From this day forward, I will be putting all new posts on my new blog .

As well as continuing to post on Central and Eastern European recruitment I will be focusing on topics I am interested in, such as how to develop passive income to lead a flexible and free lifestyle, as well as connected topics like making money online and real estate investment.

Please check out the new design and all new categories, and subscribe at www.globalmicrobrand.net

Link: Online Recruitment on the Rise in Eastern Europe.

Interesting PR peiece by jobs.cz I have never seen a job site have the dominance in one country that jobs.cz has in the Czech Republic. Hopefully jobpilot will gain some share to force jobs.cz to drop it's prices soon.

After a pretty quiet couple of months for postings to this blog I thought I would do a post on the background to this blog and where I would like it to go. As a recruiter based in Czech republic but active across central and Eastern Europe I started this blog to submit my thoughts on recruiting in the region and interesting articles I came across. I also thought it would be a good forum to publicise news and announcements about my company and to be honest the purpose of the blog became confused; was it a company blog or a blog about recruiting in the region? This factor together with the lack of time I was able to devote to it meant that I wanted to step back and take a look at where I would like it to go, which I had a chance to do this weekend in between mountain biking in the Austrian alps.

The short answer is I have stripped out all the company announcements etc. and taken it back to purely a blog about recruitment news/trends/gossip/whatever in Central and Eastern Europe, a subject of huge interest to me. To do this I would rather expand the scope of the blog and increase the number of authors so others with recruitment/executive search expertise in the region can contribute.

So basically would you like to submit some aricles to this blog? Id love to hear from anyone working as a recruiter or in HR anywhere in Central and Eastern Europe who would like to submit articles or links to this blog. All you will need to do is email me and I will set you up as an author and from there you can easily log on and post articles whenever you have something to say. Id especially love to hear from recruiters in Russia / CIS countries as I have tended to focus more on the Central European countries. Of course anyone working for competitors in Poland and the Czech Republic is welcome as well. Id like to keep the language of the blog to English but if you spot interesing articles in Polish/Rusian whatever please feel free ot submit them. If you want to post you can use this as a forum to publicise yourself/your company or remain anonymous depending on your preference.

For those who dont want to submit articles please feel free to leave comments to article as I'd like to stimulate more dicsussion between other recruiters in the region. I have also set up a new URL for the blog at www.ceerecruit.info

Cheers and hope to hear from some of you Dan

Dave Mendoza from the sixdegreesfromdave.com blog was over in Prague recently and I exchanged a couple of emails but wasn't able to meet up in the end. Here are links to his posts on the trip. Its always interesting to see the perspective of people visiting as living here you tend to take it all for granted.

http://sixdegreesfromdave.com/2007/04/16/prague-adventure-part-1-a-linkedin-connection-points-the-way/

http://sixdegreesfromdave.com/2007/04/16/prague-sights-sounds-st-charles-bridge-the-core-of-pragues-vibrant-cultural-life/

http://sixdegreesfromdave.com/2007/04/26/prague-tales-part-3-the-haunted-ghost-tour-in-old-square-the-clock/ 

http://sixdegreesfromdave.com/2007/05/07/prague-tales-part-4-macabre-in-kutna-hora-a-little-boy-running-thur-alleys-in-cesky-krumlov/

http://sixdegreesfromdave.com/2007/06/04/international-staffing-perspectives-brian-janecek-brno-czech-republic/

Anyone who has visited Estonia, Latvia and Lithuania recently knows about the booming economies of the three Baltic states. The labour shortage is obvious but in these former Soviet countries this takes on a whole political dimension due to the large scale migration and Russification in Soviet Times.

Discussion in the Baltic times here

One of the better articles on the future for Polish - British and returning British - Polish migration.

Appeals to Polish patriotism (like those made by the city of Wroclaw and the Polish prime minister) are unlikely to encourage many to return to their homeland. Poles are pragmatic and suspicious of government statements . The one and only thing that will encourage to return are well paid jobs. The jobs are coming, most noticeably in Warsaw, but not fast enough to stem the tide through 2007.

http://www.personneltoday.com/Articles/2006/11/21/38260/poles-apart-how-is-poland-tackling-mass-migration.html

http://www.cbw.cz/phprs/2006110612.html

So the Czech Republic is opening it's doors to the new EU arrivals; Bulgaria and Romania. The Czech media is split on whether this is good or bad, but from a Czech recruitment point of view we welcome it. The labour market is tight here and the Czech economy will benefit from an influx of keen and qualified immigrants, the same way as the UK economy benefited after it opened its labour markets to the new entrants in 2004.

http://www.cbw.cz/phprs/2006111329.html

A well balanced article from Cristina Muntean (once again). It brings up a couple of interesting points; firstly about the general dire state of the recruitment environment in the Czech Republic, and secondly about the increasing number of Poles coming to work in the Czech Republic, where they are now the third largest minority after Ukrainians and Vietnamese (nobody really counts the Slovaks as foreign).

A lot of the recruitment activity in the Czech Republic is murky to say the least and the least events at Skoda are only the tip of the iceberg in my opinion.

There is a recruitment industry association in the Czech Republic (the APPS) which campaigns for a better recruitment environment, and requires all its members to sign a code of conduct. It is quite telling though that out of 1,500 agencies in the Czech Republic, only 10 of us are members!

On a personal note I was very pleased to see the comment at the end from Jitka Dobrakova from Manpower where she urges companies to use an agency with ISO 9001:2000 certification and is a member of the Czech recruitment Association (the APPS). As far as I can make out the only agency who this applies to is my company Dunross Recruitment, so hopefully all employers will be following Jitka's advice :)

Wll the CBW thinks so. Two interesting stories from Cristina Muntean. It is always difficult to estimate how many headhunters are operating in the region as many will cover a business sector across multiple countries from one office.

Personally I think we will see a peak this year in Czech Republic and Slovakia and then a decline as headhunters focus their interest on Romania, the big new EU entry in 2007!

http://www.cbw.cz/phprs/2006082125.html
http://www.cbw.cz/phprs/2006091104.html

Well it's been a week or so without any news ragging on the Czech labour force so it was about time for a survey from PwC showing that around 16 per cent of Czechs leave their jobs annually compared to 9 percent Europe-wide.

The article is reviewed here in the Post:

http://www.praguepost.com/P03/2006/Art/0824/busi4.php

I agree broadly with Katya Zapletnyuk's excellent analysis and would like to add a couple of points.

