The Baltic Course  

Enough work force, specialists wanted

Olga Pavuk, Tatyana Komorskaya, Tatyana Merkulova

In the USA, employment agents are even killed in broad daylight. In the Baltics, all is quiet for now, however, experts forecast an big bang for the labour market. This bang will be caused by a growing excess of certified specialists, who cannot find a proper job

Photo: NRA

Latvian employers getting pickier

In Latvia, a recruitment boom similar to the one that took place five years ago due to active foreign investments and privatisation is barely possible any more. The labour market is no longer as lucrative and the competitors have to work hard to keep their business cost-effective. Recruitment agents are quick to come up with ever more tricks for boosting the quality of their services.

There are about 20 recruitment agencies in the Latvian market. 15 of them can be considered as serious companies, while the rest serve only a particular industry, like navigation, pharmacy and others.

Top-level recruitment - or head hunting services – are rendered by companies J. Frisberg & Partners and Amrop. 99.9% of their work consists of search for top-level managers - the Latvian market offers jobs for 100 to 300 such people. As a rule, the usual clients of these companies are foreign corporations. Fontes R&I, RMS-Recruitment, Merkuri Urval, Working. LV, CV Online Latvia - the mid-level recruitment agencies also do some head hunting, still their main work consists of selecting higher and middle level management.

Aleksey Milovsky

Photo: A.F.I.

In general, the labour market has stabilised. Besides, if a couple of years ago, 80% of the clients of recruitment agencies were from abroad, now the share of domestic clients has grown to 40%. According to Aleksey Milovsky, the director of RMS, working with these clients can be quite tough, since they have a poor understanding on recruitment issues.

Anita Aboltina, project manager with the RMS-Recruitment, points out two basic market tendencies over the last two years. The first: employment companies have developed extensive databases, which are inexpensive and cost-effective. This also improves the quality of information. The other tendency has also risen due to the growing competition: personnel divisions of the larger companies create separate personnel departments, who develop databases of their own. Such departments are being created in medium-sized companies that look for quality employees as well. The major share of these databases are built using documental information and by introducing personnel evaluation programs.

In turn, more experienced recruitment companies, such as Fontes R&I or RMS-Recruitment, have their own databases, created over several years of work. For example, the database of RMS-Recruitment has files on 16 thousand people. Along with the specialised companies, there are four Internet portals maintaining vacancy databases. The difference is in the fact that the recruitment companies offer higher quality, while the Internet portals win by numbers.

There are times, when the interests of the subscribers to the information on vacancies may vary. It all depends on the position level and their readiness to allot their time. Of course, you can surf the net and place your own ad. However, it can only be guessed as to how much time will be necessary for the interviewing and how good the result will be. The undisputable advantages of using the services of professional recruiters are their extensive databases and a guarantee that the employee will be found and will work for at least the initial probation time. Milovsky pointed out that customers are becoming more and more demanding and their numbers are decreasing (due to the above-mentioned reasons). This means that work has to be done more accurately, always keeping in mind quality.

The BC took interest in the number of applicants for the most popular professions. According to the estimates of RMS, the absolute numbers of people in search of employment is constant and depends on the desired position. For example, there are usually up to 200 applications for a single position as secretary, while other positions ay draw 30 - 40 people. The average age of applicants is up to 25 years, while there are many in their forties. Milovsky thinks that "it appears that there are more and more university graduates (economists and law specialists) among people searching for a job. This may lead to a social bang. The state should give thought as to some regulation of the number of graduates". Another issue, mentioned by the specialists, is structural unemployment: the emerging shortage of specialists in technical areas.

According to Eurostat, more attention to training employees is paid by large companies with 250 or more employees. In Latvia’s small and medium-sized companies, 2% of business hours are spent on employee training, with 3% spent in in larger companies. In Lithuania, the respective figures are at 1% and 4%, while in Estonia, the figures are 2% in small companies, 3% in medium-sized and 6% in larger ones.

According to the Latvian statistics office, there are 68,600 people (42% of all employees) employed as specialists and chief specialists in the public sector. The highest salaries are paid to lawmakers, higher officials and managers. The average salary for this category is LVL 245, while the absolute leaders were executives of companies and institutions, receiving LVL 499 on average.

These are followed by chief specialists, who receive LVL 225 on average. The leaders in this category are designers and analysts for computing systems and chief specialists of navigation and aircraft operation; they receive LVL 458 and 466 respectively.

For specialists, the average salary is LVL 178; the leaders being of marine and air transportation, who receive LVL 349, and state licensing specialists with LVL 279.

The lowest salaries are received by employees in the trade and services business - LVL 85 monthly and representatives of non-qualified vocations - LVL 95.

According to a survey by politologist Artis Pabriks, carried out in 10 ministries of Latvia, 92.1% of the officials are Latvian and only 7.9% belong to other nationalities.


Recruitment in Lithuania - a growing trend

Darius Mazeika

Photo: P.Lileikis, Lietuvos rytas

In spite of the largest unemployment rate among the Baltic States, the Lithuanian labour market already has a shortage of qualified specialists. Darius Mazeika, the executive for the personnel search and selection company, CV-Online Lietuva, says that his company, maintaining a database of 35,000 applications, still places their personnel want ads individually.

