vantage

Ino
4th Industrial Revolution
in Central and Eastern Europe
Innovation and Advantage drive success.
Using creativity and analysis-driven writing
to convey business acumen and the pursuit of success,
‘Inovantage’ is a quarterly that discusses employment,
education and economy in CEE.
Editor’s Note
Dear Readers,
We are happy to introduce to you our quarterly trends report focused
on Central and Eastern Europe that you can now expect to guide you 3-4 times
every year!
Here we attempt to demystify certain myths and use valid data and thought
leader analysis to answer important question regarding employment, education
and the economy.
When we wanted to name this report we struggled to find something that
suggested creativity and analysis-driven writing, also conveying business acumen
and the pursuit of success. Though Inovantage primarily touches on the themes
of employment, education and economy we didn’t want the quarterly to be limited
to that. If something in the future suggests that we need to cover themes
beyond the mentioned space, we are more than open to it, as the world of work
as we know it is constantly evolving.
So we chose our two primary inspirations: Innovation and Advantage which Manlio!Ciralli!
drives success. Hope you enjoy reading the quarterly as much as we enjoyed
creating it.
In the time of the hotly debated topic of the future of work, we have chosen to analyze how skills shape the future
ofCentralandEasternEuropeinatimeofuncertainty.Witheveryonerushingintotalkaboutautomationandhumanaugmentation,
we need to clarify some hard truths about these disruptions. Automation needs to stop being viewed
as a dichotomy of utopia or dystopia – Will jobs be lost? Yes. Will jobs be created? Yes.

So the appropriate reaction? Evolve and Augment your talent.

The accelerating pace of technological, demographic and socio-economic
disruption is transforming industries and business models, shortens the shelf-life
of employees’ existing skill sets in the process. The workforce now needs to re-skill ever
5 years not every 20-25 years according to the World Economic Forum and we
stand by that.

Hiring a team of data scientists or the next trendiest new job title isn’t just
the answer. Understand the importance of upskilling your entire workforce
- Using AI and technology driven by these new jobs to augment the current
workforce’s skills has a value that is insurmountable.
Organizations need a diverse workforce with a ‘probability mindset’ - this defines
Sandhya!Sabapathy the future of management. Managers will be focused on managing complexity,
juggling and multi-tasking tech with effective empathetic human interaction.

Why skills? In a region where unemployment is low and growth is rapid, we find CEE lacking in specialists and facing deep
scarcities in its biggest investment supported industries. Our 3 picks surround some of the fastest growing industries in EE
& CEE: ICT skills are the deepest scarcity with steep industry growth rate, Automobile is the fastest growing industry and
Engineering skills are the most critical for the foundation for CEE’s infrastructure growth.
We hope to use this quarterly to educate, empower and shed light on some important issues that TAG hopes to have your
support in addressing.

Yours Sincerely,

Manlio Ciralli & Sandhya Sabapathy

Branding & Innovation Department
(Italy, Central and Eastern Europe, Middle East and North Africa)

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Preface
The natural transition of an industrial revolution cannot be fought. Instead of shying away from modern disruptions, we
must be open to understand the shifting of tides. Instill the importance of digital intelligence, continuous upskilling and
reskilling of our current workforce. Analysis driven-education on what lies ahead and proper preparation & acceptance
of a future of continuous learning are great areas to take some critical steps – invest in the future.

Central and Eastern Europe is in the center of this tech-hub surge in Europe.
For the last five years WEF states the region registered an impressive growth
in Information Communication Technology (ICT) as a share of its GDP (in Bulgaria,
for instance, it rose from 1.3% in 2012 to 3.3% in 2016) and is a leader in the auto-
mobile industry.
Employers in the CEE need to work on modernizing the working environment,
implementing continuous learning and development programs, improving
compensations and benefits programs, implementing the new flexible ways
of working (mobile and remote working), working with educational studies and
sometimes relocating their operations closer to available talent pools to help
prevent the brain drain in this fast-evolving space.
CEE is facing an interesting challenge of focusing on becoming more ‘loyal’ employers
and fostering a sense of trust thereby increasing cohesion in society.
CEE needs to work of creating a hospitable environment to growth digital talent
Sergio!Picarelli which is perhaps more vital than anything else to sustain and increase the growth
of industries in the region.
Labour markets around the world continuously demonstrate various types
of ‘mismatch’, including mismatch between the number of job seekers and employment opportunities, which is reflected
in unemployment.
But more importantly from a simpler perspective – Are companies looking for skills in the local market that aren’t there?
Why does CEE seem to need to import experts? Are youth training and investing in education that will not guarantee them
a job? Read on to find out.

Adecco Group’s Recommendation for skill development in the CEE is focused on growth,
employability and education:
• Work-based training, such as apprenticeships, make sure that the education “output”
matches the need of businesses, while also giving young people a valuable first
experience to the realities of the world of work.
• Lifelong learning is indispensable in times of rapid technological, economic and
demographic change.
• Work mobility is an important tool for businesses to find the talent they need
despite shortages on the local labour market.
• Diversity has become a key component for companies to succeed, encompassing
strategies that cater for a diverse workforce (by gender, age, geographical/cultural
origins), as well as diversity in labour contracts and forms of work.

Success will not be possible without deeper, accountable cooperation between

employers and educational institutions. In this context, it is particularly important Angelo Lo Vecchio
to create new platforms for cooperation between universities and business,
and to recognise the benefits of such exchanges for all actors involved.
We hope to start such conversations with some esteemed professors from top CEE schools being partners in this project
with us. We are always available for more enquiries on this important topic of Skills and hope to be in touch with all of this
report’s readers for their feedback, questions and continued support.

Sergio Picarelli Angelo Lo Vecchio

Executive Board Member, Adecco Group Head of Central and Eastern Europe,
CEO of Italy, Central and Eastern Europe, Middle East & North Africa Middle East & North Africa
Global Head of Permanent Placement and Lee Hecht Harrison

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 A taste of things
to come:

o f t h e
Sk i l l s
fu t u r e
 In the age of disruption and agile market changes, the ultimate currency in the new
industrial revolution: Talent. But what exactly do we mean by talent?
What are the main skills talent needs to have and why are these skills so attractive?
With the spotlight on Central and Eastern Europe, TAG attempts to find out.

The Power loom was invented in 1810, but it took 35 The natural transition of an industrial revolution cannot
years for its usage to transform the textile industry: be fought. Instead of shying away from modern
Experts observed that textiles didn’t attract engineers disruptions, we must be open to understand the shifting
who had the skills to man these machines and a veritable of tides. Instill the importance of digital intelligence,
invention collected dust for almost half a century. continuous upskilling and reskilling of our current
Mendel’s law of genetics – a fundamental in biology, workforce. Analysis driven-education on what lies ahead
discovered by a young Austrian recognized friar, Gregor and proper preparation & acceptance of a future of
Mendel, took a 100 years to be recognizes as pillar in continuous learning are great areas to take some critical
genetics: Experts say it was because of a lack of creative steps – invest in the future.
thinking amongst scientists. With tech-hubs, like San Francisco, attracting massive
Is the next big market disruption already out there? Do global funds and some of the best talent, Technology
policy-makers, educational institutions and enterprises and Digital is emerging as one of the foremost industries
have the right people to understand and nurture it? of this day and age. The hunt for the new ‘Silicon Valley’ is
an engaging theme with mass speculation. But this may
The 4th Industrial revolution not very well be the case as the need for a hub-based,
centralized, melting-pot of talent is decreasing with the
An estimated one in two jobs today risk being replaced rapid rise of the gig economy and freelancers.
by machines, according to The Adecco Group’s Global International mobility is the talk of the decade with
Talent Competitiveness Index 2016 with INSEAD. millennials refusing to stay in a city for long, spurring
Automation, which will be further explored in chapter 2, the need for strong cross-location interaction and the
needs to stop being viewed as a dichotomy of utopia or emergence of a much smaller hyper-connected world.
dystopia – Will jobs be lost? Yes. Will jobs be created? Central and Eastern Europe is in the center of this tech-
Yes. So, the appropriate reaction? hub surge in Europe. For the last five years, WEF states
the region registered an impressive growth in Information
“AUGMENT NOT REPLACE. TALENT IS THE NEW Communication Technology (ICT) as a share of its GDP
CURRENCY.“ (in Bulgaria, for instance, it rose from 1.3% in 2012 to 3.3%
in 2016).

Creative and multimedia

Clerical and data entry
Sales and marketing support
Software development and technology
Writing and translation
Professional services
Not enough data

Online Labour Index top occupation by country

(Europe), 1-6 July 2017

Many of CEE ’s top cities like Prague and Budapest (profiled in Chapter 3), are on the forefront of digital change. But 62%
of CEOs in CEE find it “very” or “somewhat” difficult to recruit for digital talent, compared to 50% globally.3 How do we
chronicle this change?

o f t h e
Skills
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 The Talent Model Shift
Talent models have evolved over the past decade, accel- Understanding differentiated capabilities: Do companies
erated in the economic downturn - companies no longer have the skills, knowledge, and abilities required for com-
have the luxury of adhering to status quo talent strategies. petitive advantage? Accelerated Performance: Do current
In fact, to attract, engage, develop, and retain the Talent processes and programs improve workforce per-
right talent, companies need to rethink their talent models. formance and drive meritocratic decision making? 5
Too many remain mired in ineffective practices that re- Leadership Development: Are companies run by the
flect 20th-century assumptions about how, where, and right leaders, and do companies have effective leadership
by whom work gets done. The old model no longer building capabilities? Talent Culture: Does work place en-
works for many high performers, nor does it meet the vironment maximize the contribution?
needs of a large majority of the current workforce. Com-
panies are wasting resources - both human and financial
by perpetuating HR programs that are out of step with
the way work is conducted.

20TH CENTURY MODEL 21TH CENTURY MODEL

North American/Western European, and male dominated Global, diverse, gender balanced

Continuous employment with lockstep career progression Discontinuous career progression

Nonlinear career paths (lateral) Companies are groups of capabi-

Linear and siloed vertical career progression
lities to be deployed wherever and whenever appropriate
Multidimensional expertise valued.
Deep functional expertise valued
Value placed on both technical and leadership skills.
Flexible employment models – part-time, same hours in fewer
Full-time employment models
days, summer off

Face-to-face work interaction Virtual workplace and face-to-face

Expectation of only one chance to advance career (in 30s)

Any time is good as long as performance is sustained
-no second chances

Work, family, community separate Family-community-work intertwined

Monetary and nonmonetary rewards Nonmonetary can have

Monetary rewards as motivators
even greater value

STABLE AND PREDICTABLE ENVIRONMENT DYNAMIC AND UNPREDICTABLE ENVIRONMENT

INCREMENTAL CHANGE STEP CHANGE
RIGID HIERARCHIES FLEXIBLE WORKPLACE

CEE is facing an interesting challenge of focusing on becoming more ‘loyal’ employers and fostering a sense of trust
thereby increasing cohesion in society. 69% of CEOs in CEE report that they’re making efforts to measure trust
between their workforce and their organization’s senior leadership, close to the global rate of 71%.3

Anna Wicha, Country Manager, Adecco Poland points out that the war for talent is in full-swing, and which competences
are the most valuable thing about it – is constantly changing. That is why it is crucial for employees and candidates to
implement the “longlife learning” principles. Technology, and consequently also business and our everyday lives, change
too fast for once acquired knowledge to last for the rest of life.
In this context, what is the role of companies and HR departments? First of all, it is massively growing. I see an increasing
need to approach HR as a broad process, including communication - building bridges between employer and candidate.
At the same time, HR’s task is increasingly to develop talents, and build competences in organizations to prevent their
possible deficits in the future.