Firstly this figure needs to be looked at in the context of all the new emerging economies of Central Europe where turnover rates are high across the board, due to the rapid speed the economies are changing as new companies move in and older ones are taken over or go under.

Secondly the important point that you can't see in the figures is that if you do have one of the 84 per cent who apparently will stay with you the quality can be very high, extremely so if you look at recent University graduates where foreign language skills and commercial awareness are excellent.

Dan Taylor | Dunross | T: +420 222 723 664 | F: +420 222 726 747 | M: +420 603 147 177 | E: dantaylor@dunross.co.uk| Skype Name: dan-dunross | A: Sudomerska 32, 130 00 Prague, Czech Republic

ISO 9001:2000 Registered

Member of Association of Personnel Services Providers

.......if you take the cost of living into account according to a survey from Hay group , a human-resources firm. The calculations include the cost of rent, which is punishingly high in some financial centres. Sweden's heavy taxes leave top managers in Stockholm worse off, in real terms, than their peers in Shanghai or Budapest.

From a central European perspective both Czech Republic, Slovakia and Poland rank above the UK in 'real pay' rankings for senior managers!

A question we're often asked is what is going to happen in 2007, when if all goes to plan Bulgaria and Romania are scheduled (but still not confirmed) to join the European Union? Will the countries who have accepted workers from the original 10 accession countries (Britain, Sweden, Ireland, Finland, Spain, Portugal, Greece and now Italy) accept these workers?

Most countries are staying silent on the issue at present just as they did before the original EU enlargement in May 2004, but the first rumblings of a debate are starting as this article on workpermit.com shows.

Our opinion: In the current climate Britain and other countries will not admit Bulgarians and Romanian workers and will invoke a veto for several years, similar to the 7 year veto used by Germany France and others on the first accession countries.

http://www.workpermit.com/2006_08_08/uk/open-door_policy_debate.htm

Dan Taylor | Dunross | T: +420 222 723 664 | F: +420 222 726 747 | M: +420 603 147 177 | E: dantaylor@dunross.co.uk| Skype Name: dan-dunross | A: Sudomerska 32, 130 00 Prague, Czech Republic

ISO 9001:2000 Registered

Member of Association of Personnel Services Providers

Everyone discusses the large scale movement of workers from the EU accession countries to Western Europe but an interesting trend is the record number of foreigners from the old EU states coming to work in the accession countries, in particular from Germany. Grafton's MIlan Novak offers his take on this trend.

Like Grafton, Dunross recruit a large number of English and German speakers for positions in Prague so it's a trend we welcome!

http://www.radio.cz/en/article/81519

Anyone who runs a business in the Czech Republic is familiar with the high number of sick days. The Czech Business Weekly discusses a survey carried out by PWC which concludes the average number of sick days a year in the Czech Republic is 11 compared to an EU average of 5!

http://www.cbw.cz/phprs/2006080709.html

An interesting article in the Czech Business Weekly which discusses the shortage of skilled Czech workers in the IT, automotive and finance sectors. This co-relates broadly with the trends we have witnessed at Dunross.

http://www.cbw.cz/phprs/2006052919.html

Nearly one-third of UK entrants who arrived last year are now working in management services, business and administration roles, compared with just 4% in the construction sector and 12% in agriculture.

About 300,000 citizens of the 10 countries that joined the European Union two years ago have taken new jobs in the UK, The Independent reported.

Professor Peter Spencer, chief economic adviser to Ernst & Young Item Club, said the new workforce would contribute a significant boost to the UK economy.

"The UK workforce has been younger, more flexible and economical, easing the pensions burden and keeping interest rates lower than many commentators could have predicted," he said.

http://news.independent.co.uk/business/news/article359850.ece

The Recruitment and Employment Confederation (REC), the body that represents the UK recruitment industry welcomes Ernst and Young’s recent report which recognises the important contribution that migrant workers make to the UK economy. However, it warns that more needs to be done to ensure migrants are not being exploited. The current UK skills crisis has put considerable pressure on employers and recruiters looking to source skilled workers.

This problem is particularly evident in key sectors such as construction and hospitality where migrant workers have made a real difference. Gareth Osborne, managing director, Recruitment and Employment Confederation (REC) comments, “Whether it is bus companies or restaurants, employers all over the country are finding it increasingly difficult to recruit locally or nationally. The REC’s monthly Report on Jobs – which is conducted in association with KPMG and NTC research – shows that the demand for staff continues to rise. This demand covers both skilled and unskilled posts and has led to a number of recruiters undertaking pro-active campaigns in the new member states.” Worryingly, there have been problems in integrating this new workforce with some unscrupulous employers exploiting their lack of knowledge of the UK labour market. Osborne continues: “Whilst these figures show that workers from Poland are keen to come to the UK and that in the main they contribute to UK market, at the same time, more needs to be done to ensure that they are not exploited and do not fall into the wrong hands. It is for this reason that the REC will be working with the DTI following the recent report "Success at Work" which highlights the need to protect vulnerable workers.” Examples of exploitation have included paying under the minimum wage, unfit housing and making illegal deductions from wage packets. Gareth Osborne concludes, “It is unacceptable that people are being contracted to work outside the law. This is harmful to both the worker and for bona fide agencies who are competing with the small number of rogue operators. The REC is pressing the Government to improve its enforcement regime and is promoting best practice within the industry when it comes to managing migrant labour. Employers need to ensure they choose recruiters based on their quality and reputation, not just cost.”

http://www.onrec.com/content2/news.asp?ID=11440

- We are always pleased when the EU implements a standard which makes life easier for everyone concerned..

European Union transport ministers are close to substituting a new EU driving licence for more than 80 different types of driving licence used across the 25-nation union. The new credit-card sized plastic licence would be harder to forge because its photograph and other details would have to be updated every 10 years. It could also contain electronic information about the driver.

By Raphael Minder in Bregenz, Austria
Published: March 3 2006 19:58
FT.com

By Andrew Taylor, Employment Correspondent
Published: February 28 2006 17:46 | Last updated: February 28 2006 17:46

FT.com

Migrant workers from eastern and central Europe have not taken jobs from unemployed Britons, according to a government study.

Some 329,000 eastern and central Europeans, more than half of them from Poland, have registered to work in the UK since their countries joined the European Union in May 2004.

