Understanding mobility

Despite their eagerness to travel abroad for work, Poles lack labor market mobility. Anna Wicha, CEO of Adecco Poland, explained what labor market shortcomings Poland must tackle in order to avoid the middle-income trap Interview by Beata Socha WBJ Observer: Poland ranked 38th out of 109 economies in Adecco’s Global Talent Competitiveness Index, one spot better than last year. Is it a good result? Anna Wicha: It’s not a great outcome. It would be OK if we had made it into the top 10. Other countries from our geographical region are ahead of us, which is food for thought in itself. What seems to be Poland’s Achilles heel then? One of the biggest problems of Poland’s labor market is talent attraction. Poland ranked 77th in this category. It’s caused by low wage attractiveness. Young people get a university-level education and then move abroad to look for better pay opportunities. Secondly, we lack vocational education. Being a manual worker, even a highly qualified one, has long been out of fashion. I’m not talking here about simple repetitive labor, but about people operating computers, CNC machines etc. In the 1990s, Poles started seeing university as a must. As a result, we have too many university students. And, after they graduate, they have higher expectations in terms of pay and responsibility. Meanwhile, as people without any experience, they have to start from entry-level positions and move up the ladder gradually. Isn’t that a generational issue? It is. Today’s university graduates, the Millennials, expect more: they want a good work-life balance. They want to earn over PLN 4,000 gross from day one. If they don’t, they get disappointed and disillusioned very quickly and start jumping from one job to another. That’s what creates a certain gap in the job market. On the one hand unemployment is close to 10 percent, on the other – we don’t have enough employees to fill vacancies. There is a wide gap between supply and demand on the labor market. What should Poland change in university education to make the gap smaller? We still don’t have courses educating people to do jobs that have existed for years in the market. Take a recruitment specialist. We have sociology and human resources management, but not a faculty educating people in recruitment. Meanwhile, there are 10,000 recruiters in Warsaw alone! We don’t have a university faculty specializing in training salespeople. Internet retail is booming, yet we don’t teach e-commerce. Best-case scenario, there is a semester squeezed in at the economics faculty, and usually taught by people who know e-commerce only in theory. That’s another issue – people who teach business at universities have little or nothing to do with business. They teach according to an outdated syllabus, with no practical experience in the field whatsoever. Private universities try to keep up by hiring people from the business world, but public universities rarely do. Luckily, one of the criteria for assessing universities nowadays is how many of its graduates find good jobs. Do Poles lack soft skills? They absolutely do. There’s a big gap between Poles’ so-called hard and soft skills. Polish children have some of the best scores in PISA rankings. They have excellent analytical and mathematical skills, logical thinking etc. But they come up short on teamwork and mobility. But how do you reconcile that with the fact that over 2 million Poles migrated to other EU countries looking for work after Poland joined the EU? Indeed, Poles are eager to go work and live abroad. But they don’t want to move from one city to another within the country. Why? They don’t want to leave their parents’ home. Also, this lack of mobility stems, at least partly, from the insufficient number of apartments for rent. The rental market is severely underdeveloped in Poland, compared to other countries. Do Polish cities specialize in any particular business? Is there, for instance, any chance of creating a Silicon Valley in Poland? Cities do specialize, depending on which investors initially came to the city. The first major investor created a supply chain around it, attracting more companies to the area. Thus, we have several clusters, for instance the automotive cluster near Gliwice, the aviation valley near Rzeszów or electronics in Wrocław, logistics near Poznań and Kraków’s shared service center hub. Adecco’s recent study suggests that productiveness is one of Poles’ stronger suits. Is it really so? The score for productiveness is higher than in attracting talent, but there is still a lot to be done. According to a study by employers’ confederation “Lewiatan,” we work 33 percent more than Germans, but our productiveness is 50 percent lower than that of Germans. How can Poles increase their productiveness? Polish companies need to give employees more feedback. They need to be more goal-oriented. It motivates employees to become more efficient at work. If you have two employees: one very diligent and the other one, say, a slacker, and there is no feedback from their superior – it won’t motivate the slacker to put in more effort. Quite the opposite – it will demotivate the diligent employee. Polish firms are starting to adopt employee assessment schemes. Will that make a difference? If it’s a once-a-year analysis, not really. You need constant feedback from your superior, you need target-oriented management. When employees have clear short-term goals, they are motivated to meet them. Unfortunately, in many companies, even if such goals and targets are formulated, they are often known among the top layer of management, and are seldom communicated to low-level workers. There’s a number of other ways of motivating employees to more productive work: performance-related bonus systems instead of the so called “trzynastka” (an extra, “thirteenth” salary), which is given to all employees, regardless of their results. Do you think performance-related remuneration, like what you often see in sales departments, is the way to go for other jobs as well? For some reason Poles tend to think that   their performance is measurable only in jobs where the employee is directly responsible for some end results, like in sales. But it isn’t entirely true. There are a lot of ways to measure how efficient a person is. In back office jobs: accounting, payroll, HR, a large number of everyday jobs can be quantified. For example: how quickly expenses from business trips are reimbursed, how quickly documents circulate around the company etc. This is also where innovation can be used as a motivator: if you make your job more efficient and you make some sort of lasting improvement from which the company can benefit, the firm will give you a part of the extra money. Automation is also an obvious way of increasing productiveness, but it’s an area where Polish firms lag behind. Can it be remedied? It could, for example by introducing better tax incentives for modernization and automation. What are Poles’ biggest strengths then? We are very adaptable and flexible and good at problem-solving when difficulties arise. When the Russian embargo hit Polish farmers and meat producers, they quickly adapted and found new, creative ways of selling their oversupply. What helps Polish firms to be so flexible is the fact that 95 percent of all companies are SMEs, where all the decision making is done in one room. That’s what makes them respond so quickly. Coming back to attracting talent: Poland is still relatively young compared to Western Europe, but given our low birth rate, a time will inevitably come when we will need immigration to meet the demand for labor. Can we attract talent from abroad? Last year, there were some 400,000 Ukrainians working in Poland legally, another 400,000 or so – illegally. That gives us close to a million people working here. It isn’t an easy subject. We do not support their assimilation within our society and that could create some friction. We need to open up to immigration. People migrating for work bring a lot of positive qualities to the job market. They adapt to new realities and accept conditions that some Poles would not deem acceptable – it’s exactly the same thing that Poles brought with them to the UK. Given the recent new government policies, we may need immigrants even sooner than we thought. The 500+ program [where parents are given a monthly allowance of PLN 500 per month for the second and subsequent children; in poorer families the program includes all children] may create another gap in the market. A woman with three or more children will have a hard time deciding if she wants to go back to work for a minimum wage or stay at home raising kids with the state allowance exceeding her potential pay.