Also foreign employers who search for personnel, have noticed the discrepancy between the offer and the demand in the labour market. According to Mazeika, the people who had a fine position in engineering 10 years ago, but have not worked in their field for the last few years, have but the slightest chance of being employed as designer engineers or even sales engineers. The chances are higher for those, who have used the last few years for professional training, acquiring PC skills or learning a foreign language. However, no one needs people with beginner-level PC skills; moreover, employers want people with skills in design and accounting software. Some of these programs might be quite sophisticated and specific. Concerning foreign language skills - it turns out that 80% of all employers require language skills. They will not put up with an elusive "use of dictionary". The employee should have free command of spoken, written and technical language.

"Let's consider one particular profession - the production of refrigeration equipment," Mazeika explains, "What we had here 10 years ago, is now scrap. Those who left the competition ten years ago don't have the modern skills. Of course, these specialists can try to get into some other, lower positions, like maintenance specialist positions, which have lower requirements."

The chances of getting a job are no brighter for Lithuanian youth as well. According to the executive of CV-Online Lietuva, in Lithuania, there is an excess of managers and specialists of finance and business administration, with "anyone who’s not too lazy to" having passed such qualifications, while the actual demand is quite low. 10 years ago, the entrance competition for these programs was the fiercest. On the other hand, those who specialised in the operation of air-conditioning, heating, refrigeration and gas supply systems or geodesy, applied for these courses after failing the entrance exams for management studies or were bent on technical knowledge as such. The current demand for specialists of these types is much higher than the demand for top-level executives, while in ten years' time, when, supposedly, the systems of heating, air-conditioning, gas and water supply will be renovated, the demand structure in the labour market will change once again: maintenance personnel for these up-to-date systems will be needed.

Currently, there is a high demand for managers of construction projects and construction works. Although there have been a lot of specialists trained over the past years, not all of them come up to the requirements for a modern foreman: managing a team of workers, timely placing construction material orders and co-ordinating the work. In fact, a modern foreman is the manager of a small business. Besides, there is a high demand for all kinds of engineering specialists.

In the meantime, there are about 200 applications for position of accountant and 300 for the position of office administrator (secretary).

In Lithuania, the major personnel search and selection companies are J.Friisberg & Partners, Mercuri Urval, Zmogaus studiju centro grupe1, Vilniaus konsultacine grupe, Primum Esse and others. Lina Zizite, a specialist of CV-Online Lietuva, points to their bright future prospects and tells that her company does not strive to work with large or foreign companies only. Moreover, more and more employers now consign personnel selection to the professionals. "We aim at higher and mid-level specialists and, unlike, let's say, the labour exchange, we do active search," she tells. "We invite people, test them and evaluate them. A consultant is assigned to every employer to stay in touch with our clients. The type of selection of the employee depends from the requirements of the company. Besides, we go head hunting as well".

As for salaries: executives (depending on their company’s business) receive from 1.5 to 8 thousand litas, business managers receive about 3 thousand, chief finance specialists earn from 2 to 3.5 thousand, accountants - up to 1.5 thousand, middle-level engineers - from 1.5 to 2.5 thousand. The salary of the sought-after construction managers of 2.5 thousand is considered rather small. The average salary for the leading specialists in this branch, having language skills, proper qualification and personnel management skills, is calculated to be around 4 - 5 thousand per month. The companies with foreign capital share pay 20 - 30% more and do it in a legitimate way, while, according to a survey, carried out by CV-Online Lietuva, in a particular industry, less than 20% of the Lithuanian companies bother to pay the whole salary officially.


Half of Estonians would rather work in Europe

In spite of the huge number of personnel selection companies in Estonia, Estonian companies keep suffering from a shortage of work force and specialists. At the same time, half of all Estonians have expressed wish to work in other European countries.

Meelis Kuiviiga

Photo: R.Mee, Aripaev

According to Meelis Kuiviiga, the director of the Estonian Association of Machine Building, Estonia does not have an authority that would deal with the gathering and analysis of the information on the demand of the business sector and the offer of educational establishments in a centralised way.

Over 30 companies are involved in the recruitment business in Estonia. Many of them have extensive experience, well-established contacts abroad, their own databases and maintain so called “open access CV-online systems”. Besides, according to Vaino Rajangu, the manager of the Education Research Centre of the Tallinn Technical University, there has never been such a wide discrepancy between the actual demand and the offer in the Estonian labour market.

The multiple databases run by private recruitment agencies as well as the database of the State Department of Labour Market repeatedly receive want ads from the active employers in search of engineers, welders, builders, sales personnel, specialists in manufacturing, the restaurant business and other sectors. Meanwhile, young Estonians continue to apply for higher education courses in law, economy and social sector programs. A part of the Estonian machine builders could sign much more contracts and increase their output by 2.5 times, if only they had enough workforce. "In Estonia, there are 17 educational establishments training builders, nevertheless, not all of them offer their students a sufficient field training exercise, which results in a shortage of workforce in virtually every construction company," told Ilmar Link, the director of the Association of Construction Companies.