An investigation into their impact on the labour market was launched last year after the number of people claiming unemployment benefit rose by 90,000 in 2005.

The study, commissioned by the Department for Work and Pensions and published on Tuesday, found there was “no discernible statistical evidence” that migrant workers from the so-called A8 accession countries had contributed to the rise in claimants.

It said: “Overall, the economic impact of migration from the new EU member states has been modest, but broadly positive.”

The report compared movements in the number of people claiming benefit with the number of migrants applying to work in individual local authority districts. It said there was “no significant statistical relationship between concentrations of workers, registration scheme applicants...and increases in the claimant count rate.”

Only Britain, Ireland and Sweden of the previous 15 EU members have allowed unrestricted access to their labour markets to workers from A8 countries. A European Commission study earlier this month urged other members to follow suit. It said fears of an influx of cheap labour and welfare tourism had proved groundless and Britain, Ireland and Sweden had enjoyed high economic growth and high employment despite opening their labour markets.

Tony McNulty, immigration minister, said workers from the accession countries were “filling important vacancies, supporting the provision of public services in communities across the UK and making a welcome contribution to our economy and society”.

According to Home Office figures, some 5,000 accession country workers had registered as bus, lorry and coach drivers between July 2004 and the end of last year. Another 9,300 had registered as care workers; 1,200 as teachers, researchers and classroom assistants; almost 500 as dental practitioners and more than 1,400 as GPs, hospital doctors, nurses and other health specialists.

Polish workers accounted for 59 per cent of the applicants, Lithuanians another 13 per cent and Slovaks 11 per cent.

Meanwhile separate figures published by the Home Office showed that asylum applications fell in 2005 to their lowest level since 1994. The number of removals had also increased for the fourth consecutive quarter.

'The influx of workers from central and eastern Europe has boosted Britain's economy, relieved skilled shortages and cut dole queues, the European Commission says.'

The Independent Online
By Nigel Morris and Stephen Castle in Brussels

      Published: 09 February 2006

Britian had reaped the benefit of fully opening its borders to citizens of   new EU member states, the commission said, and it urged countries that had   imposed tough restrictions to follow Britain's lead.

Financial Times - London,England,UK
If you have to take medicine, it is best to take it sooner rather than later - delay will make it no easier. If the medicine is guaranteed to improve your health, delay is positively stupid. The 12 European Union countries that have delayed giving workers from the east free access to their labour markets should therefore study carefully a new report which shows that letting them in would improve their economic health.

The report will be published on Wednesday by Vladimir Spidla, EU employment commissioner, to help the 12 decide whether to maintain the restrictions after the end of April. Under the treaty that brought 10 new members into the EU in May 2004, the existing 15 member states could delay the introduction of free movement of labour from the accession countries for up to seven years. Mr Spidla's report summarises the impact of the restrictions imposed by the 12 countries, which must renew them by May 1 if they are not to lapse automatically. The most important finding is that the barriers have been largely ineffective in stopping movement. The flows into Britain and Sweden - two of the three countries that chose not to maintain barriers after May 1, 2004 - were comparable to or lower than those into the 12 countries that kept them. The main impact of the restrictions was to force migrants from the east to come as posted workers or self-employed - side-stepping the barriers for job-seekers. Overall, the flow has been relatively limited. In the first quarter of 2005, the proportion of the working age population in the EU-15 from the 10 accession countries ranged from 0.1 per cent in France and the Netherlands to 1.4 per cent in Austria and 2 per cent in Ireland. The average for the 15 countries was 0.4 per cent - compared with 2.1 per cent from other EU-15 countries and 5.1 per cent from outside the EU. The migrants from the east also appear to have filled gaps in the labour markets of the countries they moved to, particularly in construction. Their employment rate is similar to, if not higher than, that of nationals in those countries - and much higher in Britain and Ireland, two of the three countries that lifted restrictions. Their arrival has helped lift the employment rate in several countries, as workers have moved out of the black economy. There have been setbacks. Ireland, which has the highest proportion as a percentage of its workforce, has experienced a minor backlash after alarmist scares about the welfare costs. In Britain, however, the 293,000 applicants for its worker registration scheme during the first 17 months have disappeared into a range of industries across the country with little protest from the communities they have arrived in. Finally, it should be noted that the European economy's performance has improved since accession. The Commission says improved labour market performance has contributed to economic growth and better public finances. The decision to maintain the barriers on free movement of labour from the 10 accession countries was always a shabby one, reflecting the lack of confidence among the older member states about the economic impact. Experience has again proved wrong the lump of labour fallacy that there is only so much work to go round and that migrants will displace the existing workforce. As the deadline for deciding on whether to lift the restrictions approaches, the 12 countries that maintain them must show boldness and courage in taking medicine that will undoubtedly do them good.

A link to an article by John Ross from the Scotsman regarding the skills shortage in the Highalnds and Islands of Scotland and how positions are being filled by workers from the new EU countries.

Scotsman article

A very positive artice from this weeks Economist about the benefits of workers from the new EU Accession countries coming to the UK.Download article_1.pdf Download article_2.pdf

The December Issue of Busienss Week had a fascinating article on knowledge workers in Central Europe including some good comparison tables of wage rates across the region and economic statistics for all the countries. The entire article is available below.  

Rise Of A Powerhouse
How the young knowledge workers of Central Europe are pushing the region to a new level

They came from around the world, young men with handles like SnapDragon and Bladerunner attacking computing problems so complex that even experienced coders could only stare at the screen in bewilderment. Only one mastered the final algorithm problem: Eryk Kopczynski, a.k.a. Eryx, a reticent Warsaw University student who wears his long hair in a ponytail and says his life's ambition is to "discover some interesting notion."

Kopczynski's triumph in this year's TopCoder Open, sponsored by Sun Microsystems, was no fluke. He was following in the footsteps of a slew of computing geniuses to emerge from the monolithic Soviet style buildings of Warsaw U. "Poles like to compete," says Warsaw U computer science student Marek Cygan, winner of this year's Google Code Jam. No kidding.

Warsaw University is ranked No. 1 in the world in top coder events, ahead of the likes of Massachusetts Institute of Technology. Just like India's best tech schools, Warsaw U has confounded a scarcity of resources to identify and nurture bright students. As the race for top talent heats up globally, it turns out that Central Europe houses one of the planet's richest creative pools.

