The first impact a year and half ago was shock and awe. Firms put the brakes on hiring, a full stop – asking themselves how deep this is, how long will it go on for, and how to navigate this situation. They were looking at cash flow and reserves, worried about carrying costs, knowing they can’t stay in limbo for ever. But they worked through that. Since then, vaccines have changed the situation. The emergence of vaccines was a watershed; it generated an optimism. The questions became how do we continue to operate, who do we hire first, which roles are critical, and who do we leave to later?
Since then, there was a massive uptick in hiring. The second quarter of this year was a record for us across the board, and it has hasn’t slowed down since the fourth quarter of 2020.
Normally, in a dipping economy, permanent placements fall off; hiring of temporary workers, outsourcing and contracting all rise. There’s a nervousness about taking on permanent staff. But we didn’t see the downturn like in a usual recession. People got their heads around working from home very quickly. Business confidence is back. Internationally, we’re seeing more interest in terms of new inward investment into Poland than we have ever seen, and at the same time existing investors are increasing their presence in Poland. The country is perceived as a safe bet, attractive. Where to invest? Poland is right up there. The economy is the most resilient and optimistic among the OECD right now.
What is the source of this optimism?
Poland is currently an emerging information economy. This means its labour market must be seen through a different lens. Before the pandemic, Poland was seen by many investors primarily as a source of quality workers paid lower salaries than in Western Europe or the US. But now, other countries elsewhere in the CEE region are cheaper in terms of running a business. Candidates in Poland are increasingly seeking high-paid work in skilled occupations. The quality of the labour force is high. As a result, existing international companies are moving more and more sophisticated operations to Poland, at the same time as newcomers continue turning up.
Technology has exploded. Before the pandemic we could see that anyway. Working from home has proved to be no barrier. Nearshoring in the technology space makes sense due to wage arbitrage. Getting top Polish talent to work in Poland for UK companies means it’s still cheaper to do the job here. We are seeing a world without walls, a labour market without barriers – although there are governmental or jurisdictional issues such as tax entities that need to be worked through.
The labour market has been like an elastic band that had been stretching, then the pandemic gave it some slack, now it’s stretching again, and this is most acute in IT, where demand is exploding. From our point of view, as Hays Poland, we have to decide who to say ‘no’ to. We have to be selective and partner with firms that offer a great working environment and good careers. It’s a candidate’s market out there, the best receive multiple job offers, allowing them to choose where they want to work. Remote working has opened this up – you can now work internationally from your living room.
So, an employer’s value proposition becomes key in the war for talent. Employer branding is your promise – but do you keep your promise? The sizzle and the sausage! Social media means that people experiencing bad employment conditions will let the world know instantly.
You’ve mentioned remote working. Is working from home our future? Back to the office? A hybrid? Or maybe even back to the office scenario?
The genie is out of the bottle. Is working from home the future or is it some form of hybrid work depending on industry? It is easy to get overwhelmed with the options and what is best for your teams - whether that be returning to offices, working from home or implementing a hybrid model. Working from home, remote or hybrid is going to be a feature of the future in some form, so we need to ensure our organisations, leaders, and employees are best able to thrive in this environment.
Certainly, there’s meaningful benefit from getting people together. In an office environment, a peer group can often provide ad hoc informal learning and a level of wellness-support though social interaction. It is missing in a remote environment and may have to be replaced by additional resources. The right working model for an organisation depends on the nature of the business, the roles within it and the benefits that individuals can give and get either in the office or remotely.
For many businesses hybrid is the way to go. Outcomes for business in terms of productivity, meeting the expectations of your people – a winning ticket that aligns lifestyle and developing business. There needs to be a formal, recognised hybrid model. For us at Hays, it’s three days a week in the office, two days working from home.
During the first lockdown, the first experience of working from home, productivity spiked. But then isolation fatigue set in, and productivity dipped. It’s climbing back now. We are developing new critical success metrics, different to the old-school KPIs. Out of 100 indicators regularly measured, 97 are not important but three are game-changers. Winning firms are coaching and supporting their leaders to manage people remotely, to gain insights in real time, to understand the effort and effectiveness of remote work and what’s best done face to face.
Having meaningful meetings on Teams or Zoom means understanding the nuances of the platforms. We work with databases, we spend time learning and developing – training interactively, effectively online, and we complement that physically face-to-face. Energy is crucial in business. Working with people is about the buzz. We are social animals.
