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The Warsaw Voice » Business » April 2, 2008
LABOR MARKET
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Jobs on the Increase
April 2, 2008   
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Unemployment in Poland shrank to 11.5 percent in February as the economy continues to expand and investment increases.

Poland has largely remained unaffected by the recession in the United States and turmoil on global financial markets. Industrial production here rose by 14.9 percent in February year on year, and the construction sector grew 20.7 percent. Retail sales increased by 0.3 percent month on month and 23.8 percent year on year. Even though the zloty remains strong, the volume of foreign trade is also growing, and there is every indication that the country's GDP grew by over 6 percent in the first quarter of the year.

According to the Labor Ministry, unemployment fell to 11.5 percent in February, from 11.8 percent in January, 14.8 percent in February 2007, 18 percent in February 2006, and 19.4 percent in February 2005. Czesława Ostrowska, deputy minister of labor, says that by the end of this year unemployment may drop to 9.7-9.8 percent. In the 2008 budget, the target is set at 9.9 percent.

Rapid economic expansion, coupled with a fast increase in investment, leads to a situation in which more companies are having problems recruiting the staff they need. The labor market is becoming increasingly unfriendly to employers, although unemployment remains relatively high.

One of the reasons is that many countries have opened their labor markets since Poland's European Union entry in May 2004, and tens of thousands of people have left the country to work abroad. As a result, some of the rapidly growing sectors of the Polish economy are now facing an acute shortage of skilled employees, despite considerable pay raises.

The Labor Ministry's Migration Department estimates that Poland is short of over 300,000 skilled workers, mainly in construction and services. The greatest demand now is for workers with a university and secondary education specialized in information technology, finance and logistics. There are also shortages of construction workers, electricians, toolmakers, machine operators and people with similar skills. According to data from the Labor Ministry, 1.2 million Poles are working abroad, most of them in Britain (310,000), Ireland and Germany (160,000 each).

Experts say the government should remove tax barriers and pursue a more active labor market policy to encourage workers to return to the country. This especially applies to highly skilled workers and enterprising people, who are needed most. They need to stay in touch with the country and be kept informed about employment and business opportunities here. According to experts, if the Polish government wants to create conditions for those working abroad to return home and to keep university graduates in the country, it should find out what these people want to see most on the Polish labor market and what they like about foreign employers.

Pay is not the only factor, experts say. Research by the British-Polish Chamber of Commerce shows that Poles also value fair treatment, a good atmosphere, security and stability, and the ability to use skills they already have and opportunities to acquire new ones.

Companies that have a "flat" management structure, treat their employees as partners and offer them opportunities to pursue their individual career paths are winning the race for new workers.

Experts say labor market policies should become more active and involve measures designed to increase employment among graduates and people over 50 years of age. It is also necessary to better target social benefits and promote flexible forms of employment such as flexible work hours and telecommuting, which enable employees to combine work with family commitments.

The labor market would also benefit from more flexible regulations on the employment of foreigners. At present, procedures involved in applying for work permits are lengthy and complex while the permits expire quickly. This is a major barrier to hiring foreigners, many of whom work in Poland illegally, while they could become legal workers if employment costs were lowered.

Recruitment problems are also faced by foreign companies, which invested around 15 billion euros here last year. There is every indication that their interest in Poland is not diminishing. According to the Federation of European Employers, Poland is the most attractive country in Europe for employers. A young labor force, the presence of women on the labor market, and the availability of temporary workers are the country's strongest advantages. The federation's league table comprises 31 countries, including EU members, Iceland, Norway, Switzerland and Turkey. The federation considers factors that are especially important to investors, including access to labor force, relations on the labor market, inflation, labor costs, and labor market flexibility.

Foreign investors tend to give high ratings to the skills and commitment of Polish workers. Many Polish subsidiaries of global corporations have been evaluated as the most efficient in the world. In an Ernst&Young report, Poland ranked fifth after Germany, Britain, France and Scandinavia in terms of worker skills. Poland has the youngest population of all European countries and the largest labor force of all Central European countries. Around 47 percent of the population is under 35, and 32 percent is under 25. Young Poles are better educated than their peers elsewhere in Europe, and over 55 percent of people aged between 19 and 24 attend universities and colleges.
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