U.S. movie director Brian De Palma recently wrapped up filming in Sofia of The Black Dahlia, a version of the James Ellroy noir novel starring Hilary Swank and Scarlett Johansson. The producers painstakingly recreated the streets of 1940s Los Angeles on a Sofia movie set. Why Bulgaria ? Super low costs is one reason. But there's more: "The crew is probably the best I've seen anywhere," says David Varod, head of Bulgarian operations for Los Angeles-based Nu Image/Millenium Films, which co-financed the picture.

Next stop on the tour: a Budapest neighborhood where new office buildings encroach on older factories. Here outsourcer Genpact, a spin-off of mighty General Electric Co. (GE ), employs 550 workers to handle business processes such as accounts receivable for corporate clients. At one terminal, a young woman uses SAP (SAP ) software to process an invoice from a German supplier to a French company. It's cheaper to do such work in India: Gross pay for Genpact workers in Budapest ranges from about $950 to $1400 a month, four times the Indian pay scale. But it would be very difficult to find French-speaking Indians to do the job. And clients just want their work handled by someone who is in the same time zone. "The nice thing about Hungary and Romania is that they are a two- or three-hour flight from anywhere in Europe," says Patrick Cogny, President and CEO of Genpact Europe. Proximity is key, says David Morgenstern, a managing director at Sunnyvale (Calif.) supply-chain specialist Ariba Inc. "Even if China is 5% cheaper," he says, "that sways the argument back to sourcing in Central Europe."

It has been more than 15 years since the collapse of the Iron Curtain opened up Central Europe to the world. In that time the region's 10 countries have survived bouts of gangster capitalism, waves of painful reforms, and dramatic changes in government. Yet the region's economies have somehow managed to thrive, easing entry (for most) into the European Union. In the process, Central Europe
has made a wholesale transformation into the low-cost manufacturing zone of the continent. Today the region is sucking in foreign investment at a rate of $37 billion annually, which places it second to China in the international competition for capital and light years ahead of India. Central European stock markets are taking off, too. Growth ranges from 3.5% in Poland to 6.8% in Estonia. Poverty rates are declining, and the area's 100 million citizens are turning into a potent consumer market. Most of the region's countries have flat taxes, with rates as low as 15% for corporations -- a big investment draw. The mightiest of multinationals, from Hewlett-Packard (HPQ ) to SAP to GE, have been piling in. On Sept. 21, IBM (IBM ) announced plans to build a new software development lab in Krakow that will eventually employ 200 Poles. And LG.Philips, the liquid-crystal-display producer, recently announced plans to spend $430 million to make flat-screen TVs in Wroclaw, Poland, creating 3,200 skilled jobs.

What few anticipated is that the once-bankrupt economies of Central Europe would move up the industrial food chain so quickly and attract research jobs in knowledge-driven industries ranging from telecoms to autos to pharmaceuticals. Now, thanks to their growing ranks of high-skilled workers, these countries are shaping up as the next outsourcing haven for engineering and software development, just behind China and India.

Evidence of this next chapter in the global outsourcing saga is everywhere. In offices above an Audi dealership in Sofia, for instance, engineers working for Idaho-based AMI Semiconductor Inc. (AMIS ) are busy developing next-generation chips for automobiles and medical equipment. AMIS set up an office in the Bulgarian capital after its managers in Belgium noticed they were getting a lot of applications from qualified Bulgarian semiconductor specialists. Anelia Mladenova Pergoot, a native Bulgarian who worked 16 years for AMIS in Belgium, returned home to run the new office, which plans to double staff, to 40, by next year. "I'm impressed by the level of quality the technical universities have been able to support," she says.

In the Czech Republic, investments in such sectors as software and customer-service centers rose 150% in 2004. According to IBM, Hungary, Poland, and the Czech Republic ranked among the top 10 global destinations for research and development jobs in the first half of 2005. In Europe, only Britain attracted more R&D work. Some 67% of the Polish economy is already made up of services, says the Organization of Economic Cooperation and Development (OECD). Case in point: Hewlett-Packard's five-year-old information-technology outsourcing center in Warsaw, which employs 1,000, and its new $54 million business-process outsourcing center in Wroclaw, which opened in April and is expected to create another 1,000 jobs. HP already generates $550 million in revenues in Poland.

"The Spirit Is There"
To develop these service businesses, the multinationals are seeking talent, and finding it, in the region's top schools.Poland boasts one of the highest percentages of university graduates in the world among younger workers. The country mints 460,000 new grads each year.

It isn't just key locales like Poland, the Czech Republic, and Slovakia that are attracting the attention of some of the world's top tech players. Bulgaria now hosts a number of  U.S. software companies, and Romania has become a new engineering and R&D hub for auto makers and other industries. Just a few years ago no one even in Central Europe thought these two countries could break the destructive cycle of hyperinflation, misgovernment, and crime. "Conditions for doing business [in Bulgaria and Romania] have improved very significantly," says Francesca Pissarides, an economist at the European Bank for Reconstruction & Development in London. "The spirit is there."

Problems? There are plenty, of course, just as there are in India and China. Central Europe's top cities boast state-of-the-art infrastructure, but second-tier cities and the countryside are another story. Management talent, as opposed to technical and manufacturing knowhow, is scarce. Judicial corruption is still a big problem in Romania, and the mob remains dangerously active in Bulgaria: In October, Emil Kyulev, head of the DZI Financial Group and one of the country's richest men, was shot dead as he rode down a Sofia boulevard. What's more, wages are creeping up across the region. A Polish factory worker earns slightly more than $3 an hour, compared with $19 for his counterpart in Western Germany, according to data compiled by supply-chain specialist Ariba Inc. (ARBA ) And an engineer might make only about $950 a month. But wage inflation, expected to hit more than 9% this year in Lithuania,  Latvia, and  Bulgaria, is already driving labor-intensive industries such as textiles to cheaper locales in Russia and  Ukraine. "One day the manufacturing jobs will relocate somewhere else," says Sebastian Mikosz, executive vice-president of Poland's Foreign Investment Agency.