Ilves-Extra, a successful clothing manufacturer, was forced to shut down its affiliate manufacturing unit in Tartu. It turned out that in the countryside, where unemployment is much higher, it was impossible to find employees of the necessary qualification.

The Estonians with long experience of working abroad in neighbouring Finland on the first hand, would rather go there to work on contract. This is a widespread trend in the construction business in particular. Estonian companies get along without the help of recruitment agencies and sign contracts with foreign partners, "hiring" their employees to the latter for a certain time. In the neighbouring markets, the Estonian builders have gained a reputation of a tireless and "omnivorous" workforce.

Recently, it appeared that Estonian doctors are also being recruited for work in Finland, where salaries are several times higher than in Estonia. The Estonian Union of Doctors points out, that, as a rule, those are younger people who go working abroad and the emigration of doctors has started to cause shortages of doctors in the country.

Most of the recruitment agencies specialise in arranging opportunities for working abroad. Still, they will be soon encountered by a serious competitor - the state. According to Alis Lugna, the specialist with the Department of Labour Market, the government has already developed a system, which enables government specialists to operate easily with the statistical data on services that the Department renders to the unemployed, vacancies, unemployment rates, education, age and other characteristics of the unemployed.

A new project is under way that will include an additional system of self-service. "The unemployed will be able to list their CVs online, and employers will list their vacancies. The system will be linked to the unemployment database, which is already operating in the Department. The European Union has allocated 200 thousand euros in the framework of the PHARE program for the development of this system. The database will be available free of charge both for employers and job seekers. The Department hopes that the database will be more comprehensive than private databases," says Lugna.


EU to offer vacancies

With the support of the European Commission (EC), the Baltic States implement a project of developing an unemployment database and updating their own information systems. "This project envisages updating information systems that will enable us to carry out a full analysis of the national labour market and to find out which sectors have the greatest shortage of workforce and which sectors have it in excess," the LETA agency was told by Alvis Vitols, the director of the State Employment Agency. He continued: "As a result, we will be ready to join the European Employment Service network (EURES), which was created in 1994 by the EC". The EURES network provides employment agencies of 17 countries (EU member states, Norway and Iceland) with an opportunity to exchange information on vacancies.


Major problem – we’re dying out

"There are too few of us, we’re dying out and the population is rapidly ageing. Accession to the EU will undoubtedly bring an influx of workforce to our countries," concludes Kaspars Kaulins, one of the leading specialists in recruitment for the Baltic States, chairman of the Board and the chief consultant of Fontes R&I.

Kaspars Kaulins

Photo: Fontes R&I

What differs Lithuania from Estonia and Latvia, is a more developed city infrastructure. Besides the capital, there are five other large cities in Lithuania, thus they have a larger manufacturing industry and consequently, more specialists and managers of these industries. Nevertheless, Lithuanians have received less Western and Nordic experience, which found its way to Latvia and Estonia via the small and medium-sized enterprises. On the whole, Lithuanians have attracted larger amounts of Western investment, like Kraft Jakobs, Mazeikiu Nafta and others; the presence of Polish, Russian and German capital is more extensive. Lithuania has the largest workforce. Moreover, Lithuania's population is the largest in the Baltic states, consequently, the choice of qualified personnel is wider. Therefore only a few companies bother to turn for help to recruitment agencies.

Also, Lithuanians managed to maintain more of their agricultural and manufacturing enterprises during the transition period. Now they face a new challenge - to raise the quality and provide licensing and certification of agricultural products according to European standards. New specialists will be needed. I believe that the Lithuanians will cope with this task. Another peculiarity of the Lithuanian labour market is the presence or larger amounts of domestic capital, Lithuanians have their "strike force" on behalf of companies like VP Prekyba, Sonex and others. They can afford aggressive policy for recruitment not only at home, but also in the neighbouring states, where they have established affiliate companies.

Estonians got a head start in the recruitment race for specialists already several years ago, when the small and medium sized companies got the chance of grooming their specialists in Nordic style - possibly not a thoroughly European style schooling, nevertheless, a Western level one.

The greatest problem for Latvians is the super slow development outside Riga city - the communication is poor, jobs are few, no infrastructure. The qualification level of specialists in large companies is decreasing year by year, and it is easier to train the necessary specialists from scratch. The dialogue between the government and higher educational establishments has begun, although a little too late. New specialists in technologies will enter the labour market in just about seven years.

A common problem for all three Baltic States is the shortage of qualified specialists in the high-tech sector and an excess of economists and law specialists. After joining the EU, the latter will have to turn to public rights used in the Western Europe. The economists will have to exercise their macroeconomics.

In the meantime, Estonia and Latvia share a common problem on their workforce. There are too few of us few, we’re dying out and the population is rapidly ageing. After joining the EU, an influx of work force is beyond all questions, there is just no other alternative. I don't have any favouritism concerning religion, but working with people that come from a little closer to home may be better than with people from, for example, the Middle East or Asia. It is no secret that the so-called “pioneers” - illegal construction workers from Ukraine and Belarus - have already been working in the Baltic states for quite some years. It is easier for us to get along with them. In turn, Europeans want to work in more prestigious positions.