o f t h e
Skills
fu t u r e
 Evolution of Employer – Employee Relationship

Life-long Jobs Industry Jobs Career Citizens Decentralized work

Little or no movement Moving within In search of purpose, pay, Freelancers, digital

b/w companies the industry skill set development communicators
in search of personal
Jobs for life development Not dependent on pay Block chain-esque technology
and benefits project managing security,
Dependent on pay, Reliant on pay benefits, based/interest based office location no longer
benefits, housing, services housing and security a priority
and social security Hiring based on demand
and access to talent Who is the organization?
Who is the employer?
Lines is blurred

Skill Evolution
Looking at employment structure by occupation provides with this level of education can be attributed to the fact
a straightforward measure of the skill content of labor that many of these workers are employed in agriculture.
demand. In most CEE countries, employment has shifted
away from less skilled occupations towards more skilled In CEE , the demand for white-collar labor with medi-
occupations. In particular, there has been a shift from um-level skills is limited relative to supply, while the de-
blue- to white-collar occupations, as well as an increase mand for blue-collar labor with mid-level skills is high
in the skill content of employment in both kinds of work. relative to supply. But job prospects are limited for
white-collar workers with medium-level skills (e.g., clerks,
Pattern of Change: service workers, salespeople).
• Substantial fall in demand for agricultural skills, Changes in the demand for skills are certainly reflect-
• Fall in demand for manual labor, ed in the movement of wages. Given the supply of skills,
both skilled and unskilled, an increase in demand for certain skills manifests as an
• Rise in demand for service sector occupations, increase in the relative wages of workers who possess
• Surge in demand for professional skills. these skills. In the majority of CEE , the returns to educa-
tion have sharply increased and are presently compara-
Romania and Turkey saw increases in the demand for ble to those observed in developed market economies. 4
manual labor (not decreases), but these increases were
for skilled manual labor. Increased demand for skilled la-
bor is also evident in the pattern of unemployment and
exit from unemployment found in the CEE regions. As a
rule - the unemployment rate is highest among workers
with only a basic education, except in Turkey and Greece.
The relatively low unemployment rate among workers

o f t h e
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 Skill based Educational Assessment
Lack of data on student learning and employment out- Secondary education and high schools are facing diffi-
comes makes CEE a difficult area for education ministries culties in imparting problem-solving skills. Driven by resil-
to address the legacy of central planning. ience to crisis situations these students face the danger
Ministries of education in the region continue to micro- of falling short in the modern day competitive market.
manage the sector using detailed norms and regulations. Universities need to focus on the importance of diverse
This input-oriented style of management leads to the in- degrees which improve the employability of a student
efficient use of resources and results in a rigid education in the current job market. Focus on filling the skill gap by
sector-not the type of flexible sector needed by CEE directing students based on personality and interest as-
to create modern, skilled workforces. sessment towards value-based societal needs massive
improvement – current traditional degrees are focused
on theoretical processes impractical in a face-paced
competitive world of continuous change.4

Prof. Krzysztof Martyniak, eminent sociologist, University of Warsaw gives us an idea of what his take on this matter
in Poland looks like: One of the problems of the modern labour market is the mismatch between education programmes/
skills of young people entering the labour market and the needs of the economy. The problem does not concern only
Poland, it is global. What are the reasons? First of all, the development of technology - so dynamic that it is difficult to
prepare a study plan for several years taking into account potential changes and new requirements.

However, the global technology race has its leaders. Technology, for the time being, is not being created by itself. It is
developed by people who are well prepared not only by the education systems, but also by general social support. That
is why it is worth asking ourselves how to teach and support in order to transfer knowledge and skills as “timeless” as
possible.

There are few roads. We should start with verifying how much of the information acquired by pupils or students is an (un)
useful knowledge. People, seeing what they can achieve or create thanks to the acquired information, will, on their own,
expand such knowledge - at all stages of their lives - if it becomes insufficient. This is the basis of the ‘lifelong learning’
principle.

Another challenge of education is the development of soft/social skills, teamwork and creativity related to social and
cultural capital among young people. There are not many visionaries in the world, but a lot of fantastic achievements
were the result of effective work of a group of people (synergy effect).

However, success will not be possible without wider and deeper cooperation between employers and educational
institutions. In this context, it is particularly important to create new platforms for cooperation between universities and
business, and to recognise the benefits of such exchanges for all actors involved.

Polish education is mismatched to the needs of business. Optimistically, I believe that we are in a perfect moment to make
a difference in many areas of our lives. The economy produces good macroeconomic data and the unemployment rate
record low. The market absorbs workers like a sponge, and in many sectors employers are willing to train on their own
almost inexperienced people with the potential to acquire skills. There may be no better time for changes in education
as is now.

o f t h e
Skills
fu t u r e
 Skill based Assessment of Learning Outcomes CEE (2000 – Current)

Several years of experience

in measuring, analyzing
and utilizing learning results
Several years of experience to improve education policy
Early piloting of own with own assessments
None/very early internal assessment instruments, and regular participation
and international some participation international assessments
assessments in internal and international
assessments

BULGARIA
CROATIA
HUNGARY
CZECH REPUBLIC
TURKEY ROMANIA GREECE
POLAND
SERBIA
SLOVAKIA
SLOVENIA

Most sought after jobs based on recommended

skills & Job market growth
Zooming into Digital Skills in CEE
Before we announce TAG’s top skills, for CEE let’s have a closer look at digital skills, the global call-to-action for skills
development with ample reason for growth in CEE.
Global companies have discovered CEE ’s deep digital talent pool, and since digital skills are portable, many of the
brightest people in the region are lured to global players. Companies in CEE need to compete with the global brands
names for top digital talent. 3

Thinking about your people strategy for the digital age, how strongly do you agree or disagree with the following
statements? (’strongly agree’ and ‘agree’ answers)

We need to strengthen soft skills

97 %
in our organization alongside digital skills

We make decisions on automation of tasks & jobs based

90 %
on how best to deliver our corporate purpose

We expect to grow our workforce through 76 %

interships & appretinceships

o f t h e
Skills
fu t u r e
 Anna Wicha, Country Manager, Adecco Poland stresses the specificity of modern economy - transnational and more
and more based on technology - it contributes to a brain drain - the interception of high-class specialists by employers
from countries offering better living conditions. For Poland and other countries in the region, this is a two-dimensional
challenge. On the one hand, we must do everything to limit the outflow of specialists from Poland. On the other hand,
we should try to attract specialist from abroad, such as Ukraine. It could be said that the brain drain is an international
game in which the most efficient and effective employers will win the competition. How do we deal with these struggles?
According to Global Talent Competitiveness Index prepared by Adecco - Poland is ranked 39th out of 119 countries
surveyed in terms of attractiveness for development and attracting talented employees.

The war for talent is going on, and which competences are the most valuable thing about it - it is still changing. That is why
it is crucial for employees and candidates to implement the “longlife learning” principles. Technology, and consequently
also business and our everyday lives, change too fast for once acquired knowledge to last for the rest of life.

Country Manager of Greece, Konstantinos Milonas gives us his input on Greece: In GTCI 2018 , Greece is ranked 42nd
in Talent Competitiveness among 119 countries. Now, some interesting figures also coming from this year’s GTCI: Greece
is No 1 in tertiary education enrolment but No 97 in Relevance of education system to the economy, No 51 in Skills
matching with tertiary education and No 89 in Lifelong learning.

Greece has more than 20 Schools of Philology, Philosophy, History, Archaeology etc, known for their low labour market
absorption and the high unemployment among their graduates. On the other hand, Greece only has 9 Schools of
Maritime Studies and 13 Schools of Tourism, which are our main two “Heavy industries” in Greece. This is something
that reflects the lack of relevance of the education system to the economy. It’s high time Governments, Educational
Institutions and Businesses came together to work for the right solutions to this very important issue.

Prof. Cristian MARINAȘ MA Coordinator in Human Resources Management at the The Bucharest University of
Economic Studies, Faculty of Management, chimes in by pointing out what companies use the following strategies to
attract or to develop the digital talent: modernising the working enironment, implementing continuous learning and
development programmes, improving compensations and benefits programmes, implementing the new flexible ways
of working (mobile and remote working), working with educational studies and some times they are relocating their
operations closer to available talent pools.

CEE needs to work to create a hospitable enivroment to grow digital talent which is perhaps more vital than anythign
else to sustrain and increase the growth of digitalization in the region.

o f t h e
Skills
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 Top skills Adecco recommended (hard and soft)
Analyzing the CEE market with data-partners WEF & OECD we propose, in no particular order:

TOP HARD SKILLS IN CEE TOP SOFT SKILLS IN CEE

IT Strategy Management Creativity

Mechanical Engineering Leadership & Crisis Management

Forklift Operation Grit and Resilience

Marketing and Advertising Flexibility and problem solving

Aviation Engineering Cross Cultural understanding

Search engine optimization (SEO) Entrepreneurship

Cybersecurity Data literacy

Data Analytics Agility & Quick Learning

Financial Analysis

CEO Skills
What does it take to earn the top spot in the completive emerging CEE market?
Here is what TAG found from our data and recommend.

CITIES WITH THE MOST CEOS COMPANIES LOOKING FOR/ATTRACTING THE MOST CEOS IN CEE

Warsaw, Masovian District, Poland Apple

Hungary area CEO

Istanbul, Turkey Siemens

Prague, The Capital, Czech Republic Self-employed

Cracow, Lesser Poland District, Poland Koc Holding A.S.

Bucharest, Romania Citi

Ford Motor Company

o f t h e
Skills
fu t u r e
 WHERE ARE THE CEOS COMING FROM WHAT ARE THE MAIN SKILLS THEY HAVE

SGH-Warsaw School of Economics Sales management

University of Warsaw Business Planning

Anadolu University Social Media Marketing

Warsaw University of Technology Start-ups

University of Zagreb/Sveuciliste u Zagrebu Online Marketing

Budapest University of Technology and Economics Entrepreneurship

Istanbul University Product Development

University of Belgrade Management Consulting

Corvinus University of Budapest Online Marketing

University of Economics, Prague Business Analysis

WHAT ARE THE INDUSTRIES ACTIVELY HIRING FOR SENIOR MANAGEMENT?

Information Technology & Services Construction

Marketing & Advertising Financial Services

Computer Software Management Consulting

Internet Automotive

Konstantinos Milonas, Country Manager of Adecco Greece, emphasizes on the traits of a leader. High trust between
leadership and employees increases the workforce’s engagement and commitment and brings higher performance. And
higher performance means more innovation and higher revenue. Given that for all businesses profit is a top priority, it’s
obvious why as CEOs we need to aim at building trust between leadership and employees. The competition for talent
in today’s labour market never abates. In this highly competitive environment we need to create a workplace where
employees will choose to work in. In a recent survey Adecco Group Greece conducted, we found that one of the most
important criteria employees evaluate when choosing an employer is the trusted and competent leadership. We need to
focus on leading with an authentic, open and honest style, in order to inspire talented employees and earn their support
that will lead to the success of the business.

o f t h e
Skills
fu t u r e
 TAG’s recommendations for CEE
In an attempt to get the conversation started with key stakeholders, this is what TAG recommends