Still, considering what the region endured through 40 years of communism and a decade of tumultuous transition, these problems look manageable. Today, Central Europeans have an optimism that few in Western Europe can muster. Local companies are bulking up and beginning to buy up foreign rivals. MBA programs are mushrooming, and thirtysomething managers are running big businesses. Restructured banks are finally lending to credit-starved companies and consumers. "You can feel the energy in the streets," says Dragostina Grancharova, who helps train aspiring network specialists for Cisco Systems Inc. (CSCO ) in Sofia, Bulgaria. There's even a feeling that Europe's center of gravity is shifting eastward. The commercial center of  Budapest, with its coffee bars, late-model autos, and restored turn-of-the-century buildings, could be a chic neighborhood anywhere in Western Europe. The city's sense of drive is personified by Janos Koka, 33, who was president of an Internet service provider before becoming Hungary's Minister of Economy & Transport in 2004. "We are in the middle of everything," Koka boasts. Hungary ranked third worldwide, behind New Zealand and India and ahead of the  U.S., in the number of people starting up new businesses, according to a study by the German Institute for Economic Research in  Berlin. "In 1990 you had a lot of enthusiasm and not much experience. Now you have a lot of enthusiasm and a very entrepreneurial climate," says David Keresztes, a principal at Euroventures Capital, a Budapest private-equity firm that has backed startups such as SkyEurope, a budget airline based in Bratislava, Slovakia. How did Central Europe gain this momentum? It started with the manufacturing plants coming in from the West. Even now, carmakers and their suppliers are plowing billions into Central Europe to build brand-new plants and add production lines at existing ones. Toyota (TM ) Motor, Volkswagen, General Motors (GM ), PSA Peugeot Citroën (PEUGY ), Renault, and Fiat (FIA ) are among those building complete cars in Poland and the former East Bloc. Even Porsche (PSEPF ) does most of the assembly for its luxury Cayenne sport-utility vehicle at VW's Bratislava plant in Slovakia. Countries in Central and Eastern Europe also produce everything from Whirlpool washing machines to Siemens (SI ) streetcars to American Standard bathroom fixtures.

Yet as the manufacturing powers have learned, workers in Central Europe are good for much more than assembly. Say this much for communism: Marxist regimes supported excellent universities and technical schools, which are still churning out top-notch graduates in engineering, mathematics, and computing. "The previous system didn't spoil these kids," says Jan Madey, professor of computer science at Warsaw University.

It took awhile for Western companies to seize on this hidden advantage. Hari N. Nair, executive vice-president, Tenneco Automotive for Europe, says his company never planned to hire skilled engineers in Poland. But as they moved low-cost production of auto parts to that country, Tenneco executives realized that Poles on-site were able to handle the engineering. They even had an edge over their German counterparts, who think in terms of complex designs. Polish engineers, who under communism became accustomed to working with limited resources, approach problems with no preconceptions. "If you give them advanced tools and design knowhow, they bridge the gap between complex technology and low-cost systems," says Nair. The Poles won an internal bid, for example, to make shock absorber replacements for the global market. They had the fastest, cheapest solution.

American and European tech companies have picked up on what the manufacturers started. The Czech capital of Prague has emerged as an info-tech hub, attracting millions in investment from the likes of express delivery and logistics company DHL International or LogicaCMG, a London-based outfit that provides tech services, such as processing text messages for mobile-phone companies. "In France, the prestigious universities to go to are management, economics, law. But here, technical schools are also prestigious," explains Jiri Turek, operations director for LogicaCMG's Corporate Global Telecom Products unit. With its lively bar and music scene, Prague has become a magnet for youth from all over Europe, and also the U.S. So companies there have their pick of talented workers fluent in several languages. "Young people like Prague because it's a cool place to be," says Ladislav Kadlec, a 23-year-old Slovak who studied human resources at Baruch College in New York City before becoming head of HR for Internet job exchange Monster.com in Prague.

More companies are also realizing that Central and Eastern Europe are competitive with Asia on price. An engineer in Bulgaria costs his employer less than his counterpart in China and India, according to data assembled by Ariba. And the competition for top talent is not as intense as in some of Asia's boomtowns. That's one reason why Tumbleweed Communications Corp. (TMWD ), a Redwood City (Calif.) maker of network-security software, chose Sofia over Bangalore for its 130-person software-development center. In Bangalore "it was difficult to get the right people at a reasonable cost when you have Microsoft across the street," says Eric Dumas, Bulgaria Country Manager for Tumbleweed.

Abundant Ambition
Moreover, deficient protections for intellectual-property rights remain a serious concern in China. "Auto companies are afraid to move core R&D knowledge to China -- it can be very dangerous," says Peter Fuss, a partner at consultancy Ernst & Young in Frankfurt, which recently completed a report on automotive investments in the region. "The move is rather to Central and Eastern Europe."

Central Europe's relationship to Western Europe increases the comfort level for investors. In 2004, the EU admitted the Baltic States, Poland, the Czech Republic, Slovakia, Slovenia, and Hungary. Bulgaria and Romania will be eligible to join as early as 2007. That eases cross-border shipping and provides a consistent legal framework for the region. The drive to qualify for EU membership has also forced Romania and Bulgaria to clean up their deficits, reform their governments, and become more attractive to investors. The move to join the EU "kicked off a virtuous cycle in Romania," says U.S. lawyer Gilbert Wood, head of Romania's Foreign Investors Council.

What ultimately sets Central Europe apart from the rest of the continent, though, is the ambition of the younger generation. Poles work an average of 1,984 hours a year, well above the 1,777 hours clocked by U.S. workers on average and far more than the 1,362 hours Germans work, according to the OECD. "These people are really hungry. They work day and night," says Stefaan Vandevelde, managing director at Delphi Europe (DPHIQ ), which has set up two engineering centers in the region, one in Krakow and another in Ineu, Romania.

If there is anything multinationals miss in their Central European employees, it's solid management expertise. Employers say they have more trouble finding a good human resources professional or marketing manager than a software programmer. "What's missing in our students is the soft skills: How do you cope with change, how do you motivate people and how do you work in teams?" says Adriana Dutescu, director of the Graduate School of Management Romanian-Canadian MBA program in Bucharest. Management education is improving fast, though, thanks to a slew of new MBA programs across the region, many with links to U.S. or European institutions. Bucharest alone boasts four international MBA programs.

A pioneer in this area was Central European University Business School in Budapest. Way back in 1988, Hungarian-born investor and philanthropist George Soros recognized the need and endowed the school, which offers both full-time and part-time MBA programs. Since then the institution has generated some of Central Europe's top managers, such as Zoltan Major, chief operating officer for the Hungarian operations of Genpact, the GE spin-off that provides outsourcing services. More such schools are needed. "Finding middle management and senior management will be our biggest challenge in Budapest," says Ahmed Mazhari, vice-president for business development at Genpact Europe.

