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NearSourcing for the Far-Sighted
With a UK election on the horizon and recent street protests elsewhere in Europe, the daily headlines can seem monopolised by politicians and commentators seemingly gripped by the spectre of rising immigration, increased labour mobility and a subsequent backlash from ‘the voters’. When we listen to the debate today, we hear those fears articulated in language such as “our towns are being taken over”, “our travel infrastructure cannot cope”, “we don’t have enough school places” and so on. Amid such powerful headlines, the positive impact on our society brought by economic migration is often forgotten.
And that impact makes a positive difference to our lives and livelihoods. Our NHS would collapse without the ‘foreign national’ doctors, nurses, opticians and pharmacists who choose to practice their profession here in the UK. Many IT, Telecom, Pharmaceutical and other ‘professional services’ could not survive without the skills and expertise we hire from Central and Eastern Europe. And on the most basic level (the food we eat), our farming communities and agricultural industries would become uncompetitive without the pickers and packers who migrate to Eastern England seasonally.
This movement of labour across national boundaries is certainly two-way, as any Brit who cares to walk around the workplaces of Berlin, Bratislava, Bucharest, Frankfurt, Krakow and Sarajevo would testify. Just read the Independent article from January 19th 2015: ‘British Expats in Romania: they come over here stealing our jobs …” for a more rounded view of reality –
BUT (and it’s a Big But) does this economic migration make sense? And is it sustainable? To the team at Resource Central, it’s part of a natural phenomena – and one that will not only continue to grow, but will proliferate in many different forms, one of which can be described as ‘NearSourcing’ of talent.
NearSourcing is “off-shoring” but with a 2/3 hour maximum flight time – i.e. you could visited your off-shored operation and be there and back in day. This is hardly revolutionary thinking – since May 2005, with the accession of the nine new “States of Europe”, companies from the UK, US and ‘the West’ in general have been setting up Contact Centres and Shared Service Centres across the CEE region. Our own industry saw Krakow as an ideal location, with Recruiting and RPO businesses such as AMS, Hays, and Kenexa setting up their support functions in that city. Drawn by low fixed costs and a supply of quality staff with excellent education and language skills, the pull proved irresistible – and continues to do so, albeit further south, with major new investments by Randstaad in Budapest and our own Resource Central operation in Sarajevo.
The economics make perfect sense. But is it right to continually “steal” the top talent from across a region? For example, is it morally correct to recruit the best doctors and nurses trained in “Romania” to support our NHS? And what about the health sector they leave behind?
Addressing the UK’s ‘Talent Deficit’ doesn’t always mean importing people.
If Britain is “full” and the infrastructure cannot cope, why do we continue to hire more people from other countries? Surely what we have here in the UK is a two-fold issue: a training and development gap which does not align our own education system with the needs of industry and society; and a “fear gap” based on the misperception that we have to always ‘import people’ to address our own talent deficit. The reality is that we need a balanced solution, taking jobs ‘out’ to people rather than always bringing the people ‘in’ to us.
We believe that this trend will only gather pace, because it’s driven by greater Demand and increasing scarcity of Supply, in more and more European countries. And we’re not alone in our view. Ervin Dombrovsky, Data Analyst of the leading Czech Job Board, Jobs.cz notes: “In 2013-2014 there were 16,222 permanent positions in the customer service segment posted on our portals, making up 4.1% of the jobs posted on our site during this period. The recovery in 2014 saw a noticeable increase in demand for people in these services – up by 22% year on year. Today, customer service jobs are among our fastest growing segments.
“Companies in this area are searching for people to fill the existing open positions. Staff turnover is increasing as more companies set up or expand their operations, with new positions ranging across call centre support and sales operations, as well as help/support desk and back office vacancies. And more than 1000 of these open positions are for managerial staff.”
This phenomenon is happening across the region. In the last six months in Bucharest alone, ADP and Vodafone have opened SCC’s that aim at fulfilment of 10.000 jobs+. Yes, they are drawn by the investments in infrastructure provided by the EU and Romanian Government – but their success is assured by a highly educated workforce with excellent language skills, a low salary base (though salary inflation across the region is increasing) and scalability.
So is NearSourcing a passing fad? We have to say a resounding “NO”. The long-term dynamics are clear to see: the market-led redistribution of work, jobs and wealth ‘eastwards and southwards’ – together with conscious building of sustainable economic growth across the CEE regions – is not a trend but a redefining of “Europe” that’s happening right now.
To hear more about this and the whole subject of talent mobility – from East to West and South to North – look out for the Resource Central track at #trumutiny or #trulondon50
We Are Resource Cent
Resource Central is a unique people engagement and resourcing solutions service firm. Created from the focus and desire of its founders. We are all experts from the Job Board, HR Communications and Recruiting industry, bringing a wealth of expertise and knowledge of specialist and large corporate campaign hiring projects across the recruiting markets of Europe.
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