GOVERNMENTS & POLICY UNIVERSITIES & EDUCATIONS

COMPANIES & ENTERPRISES NEET – YOUTH
MAKERS INSTITUTIONS

Raise the profile of employment Introduce Autonomy and Map their workforce and to Consider work-based training
issues to the top of the political accountability of departments establish a sustainable strategy to solutions such as apprenticeships
agenda based on employability results, retain current employees to enter the labour market,
allow market needs to drive combining “classical” education
Gather solid data on the labour student interest Attract future talents and ensure paths with on-the-job learning
market, mapping the skills pockets that a solid proportion of flexible experiences
and needs Improve the efficiency of resource workers contributes to the
utility through performance- innovation and growth of the Rely on the expertise and support
Recognize and foster the role based financing company, across the economic of HR service providers that
that actors such as the Adecco cycles focus on providing the stepping-
Group can play in the labour Gather solid data on the labour stone into the labour market
market, notably with regards market, mapping the skills and Invest in work-based training and remaining a “career guide”
to skills – and to lift unjustified needs solutions, either directly (or by throughout a worker’s life
restrictions that hinder private calling on solutions such as the
employment agencies to increase Structure programs based on Agency Apprenticeship Contracts Develop a state-of-mind which
the employability of workers practicality of the job market developed by The Adecco Group) recognizes that employment
security, fostered by continuous
Promote education policies that Actively be involved in student Recognize that today 3-4 skills development, is a more
link the work of education with based apprenticeships to guide generations operate at work sustainable path to a gratifying
the world of work, with a strong interest and self-assessment together and therefore boost career than relying on job
focus on work-based training diversity security
solutions Build the Foundations of Adult
Learning Systems – important Establish flexible working schemes Consider skill profiles that are
Encourage private-public for universities to be at the recognising the different age not seen as “classical” in order to
partnerships that promote the forefront to shift government- groups, supporting mentoring increase their own employability
development of work-based defined programs towards a schemes and allowing for life- chances
training opportunities, such as well-regulated market of private long-learning experiences.
apprenticeships and public providers that deliver See skills as a heterogeneous set
training services to both working of inherited, acquired, and yet to
Boost openness of the labour and unemployed adults be learnt competences that are as
market in order to attract the much technical, as cultural such as
best talent and favour a culture of “soft factors”, touching on aspects
diversity such as professional & punctual
behavior, appearance, motivation
and engagement

Prof. Cristian MARINAȘ MA Coordinator in Human Resources Management at The Bucharest University of Economic
Studies, Faculty of Management, supports TAG’s recommendations with his deep-dive into the Romanian labour market
and Education: In today’s business environment, companies need to constantly adapt their strategies to attract, maintain,
and develop talent. For new generations, the concept of “traditional” work is not relevant anymore, young people are
being motivated by a job that offers them a balance between the purpose of the work itself and the personal life, with a
focus on horizontal communication and team work. The recognition of their results and the need for affiliation are import-
ant motivational factors, young people being tempted to accept jobs that involve interaction with people from differ-
ent cultures and geographic areas that involve a high degree of mobility instead of long-term and secure jobs that are
based on very clear, monotonous rules and procedures. The emotional fragility of the current generations is the main
problem, their resistance in stressful and work environments being very low. This is the reason why engagement
becomes a strategic issue for companies whose future depends on finding the best solution regarding this matter. In the
long term, competitive advantage will be gained by companies that will understand these behaviors and who will be able
to adapt, personalize long-term employee retention strategies.
Educational systems must be rethought and adapted to the requirements of the new eco-system, with emphasis being
placed on the development of practical skills, especially on the transversal ones. The involvement of professionals in
teaching activities and the establishment of long-term partnerships with organizations from different fields of activity, in
the case of practical training, should be encouraged as successful factors. Promoting innovative learning methods and
resigning from the classical approach in which the teacher often seems to be the only benchmark, can make a decisive
contribution to increasing the performance of Romanian education.

o f t h e
Skills
fu t u r e
 Golden Age of Central and Eastern Europe
TAG believes this quarterly focus on CEE comes at an opportune moment. It is now the age of emerging markets and
CEE is moving into an optimistic period. Let’s have a brief foray into the current economic snapshot of CEE to see why
it’s the golden age of CEE .

Germany has long been the engine that drives the EU’s economic growth, but for the past few years it has been outpaced
by countries further east—most notably Poland, Romania, and the Czech Republic.
The three largest eastern EU members by GDP are experiencing peaks of high economic growth, low unemployment,
and manageable inflation of around 2%. The IMF now forecasts the “emerging and developing Europe” economies to
grow 4.5% this year, upping their prediction by 1.5 percentage points from six months ago. This increased optimism is
based, in part, on bumper growth in the second quarter of 2017, when Romania’s economy increased 5.7% versus a year
earlier, the Czech Republic’s by 4.7%, and Poland’s by 4.4%. By comparison, the EU average was 2.4% growth over the
same period.

European economic growth in the second quarter of 2017

GDP vs previous year

Romania 5,7 %

Czech Republic 4,7 %

Poland 4,4 %

EU average 2,4 %

Euro zone average 2,3 %

Germany 2,1 %

France 1,7 %

o f t h e
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 Key players
All of CEE economies are still heavily reliant on manu- Now, rising wages are starting to send factory jobs to
facturing, exporting much of their production to the cheaper countries. Japan’s Yazaki Corp., for instance, is
rest of the EU. For example, the Czech Republic has the switching production of the vehicle wiring it makes from
lowest unemployment rate in the EU and about 35% of the Plzen area to Serbia, where industry wages are al-
the Czech labor force is employed in manufacturing, the most 60 percent lower.
highest proportion of any EU country. When Europe is
growing, demand for the things made in these econo- Miro Smrekar, Adecco’s Head of the Adriatic Zone adds:
mies grows. Often this means cars: automakers includ- With the economy growing and due to demographic
ing Toyota, Volkswagen, and Peugeot have factories in trends we are approaching the natural level of unem-
the Czech Republic. Romania’s largest exporter is Dacia, ployment, that is why now is the time to start adopting
a  subsidiary of French car company Renault (explored measures that would include more people in the labour
in Chapter 3). market. We must create conditions together so that
Robust economic growth and low unemployment also companies may employ people they need, in order to
leads to an increase in tax revenues, improving the health encourage people to become economically active earlier
of budgets and making these countries more attractive and inactive at a later age, so that companies will be able
to investors. to include young people in their processes using appren-
ticeship systems, who will then have useful knowledge
At the same time, many eastern countries are starting to and work practice, to adjust workplaces so that they
absorb the money from the EU’s most recent seven-year would be appealing for candidates and to establish an
budgetary cycle, which started in 2014, of which Poland attractive environment for foreign human resources as
is the biggest beneficiary. The Czech central bank gover- well as young people who are looking for opportunities
nor recently said that the government’s investment cycle abroad. All the major players in the labour market have
is closely linked to the EU’s budget cycle. The IMF noted an important role in this: the state, the companies, and
that public investment contracted sharply in the country the recruitment agencies, while each of them has to as-
last year because of low take-up of EU funds. sume personal responsibility for their own employability.
Poland is also benefiting from a surge in workers from
Ukraine. It’s estimated that as many as 1 million Ukrain- With one of the region’s best-educated populations, the
ians are working in Poland at any one time, who come Czech government pushed through development pro-
for higher wages and more opportunities, especially grams that lured German carmaker BMW to invest more
since the recession that hit after the 2014 annexation than 200 million euros into a research facility developing
of Crimea by Russia. Ukrainian workers have helped digital technology and autonomous driving. In Romania,
address Poland’s demographic issues—an aging popu- tax breaks lured the likes of Oracle Corp. and IBM.
lation and low fertility rate—in addition to counterbal- In Poland, such companies as Amazon, JPMorgan and
ancing the emigration of millions of Poles after the na- IBM have set up hubs or distribution centers, bringing
tion joined the EU in 2004. foreign direct investment to a record $10 billion in 2016.
That’s in part because Poland’s work force offers a high-
Skepticism? er level of training relative to wage levels than in other
parts of Eastern Europe.
Recent rapid growth in some of these countries may
come at a cost. In Romania, there are fears that econom- Country Manager of Czech Republic and Slovakia,
ic success is being spurred by unsustainable consumer Ondřej Wysoglad comments: The revolution has be-
spending fueled by the government increasing public gun, that’s clear, as Inovantage reports. Revolution de-
wages. In August, Fitch Ratings sounded the alarm that notes the term 4. It applies to all areas, including the labor
this policy risked overheating the economy. Wages are market. Within twenty years, a number of professions
outpacing productivity growth and tax cuts have wid- we know today will disappear. But there will also be new
ened the budget deficit, a Fitch analyst noted even as the professions we can not imagine yet. This all goes hand
agency boosted its forecast for Romanian GDP growth in hand with attracting talent from abroad and keep-
this year. ing them, the Czech Republic is not able to compete
with leading countries in terms of attracting talent from
abroad, and so the capacity of skills related to global
knowledge can also improve.

o f t h e
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fu t u r e
 In order for the revolution to be successful and successful has said isn’t up to EU standards. That, and the increas-
in the labor market, it is one crucial thing: the ability to ingly authoritarian tendencies of the government, are
learn. In the future, people will not work on the basis of spooking investors somewhat.
education, but how they will be able and willing to con- If the relationship between Central and Eastern Europe-
tinue learning. Just for the sake of interest: the World an governments and Brussels worsen, it’s unclear what
Economic Forum has compiled a chart of skills that will be will happen in the EU’s next funding cycle. Proposals
required to dominate today’s 10-year-olds in the future have been floated to restrict funds going to countries
labor market. These are, for example, problem solving, that don’t meet certain EU standards.
critical thinking skills, creativity, emotional intelligence, in- And even further into the future, these economies will
teraction with other people, and bargaining skills. need to shift jobs from manufacturing to services if they
want to avoid the inevitable disruption to factory jobs
The biggest concern, perhaps, is politics. Over the week- from automation.
end, billionaire Andrej Babiš and his populist ANO par-
ty won the most votes in the Czech Republic’s legislative For now, the benefits of their economic models seem to
election. The anti-establishment candidate looks set to outweigh the risks, so the EU’s eastern economies are
become the country’s next prime minister, even as he’s likely to keep growing. EU funds are there to be invest-
being investigated for misuse of EU funds. Promising to ed, central banks have supportive monetary policies, and
push for significant constitutional changes, his election political tensions aren’t yet at a breaking point.
was another rebuke for the traditional parties that have On this positive note, TAG moves on to a more pressing
held power in Europe for decades. issue in chapter 2, Skills Mismatch and Reskilling.
Meanwhile, Poland’s Law & Justice party are engaged
in an ongoing battle with Brussels over efforts to reform
the country’s judiciary, which the European Commission

References:

1. Ec.europa.eu. (2018). New Skills Agenda for Europe - Employment, Social Affairs & Inclusion - European
Commission. [online] Available at: http://ec.europa.eu/social/main.jsp?catId=1223&langId=en.

2. World Economic Forum. (2018). Eastern Europe’s major economies are having a “Goldilocks moment”. [online]
Available at: https://www.weforum.org/agenda/2017/11/eastern-europe-s-major-economies-are-having-a-
goldilocks-moment.

3. PwC. (2018). 21st CEO Survey - PwC Global. [online]

Available at: https://www.pwc.com/gx/en/ceo-agenda/ceosurvey/2018/gx.html.

4. SKILLS FOR EMPLOYMENT - Knowledge sharing platform. (2018). SKILLS FOR EMPLOYMENT - Knowledge
sharing platform. [online]
Available at: http://www.skillsforemployment.org/KSP/en/Sources/WorldBank/index.htm.

5. Boozallen.com. (2018). Booz Allen Hamilton | Consulting, Analytics, Digital Solutions, Engineering, Cyber. [online]
Available at: https://www.boozallen.com/ [Accessed 3 May 2018].

6. Finanza.repubblica.it. (2018). Thirty Years Upended as Eastern Europe Faces Skills Shortage. [online]
Available at: https://finanza.repubblica.it/Bloomberg/2018/04/04/thirty_years_upended_as_eastern_europe_
faces_skills_shortage-P6N4CC6S972901_BLF/

o f t h e
Skills
fu t u r e
Looking at
the Ingredients:

s m a t c h
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Sk n g
k i l l i
& Res
 When cooking a sweet or savory dish the most important element is finding the right
ingredients. In this day and age, in Central and Eastern Europe, where most of the
countries have a low unemployment rate, there is a need for specialists. Why aren’t CEE
schools producing the candidates we can place? How can we continuously skill the current
workforce to increase its potential?