How sustainable is the growth in Central Europe? All the elements are there: pent-up demand, robust foreign direct investment, excellent universities, and improving infrastructure. The region is still relatively free of the labor regulations that stifle job growth in Germany, France, and Italy. What's more, even by 2020 wages in most of the region will still be one-third to half the EU average, according to the U.N. Conference on Trade & Development.

Still, Central Europe has to keep building on what it has accomplished so far. "The big question is how we position ourselves," says Henryka Bochniarz, former Minister of Industry in Poland and founder of a Warsaw consultancy called Nicom Consulting Ltd. that helps small businesses qualify for European Union funds. "We have to build our future based on the quality of our education." Top-notch schools have seeded change. Now government needs to make sure those algorithmically gifted TopCoders remain a high priority. 

Dunross was recently featured in a UK television documentary about it's co-operation with TaxiFast, the leading private hire company in the West of England. The program visits the Dunross training centre in Prague and follows the drivers in the UK.

Download EAST_MEETS_WEST.mp3

Older generations complaining about the youth of today and the superior standards of the yesteryear are a familiar quirk that most of us attribute to aged cynicism. Unfortunately for Britain the older eneration may well be proved right.

Gordon's gone to China, so let's hope he wakes up and smells the green tea
By Niall Ferguson
(Filed: 16/10/2005)

European Union finance ministers went to China last week. Let's hope the trip shatters the complacency that seems to pervade European capitals these days. "Wake up and smell the coffee," is what Americans like to say when they encounter complacency. But it's the Chinese green tea the Europeans need to wake up and smell.

A hundred years ago any delegation of European leaders visiting China could have felt smug with reason. Western Europe accounted for roughly a third of world output. After a century of economic stagnation, China produced less than a tenth.

The British, French, Russian German and Japanese empires all controlled chunks of Chinese territory. All down the Chinese coast and even inland, there were numerous so-called "treaty ports", where European citizens could live and work with complete immunity from Chinese law. So indebted was the Qing Empire to European bondholders that the Chinese system of customs collection was staffed by foreign officials. It was even run by an Ulsterman. The revenues from Chinese trade flowed directly to European investors.

China's humiliation was complete when, in 1900, the European empires joined forces with the United States and Japan to suppress the anti-Western Boxer Rebellion. Having defeated the Boxers in Beijing, the international expeditionary force staged a "grand march" through the Forbidden City, pausing only to "acquire" some ancestral Manchu tablets for the British Museum.

That was then. Today, as a result of reforms dating back to the late 1970s, China has the most dynamic economy in the world and quite possibly in all history. Europe, by contrast, is fast becoming the "sick man" of the developed world - a title held by Japan for most of the past 15 years.

Over the past decade, according to the International Monetary Fund's latest World Economic Outlook, growth in the core economies of the EU that make up the eurozone has been a miserable two per cent per annum. Growth in China has been more than four times faster.

Already, as World Bank figures reveal, China's gross domestic product is around a fifth the size of the eurozone in dollar terms. Project those growth rates forward and China could overtake the eurozone within 30 years.

Of course, economic history is never linear and the chances are that China's growth will slow somewhat in the coming decades. But even the most pessimistic observers do not anticipate its falling below six per cent a year. Meanwhile, it will be nothing short of miraculous if the European economy grows as fast as two per cent a year between now and 2035. The European Commission itself admits that the effect of ageing populations could reduce annual growth by up to three-quarters of a percentage point. Even if China grows at six per cent and the eurozone at 1.25 per cent, Beijing will still overtake Brussels before 2040, around the time my children will be the age I am now.

Europe's sluggish growth - and high unemployment - are two of many reasons why China's leaders rank the EU significantly behind the United States in the global pecking order. Leave aside the two other big reasons, lack of military clout and lack of significant energy reserves, both of which make even Russia seem more important to Beijing, and purely as a potential market for China's exports, Europe seems less promising than China's own Asian neighbours.

European politicians, of course, only make matters worse. To say that the Chinese were unimpressed by the EU's decision to slap quotas on Chinese textiles last June would be an understatement. Not only was it a flagrant piece of protectionism, it was also a cock-up, as European warehouses proceeded to overflow with suddenly illicit Oriental underwear. The subsequent compromise hammered out between Beijing and Brussels was far more of a humiliation for the European Trade Commissioner, our own Peter Mandelson, than is generally appreciated. In Chinese eyes, he had to come begging to them for a bale-out. (Losing face is bad, even if you have two.)

And yet European leaders just don't seem to grasp how dire their economic predicament is becoming. Quite the reverse. The out-going German Chancellor, Gerhard Schröder, regaled his Social Democrat fan club last week with a risible defence of the "strong state", apparently oblivious to the fact that most German corporations long ago gave up on the German state as a potential engine of economic reform.

Earlier this month, I had the pleasure of hearing the urbane and witty President of the European Central Bank, Jean-Claude Trichet, give a speech in Athens. Sadly, his message was another vintage piece of Euro-complacency. The euro, he assured his after-dinner audience, was a huge success story. Wait a second. A success? The IMF forecasts that the eurozone economy will grow by 1.2 per cent this year. Growth in Germany will be 0.9 per cent. In Italy it will be zero. I'm not sure Alan Greenspan would regard these as the achievements of a successful monetary policy.

Of course, we in Britain have a Chancellor of the Exchequer who is immune from Euro-complacency. On the eve of their departure to Beijing, Mr Brown admonished his fellow finance ministers for their wicked ways rather as I imagine his Presbyterian father once admonished the congregation at St Bryce Kirk, Kirkcaldy. Preaching from the pulpit of the Financial Times, Mr Brown called for "reforms in labour and capital markets [and] in trade and in macro-policy". "Europe can no longer succeed as a trade bloc looking in on itself," thundered the Rev Brown. "Instead, Global Europe must be outward not inward looking, focused on external competition."

Yet for all his fine words about the need for "risk-based approach to regulation" and reductions in "labour market rigidities", Mr Brown was exposed last week as being something less than the pillar of economic rectitude he claims to be. The Organisation for Economic Cooperation and Development has just published a new Economic Survey of the United Kingdom. It confirms my long-standing suspicion that Britain is no better prepared for the economic challenge posed by a resurgent China than any of our Continental neighbours.

