to recruitment there is a shortage in the skilled workforce pool. “When speaking about higher education, more emphasis should be placed on the shortage of professionals in specific areas (for example engineers, mechanics). There are great cooperation initiatives between real
estate market players and education institutions, but more proactivity would be helpful,” Erdélyi comments. “To motivate or attract skilled labor to return from abroad, companies must provide safe and comfortable working environment on construction sites, demonstrate a high level of ethical and transparent approach, as well as offer training opportunities.” One electrical and climate engineer working in Budapest commercial real estate that the Budapest Business
“When speaking about higher education, more emphasis should be placed on the shortage of professionals in specific areas (for example engineers, mechanics). There are great cooperation initiatives between real estate market players and education institutions, but more proactivity would be helpful.”
Journal spoke with says that net pay has risen by as much as 40% in the past two year and that he had been offered a number of jobs both in Hungary and abroad. The most favored target destinations for working abroad are Germany and the United Kingdom, with pay as the major motivation, although a number of Hungarian professionals are currently also working in Sweden, Holland, France and Ireland. The minimum
period for working abroad tends to be three years, with around 30% of workers taking their family with them. Püschl comments that the government should strive to motivate people who have already left Hungary to work to return. “Of course the biggest motivation is the salary and living standards. The problem is that in many professional fields, a person with good skills and knowledge could
earn two or three times more abroad than in Budapest for the same amount of work. I don’t think that the education system has significant problems. Of course it has to be developed. The problem is the level of salaries versus the cost of life in Hungary. Salaries are still very low and everything is getting more and more expensive (like real estate, food, holidays, etc.)” One of the solutions to the labor shortage in Hungary (and CEE in general) is seen as the return of workers from Western Europe and the economic conditions to trigger this, such as wage growth, are present. Wages are currently rising faster in CEE than in Western Europe and the attitude to workers from CEE is less favorable in the United Kingdom, for example, in the wake of the BREXIT vote. To return to Hungary would also give workers the possibility to have a comfortable and rewarding life in their home environment. That said, there are currently no major governmental incentives or PR campaigns for workers to return home.
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