HRM market: what was 2019 like, what will 2020 bring?
What did the Polish HRM market look like in 2019? What trends in the area of recruitment and employee management should continue, and which have not come true and will expire? What awaits the market in 2020?
The HRM industry is evolving, and with it the way HR consulting agencies operate. Employers more and more often expect a comprehensive approach to cooperation, requiring solutions that combine the scope of several separate services, e.g. permanent recruitment, outsourcing of services or temporary work. Candidates and employees, on the other hand, need advice on their own development or recommendations on benefits. With the changing market, in 2020 HR consulting agencies will have to redefine and adapt their role to the expectations of clients.
TEMPORARY WORK: STILL ON A ROLL
Although the continuing employee market and the tightening of time limits for the use of temporary work by user employers have resulted in declines in the number of people working in this legal formula, the temporary employment market remains stable and the demand among customers is not decreasing. Let us remember that the saturation of the Polish temporary employment market at the level of 1.2% is still below the European average of 1.9%1.
– On the one hand, withWe believe that clients are increasingly using the Try & Hire service, i.e. after a few or several months they hire proven and trained temporary employees on a permanent basis, and some companies even immediately outsource the recruitment of permanent employees to agencies. On the other hand, however, the share of temporary work is still growing wherever there is seasonality, especially in the era of rising labour costs (PPK, minimum wage in 2020 higher by 15.6% compared to 2019) and the uncertain economic situation in Poland and globally – comments Marcin Ostrowski, Sales Director at LeasingTeam Group.
The demand for the broadly understood outsourcing of a process or function is also constantly increasing. – This form of cooperation is an extremely beneficial solution in the logistics, manufacturing, share service or e-commerce industries, i.e. wherever we can settle for the effect. Well-prepared and implemented outsourcing gives the client measurable benefits and time savings. Despite many advantages, the share of outsourcing is not growing as fast as we expected, m.in. because it is not always possible to apply it where temporary work has been operating so far. This is another proof that temporary work is needed and will not disappear from the market – adds Edyta Kowalczyk, Key Account Director at LeasingTeam Group.
RECRUITMENT: STILL NOT AN EASY TASK
The demographic decline, which is already noticeable today, undoubtedly makes it difficult to recruit employees, especially when it comes to qualified staff with specific skills or qualifications. The demand for employees in individual industries has been similar for years. IT specialists, engineers, blue-collar workers or people who speak many foreign languages are invariably in demand. Staff shortages in these areas are increasingly a big problem for employers.
At the same time, in 2019, there was a noticeable increase in the requirements of candidates towards a potential employer. Candidates expect higher salaries, additional benefits and friendly working conditions. One of the very important factors, the role of which has recently increased significantly, has become an attractive and convenient location of the workplace. This is especially evident in larger cities, where covering longer distances every day takes too much time.
Reaching the right candidates and then acquiring them is an increasing challenge for recruiters. Their task is no longer just to present an offer to the employer. In order to encourage and convince a person who is not thinking about changing jobs at all to participate in the recruitment process – they must demonstrate extensive sales skills, thorough knowledge of the offer and a high level of interpersonal skills. The need to reach out to passive candidates also makes recruitment marketing particularly important, as it can be used to reach candidates and interest them in the offer in an unconventional way. The range of modern tools used in recruitment processes is also expanding.
– The new generations on the labour market, accustomed to using the latest technological solutions, are forcing employers and recruiters to change the way they recruit. The use of modern tools not only shortens the time of its implementation, but – most importantly – helps to attract the best candidates. It is also an element of building a positive image of the company as an employer – notes Anna Formela, Recruitment Director at LeasingTeam Professional. And he adds: – Undoubtedly, progress in the development of artificial intelligence will have a major impact on the situation on the labor market. Already today, many organizations use the so-called chatbots, which help reduce the time provided for the completion of a given task. They are also used by some companies in the recruitment process.
Permanent recruitment is currently quite a challenge, but there are also signals in the media that the end of the so-called employee market is approaching. Companies, fearing the deterioration of the economic situation in the country, take into account the possible need to reduce employment, which is manifested, m.in by an increase in interest in the outplacement service – At the end of 2019, we already had several such inquiries. Customers want to have an overview in the event of a sudden deterioration in the economic situation. This proves that companies are increasingly aware of human capital management and an attempt to stay ahead of market changes. We cannot yet talk about an increased demand for outplacement, but the situation is dynamic and everything will depend on the condition of the economy in 2020 – comments Anna Formela.
