LDN - Business

Massages and free fish help east Europe tackle labor shortages

[December 21, 2018] By Michael Kahn

PRAGUE (Reuters) - What's does a company do when it doesn't have enough workers and unemployment rates are at record lows? In eastern Europe answers includes workplace massages, free carp for Christmas and guaranteed jobs for spouses.

With some of the European Union's lowest unemployment rates, companies in the region are increasingly being forced to adopt novel measures to attract and retain workers so they can carry on expanding.

Take Amazon <AMZN.O>, which employs 20,000 people in the Czech Republic, Poland and Slovakia and wanted to hire another 10,000 for the holiday season. To fully staff its centers, the company has to bus in staff from cities up to 90 minutes away.

The U.S. giant also uses daily questionnaires to ensure workers are happy, asking among other things whether restrooms are clean as managers try to resolve immediately any issue that might dissatisfy employees.

"The only way we can get these numbers is by spending lots of time on the conditions and the work environment," said Steven Harman, who oversees Amazon's logistics centers across a number of European countries.

Filling positions is a struggle for companies such as Amazon in the Czech Republic where the unemployment rate is the lowest in European Union at well under 3 percent. The number of job vacancies in the country of 10.6 million people is the highest since records started in 1995.

"It is about where the people are applying from and we find the most efficient way to get them to our fulfillment centers," Harman said.

Jaroslav Hanak, president of the Czech Confederation of Industry, predicted the hunt for workers would get even more difficult in the coming months, with employers sweetening offers to prospective staff.

Hiring students and offering vocational training, providing an extra week of holiday and offering day care to lure mothers with young children back to work are examples, Hanak said.

KEEP IT IN THE FAMILY

In Slovakia, many companies are hiring workers from non-EU countries without work permits to plug the gap, especially for construction or seasonal jobs, said Julius Kostolny, deputy chief of the country's Chamber of Commerce and Industry.

Companies are also offering to cover severance pay for employees willing to quit a previous job at a day's notice, rather than working out the traditional 60-day period, he said.

"There is also a new phenomenon," Kostolny said. "Businesses are focusing on couples. If a man starts working at a company, the company guarantees a job for the wife."

In Bulgaria, companies say labor shortages are one of the main factors preventing faster economic growth.

According to the Bulgarian Industrial Capital Association, the nation of 7 million people needs at least half a million workers in the next five years to grow.

Canada's Telus International, which provides business outsourcing services and employs more than 3,000 people in Bulgaria, has started offering air tickets and relocation support to attract young Bulgarians living abroad, as well as free German lessons and a 2,500 euro ($2,867) bonus.

It also throws in free fitness club memberships, massages and yoga for its workers - benefits more common in places such as Silicon Valley and London than Sofia.

"We have had to decline new business and projects due to lack of workers," Telus spokeswoman Simona Stiliyanova said. "We face challenges in finding people with proper language skills and this is the reason to seek new ways to find them."

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An employee works at the Amazon fulfillment center in Prague, Czech Republic, December 20, 2018. Picture taken December 20, 2018. REUTERS/David W Cerny

In Poland, at least one company uses prisoners to beef up its workforce. Amica Wronki <AMCP.WA>, a household appliance maker and wholesaler, has started cooperating with the country's biggest prison and now has 50 inmates on its books.

Poland's unemployment rate is expected to remain lower than 6 percent through the end of 2018, hovering at levels unseen since the early 1990s. Officials view the labor shortage in some industries as a growing threat to the economy.

"The project helps local entrepreneurs to solve some of the problems associated with the search for employees for production positions, which result from the high density of plants in this part of the country," Amica spokesman Tomasz Pietrzyk said.

CHRISTMAS CARP Other companies in the region's biggest economy are simply throwing cash at the problem. Budimex <BDXP.WA>, Poland's largest construction company and subsidiary of Spain's Ferrovial <FER.MC>, has launched a program offering money to anyone who helps find new workers.

"We are aiming for a long-term duration of the program," spokesman Michal Wrzosek said. "We are looking for more or less 50 different specializations."

In Hungary, a Eurostat survey cited by economists at Erste Group Bank <ERST.VI> showed a lack of workers limited production at 83 percent of industrial companies in the third quarter, and at half of Polish and 44 percent of Czech businesses.

Hungary's chronic labor shortage is now feeding into corporate takeover activity with some companies making acquisitions to find the workers or expertise needed to keep their businesses humming.

Companies across eastern Europe are also ramping up investment in automation to cope with shortages that started after the 2008 financial crisis and worsened in 2011 when final curbs on workers moving to richer EU countries were lifted.

But sometimes a more human touch does the trick.

Czech bearing maker Koyo - part of Japan's Jtekt <6473.T> - offers a range of perks and has set up what it calls a Dojo training center in a nod to its Japanese owners to train local unskilled workers quickly for manufacturing jobs.

And as an end-of-year gesture, Koyo sends every worker home with a carp for their traditional Czech Christmas meal.

"On Friday, every employee will get a carp and they don't have to worry about buying one themselves," said Petr Novak, Koyo's managing director.

(Reporting by Michael Kahn in Prague; additional reporting by Anna Koper in Warsaw, Tatiana Jancarikova in Bratislava and Tsvetelia Tsolova in Sofia; editing by David Clarke)

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