Neither extreme will work – the ‘all-back’ model is a backlash, driven by managers who take comfort in the old-school thinking that ‘only if I can see you, you are working’. Neither will we be all working from home. The hybrid model is right for us, I expect that in some shape it will become the dominant model.
What is now happening in the labour market? Are employers willing to pay more if that’s necessary to acquire skills? There is an ongoing discussion about growing recruitment challenges…
Top-quality contracting IT professionals are on top wages here, working primarily into London, where there is still a significant difference between what’s top-whack around the world. Salaries in IT in Poland have risen by between 7% and 10% since the outbreak of the pandemic. But to counter such offers, companies have had to pay significantly more to retain those employees they least want to lose. This takes the edge off productivity gains, as firms reach a tipping point. At what point is it no longer worth keeping someone? There is a false-positive perception of what’s sustainable – inflation is a problem – will it stabilise, equalise regionally or globally? At some point businesses will probably say ‘enough is enough’.
And yet the number of investors is huge. They’re still coming – engineering, shared services, tech – the sheer volume is we’ve never seen before. They are looking for 200, 300, 400 staff. The challenge is supply as everyone’s fishing in the same pond. Developing and retraining skills needs acceleration.
Then what is the answer to the talent shortage dilemma? Is it automation, migration, skills-development schemes?
AI is part of the answer but is not the answer. It will replace some jobs, it will replace parts of many processes, but it will also create new professions needing new skills people haven’t got. Similar numbers of jobs in the economy, but doing different things. We’ll need to be able to develop, manipulate, interpret, manage data.
But this is a great problem to have, compared to a deep-dive recession. These are problems to relish, not to fear. How do you grow? Poland is in a better position than before the pandemic. It has a window of opportunity right now, but it’s facing similar challenges to Japan. Do you buy, build or adapt talent? Do you encourage immigration, develop new entrants through the education system, or retrain the existing workforce?
The percentage of foreign workers – in the IT sector and shared-services sectors anyway – is still tiny, with Ukraine and Belarus the main sources. The well will run dry and others will take the opportunities if Poland doesn’t.
The solution might be pushing STEM (science, technology, engineering and maths), hard and fast, as in Japan. Adjusting the education pipeline is a step, but the short-term answer is skilled migrants. It raises concerns in the population about ‘foreigners taking our jobs’. But just like in the UK, these jobs fall into two categories – work you don’t want to do and work you’re not equipped to do.
Is there a willingness to cross-train, importing STEM? The government seems to be without a plan. It requires resource, attention to detail and effort. Is this a cost or an investment? There is the cultural aspect too – who has the lowest propensity to cross-train?
There needs to be a coherent plan – private and public sector working together. In New Zealand, there is the notion of ‘our team’, five-million strong, this is where we’re going, here’s the roadmap.
Business is changing, technology is driving the change. Look at how marketing has changed over the past ten years. Traditional marketing has evolved – it just happened. It moved to digital marketing seamlessly. Today it’s about big data, search-engine optimisation, social media and online ad campaigns.
The pace of change has never been faster, and markets are changing quicker than skills. Companies will have to look into different solutions in order to acquire skills they need now, not in the future. The popularisation of hybrid and remote working might be one of the advantages. Remote models enable hiring from much wider areas and bigger talent pools, which in some cases can ease the strain on their recruitment processes.
The Polish labour market creates strong opportunities for skilled workers. If employers and investors are now hiring or planning to hire, how has Hays performed in the pandemic?
Hays in Poland has become a Superbrand, we’re in Forbes Top 75 Polish employers, we’re number one in permanent recruitment. It’s good to have recognition of our hard work. However, it’s becoming a challenge to say ‘no’ to a potential client.
Biggest lesson from the pandemic? Don’t forget the lessons you’ve learned! Downturns make you realise how many things there are that you don’t really need to do any more. We have found new ways to ramp up productivity in the short term, these should be onboarded. We all need to institutionalise the lessons we’ve learnt for good – not just something we did to get us through the downturn that we can forget when things improve.
Businesses can’t let this crisis go to waste. Tough times force all of us to confront things that may be uncomfortable and to make some decisions that we know we should have made anyway. A crisis often leads to creativity and increased productivity. But it is necessary to remember that you can’t risk burning out your people. You can only sweat your assets for so long, then you need to add more resources.
My personal advice is to stay focused on engaged, accessible and open leadership. Communication is critical in a crisis but equally important in the good times. Our engagement at record high levels is due to this focus.