Dubliner Niall Keyes moved to the Czech Republic in 1993 to work for the Eastern European arm of Irish firm Grafton Recruitment. Fourteen years on, still based in Prague, he is managing director of the company and heads its Central and Eastern European operation. Personnel Today met him in Prague to discuss the changing Czech labour market and what Romania and Bulgaria’s accession to the EU means for the UK.
Greg Pitcher (GP): You came to the Czech Republic at a critical time for the country, just as it emerged from the end of communism. How has the labour market changed in the past 14 years?
Niall Keyes (NK): When society first gave freedom to the people, they tried out different disciplines. Companies were taking people on cultural fit rather than qualifications. For the first three or four years, the turnover was huge, and you saw wildly differing salaries for people doing the same job at different companies.
Over time, universities and colleges developed their programmes, and firms started training in-house. The labour market matured significantly and now boasts far more skilled people. In the late 1990s, the economy stagnated and people had to make decisions because there were not jobs a-plenty any more. As a result, retention rates increased and salaries stabilised.
GP: How much interest have UK companies expressed in Eastern European workers?
NK: Movement of Eastern European workers to the UK has grown since EU accession three years ago. We have not fielded enquiries based on Eastern Europeans being cheaper, however – it’s more because UK firms are finding it hard to recruit locally.
UK firms want the language skills, the technical expertise, plus the greater productivity you get from migrant workers – when you are removed from your social environment, everything revolves around your work.
GP: Is this movement of Eastern Europeans to the UK leaving skills shortages in the countries of origin?
NK: The Baltic states (Estonia, Latvia and Lithuania) are the only three of the 10 original accession states that are suffering from a ‘brain drain’.
Poland still has a labour pool to draw on so it’s not a problem there, and the Czech population is not really willing to emigrate so the numbers are not that high. We used to talk about the brain drain and how it would be a disaster in the Czech Republic, but moving abroad is only a two- to three-year project for most people.
GP: Do you think the scare stories about Eastern European workers overrunning the UK are over-hyped?
NK: We will see a reduction in the number of Eastern Europeans in London. A significant number of people come back after two or three years – we are already interviewing people who have returned. Plus, the economy is growing here, and as that happens, we will see even more people coming back.
Everybody wins from Polish migration to the UK. It is an opportunity for the UK to fill skills shortages, and for Poland to reduce unemployment. UK firms are also investing heavily in Poland and central Europe, particularly in production.
GP: How about the latest accession states – Romania and Bulgaria?
NK: Lots of Romanians and Bulgarians have a huge appetite for working in the UK. Romania is worse than Poland in regional areas – there is a low standard of living – and the people don’t mind emigrating for work. Lots are registering in the IT sector as self-employed to get around the work permit requirements.
But we need to be careful because you cannot just flood an economy that is doing well – you need the workforce to relaunch the old economy. Lithuania is struggling to attract foreign investment because its unemployment rate is 2%.
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GP: HR roles and other back-office jobs are going from the UK to India. How many jobs are coming to Eastern Europe?
NK: Offshoring of back-office functions is buoyant. Indian firms are offshoring to Central and Eastern Europe because the time zone, low salaries and strong language skills make it a good place for UK firms. Offshoring is getting mega. HR expertise centres already exist in Eastern Europe.