The accelerating pace of technological, demographic occupations. Even those jobs that are less directly affect-
and socio-economic disruption is transforming industries ed by technological change and have a largely stable
and business models, shortens the shelf-life of employ- employment outlook require a fresh take on skills – the
ees’ existing skill sets in the process. workforce now needs to re-skill ever 5 years as opposed
For example, technological disruptions such as robotics to every 20-25.
and machine learning—rather than completely replac- Let’s try and break it down: Why is this important?
ing existing occupations and job categories—are likely Labour markets around the world continuously demon-
to substitute specific tasks previously carried out as part strate various types of ‘mismatch’, including mismatch
of these jobs, freeing workers up to focus on new tasks between the number of job seekers and employment
and leading to rapidly changing core skill sets in these opportunities, which is reflected in unemployment.

But more importantly from a simpler perspective – Are companies looking for skills in the local market that aren’t there?
Why does CEE seem to need to import experts? Are youth training and investing in education that will not guarantee
them a job?

CONTEXTUAL FACTORS
Economic level and structure Technology
Demographics Work organization
Maternal and child health Institutional settings

SKILL ACQUISITION SKILL REQUIREMENTS

Educational attainment Employment by education
Level of cognitive skills Employment by occupation
Skill formation Job task measures of skill

MATCHING
Education mismatch
Skills and informal work
Hard-to-fill vacancies
Skill gaps

OUTCOMES
Growth and productivity
Level of cognitive skills
Skill formation

There are many factors that affect skills that are interconnected with economic productivity and individual growth. For
a better cognitively developed nation and a pyramid growth of skills with a solid top-line expert block.

is m a t c h
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 What is skill mismatch?
Skills Mismatch is defined as the gap between an individual’s job skills and the demands of the job market; it has
become a central challenge for Central and Eastern Europe, affecting all layers of society, from the productivity and
efficiency of businesses to the current and prospective welfare of youth.

Here are some of the more frequently discussed types of mismatch.

Frequently discussed types of skills mismatch

Skill shortage (surplus) Demand (supply) for a particular type of skills exceeds the supply (demand) of people with that skill

Skill gap Type or level of skills is different from that required to adequately perform the job

Vertical mismatch The level of education or qualification is less or more than required

Horizontal mismatch The type/field of education or skills is inappropriate for the job

Overeducation (undereducation) Workers have more (less) years of education than the job requires

Overqualification (underqualification) Workers hold a higher (lower) qualification than the job requires

Skills obsolescence Skills previously used in a job are no longer required and/or skills have deteriorated over time

Skill Development, Activation and Matching

Determination of a country’s skill progression is key in understanding steps to be taken forward, let’s have a look at CEE:

Skill Development

Participation in Post- Government spending

Attainment of Upper Vocational Educational
Country Compulsory Education on education as % of
Secondary Education Training Participation
(last 12 months) GDP (%)

Poland 0.15 -0.01 -0.01 8.26

Romania 0.08 -0.07 0.04 5.98

Czech Republic 0.23 0.06 0.08 5.83

Greece -0.05 -0.04 -0.06 4.4

Hungary 0.12 -0.03 -0.08 7.89

Slovenia 0.10 0.00 0.05 6.7

Slovakia 0.21 0.02 0.07 5.9

Croatia 0.15 -0.02 0.07 6.12

Bulgaria 0.08 -0.06 NA 8.26

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 Skill Activation

Employment Rate of
Country Youth in NEET
Recent Graduates

Poland -0.01 0.01

Romania -0.14 -0.04

Czech Republic 0.07 0.16

Greece -0.46 -0.27

Hungary 0.03 -0.03

Slovenia 0.09 0.12

Slovakia -0.05 -0.01

Croatia -0.20 -0.25

Bulgaria -0.15 -0.22

Skill Matching

Tertiary graduates Employers

Underemployed Long term
Country employed in lower expecting outdating Structural Vacancies
Part-time workers unemployment rate
skilled jobs of skills in 5 years

Poland -0.10 -0.04 0.17 0.43 0.06

Romania 0.08 0.14 -0.47 0.39 0.10

Czech Republic 0.26 -0.27 0.31 0.11 0.37

Greece -0.25 0.02 -0.08 0.14 -0.54

Hungary 0.23 0.11 0.21 0.24 0.06

Slovenia 0.19 -0.32 0.14 0.31 -0.01

Slovakia 0.04 -0.13 0.22 0.17 -0.18

Croatia 0.10 -0.14 0.21 0.04 -0.22

Bulgaria -0.26 0.42 0.28 0.31 -0.08

Czech Republic leads the way with the top scores across all of EU for life-long learning, VET and performs above average
in al the 3 pillars measured. It also has a strong performance in upper secondary education, with participation and
attainment ranked highly across Europe in general. Key issues when it comes to Czech for skills are brain drain and
engaging high-schoolers in career building skill development activity.

The Czech Republic has been very good at publicly documenting skill and labour trends growth providing detailed
analysis per profession on the skill changes and how an individual can improve their potential in the market. A snapshot
of budoucnostprofesi, an online portal for Czech Future Skills on TAG’s CEE skill recommendation and top growing skillset
for Czech Republic IS/IT Management3

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 Summary of present and future requirements:

Processes,
ICT Sales marketing, law management, Soft skills
organization

Current relevancy of skills

Future relevancy of skills

Interdisciplinary Specialized technical General technical

Languages
knowledge knowledge knowledge

Current relevancy of skills

Future relevancy of skills

Poland follows Czech in many areas with has great results Slovenia is another strong contender with great scores for
across in the board, falling below EU average only in VET and post-secondary education. Slovenia falls behind
skills activation. This shows that young graduates aren’t in activating the aging population from 50 onwards and
necessarily equipped with the right skills and though are keeping them engaged before retirement. Another factor
employed fairly well by the Polish market right off the bat is that Slovenia has very high rates of Skills obsolescence
still need training to increase productivity with a focus on with a lot of skills completely being replaced by new ones.
specialization.

Dr Ioannis Nikolaou, Work & Organizational Psychologist, Associate Professor in Organisational Behaviour and
Director of the MSc in Human Resources Management at Athens University of Economics and Business, mentions that
governments need to invest heavily in education. East European countries need to follow the example of countries such
as Poland, Bulgaria and Hungary which have increased their educational budgets, as % of their GDP. Education is the
best response in dealing successfully with skills mismatch. Further, governments should encourage an alignment between
education (especially universities) and industry, in order to reduce shortage in specific occupations and also provide
reskilling into professions suffering from increased surplus and high unemployment rates.

As a whole Greece ranks the lowest across the 28 member states of the EU, with scores well below the EU average for
each of the three pillars with a particularly low score for long-term unemployment.

Konstantinos Milonas, Country Manager of Adecco Group Greece, says: In a recent survey conducted by Adecco
Group Greece, in Greece 80% of employers stated that they believe that the education system in Greece does not equip
graduates with the necessary skillset required by the labour market. In the same survey we found that the soft skills
mostly sought by Companies in Greece are business ethics, teamwork, flexibility and adaptability and communication
skills. Answering whether they find these skills in the candidates they assess for job positions in their companies, they told
us that they don’t find them easily and to the extend they need them. The majority of the respondents think that the most
effective way to address the skills gap is through Internship and Apprenticeship schemes that can prepare youngsters for
the world of work. It is also important that schools and universities make their students familiar with business practices.
Teach them how to work in teams, give them the opportunity to practice public speaking, improve their presentation
and communication skills etc. It is true that we have a big number of highly educated candidates in Greece as far as their
academic background is concerned. What we need to focus on more is to empower them with the necessary soft skills
that will help them thrive in today’s world of work

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 Zooming on Country-wise shortages
Mismatch of priority occupations defines the direction of need-based education and we look into some top line
mismatches. We will go into 3 industries in detail in the next chapter and attempt to answer some important questions:

Bulgaria
Shortage occupations Surplus occupations
ICT professionals Street workers
Teachers Labourers in mining, construction,
manufacturing and transport
Health professionals
Refuse workers
Financial and mathematical professionals
Agricultural, forestry and fishery labourers
Sales and purchasing agents and brokers
Cleaners and helpers
Administration and business services professionals

Greece
Shortage occupations Surplus occupations
Business services and administration managers Building frame and related trades workers
ICT operations and user support technicians Mining and constructions labourers
Sales, marketing and development managers Wood treaters, cabinet-makers and related
trades workers
Painters, building structure cleaners and related
trades workers

Croatia
Shortage occupations Surplus occupations
ICT Professionals Political scientists
Mechanical engineers Journalists
Medical doctors Philosophers
Nursing associate professionals
Secondary education teachers (mathematics)

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 Czech Republic
Shortage occupations Surplus occupations
Engineers and other technical professionals Workers in hospitality and gastronomy sector
Nursing and midwifery professionals Project managers
Medical doctors and other health professionals General and keyboard clerks
ICT professionals Architects and urban planners and designers
Teachers

Slovenia
Shortage occupations Surplus occupations
ICT professionals Building and related trades workers
Health professionals Science and engineering associate professionals
Science and engineering professionals Metal, machinery and related trades workers
Handicraft and printing workers
Drivers and mobile plant operators
Business and administration associate professionals
Stationary plant and machine operators
Personal service workers
General and keyboard clerks

Romania
Shortage occupations Surplus occupations
ICT professionals Market-oriented skilled agricultural workers
Health professionals Client information workers
Teachers Clerks
Sales, marketing and public relations professionals Retail and wholesale trade managers
Financial professionals and legislators and Street vendors (excluding food)
senior officials
Building and housekeeping supervisors
Professional services managers
Forestry and related workers
Administration services professionals

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 Poland
Shortage occupations Surplus occupations
ICT specialist Market-oriented skilled forestry and fishery workers
Healthcare specialist Food processing workers
Managers Wood working workers
Science and engineering professionals Garment and other craft and trade related workers
Skilled manual workers Social, cultural and related associate professionals
Teaching professionals

Hungary
Shortage occupations Surplus occupations
ICT professionals Street vendors
Engineers and natural science professionals Hotel and restaurant managers
Health professionals Mining and construction labourers Keyboard operators
Economic and financial managers and professionals General office clerks
Agricultural, forestry and fishery labourers
Textile, fur and leather product machine operators
Garment and related trades workers
Food preparation assistants, cashiers and ticket clerks
Shop salespersons

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 Adecco Group’s Recommendations
The Adecco Group addresses the current skills shortages and skills mismatch with these recommendations:

• Work-based training, such as apprenticeships, make sure that the education “output” matches the need of
businesses, while also giving young people a valuable first experience to the realities of the world of work.

• Lifelong learning is indispensable in times of rapid technological, economic and demographic change.

• Work mobility is an important tool for businesses to find the talent they need despite shortages on the local
labour  market.

• Diversity has become a key component for companies to succeed, encompassing strategies that cater for
a diverse workforce (by gender, age, geographical/cultural origins), as well as diversity in labour contracts and
forms of work.

Stay with TAG to explore 3 industries Automobile, IT and Engineering in detail in Chapter 3.

References:

1. Skillspanorama.cedefop.europa.eu. (2018). Skills Panorama. [online]

Available at: http://skillspanorama.cedefop.europa.eu/en.

2. The Future of Jobs - World Economic Forum. (n.d.).

Retrieved from http://www3.weforum.org/docs/WEF_Future_of_Jobs.pdf

3. [http://www.praguebest.cz], P. S. (n.d.). Budoucnost profes.

Retrieved from http://budoucnostprofesi.cz/en/index.html

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 A Bite of the Apple:

a l y s i s
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Sk s t r i e s
y I nd u
o f K e
IT, Automobile & Engineering
 The accelerating pace of technological, demographic of these jobs, freeing workers up to focus on new tasks
and socio-economic disruption is transforming industries and leading to rapidly changing core skill sets in these
and business models, shortens the shelf-life of employ- occupations. Even those jobs that are less directly affect-
ees’ existing skill sets in the process. ed by technological change and have a largely stable
For example, technological disruptions such as robotics employment outlook require a fresh take on skills – the
and machine learning—rather than completely replac- workforce now needs to re-skill ever 5 years as opposed
ing existing occupations and job categories—are likely to every 20-25.
to substitute specific tasks previously carried out as part Let’s try and break it down: Why is this important?

