Business
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With the right attitude, unemployment need not be a curse; HRM agencies are here to help (Photo: Dreamstime)
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Human resources management
Back to Basics
05.02.2010
The recession has forced the human resource sector to return to their fundamental business model, which is to act as a middleman for employers and job seekers.In 2009, financial sector caught the headlines with cuts and financial losses but the human resources management firms have suffered equally in the economic downturn. Tight economic conditions have heavily shaken the labour market. This is not surpirsing since when a company decides to cut costs, the first on the list has always been streamlining human resources. Of course, Slovenia is no different - it’s unemployment rate has gone up to 6.8% in November 2009 from 4.6% in January 2009 (see chart). The impact is obvious on the government’s spending. But employment agencies have also faced some unprecedented challenges.
Steep fall
Adecco, an international human resources management firm, reported a 35% fall in demand for its services in Slovenia in 2009 in comparison to 2008, with the first half of last year being particularly hard.
Moje Delo, a Slovenian employment web portal, also saw a sharp fall in demand for its services in 2009 – an incredible 50%. They observed the biggest fall in industry terms in the metal production industry and the real estate sector. In contrast, the greatest demand for new employees in 2009 was seen in the pharmaceutical industries, as well as IT and insurance sectors.
“The companies were employing primarily in the services sector and the value-added services, which - unfortunately - are not in abundance in Slovenia, thus the employment wasn’t massive,” commented Adecco.
Everything’s changed
To weather the crisis, changes had to be made. In Moje Delo, they had to cut costs and reorganise certain projects. They also went further, by helping those most in need of their services - the unemployed. Throughout 2009, the company organised free seminars around Slovenia, which were designed to inform visitors on ways of finding employment.
Not only did the number of demands for the services of employment agencies changed - the type of demand has changed, too. Moje Delo is finding that companies are recruiting more carefully and employers are putting more emphasis on keeping their current workforce. They want to retain good people so they want to find out how much their employees are worth in today’s market. At Simobil, for example, they have cut down on using external staff, and are relying more on the internal employees. As a result of this strategy, HRM agencies are being asked to provide advisory services such as assessment centres even for senior management personnel.
There has also been a change in the type of employment, with an increase in demand for part-time and temporary employees. This type of employment had been growing rapidly in Slovenia even before the crisis, especially since the country joined the European Union in 2004.
“Long-term employment is almost gone,” said Tomaž Dimnik, the business director of Moje Delo.
Future problems
The current trend with employers is that they only employ new people when there is an immediate need to fill in a position. The employment agencies agree this strategy is appropriate for staff with lower qualifications, where basic training can be done fairly quickly. But the agencies warn that highly qualified professionals will be difficult to find in the future and the choice in a country like Slovenia will be small. The headhunting agency Trescon says this is not new and that shortage of highly skilled professionals has been apparent in the past decade. Poor employer branding and poor image of some professions have added to this problem, the agency says. But lack of key personnel could only play in the hands of recruitment companies and additionally increase their role in the employment sector.
“That si why so many of our searches are headhunting based,” explains Petra Treven Bernat, head of Trescon. “And the fact is that this applies to the search for specialist managers and not general managers.”
The local attitude
There is an additional problem in Slovenia that prevents companies from hiring the best candidates. The fact that most small or mid-sized companies do not have a designated HR manager – most HR operations are done by secretaries, directors or managers – shows that the importance of human resource management is not fully taken into account.
“Statistics show that one HRM expert is usually there to serve 80 or more people”, explains Ms Treven Bernat. “There are other extremes,” she continues, “we have a media client who decided to employ an HRM expert only after reaching 300 employees”.
Industry experts warn that the role of the HRM in Slovenian labour market will have to become more strategic rather than managerial. To cap that, the providers of such services here have to find ways to raise up to challenges left by the recession itself.
“The recession has made a long-lasting impact on HRM services,“ Dimnik said. “It is hard to have the same level of quality and lower prices, so only those who will be innovative, fast and with the best service will survive.”