WORKERS FROM UKRAINE: NO WORRIES ABOUT THE OUTFLOW
In the face of the shortage of local workers, in recent years the Polish market has been willing to use people from Ukraine. Currently, they are a large group that is increasingly aware of their rights. They pay more attention to rates, employment and accommodation conditions. “Poland is a market that Ukrainians know and where they feel safe, so it can be assumed that they will continue to be active in Poland. In addition, the recent increase in the lowest national hourly rate may make it easier to attract candidates for lower-paying projects, but offering a large number of hours, i.e. 200 per month – says Joanna Januchta, Head of Foreign Market Development at LeasingTeam.
Contrary to earlier fears, the situation should not be significantly changed by the new regulations that will come into force in March this year in Germany, as part of the law on the influx of professional labour (Fachkräfteeinwanderungsgesetz), which facilitates the employment of non-EU citizens. In practice, the number of people who can benefit from this will be limited. Although there is no official information yet on how the verification of non-EU citizens will be carried out, we already know that a number of requirements are imposed on potential candidates: documented professional qualifications or education equivalent to German must be presented, knowledge of German at least at B1 level is necessary, and a candidate from outside the European Union must also have a livelihood for the period until the first income is obtained.
– The candidate must take into account both high costs of stay and obtaining the necessary permits, e.g. the costs of translations can amount to several hundred euros, as well as at least a few weeks of waiting for a temporary residence permit in order to perform work.In addition, it is not at all obvious that nominally higher wages in Germany will offset the high cost of living, especially since the German employer, unlike the Polish one, usually does not offer accommodation to the employee – explains Anna Macheta, Development Director at CPC Consulting Group – the LeasingTeam Group company responsible for cross-border posting of workers to Germany.
Fears about economic emigration of Ukrainians to Germany are therefore proving premature and unfounded. The same conclusions were reached by experts at this year’s Meet UA Summit conference, which took place on January 24 in Kyiv. They agreed that Poland is not threatened by a massive and sudden outflow of workers from Ukraine in the next few years. In addition to the significant costs associated with taking up work in Germany, the entities of the Ukrainian labour market (employment agencies and employees) are not ready for such a change. They do not know the German language, the rules of posting or German labour law. A barrier for them is also the completely different business culture prevailing beyond our western border.
HR AND PAYROLL: CHANGES, CHANGES
The year 2019 was very demanding in terms of HR and payroll services for employees. It was marked by permanent change. – New regulations They entered very quickly, not giving time for proper preparation and causing unnecessary panic among employers. It is enough to mention, for example, the requirement to reduce the advance payment for income tax from 18% to 17%. In a hurry, within a few weeks, companies had to implement new solutions, e.g. with Update or purchase new HR and payroll software.Although the imposed pace of change forced companies to provide immediate education and full mobilization, it also entailed additional personnel and financial burdens ,” comments Monika Rutowska, Head of the HR and Payroll Department at LeasingTeam.
Will we face similar situations in 2020? – It is difficult to predict, but 2019 has shown that the unexpected should be expected. Entrepreneurs seem to come to similar conclusions. More and more often they ask us about outsourcing HR and payroll services. This is actually an optimal solution, because The responsibility for tracking changes, their quick implementation, and updating HR tools rests with the service provider. This cannot be overestimated, especially in the face of difficult and unexpected circumstances, which specialized external companies can cope with much more efficiently – sums up Monika Rutowska.
Although the pace of introduction of new regulations in 2019 raised concerns, some of them are beneficial for the labour market, as they may affect the professional activation of Polish citizens, in particular the youngest generation entering the labour market. And this is very important, because Poland has one of the lowest rates of economic activity in Europe.
The key change was the relief for young taxpayers introduced in the summer, i.e. exemption from income tax for people under 26 years of age. So far, many of them have given up employment options, explaining lack of time or low wages. Currently, more and more jobs are being created that offer flexible time and forms of employment, and the tax exemption has significantly increased the salaries of young people. Working on the basis of a contract of mandate, not only do they not pay PIT, but they receive the equivalent of the gross rate. The activation of young people gives hope for eliminating staff shortages, e.g. we can already see greater interest in temporary work in the white collar segment, i.e. office workers.
Another change that had a mobilizing impact on the labor market was the reduction of the income tax advance from 18% to 17% for people with income up to PLN 85,528 per year as of October 1, 2019. At the same time, the amount of tax-deductible costs was increased to PLN 250 per month (previously PLN 111.25) and PLN 300 per month for commuters (previously PLN 139.06). From the perspective of both employees and employers, these changes are beneficial. The labour market has been waiting for them for a long time, especially the increase in tax-deductible costs, which were disproportionately low compared to those incurred in real terms and have remained unchanged for 11 years, despite significant changes in the economy and the labour market.
1) Economic Report 2018 Edition
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