Impact felt already 2015–2017 2018–2020

• Rising geopolitical volatility • New energy supplies and technologies • Advanced robotics and autonomous trans-
port
• Mobile internet and cloud technology • The Internet of Things
• Artificial intelligence and machine learning
• Advances in computing power and Big Data • Advanced manufacturing and 3D printing
• Advanced materials, biotechnology and
• Crowdsourcing, the sharing economy and • Longevity and ageing societies genomics
peer-to-peer platforms
• New consumer concerns about ethical and
• Rise of the middle class in emerging markets privacy issues
• Rapid urbanization • Women’s rising aspirations and economic
power
• Changing work environments and flexible
working arrangements
• Climate change, natural resource constraints
and the transition to a greener economy

Negative outlook 100 Positive outlook

skills stable skills stable
90 Media,
Healthcare Entertainment
80 Consumer and Information Professional
Energy Services
AVERAGE 70
Basic and Mobility Information and
60 Communication
Infrastructure
Financial Services Technology
2015–2020. %

50 & Inventors
Skills stability,

40

30

20
Negative outlook 10 Positive outlook
skills disrupted skills disrupted

-1,0 -0,5 0 0,5 1,0 1,5 2,0 2,5 3,0

Expected change in employment, 2015–2020. %

Source: WEF Analysis

Hiring a team of data scientists or the trendiest new job title isn’t just the answer, integrating the workforce using AI and
technology driven by these new jobs to augment the current workforce’s skills has a value that is insurmountable.
Organizations need a diverse workforce with a ‘probability mindset’- this defines the future of management, managers
will be focused on managing complexity, juggling and multi-tasking tech with effective empathetic human interaction.
TAG now attempts to tackle 3 key industries – IT, Automobile and Aviation Engineering and map the change in skills with
these major CEE industries garnering the largest FDI investment.

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 Information Technology
With ICT Skills being the largest scarcity when it comes to skills in the CEE, we take a deep dive into understanding where
this lies and what the true drivers of effecting IT staffing skills are.

Effecting IT Staffing skills

1 2 3 4

Media, Entertainment Digital Insourcing New ways of working Commoditization

and Information

RPA and AI reducing Firms requiring critical skills Agile transformation and Outsourcing of deliverables
amount of human work, s.a. data scientists and DevOps creating smart replacing staffing to gain
customer journey analysts processes onshore flexibility & scale
Digitization changing to compete
operating & business models

5 6

Regulatory Change in competitive

developments landscape

Protectionism and legal Market consolidation incr.

uncertainty caused i.e. by Need for scale,
administrations (US) & labor
unions (GER) New entrants, (i.e. Cloud, Al),
from many backgrounds

What is the largest skill group rapidly in need right now?

Software Developers / Programmers still the largest skill group
Skillset Description
100 %

• Skilled in-house project managers with broad experience hard to find,

Project • Ext. Project leader skills are therefore rare, resulting in a high demand, 12 %
manager • Vendors compete with freelancer are no SG&A (therefore cheaper)

• Development is shaped by fierce international competition (e.g., Tata, Infosys, Wipro),

Software dev./ • Dev. Is heavily dependent on tasks,
programmer 26 %
- If Java, C++, etc. it is a commodity (outsourcing to India, etc.),
- If client interaction, process (re) design end ERP system under-standing needed, no offshoring

• Data architect/scientist are becoming very important around

Data/cloud trends like Big Data, Robotics and Al
architect/scientist 9%
1%
6%
• Cybersecurity is high on the Agenda of CIOs-esp. After latest worldwide data leaks,
Cyber/data • Vendors can bring a lot of expertise to the client, who lack talent,
security • Required skills are often context specific (knowledge of systems, 13 %
legacy of data leaks and attacks useful)

• Software QA/testing is mainly a volume driven skillset, under increasing pressure

Software QA/ of commoditization by advancing technology s.a. Agile devOps,
testing • Esp. for user acceptance testing (performance testing is less of a commodity)
33 %
Other
• Helpdesk are often near-/offshore, only activities requiring local support being kept onshore,
Help desk/IT • Often clear layer model for support (Level 1,2 and 3)
infrastructure

Note: “Other “ skillsets not subject to closer inspections; Skill split based on US breakdown Total
Source: Expert interviews; BCG maket

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 Skills are largely applicable across verticals
Tech/Telco Banking/FS/ Retail HC/Pharma/ Public sector Manufacturing
Insurance Biotech/Med Also drives dependency
Engineering PS
dev.. on IT skills

Poject
Manager

Software Dev./
Programmer

Data/cloud
Architect/
Scientist

Cyber/data
Security

Software
QA/testing

Help desk/
IT infrastructure

Drives of this shift as mentioned at the start of the chapter is driven by AI and RPA and the rapid change of business
models and talent models as touched on in chapter 1.

Description
• RPA and Al reducing amount of human work
• Digitization changing operating & business models
• Firms requiring critical skills s.a. data scientists and customer journey analysts to compete
• Agile transformation and DevOps creating smart processes onshore
• Outsourcing of non core processes as deliverables, replacing staffing to gain flexibility & scale

Description
• Urgent demand for efficient solutions
• Client lacking tools, licenses and facilities
• Old technologies becoming “non-core “
• Lack of internal know-how of processes becoming core or increasingly important
• Business value and IP of core processes
• Low ability or lack of experience to apply agile best practices or DevOps, but need for efficiency and quality
& cost advantage
• Technological evolution & globalization result in globally available skillset creating potential for arbitrage

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 Adecco Group Greece Country Manager Konstantinos Milonas takes us down a snapshot of digitalization and ICT Skills
in Greece: The technological advancements are implemented so fast that mapping out a talent acquisition strategy is a
challenge HR sector must face. Attracting and retaining key digital talent can differentiate the winners from the losers of
today’s business world. In Greece, it seems that we are still striving to keep pace with other European Countries in digital
evolution. Europe’s Digital Progress Report (EDPR, 2017) tracks the progress made by Member States in terms of their
digitization. Greece ranks 26th out of the 28 EU Member States. Overall Greece does not progress as fast as other EU
Member States. In Human Capital, Greece’s performance is well below EU average even though it is slightly progressing.
In 2016, the percentage of the Greek population using the internet on a regular basis (66%) was one of the lowest among
European countries (EU average is 79%). We though see that the number of individuals having at least a basic level of
digital skills is progressing with 46% in 2016 compared with 44% in 2015. The share of the STEM graduates remains
relatively high and this is promising for Greece’s digital future. Currently, though, Greece still has the lowest proportion
of ICT specialists in the workforce (1.2%) in the EU as shown on the EDPR 2017.

With Greece suffering a lot lately from a “brain drain”, attracting and retaining ICT specialists remains crucial for
supporting the Country’s digital transformation. With the recent technological advancements and the rapid changes
they bring in the way we work, digital skills and competences are needed for nearly all jobs. Not being able to cope with
the need of dealing with digital talent shortages could increase barriers for the country’s economic development.

Tibet Egriglou, Zone Director, MENA and Turkey comments on the need for ICT skill development in Turkey.

Technology, artificial intelligence and robots are inevitable facts that need to be adapted in business world. You need to
adapt to the new technologies. You can observe technological developments in all industries. The most important point
is the open-minded view of individuals to continue a life-long learning.

We aren’t ready for artificial intelligence yet, neither as a society nor as individuals. Although we strive to reach it. With
high rates of youth unemployment in Turkey, it is not only a responsibility, but is also a strong investment for the future.
Hence, investing in the digital area and improving the skills of the existing work is a must.

Technological changes, greater adoption of robots and artificial intelligence brings about a great change in the field
of Human Resources. Human Resources need not only to be aware of the change to prepare their companies for the
future, but also predict the changes. They should also lead the way for better education of professionals in terms of skills.

As the speed of development of the technology increases, we shouldn’t oversee that new skills will be needed. It is very
important for the companies to foresee the skills and develop them constantly.

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HUNGARY – ITO MARKET 2016

Hungary’s value proposition is based on cost- Offshore/Nearshore Comparative rating

competitiveness, geographic and time-zone proximity Language C ountry Indicators
to European countries, educated workforce, political Data/IP Security Government
Minimum wage 2,3 € / h
and Privacy 7 Support
and economic stability through the EU membership, 5 6
Unemployment 4,5 %
close cultural affinity with Western Europe and the Global and Legal
Labor Pool
USA, and government incentives for inward investment. Maturity 7
4
GDP growth +2,2 %
Approximately 42,000 workers deliver exported business 6,0 Population 10 milion
services, based predominantly in Budapest, with much Cultural 8 7 Infrastructure Offshore location Yes
smaller workforces in Debrecen, Székesfehérvár, Pécs, Compatibility
4
Békéscsaba and Szeged. 5
Political and Economic 7 Educational
Environment System
Cost

IT Outsourcing Market 2016 ITO Market 2016 – split per vertical Top 10 vendors – Market share 2016
Wholesale Trade: 0,93% Canon: 0,92%
Service Desk Outsourcing: 0,01 Utilities: 4,83% Samsung SDS: 1,23%
Infrastructure as a Service (IaaS): 0,02 Transportation: 4,45% Teleperformance: 1,48%
Enterprise Network Outsourcing: 0,05 Retail: 6,23% Accenture: 1,72%
Manufacturing & Natural Resources: 24,98%
End User Device Outsourcing: 0,03 Capgemini: 1,94%
Insurance: 5,35%
Data Center Services: 0,14 TCS: 2,09%
Healthcare Providers: 3,75%
Government: 15,65% Atos: 5,30%
Custom Application Outsourcing: 0,01
Education: 1,48% IBM:10,42%
Commercial Application Outsourcing: 0,01
Communications, Media & Services: 18,56% Getronics: 11,64%
Banking & Securities: 13,90% HPE: 26,17%

HUNGARY – Market forecast

IT outsourcing market forecast 2016-2021 Market highlights

0,4 1. Hungary’s value proposition is based on its stable economy, educated workplace, attractive labor
CAGR rates and government incentives for inward investment
0,4 +3,9 %
0,3 2. Delivery centers are heavily centralized around Budapest, which supplies more than 80% of the
0,3 0,3
0,3 capacity for nearshore services. Approximately 42,000 workers deliver exported business services,
0,3 0,3
0,3 based predominantly in Budapest.
0,3
EUR

0,2 3. The Hungarian government has continued a program to attract foreign direct investments, which it
started in 2014. It offers regional grants, training subsidies and various tax breaks.
0,2

0,1 4. Foreign language capability is lower than many other locations in Europe, and although most fresh
graduates now have English language skills, it is not widely spoken. Other languages spoken in
0,1 Hungary include German and French, but again, they are not widely available.

0,0
5. The tax system is gradually moving from an income-based system to a consumption-tax-based
2016 YR 2017 YR 2018 YR 2019 YR 2020 YR 2021 YR
system. Currently, there is a flat-rate tax system with a 16% personal income tax and corporate tax
rate od 10% (up to 500 million forints).