In many ways, the best measure of an economy's performance and prospects is the productivity of its workforce - the efficiency with which they work or, if you prefer, the amount an individual worker can produce in a given hour. By this key measure, the United Kingdom is in fact one of the worst economies in Europe. According to the OECD, productivity in the United States, Germany and even Italy is 20 per cent higher than it is in Britain. In France it is nearly 33 per cent higher.

The roots of the problem are not far to seek. As the OECD points out, an exceptionally large share of British pupils leave school without qualifications. This helps to explain why one in every 14 British men aged between 25 and 54 is inactive; they simply lack the skills that employers need. Thirty per cent of Britons aged between 25 and 34 are classified by the OECD as "low-skilled", the second-worst rate in a sample of 16 developed countries. The countries that come top - with five per cent or fewer "low-skilled" - are Japan and Korea.

This is where Europe really has to worry. For what is happening in Asia is not merely that their manufactures are becoming as good as ours. The reality is that their workforce is rapidly becoming better than ours. And as a billion-plus Chinese pour their energies not only into working but also into studying, the gap between the Old West and the New East can only widen.

No doubt a few days in China will do Mr Brown and his colleagues a power of good. I only wish all the British teenagers contemplating an early exit from education could have gone too. They're the ones who really need to wake up and smell the green tea.

With the recent immigration surge, the UK's population has just pushed the 60m mark. However, it appears that for Scotland this will deliver only short term relief from serious population decline.

Declining population held off, for now

SCOTLAND'S population will not fall below the five million mark until 2036, according to new figures which reveal a large increase in immigration from eastern Europe.

Just two years ago the Registrar-General had predicted the country's population would fall below five million in 2009, but a recent influx of 26,000 migrants from the new EU accession states has led to a turnaround.

 

With a further 4,000 immigrants predicted to arrive in Scotland each year, it is now expected the population will rise steadily for the next 15 years.

But Duncan Macniven, the Registrar-General, warned that the revival was only temporary.

HAMISH MACDONELL
SCOTTISH POLITICAL EDITOR

Migrants add flair to Irish economy
By John Murray Brown
Published: October 20 2005 03:00 | Last updated: October 20 2005 03:00

It is no coincidence thatstaff at the Bank of Irelandon Dublin's O'Connell Street speak Polish, Russian and Mandarin Chinese. Seamus Maher, the branch manager, estimates migrant workers account for more than 70 per cent of the accounts opened in the last 12 months.

"As an immigrant the first thing you want is a job. If you have a job, you have to have a bank account just to be able to get paid," he says.

Not all immigrants are poor either. Davy stockbrokers are currently looking for a Chinese speaker to sell equities to local Chinese clients.

These are just two illustrations of the growing importance of foreigners to the Irish economy. Commentators sometimes assume Ireland's recent economic performance is some form of productivity miracle, or is the result of large transfers of European Union aid.

Eunan King, senior economist at NCB stockbrokers, says the reality is more simple. Where the baby boom, greater female participation and returning Irish expatriates helped fuel the labour supply in the late 1990s, today's growth is being driven in large part by an inflow of foreign workers.

The government's Central Statistics Office calculates gross domestic product grew by 4.1 per cent in the year to July.

Mr King believes this understates the real growth rate and points to the 5.1 per cent increase in employment - the highest since 1999. Productivity is holding up at about 2 per cent.

As for EU aid, from next year Ireland will be a net contributor to the EU budget. Ireland arguably used its EU aid better than other countries. Spain and Portugal, for example, built roads and other infrastructure. Ireland invested in human capital, building tertiary colleges. These are now providing the technical skills that Ireland needs as it aspires to become a knowledge-based economy.

As the Irish workforce becomes more educated, immigrants are fulfilling the growing demand for services. There are currently 870,000 jobs in private sector services. This dwarfs the 100,000 in the foreign-owned manufacturing sector.

Ireland, along with the UK and Sweden, opened its labour markets to the 10 new EU accession states when they joined in May 2004.

This resulted in the biggest ever annual net inflow, of 53,500 people in the year to April 2005 - 70,000 arrivals and 16,500 leaving the country. The 10 new members of the EU accounted for 26,000 arrivals. In the same period, the number in work increased by 94,000 to 1.9m.

Indeed since accession, 139,000 people from the 10 new member states have registered to work in Ireland. The figure is currently running at 12,000 a month, with Poles and Lithuanians making up by far the largest number.

While business has been happy to tap this fresh supply of cheap labour, trade unions believe it is a mixed blessing. "Economic growth for its own sake is of limited value," says David Begg, secretary general of the Irish Congress of Trade Unions.

"If it is supported by a large intake of immigrants, it will increase GNP but not necessarily GNP per head, in other words living standards. The reason is that everyone who comes to work in Ireland needs a home, healthcare, education. Providing for these needs costs money. With the economy at virtually full employment a more balanced approach is called for."

He says 42 per cent of the jobs created in the economy in the last year have been in construction. He believes it is a fair assumption that the vast bulk of those jobs are being taken by immigrants, while the houses built are either being bought or rented by immigrants.

If the economy were to take a downturn, Mr Begg says, this has "all the attributes of a potential property bubble".

The Swiss press have applauded the recent vote in favour of extending EU labour accord, proclaiming that pragmatism has won over fear. Indicating an agreement forged between a more euro-sceptic French Swizerland with the less so German Swizerland, confidence in the future of the EU has grown nationaly and abroad.

Of course this result doesnt mean that the EU debate is coming to an end, but progress should be made toward organising a referendum on the expansion of the EU to Romania and Bulgaria.

By Dan Taylor, Dunross Czech Republic. Information for businesses in the UK looking to recruit from the new EU countries such as Poland and Czech Republic.

Download top_ten_tips_for_recruiting_from_eastern_europe.mp3

Alec is a leading Recruitment and Human Resources consultant with particular expertise in the new EU Countries. We caught up with him on his visit to Prague to get his thoughts on recruiting from the new EU countries to the UK.

Download alec_page_interview.mp3

Migrant workers boost EU nations in wake of enlargement

A report on the trends in migration of New EU nationals to 'Old EU' member states, and the positive effects are outlined in this Financial Times article.

By Sarah Laitner in Brussels
Published: September 7 2005 03:00

Download ft_com_world_europe_migrant_workers_boost_eu_nations_in_wake_of_enlargement.htm

By Daniel Taylor, Dunross Czech Republic

So you are a British or Irish company and you have heard about the opportunities of recruiting labour from the new EU Accession Countries in Central Europe. So what should you look for when looking for a recruitment agency to recruit staff for you?

