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There is a significant labor shortage in factories: Foreign guest workers are still needed

Despite gloomy macroeconomic forecasts, industrial investments are flooding into Hungary. "In the factories in Hungary, there are not enough workers available anymore, and there is a need for workers coming from third countries," states László Küzmös, the owner of the Get Work Group.


According to autumn surveys, tougher months lie ahead for the economy: GKI Economic Research's business and consumer expectations are deteriorating in their economic survey. The business confidence index has been in the negative zone for the second month, meaning there are more pessimistic companies than optimistic ones. Fear of unemployment among the population is increasing. The number of job advertisements decreased by 11% in October on the Állásportál.hu job portal. However, this downturn doesn't affect the domestic manufacturing sector. "Whenever I talk to anyone, there's no break in hiring, there's a continuous demand for workforce, not only for this year but also for the next," says László Küzmös, the owner of the Get Work Group. According to him, the main reason for this is that as a consequence of the Covid-19 pandemic, Western European companies are shifting large manufacturing capacities from the Far East to Central and Eastern Europe, and an increasing number of companies from Asia are also manufacturing in the cost-effective EU region. The Russian-Ukrainian war has also brought investments to the region from Russia. "There is currently an insufficient number of industrial production workers in Hungary," summarizes László Küzmös.




New jobs in the manufacturing sector.


If we look at the expansion news that has appeared on the HR Portal in the last two months, the optimism of the manufacturing sector (especially within machinery and automotive companies) is evident: The Chinese company Contemporary Amperex Technology, the world's largest battery manufacturer, is creating 7,000 new jobs in Debrecen. Siemens Energy is building a new production hall and will hire 400 workers. The Lego factory in Nyíregyháza will increase its production capacity by 250 employees. Chinese company Halms, which manufactures components for electric cars, will bring 300 jobs to Debrecen. Schneider Electric's smart factory in Dunavecsé will provide jobs for 500 people. Bosch will create 200 engineering positions in Zalaegerszeg. The electrical and installation technology manufacturer OBO Bettermann Group will expand by 100 employees in Bugyi, Pest County.


Even wage enticement is not a miracle cure within the country. László Küzmös stated that Hungarian manufacturing companies have raised wages between 15% and 30% this year. Those who decided on an increase less than 10% will likely give larger raises early next year. Wage bidding among companies is also observed. Sometimes, the intermediary company doesn't receive a salary range from the client for a particular position; instead, they provide a "whatever it takes to get them" incentive to headhunters.


Cannot achieve workforce numbers without foreigners.


Experience shows that companies cannot achieve the required workforce without external sources. Although layoffs are happening in the hospitality industry, some of these workers have already found jobs in Western Europe during the ski season, while others are not interested or suitable for factory work. Another problem is the high fluctuation rate of Hungarian labor. Constant replacement and training are significant costs for employers and hinder business development (they cannot take on new orders without a stable workforce), and it undermines the work morale of those already employed. The situation is further complicated by the fact that due to the war, there hasn't been enough labor coming from Ukraine for the ninth month. Some of the Ukrainians working in Hungary have already headed towards Western Europe. Thus, the only solution is to bring in guest workers from other countries.


In 2016, the government first opened the doors to workers from two non-EU countries (Ukraine and Serbia). Last fall, the list expanded to 9 more countries (Philippines, Indonesia, Vietnam, Mongolia, Belarus, Kazakhstan, Bosnia and Herzegovina, North Macedonia, Montenegro), from where certified labor-leasing companies (officially: qualified employers) can bring in workers with expedited administration on a maximum two-year contract. Then, this summer, recruitment became easier from 8 more countries (including Brazil, Colombia, Russia). Get Work was among the first to obtain certification. The number of employees they brought in is expected to reach 600 by the end of the year. "We primarily recruit from Mongolia and Vietnam through our local partners, but we are also open to the Philippines and Indonesia," says the HR expert. These two countries have substantial reserves. Furthermore, English is the second official language in the Philippines, and the state "prepares" workers for European work.


Only the weakening of the forint worries guest workers.


From the moment the order is received, the guest worker will be at the gates of the Hungarian factory within 60 to 90 days after the recruitment and administrative tasks are completed by Get Work's organization. Employers are very satisfied with those they've brought in so far. They are motivated, have lower turnover compared to Hungarian workers, and are willing to work overtime for the extra money. Since 80-90% of their wages are sent back in foreign currency, they are less affected by inflation, and their main concern in Hungary is the weakening forint.


A critical aspect of foreign recruitment is the attitude and communication of the host company and its management. "If the receiving company embraces the corporate culture, pays attention to the specific needs of foreigners, treats them the same way as Hungarian workers, they feel good and stay. If they treat them as a necessary evil, as mere "production tools," then they won't," says László Küzmös. Good accommodation can be a key to their retention. Instead of placing them in 10-15 bed dorms, they are accommodated in 2-3 bed rooms, and couples are given separate rooms. The kitchen, bathroom, and toilet must be clean, and regular cleaning should be scheduled. Strong Wi-Fi is essential because workers stay in touch with their loved ones at home through video calls on their mobile phones. If workers from several countries are being brought in, care should be taken to accommodate those from the same country together and not mix multiple nationalities on the same floor.


In the opening picture László Küzmös, owner of Get Work Group


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