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BULGARIA – ITO MARKET 2016

Building on its legacy as a key hardware and software Offshore/Nearshore Comparative rating
supplier to Russia, Bulgaria has become a major Language C ountry Indicators
provider of technical skills within southeast Europe, Data/IP Security Government
Minimum wage 1 ,4 € / h
and Privacy Support
with service exports now contributing over 3% of the 5
5
5 Unemployment 7,1 %
country’s economy. Despite relatively low numbers Global and Legal
Labor Pool
of staff, Bulgaria’s service export industry is growing Maturity 6
4
GDP growth +7,0 %
rapidly due its healthy economy, political stability and 5,6 Population 7 milion
strong foreign language offerings. Supported by a Cultural 8 6
Infrastructure Offshore location Yes
business-friendly environment and a legislative base Compatibility
derived from its EU membership, Bulgaria is being used 6
5
as an outsourcing destination by an increasing number Political and Economic 6 Educational
Environment System
of European and North American businesses. Cost

IT Outsourcing Market 2016 ITO Market 2016 – split per vertical Top 10 vendors – Market share 2016
Phama: 1% Euroccor: 3,42%
Knowledge Process Services: 0,0
Taxback: 3,50%
Manufacturing: 4,6%
Sutherland: 4,26%
Application Services: 0,1 Public sector: 7,10% IBM: 4,56%
Other: 16,50% SITEL: 4,56%
IT Infrastructure Services: 0,4
Teletech: 5,71%
Wholesale and retail: 14,30% Call Point New Europe: 7,51%
Contact Centers & Transaction Services: 1,0
Software Development: 15,60% Coca cola HBC: 9,51%
Adecco: 10,65%
Telecommunications: 19,70%
HPE: 30,43%
Financial services: 21,20%

BULGARIA – Market forecast

IT outsourcing market forecast 2016-2021 Market highlights

1,2 1. Stable growth forecasted for the outsourcing industry in Bulgaria

CAGR 2. Bulgarian outsourcing industry (incl. BPO) is expected to reach more than EUR 2.7 bln and
+13,7 % 1,1
1,0 contribute over 6.0% of the country’s GDP by 2020
1,0
3. Language proficiency and IT skills remain crucial and outsourcing companies
0,8 0,9
0,8 4. ITO/BPO sector is expected to contribute more and more to the national economy
in the period 2016-2020
EUR

0,6 0,7
0,6 6. The outsourcing industry is becoming an increasingly important taxpayer
0,4 7. The differentiation between ITO and BPO is gradually fading because of the growing complexity of
the processes and overlapping of activities performed by the company
0,2
8. The most perspective outsourcing subsectors are shaved service centres and cloud services.

0,0 9. UK’s withdrawal from the EU may boost Bulgarian outsourcing industry, as companies operating in
2016 YR 2017 YR 2018 YR 2019 YR 2020 YR 2021 YR Britain come under increased cost-cutting pressure following the Brexit.
10. Bulgaria’s offshoring industry is growing at a 13% compound annual growth rate through
a combination of low labor costs and a stable economic environment.
11. Bulgaria’s government supports the export of services through a low corporate tax rate (10%),
a fixed personal income tax rate, and a two-year value-added tax (VAT) exemption on the import of
high-tech equipment.
12. Costs in Bulgaria (labor, RE, Infrastructure) are lower than the other CEE countries.
13. No1 in Europe in IT-certified specialists per capita
14. No3 worldwide in the number of certified IT professionals
15. AWARDS:
Offshoring destination of the year 2015 (European Outsourcing Association) AT Kerney’s 2016
Global Service Index
• 2nd most preferred destination in Europe (after Poland)
• 12th most preferred destination worldwide

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POLAND – ITO MARKET 2016

Poland was one of the first countries in Eastern Offshore/Nearshore Comparative rating
Europe to build a nearshore service capability, and it Language C ountry Indicators
remains one of the most successful. Over 900 delivery Data/IP Security 7 Government
Minimum wage 5 ,0 € / h
and Privacy 7 Support
centers operate from the country, with 140,000 6
Unemployment 7,4 %
people working for service providers, and a further Global and Legal
Labor Pool
70,000 working in captive and shared service centers Maturity 7 6 GDP growth -1,1 %
operated by multinational corporations. About 60% of 6,6 Population 39 milion
the labor pool is in Krakow, Warsaw and Wroclaw. Cultural 8 7 Infrastructure Offshore location Yes
Compatibility

5 6
7
Political and Economic Educational
Environment System
Cost

IT Outsourcing Market 2016 ITO Market 2016 – split per vertical Top 10 vendors – Market share 2016
Wholesale Trade: 1,23% T-systems: 1,19%
Service Desk Outsourcing: 0,01 Utilities: 5,99% CGI: 1,21%
Infrastructure as a Service (IaaS): 0,03 Transportation: 4,56% Xerox: 1,59%
Enterprise Network Outsourcing: 0,11 Retail: 7,27%
Econocom: 1,81%
Manufacturing & Natural Resources: 18,02%
End User Device Outsourcing: 0,07 Deloitte: 1,87%
Insurance: 6,37%
Data Center Services: 0,35 Healthcare Providers: 3,66% TCS: 2,79%
Custom Application Outsourcing: 0,02 Government: 15,00% Atos: 5,21%
Education: 1,60% Accenture: 9,41%
Commercial Application Outsourcing: 0,04
Communications, Media & Services: 18,04% HPE: 10,05%
Banking & Securities: 18,27%
IBM: 23,56%

POLAND – Market forecast

IT outsourcing market forecast 2016-2021 Market highlights

0,9 1. Over 900 delivery centers operate from the country, with 140,000 people working for service
CAGR
+4,2 % providers, and a further 70,000 working in captive and shared service centers operated by
0,8 multinational corporations
0,8
0,7 0,8
0,7 2. Over 450 companies have now located delivery centers in Poland, and the service export economy
0,7
0,6 0,7 has grown at an 18% CAGR since 2009.
0,6
0,5 3. Krakow is the largest cluster of delivery centers, with 30, 000 workers, Warsaw and Wroclaw
EUR

both offer around 20,000 workers, and Lodz has a further 10,000. Smaller secondary cities include
0,4
Katowice, Lublin, Bydgoszcz, Posnan and Szczecin.
0,3
4. The availability of resources with strong foreign language skills is very good in Poland.
0,2
5. The Polish government established 14 Special Economic Zones where businesses can claim exemption
0,1
from corporate income tax.
0,0
2016 YR 2017 YR 2018 YR 2019 YR 2020 YR 2021 YR 6. Gartner estimates a labor pool of 198,000 FTEs (30% IT, 21% business process services, 14% R&D and
35% shared-service centers.

7. AT Kerney’s 2016 Global Service Index

• 1st most preferred destination in Europe

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ROMANIA – ITO MARKET 2016

According to the Association of Business Service Offshore/Nearshore Comparative rating

Leaders in Romania (ABSL), the country’s IT service Language C ountry Indicators
industry is worth over $2,5 billion and is expected Data/IP Security
6
Government
Minimum wage 1,8 € / h
and Privacy Support
to continue growing due to its labor costs and
5 Unemployment 5,4 %
technical and language skills. Romania has invested Global and Legal 4
Labor Pool
heavily in technology parks, with 2,25 million square Maturity 6 5 GDP growth +5,3 %
meters of office space available in Bucharest and 5,6 Population 19 milion
increasing options in cheaper secondary cities such as Cultural 8 6
Infrastructure Offshore location Yes
Clujnapoca, Iasi and Timisoara. Compatibility
5
6 5
Political and Economic Educational
Environment System
Cost

IT Outsourcing Market 2016 ITO Market 2016 – split per vertical Main players:
Transportation: 7,00% Oracle
R&D: 0,03
Public sector: 5,00% Microsoft
Knowledge process Services: 0,1 Healthcare: 8,00% IBM
HPE
Contact Centers, Transaction Services: 0,6 Energy and utilities: 11,00%
Orange
Consumer services: 11,00% Vodafone
Application Services: 0,1
Business and professional services: 13,00% BRD
IT Infrastructure Services: 1,4 Industrial and Consumer goods: 14,00% P&G
Emerson
Technology and Telecom: 15,00%
Bosch
BFSI: 16,00%

ROMANIA – Market forecast

IT outsourcing market forecast 2016-2021 Market highlights

8,0 1. The country’s IT service industry is worth over $2,5 billion and is expected to continue growing due to
its labor costs and technical and language skills.
7,0 CAGR
+13,7 % 2. Romania’s political stability has improved as an established member of the EU, and service exports
6,0 6,7 continue to grow at above 10% per year
6,1
5,0 5,5 3. The demand of skilled labor is creating challenges in attracting and retaining the best talent.
4,8
EUR

4,0 4. Romania has invested heavily in technology parks, with 2.25 million square meters of office space
4,2
available in Bucharest and increasing options in cheaper secondary cities such as Cluj-Napoca, Iasi,
3,0 3,6
Timisoara.
2,0 5. In addition to English language skills, Romania is an interesting option for customers needing other
1,0
European languages: 27% of IT workers speak French, and in total, Romania offers 2.7 million French
speakers. German, Italian and Spanish speakers are also widely available.
0,0
2016 YR 2017 YR 2018 YR 2019 YR 2020 YR 2021 YR 6. Romania’s political stability has improved as an established member of the EU, and service exports
continue to grow at above 10% per year. Romania is now home to delivery centers for more than 50
well-known multinational brands.

7. Gartner estimates a labor pool of approximately 60,000 FTEs24 (30% IT services, and 70% business
process services).

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ROMANIA – ITO MARKET 2016

The Czech Republic is a well-established Offshore/Nearshore Comparative rating

nearshoring location for business operations in Language C ountry Indicators
EMEA, for both business process services and, Data/IP Security Government
Minimum wage 3,7 € / h
and Privacy 6 Support
increasingly, IT outsourcing. As and EU member, 7
6
Unemployment 4,0 %
and with a stable political situation, it provides Global and Legal
Labor Pool
a mature business environment for outsourcing Maturity 7 5 GDP growth +6,1 %
service operations. Its location at the center of 6,5 Population 11 milion
Europe and well-developed infrastructure give it Cultural 8 7 Infrastructure Offshore location Yes
strong connectivity to the rest of the Continent, Compatibility
while a tradition of quality higher education 5
produces over 80,000 well-educated graduates Political and Economic 7 7 Educational
Environment System
each year, many with the ability to speak
Cost
a second language.

IT Outsourcing Market 2016 ITO Market 2016 – split per vertical Top 10 vendors – Market share 2016
Wholesale Trade: 0,84% Econocom: 0,79%
Service Desk Outsourcing: 0,01 Utilities: 5,41% Microsoft: 0,96%
Infrastructure as a Service (IaaS): 0,02 Transportation: 3,71% Fujitsu: 1,51%
Enterprise Network Outsourcing: 0,11 Retail: 7,98%
Deloitte: 1,56%
Manufacturing & Natural Resources: 19,93%
End User Device Outsourcing: 0,07 Infosys: 2,15%
Insurance: 6,71%
Data Center Services: 0,32 Healthcare Providers: 4,01% TCS: 4,47%
Custom Application Outsourcing: 0,02 Government: 13,75% Accenture: 8,34%
Education: 2,13% HPE: 8,50%
Commercial Application Outsourcing: 0,04
Communications, Media & Services: 18,04% IBM: 10,20%
Banking & Securities: 17,49%
Telefonica: 25,11%

ROMANIA – Market forecast

IT outsourcing market forecast 2016-2021 Market highlights

1,0 1. The Czech Republic is a well-established nearshoring location for business operations in EMEA, for
both process services and, increasingly, IT outsourcing
0,9
CAGR
0,8 +3,7 % 2. As and EU member, and with a stable political situation, it provides a mature business environment for
outsourcing service operations
0,7 0,8
0,7 0,7
0,6 0,7 3. More than 200 businesses use the Czech Republic as a nearshoring location, employing over 75,000
0,6 staff here.
0,6
EUR

0,5
0,4 4. The outsourcing service sector in the Czech Republic grew by 19% in 2016. As a result, competition
has increased for resources, leading to rising costs of operation.
0,3
0,2 5. The Czech Republic is well-connected by transit corridors (air, road and rail) to all major European
countries and ranks positively on quality of air transport compared with the other major European
0,1 economies. Its IT infrastructure is also relatively well-developed.
0,0
2016 YR 2017 YR 2018 YR 2019 YR 2020 YR 2021 YR 6. A wide range of IT skills continues to be fueled and supported by a strong educational system.

7. Eighty-five percent of graduates speak English, Smaller pools (less than 5% of the population) also
speak German, French, Spanish and Italian.

8. The main geographic hubs for IT operations are Prague, Brno and Ostrava. Prague, however, has
a low level of unemployment and a high cost of living. This has contributed to raising costs in the
capital while forcing the government to divert financial support to more deprived areas. Labor
inflation is 13% per year, and annual attrition rates are 14% per year.