We at Dunross have been out here in Central Europe a long time and know a lot about the business and recruitment environment across the EU Accession countries. So whoever you select here are our golden rules for selecting a recruitment agency.

1. Do they have expertise in your area

Remember that recruiting people to the UK from this region is a new industry that didn’t really exist before May 2004 and a lot of agencies are simply trying to get as many bodies on EasyJet as possible. Every market sector has its nuances and it takes time to learn them.

Does the agency have expertise in finding the type of worker you require? Do they know about the local qualifications, including which ones are genuine? Do they know about the registration process for any professional bodies in the UK for your profession or trade?

2. Go and meet them

If I had to give only one recommendation this would be it. You can look around their offices, see their systems and processes and most importantly of all meet their people. Are they all locals? Are there a mix of British/Irish people there who understand the work environment in Western Europe?

Also see their offices, a lot of recruitment agencies are really some guy working out of his bedroom. Fine if things go well but no back up when problems arise.

The main reason I say this is a lot of agencies set up a web-site and claim to be experts in recruiting from Central Europe but the reality is its one guy working out of his bedroom!

3. Who will be working on your account

While your there having a nosey round ask directly who will be dealing with your account. Here’s some news from the inside: What agencies normally do is to roll out the ‘big hitters’ to meet the client then pass the work off to a new and possibly in-experienced consultant.

When using a recruitment agency I would say you are paying 50% for the systems, processes and support of the company, and 50% for the actual resourcer who will be working on your account so you need to meet them and have confidence in them

4. Get references from existing clients

We can say what we like but it’s what clients say that matters! If you’re seriously interested in doing business with an agency and they want your business they should be tripping over themselves to give you a reference!

Here’s a tip as well. Don’t just call the contact they gave you, that mobile number they gave you could be anyone! Find the company on the web and call up the main switchboard to ask for the contact. Then you know for sure the contact is who they say they are.

5. Speak to a candidate who has already been placed with a company

Happy candidates are what you want! Ask if you can speak to someone they have sent to the UK. Are they happy with how the agency treated them? This will show you (a) Are they confident enough of what their candidates will say about them and (b) It will show you how well they are staying in touch with them once they are placed!

6. Ask to see their press coverage

So they’re a great company. Well someone must be writing about them! There’s a lot of interest in the UK at the moment about recruitment from accession countries so any company genuinely active in this area will be covered in the press.

Ask to see their press clippings, website links, TV interviews. This is also a good way to see if they’ve been around a while

7. Are they members of their national recruitment organisation, and do they have all the relevant licences

In most of the countries we operate in you need a licence to operate a recruitment company and dealing with an unlicensed company could open you up to a whole world of bureaucratic legal hassles. In a lot of countries (e.g. Czech Republic or Poland) you also need a licence to collect personal data.

If you are dealing with a company that recruits from the Czech Republic they have to be registered with the Czech Government. Just go to www.Justice.cz and enter the company name to check they are bone-fide.

8. Do they charge the candidates fees

This is the million dollar question. The problem is they will always give you a resounding “NO” when you ask it. Unfortunately it is an easy one to cover up. The most typical ways are listed below:

1. Overcharge flights (£1000 for a Ryanair ticket??!??)

2. Forcing candidates to stay in agency accommodation which is priced above market rate

3. Often to be honest they are just up front and demand it from the candidates. They then tell them that if they tell the client they will use their jobs!

All in all you probably won’t know straight away. If you’ve followed the advice above and gone to visit the agency you will get a good feel for how respectable they are. If the guys are wearing leather jackets and counting piles of £50 notes then stay well away!

9. Do they have offices in the EU accession countries

As an agency based in Czech Republic and Poland we’re constantly called up by UK agencies who themselves are selling themselves as experts in the new EU! Are they just subcontracting your work or do they have a presence out here in Central Europe?

10. What support services do they provide

Being realistic there will always be issues that need resolving when the candidates have started working with you. What is the agencies system for resolving this? Do they still give you a dedicated point of contact at the recruitment agency with a mobile phone you can call any time?

What do they do to make sure your workers are happy, productive and want to stay with you? Do they give candidates a UK mobile phone SIM card? Do they give them an emergency contact card in case they get into trouble?

Or do they just pack them on the plane!

I hope this was informative. We will be adding more articles on recruitment in the coming months so please syndicate the blog to get our updates.

To view the file as a pdf document click here Download tips.pdf

Also any comments always welcome below or email us on blogger@dunross.co.uk

© Dunross S.R.O. 2005

Polish drivers just the ticket for bus operator
By Friederike Tiesenhausen Cave
Financial Times; Nov 11, 2004
Recruiting reliable bus drivers is a widely known headache across the transport industry. Operators are all too often forced to cut services after drivers quit at short notice, forcing companies to recruit and train replacements.

First Bus, part of the First transport group, has found an ingenious solution. Since May, the company has been employing 56 trained drivers and engineers from Poland in Bath and Bristol, who have helped plug shortages and improve performance.

"We have been so pleased with this pilot, we are thinking of rolling it out on a wider scale," said Stuart Bugg of First, which employs about 20,000 bus drivers across the UK.

Attracting the right kind of people was easy. The Polish transport sector has been through consolidation and many drivers are unemployed. First offered language training and the same wages as its UK drivers - five times what drivers would earn in Poland.

Apart from a few hiccups at the beginning, the new staff had blended in seamlessly, the company said.

While First relied on word of mouth, other employers are increasingly turning to specialised recruitment agencies based directly in the new European Union member countries.

Joel Tait, who set up the Dunross agency in Prague, Czech Republic, in May this year when eight former Soviet bloc countries joined the EU, said interest had been picking up in recent months. So far, Dunross had helped 200 workers start a new career in the UK.

"About 40 per cent of the demand comes from the transport sector, another 40 per cent from industrial companies and 10 per cent from construction. The rest is divided up between IT and other sectors," said Mr Tait.

"Interest comes almost entirely from companies that can't find people elsewhere, because they are in a tight labour market or because they are in remote areas. We tend to fill most of the vacancies we advertise."

According to Mr Tait, it is mainly younger, well-qualified people in their 20s and 30s who respond to Dunross advertisements. "Most of them want to work abroad for a few years before returning home better off."