Migrant workers are not the cure-all - but they are the cure-all

One of the main themes of this year's RecruiTECH Blue was the issue of third-country workers, mainly blue-collar workers (manual workers), who are being used by many manufacturing companies to fill their staff shortages and are being recruited by a number of firms. Experiences in the cross-border labour market were shared by Ágnes Bosnyák, HR Manager of Denso, an automotive supplier in Székesfehérvár, and Emese Mucsi, HR Manager of Fornetti, among others, who talked to Viktor Göltl, Managing Director of WHC. Out of Denso's 4,800 employees, 3,000 are blue-collar workers, including members of many foreign nations: Ukrainians, Filipinos, Kyrgyz and Kazakhs all work at the factory. The company first started to provide accommodation in the country in 2014-15, then turned to Transylvania and later Ukraine, initially with Hungarian-speaking workers. However, as the HR manager explained, they had labour-intensive processes that were not sufficient for this market, and in addition, health problems often arose among Hungarian workers, as many were not suitable for standing work.

Fornetti employs 1,300 people in total: in Hungary (740 people, half of them blue-collar), Romania and Bulgaria. Two years ago they started employing Ukrainian guest workers, and now, after experience with Sri Lankans in Romania, they are bringing in temporary workers from the Philippines. Emese Mucsi said that they need to fill about 25% of their workforce with temporary workers as this is the only way to achieve adequate productivity. The frozen baked goods company also initially only recruited from further and further afield within the country, bringing workers into the factory on company flights, but the pool has expanded.

As company representatives said, there were several factors that turned them towards Asian workers, with English language skills, work ethic and cost levels being the deciding factors in favour of Filipinos at Denso. For Fornetti, the cost of constant recruitment and training was the deciding factor, as well as market experience. They are just starting to employ Asian workers. In the Asian workers' favour, turnover is down 20% from last year, providing stability in production, workers are motivated and absenteeism is down

Agnes Bosnyák and Emese Mucsi

Why is this money not given to Hungarian workers?

Viktor Göltl raised one of the most frequently asked questions: how much extra cost is involved in employing workers from third countries, and why is this money not given to Hungarian workers? At Fornetti, when you add it all up (this includes the cost of previously significant turnover) there is minimal extra expense in hiring Asians. Also at Denso, according to the HR manager, there would be no significant wage uplift if they gave this amount to the other employees. Ágnes Bosnyák said that the situation is that there are not enough workers in Hungary, and although Hungarian recruitment is their priority, they have to supplement their needs from abroad. And housing provision (which is also often criticised as a reason why Hungarian workers are not provided with housing) is not a benefit but a recruitment tool. When accommodation was provided from other parts of the country, Hungarian workers were also provided with accommodation, as there was nowhere else for the guest workers to live.

5 typical pitfalls of employing third-country nationals

The panel discussion was attended by Marianna Földiné Rusa, HR Manager of Accell Hunland Kft and Zsolt Weinhardt, Managing Director of HumaNext Group, and was followed by Judit Sinka, HR Manager of Jobtain HR Service Ltd. HR Manager of Jobtain HR. Accell is a manufacturing company with 700 employees, where roughly 25% (162) of the workforce is foreign. Some of them are Ukrainians, Kazakhs, Kyrgyz and Filipinos. Some foreigners have been with the company for 5 years and have been taken on as internal staff. Marianna Rusa pointed out some important factors in the selection process:

• relationship between the factory and the company
is important.

• a precise job description, physical expectations


• English language skills


• they have also received material from the rental company on the needs of the workers


• involved in online interviews during the selection process

The HumaNext Group is in the accommodation business, as the manager explained, it is important that the accommodation is suitable for everyone. The cultural background of the workers, the differences between them and their compliance with the rules are also important for the conditions and the way they live together. For example, they make sure that religious differences are not very present in the accommodation. Sometimes there are 4 to 6 nationalities living in the same hostel, so they occasionally organise information sessions and cultural evenings to facilitate coexistence.

Judit Sinka, Marianna Rusa, Zsolt Weinhardt

Accell provides its own accommodation for its employees, and as they say, it is important that they feel comfortable outside the workplace. The HR manager stressed the key role of communication and information, as there were regular instances of the tumble dryer breaking down in the accommodation, for example, until it was found to be full of water because they did not know the proper use of the machine. It's also important that when it comes to fitting in, you try not to think in terms of your own knowledge, but to take differences into account. The company also prepares its own staff for welcoming foreigners, providing information about their customs, and providing interpreters and multilingual signage to help them cooperate. Of course, they also find that some foreigners use the opportunity as a stepping stone, and some have already left the airport for Germany.

Weinhardt also added that an initiative has recently been launched to bring together third-country workers' representation.

This is how the Hungarian job market looks at a macro level

In the recent past, a number of factors have influenced economic developments, including inflationary pressures, the energy crisis, falling incomes, overspending, fiscal imbalances and budget cuts, said Portfolio's senior analyst István Madár in his opening presentation. However, there have been no decisive changes in the labour market, the analyst said. Although unemployment has risen slightly overall, labour market tensions - i.e. labour shortages - persist in many areas. There are around 300,000 people who are inactive, unemployed or hard to employ, and this number cannot be significantly reduced, according to the expert. Natural unemployment is around 4-5%, while the continuing decline in the working-age population is an unavoidable factor.

István Madár: The best way to deal with the situation would be to increase efficiency by learning and producing more added value.

As real wages have started to fall due to inflation, one-off annual wage increases have generally not been enough, in 2023 real wages are around the 2021 level. The expert noted that firms are in a very difficult position when it comes to the issue of pay rises, as there is a lot of uncertainty and volatility, making it difficult to decide how much to increase. A decisive factor in this is the labour supply in the sector. As he said, there is a noticeable tendency for firms to complain less about labour shortages than two years ago, but the situation has not improved significantly. Once the recession is over, this shortage could continue to limit production. The best way to deal with the situation would be to increase efficiency by learning and adding more value, but this has not worked so far, so in the short term it remains a question of migration, importing guest workers, which is not a cure-all. Among other things, it does not solve the shortage of engineers, teachers and IT specialists...