9. Brno has long been a traditional area for offshore operations, with strong levels of competition for IT
skills and consequent raising costs. The opportunities to set up new centers are limited to Ostrava.

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 Dr Ioannis Nikolaou, Work & Organizational Psychologist, Associate Professor in Organisational Behaviour and
Director of the MSc in Human Resources Management at Athens University of Economics and Business, reminds us
not to take the lack of soft skills lightly, especially in this space: Soft skills have now become the most highly sought
employee characteristic between employers in Europe. The importance of inter-personal skills, such as teamwork,
adaptability, resilience, flexibility and decision-making have radically increased in the dawn of the 21st century, even
among professions, such as software developers, mechanical and electrical engineers and data scientists, where in the
past soft skills were only considered a nice-to-have skill.

Automobile
Central and Eastern Europe has turned into major automobile production centers competing with their Western
counterparts in a regional market that had gone flat. Although the initial intention may not necessarily have been to
close plants in the West, the reality is that European production had shifted eastwards.

The key hindrances about this industry in CEE is excessive bureaucracy and poor infrastructure. Most CEE companies
believe that being complacent about the fact that further growth and economic developments will be automatic is not
the right way to approach this industry.

Box 1: Romania, where the micro-economic shapes the macro-economic

The example of Romania (and Renault’s Dacia subsidiary there) is noteworthy, since it partially illustrates a process
that is ongoing in Central and Eastern Europe. When Renault first launched its acquisition of Dacia in 1998 (an action
completed in 1999), the goal was to have a tool enabling the company to design a car that would be “modern, robust
and affordable at $6,000” (Jullien, Lung, Midler, 2013, p.9). The Logan project satisfied this objective, as did the creation of
authentic entry-range vehicles such as the Logan MCV (2006), Logan pick-Up (2007), Sandero (2008) and Duster (2010),
followed by the Lodgy and Dokker (2012, which were made in Morocco (in Tangiers)). Dacia’s success turned Mioveni-
Pitesti into a major automaking site. Initial plans targeted other CEECs but sales never really took off. Indeed, asides from
the countries’ domestic markets, most sales were in Western Europe and North Africa.

Dacia sales (in units)

350 000
Europe +
Euromed area
300 000

250 000
of wich
Roumania
200 000

150 000
of wich
France
100 000

50 000
of wich
Germany
0

2004 2005 2006 2007 2008 2009 2010 2011

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 Massive growth in Automobile output over the past years

2012 output totals, variation over 2000-2012 (units, %)

COUNTRIES 2000-2012 Production in 2012 (units)

Germany 2,2% 5,649,269
Spain -34,7% 1,979,179
France -41,2% 1,967,765
UK -13,1% 1,576,945
Czech Republic 158,8% 1,178,938
Turkey 148,8% 1,072,339
Slovakia 395,1% 900,000
Italy -61,4% 671,768
Poland 28,3% 647,803
Belgium -47,6% 541,874
Romania 332,1% 337,765
Hungary 58,5% 217,840
Portugal -33,7% 163,561
Sweden -46,0% 162,814
Austria 1,2% 142,662
Slovenia 6,5% 130,949
Netherlands -81,0% 50,862
Serbia -13,4% 11,032
Finland -92,5% 2 900
Total Europe -10,3% 17, 406, 265

Bilateral motor vehicle cover rate: sample of Central and Eastern European countries vis-à-vis Germany and France

Germany France

Czech Rep. Czech Rep.

Slovenia Slovenia

Slovakia Slovakia
2012 2012

Romania 2011 Romania 2011

2010 2010
Poland 2009 Poland 2009

2008 2008
Hungary Hungary

0 1 2 3 4 5 6 7 8 0 1 2 3 4 5 6 7 8 9 10 11 12

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 Key Industry Disrupters which will affect skills:
• Driven by shared mobility, connectivity services, and feature upgrades, new business models could expand
automotive revenue pools by about 30 percent, adding up to $1.5 trillion.

• Despite a shift toward shared mobility, vehicle unit sales will continue to grow, but likely at a lower rate of
about 2 percent per year.

• City type will replace country or region as the most relevant segmentation dimension that determines mobility
behavior and, thus, the speed and scope of the automotive revolution.

• Once technological and regulatory issues have been resolved, up to 15 percent of new cars sold in 2030 could
be fully autonomous.

• New market entrants are expected to target initially only specific, economically attractive segments and
activities along the value chain before potentially exploring further fields.

How many new cars may be fully autonomous by 2030?

New-vehicle market share High-disruption

of autonomous vehicles, % scenario
Conditionally
100
autonomous 1
90 Fully
autonomous 2
80
70
60 Availability
50 in popular Low-disruption
Commercial introduction consumer scenario
40 by new tech players and models
Technical/regulatory Conditionally
30 premium OEMs 3 autonomous
barriers delaying
20 commercial-scale
introduction
10 Fully
autonomous
0
2020 2025 2030 2035 2040

Gradual ramp-up of Commercial Low perceived value or

manufacturing capacity introduction by negative publicity following
by tech players mass-market critical incidents, causing slow
leaders consumer uptake

Factors in disruption scenarios: High disruption: Low disruption:

Regulatory challenge, Fast, Gradual,
Safe, reliable technical solutions, Comprehensive, Incomplete,
Consumer acceptance, willingness to pay Enthusiastic Limited

1
Conditionally autonomous car: the driver may take occasional control
2
Fully autonomous car: the vehicle is in full control.
3
Original-equipment manufacturers.

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 What are the top skills the Automobile industry is currently recruiting for?

The top 10 ‘critical now’ jobs  The top 10 ‘future’ jobs

1. Design Engineer  1. Design Engineer 
2. Production Engineer  2. Production Engineer 
3. Buyer  3. Maintenance Technician 
4. Senior Design Engineer/Lead  4. Manufacturing Technician 
5. Maintenance Technician 5. Tool Maker
6. Programme Manager  6. Manufacturing Team Leader 
7. Quality Operations Engineer  7. Maintenance Engineer 
8. Manufacturing Team Leader  8. Supplier Quality Engineer 
9. Programme Engineer  9. Design and Development Technician 
10. Quality Operations Technician 10. Buyer

There is also an increased demand in the number of specialist skills required due to technological advancements in
areas such as engineering, mechatronics and robotics, etc. This need is borne out of the lack of currently qualified and
experienced professional engineers available in the market place to perform these types of role.
Success in 2030 will require automotive players to shift to a continuous process of anticipating new market trends,
exploring alternatives and complements to the traditional business model, and exploring new mobility business models
and their economic and consumer viability. This will require a sophisticated degree of scenario planning and agility to
identify and scale new attractive business models.

Aviation Engineering
A recent ICAO report said that in the next 20 years, airlines would have to add 25,000 new aircrafts to keep up with
rising air passenger demand. But a lack of skilled engineers to maintain these aircraft is not only threatening airline
profits, but also aircraft safety. Impending retirements, a lack of newly trained engineers and advanced skill requirements
in this Industry only make for a challenging forecast that will only get worse unless drastic changes happen.
New technology could be the key to this. Already a big hit in the consumer world, augmented reality has the potential
to help bridge the skilled engineer gap, simplify maintenance processes and offer expert guidance to newly qualified
technicians from hundreds of miles away. The rising passenger demand for air travel has resulted in a global expansion
for airlines, but maintenance expertise is struggling to keep up.
It takes a lag of some 5 years to get a B1 or B2 EASA license as a qualified aircraft engineer. In many countries, there
simply is no training infrastructure yet to drive this.
While General managers are aware of the growing problems caused by shortages, functional leaders seem to be less
aware. Low-cost and regional airlines in general don’t seem to offer in-house training, while their more established rivals
are keeping their engineering teams up to speed.
The biggest issue is finding engineers who are committed to engineering long-term as most engineers feel the only
career path is now through management and growing their commercial and financial or business skill sets. Very few,
if any, aspire to vice-president of engineering roles and instead move into sales orientated roles leaving a huge gap in
senior management for engineering.
The competencies of the executive engineering roles are also changing. To the deep functional skills must be added
commercial acumen and strategic thinking. An overwhelming majority of survey respondents say that future leaders
will need high levels of business understanding, with 65% strongly agreeing that these skills would be needed and 27%
agreeing “a little”. Across the board, a third of the respondents point to shortages and difficulties in recruiting top talent.
Aircraft manufacturers, airlines, training equipment manufacturers, training delivery organizations, regulatory agencies
and educational institutions need to step up to meet the increasing need to train and certify pilots and technicians.”
After Asia Pacific, North America was second as far as new aircraft technician staff needed with 113,000, followed by
Europe (+101,000), Middle East (+66,000), Latin America (+47,000) and Africa and Russia/CIS (both +22,000).4

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 Conclusions
Invest in Employability to boost Youth Employment, Business Growth and Competitiveness

Florin Godean, Country Manager Adecco Romania observes that Adecco’s first CEE focused quartlery intitave clearly
shows that the things we learn at school become irrelevant under the rapid changes brought by the 4th Industrial
Revolution. In Romania, we will soon need re-skilling, not every 20 years, as it has been until now, but every 5 years. This
means that employees have to take part in new training courses “on the go”, while they activate on the labor market, if
they want to remain relevant to future job posts. At the same time, employers have to invest in such training courses if
they want to keep their employees and to be able to grow their business in the future. Without decisive steps towards
reskilling, Romania risks losing investors and high salary employment opportunities.

Stefano Longo, Country Manager Adecco Hungary, emphasizes that the report brings our attention to the rapidly
changing labour market needs, what is felt in day to day lives in Hungary. The time of the life long lasting jobs is over and
instead of “only” one profession other skills need to be picked by the new generations as the ability to develop, to learn
new things, to be able to start in a different field. This is not only true in case of white collar professions, but also the blue
ones. The need of the labour market should drive the scope of the educational system not vice versa. At the moment we
need to focus on to make popular dual trainings and skilled trainings offered by employers in the group of youth. Adecco
Hungary, as one of the biggest staffing companies takes this as its main challenges creating real added value for the
upcoming generations and Hungary.

Today, globally, some 73 million youngsters are without jobs, while 40% of employers say they cannot
find people with the right skills. TAG attempts here to address the misalignment that spells a lack of
prospects for millions of people and subpar growth for all. In too many countries, the skills gap is the
result of a mismatch of the education young people receive at school and the needs of employers.

With increasing digitization and automation of labour, pressure is mounting for young people looking to enter a labour
market. On the upside, research also shows that technology will lead to the creation of millions of new jobs, provided
workers have the right skills to fill them. With demographic changes occurring in many societies, the issue of skills is
relevant for workers of all ages.

TAG is always available for more enquiries on this important topic of Skills and hopes to be in touch with all of this
report’s readers for feedback, new & continued partnership and forward thinking mutual growth.

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 References:

1. Redline Group. (2018). The challenges of the jobs and skills change for the Automotive Industry | Redline Group
Recruitment News and Blogs. [online] Available at: https://www.redlinegroup.com/news/the-challenges-of-the-
jobs-and-skills-change-for-the-automotive-industry-62732994722

2. Mpra.ub.uni-muenchen.de. (2018). [online] Available at: https://mpra.ub.uni-muenchen.de/53509/1/

3. McKinsey & Company. (2018). Disruptive trends that will transform the auto industry. [online] Available at: https://
www.mckinsey.com/industries/automotive-and-assembly/our-insights/disruptive-trends-that-will-transform-
the-auto-industry

4. Interactive.aviationtoday.com. (2018). [online] Available at: http://interactive.aviationtoday.com/avionicsmagazine/

gca-link-april-2017/augmented-reality-solving-the-threat-of-engineer-shortages/

5. [ebook] Available at: 5. http://www.ascendforairlines.com/sites/default/files/11-Disruptive_Innovation.pdf

a l y s i s
k i l l s An
S
y Ind ustries
of K e
Special Thanks
Professor Partners:

Dr  Ioannis Nikolaou

Dr Ioannis Nikolaou is a Work & Organizational Psychologist, Associate Professor in Organisational Behaviour and Director
of the MSc in Human Resources Management at Athens University of Economics and Business. 
Dr Nikolaou has gained wide working experience as an Assistant Manager for PricewaterhouseCoopers, Greece at the department
of Global Human Resources Solutions and as Head of the Training Department at Egnatia Bank before starting
his academic career. He has written the books “Organizational Psychology & Behaviour” and “Managing Human
Capital – Greek Case Studies” (in Greek) and co-edited with Janneke Oostrom the book Employee Recruitment, Selection, and
Assessment.
Contemporary Issues for Theory and Practice. (Routledge/Psychology Press). He has also published in international peer-reviewed
academic journals, while his research interests lay in the field of Organisational Behaviour and Human Resources
Management, and more specifically in employee recruitment, selection and assessment.
He teaches courses in undergraduate (Organisational Psychology and Personal Skills Development) and post-graduate level
(Employee Selection, Performance Appraisal and Development, Organisational Behaviour & Human Resources Management,
Personal Skills Development) at Athens University of Economics and Business, while maintaining active links with
the industry through Human Resource consulting projects (National Bank of Greece, Emporiki Bank, Kantor Management
Consulting, Attika Bank) and executive training. His most recent collaborations in executive training and management
consulting include companies, such as Metro, OTE Academy, EFG Eurobank, Ethniki Asfalistiki, Misko-Barilla, Lion Hellas,
Pfizer, SEAT, Infote, Dodoni, OSE, Metaxas Diagnostics, Intracom, AB Vasilopoulos, etc.

Affiliated university
The Athens University of Economics and Business (AUEB) was founded in 1920 under the name of Athens School of Commercial
Studies. It was renamed in 1926 as the Athens School of Economics and Business, a name that was retained until 1989 when it as-
sumed its present name, the Athens University of Economics and Business.[1]
It is the oldest university in Greece in the fields of Economics and Business, its roots tracing to the
establishment of a Merchant Academy in Athens. Up to 1955 the school offered only one degree
in the general area of economics and commerce. In 1955 the duration of study at the School is
increased from three to four years and two cycles of study leading to two separate degrees: one
in economics and the other in business administration. In 1984 the school was divided into three
departments,namely the Department of Economics, the Department of Business Administration
and the Department of Statistics and Business Informatics, the latter renamed to the Informatics
Department in 1995. In 1989, the university expanded to six departments. From 1999 onwards, the
university developed even further and nowadays it includes eight academic departments, offering
eight undergraduate degrees, 28 master's degrees and an equivalent number of doctoral programs.

Prof Krzysztof Martyniak

A sociologist, graduate of the Faculty of Social Sciences of the University of Gdańsk and doctoral studies at the University of
Warsaw.  A member of the team of the Social Change Theory Laboratory and the Solidarity and Social Movement Research
Center at the Institute of Sociology of the University of Warsaw. 
He specializes in social analyzes, evaluations, public policy research, and urban sociology. Participant and co-author of many presti-
gious research projects. Lecturer, trainer, commentator on social phenomena for nationwide and regional media (including TVP1,
TVP2, TVP Info, TVP Warszawa, PR 4). 
Expert and advisor on social consultations, as well as the creation of strategic documents in local government units
(strategies for solving social problems, programs for the development of foster care, preventing domestic violence and family support). 
He worked, among others in the ESF Regional Center in Warsaw and the Mazovian Voivodship Office. 
He was a street worker, he ran a community club in the Praga district of Warsaw.  A graduate of the post-graduate "Course
for lecturers and activists - Human Rights and Freedom" of the Helsinki Foundation for Human Rights.  President of the Board
of the Mazovian Foundation for the Development of Innovation and the Foundation Foundation of Innovation and Development. 
From 2014, the owner of the EGO DIRECTION company.

Affliated Univeristy
University of Warsaw (Uniwersytet Warszawski) The University of Warsaw (Polish: Uniwersytet Warszawski, Latin: Universitas
Varsoviensis), established in 1816, is the largest university in Poland. It employs over 6,000 staff including over 3,100 academic
educators. It provides graduate courses for 53,000 students (on top of over 9,200 postgraduate and doctoral candidates).
The University offers some 37 different fields of study, 18 faculties and over 100 specializations in Humanities, technical as well
as Natural Sciences. Today, the University of Warsaw consists of 126 buildings and educational complexes with over

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18 faculties: biology, chemistry, journalism and political science, philosophy and sociology, physics,
geography and regional studies, geology, history, applied linguistics and Slavic philology, economics,
philology, pedagogy, Polish language, law and public administration, psychology, applied social sciences,
management and mathematics, computer science and mechanics.
The University of Warsaw is one of the top Polish universities.
It was ranked by Perspektywy magazine as best Polish university in 2010, 2011, 2014 and 2016.
On the list of 100 best European universities compled by University Web Ranking,
the University of Warsaw was placed as 61st. QS World University Rankings positioned the University
of Warsaw as the best higher level institution among the world's top 400.

Dr Cristian Marinaş
Dr Cristian Marinaş is a professor at the Faculty of Management and since 2004 he coordinates the Master of Human Resource
Management (MASTER_MRU) program of The Bucharest University of Economic Studies.
Cristian Marinaş is also a director of postgraduate studies: Human Resources Management, Career Development and
Development and Human Resources Training. His professional experience in human resources brings together both didactic
and practical work as a consultant and trainer for many organizations.
Cristian Marinaş is certified in the use of HOGAN (HPI, MVPI & HDS) and Human Synergistics (LSI1, LSI2, GSI & OCI) tools.
Over time he has been a member or coordinator of several scientific and/or European research projects. Consultancy in the field
of European funding is another area of expertise of Cristian Marinaş. The most relevant project that he coordinated was
the project Practice in the Human Resources Field - PREUS, funded by the European Social Fund, a project that was designated
within the Good Practices in HR, best practice projects in the field of human resources. He also coordinated an another important
HR project Job design and analysis in The Bucharest University of Economic Studies – FP ASE. Cristian Marinaş has published
16 books and over 55 specialized articles.

Affiliated university
The Bucharest University of Economic Studies (Romanian: Academia de Studii Economice din București, abbreviated ASE)
is a public university in Bucharest, Romania. Founded in 1913, it is now the leader of Romanian higher education
institutions in the field of Economic Sciences and Public Administration. The Bucharest University of Economic Studies is classified
as an intensive research university by the Romanian Ministry of Education, hosting 23 research centers acknowledged
and endorsed by the National Council for Scientific Research in Higher Education.
The Bucharest University of Economic Studies has over 22,000 students (undergraduate
and graduate levels) in twelve faculties, which organize study programs and scientific research
in the fields of Economic Sciences, Administrative Sciences, Sociology and Humanities.
Students are offered the opportunity to pursue a full academic path by attending study programs
in Romanian, English, French or German, as follows: 24 Bachelor’s programs, more
than 80 Master's programs, Doctoral studies in 10 fields, and more than 145 postgraduate continuing
education programs.
In addition, ASE organizes a preparatory year of Romanian language for foreign citizens,
continuing training programs, teacher training programs, postgraduate programs, as well as MBA and EMBA study
programs. At regional level, ASE undertakes the complex role of Central and South-Eastern European regional hub in education
and advanced scientific research.
At international level, ASE is ranked 151-200 in Top Shanghai 2017 in the field of Economics - the best position held by a Romanian
university in Shanghai Ranking’s Global Ranking of Academic Subjects 2017. Moreover, ASE is the Romanian university
with the best employer reputation, according to QS World University Rankings 2018, which is confirmed by ASE’s
own alumni surveys, according to which 81.35% of graduates find employment within 3 months from finishing their studies.

Dr. Robert Kaše

Dr. Robert Kaše is an Associate Professor of Management at the Faculty of Economics of the University of Ljubljana, Department
of Management and Organization, where he teaches various courses at the undergraduate, graduate, MBA and PhD level.
His current research interests include social networks (relationships at work), strategic and international HRM, careers,
and teamwork/emergence. His doctoral dissertation was among EDAMBA’s distinguished papers and won the Emerald/EFMD
Outstanding Doctoral Research Award in the HRM category.
His work has been published in journals such as the Organization Science, the Human Resource Management, the International
Journal of Human Resource Management. He is past Associate Editor of the Human Resource Management (Wiley)
and on advisory/editorial boards of Journal of Organizational Effectiveness: People and Performance (Emerald), Human
Resource Management Review (Elsevier) and Economic & Business Review. He is frequently involved in organization
of academic conferences, workshops and tracks.
Supporting interaction between research and practice he is an active member of the Slovenian HR Association,
regular speaker at professional conferences, lecturer at executive trainings, and time-permitting works on applied projects,
where he disseminates knowledge and learns from interesting organizations and talents.

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Affiliated University
The University of Ljubljana (Slovenian Univerza v Ljubljani , Latin Universitas Labacensis) in Ljubljana (Ljubljana) is the oldest,
largest and internationally best-rated university in Slovenia . It is ranked among the top 5 00 or top three percent of the world's top
universities by the Shanghai ranking. With over 63 ,000 enrolled students and doctoral students, it is one of the largest universities
in Europe. The University of Ljubljana was founded in 1919 in the center of Ljubljana.
As early as the 17 th century, humanist and theological academies
existed in Ljubljana, and in 1810 under French rule a first university
was founded, but it had only a short existence. Today it employs about
3 ,5 00 professors and scientific assistants as well as nearly 900 technical and
administrative staff. Until the founding of the universities in Maribor (University
of Maribor - 197 8) and in Koper (University of Primorska - 2001), she remained
for almost 5 0 years the only university in Slovenia The role of the University
Library is exercised by the Slovenian National and University Library.

Partner Universities

Adam Mickiewicz University in Poznań (UAM)

The university was ceremonially opened on May 7 , 1919 (the 4 00th anniversary of the foundation

For the first 20 years it educated students in law, economy, medicine, humanities, mathematics,
natural sciences, agriculture and forestry.

at the university, one of the first such departments in Europe. In the same period of the university's

has been frequently listed as a top three university in the country.

The Bucharest University of Economic Studies

The Bucharest University of Economic Studies (Romanian: Academia de Studii Economice din București,
abbreviated ASE) is a public university in Bucharest, Romania. Founded in 1913 as the Academy
of Higher-level Commercial and Industrial Studies (Academia de Înalte Studii Comerciale și Industriale
(AISCI) it has become one of the largest economic higher education institutes in both Romania
and South-Eastern Europe.
The Bucharest Academy of Economic Studies is classified as an advanced research and education
university by the Ministry of Education. It is one of the five members of the Universitaria Consortium
(the group of elite Romanian universities)
The Bucharest University of Economic Studies has 22,684 students (undergraduate and graduate levels)
in eleven faculties.
The university has positioned itself as a research institution, hosting 13 centers of research acknowledged and endorsed by the National
Council of Scientific Research in Higher Education.
A notable presence inside ASE is the Business Information Technology department (Romanian: Informatică Economică) which is an entity
that promotes an educational philosophy based on combining economics and software development as a way of creating experts
suitable for the Information Age.

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 Represents the world’s leading
multi-brand platform of HR
and workforce solutions,
which brings together,
under a unique ecosystem,
awide variety of multidisciplinary
services with the intent to speak
to institutions,organizations,
governments and companies.

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CEE&
MENA
zone
What is CEE&MENA…
geographically speaking?

BULGARIA MOROCCO SLOVAKIA

CROATIA POLAND SLOVENIA
CZECH REPUBLIC QATAR TUNISIA
GREECE ROMANIA TURKEY
HUNGARY SERBIA UAE

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CEE&
MENA
zone
BRANCHES
Key figures
155
TEMPORARY WORKER PROVIDED DAILY

57.000
CANDIDATES IN DATABASE

4.200.200

EMPLOYEES

1.380
CLIENTS SERVED DAILY

4.500

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 vantage
Ino