Hungary – A country of possibilities or difficulties?

HILL International has existed in Hungary for 34 years and has followed the events of the labor market. We would like to give a snapshot of the current situation, viewing the economic environment, and how it affects the employment and recruitment process. In the past years, many changes were noted – an example is a decreasing unemployment tendency – but there is still an unequal work distribution looking at the different parts of Hungary. What do the professional websites say, what do the companies have to add, and what do we, HILL International consultants experience? In this article we asked HILL Hungary’s Consultant, Eszter Tompos-Nagy to help us to break the nut and give answers.

How would you describe the current economic situation and the labor market in Hungary?

Eszter: According to the Central Statistical Office of Hungary (KSH), the unemployment rate is at its lowest nowadays. From a number of 11%, which was experienced in 2010, it has decreased to 4,5%. Next to this, employment has increased by 13,000 headcounts compared to last year, which strengthens the positive trend. The salaries have increased in the past year and are now at an average gross salary of 600 000 HUF (1500 EUR) in Hungary, but the inflation is also catching up quickly. Regarding the employment trends of companies, when 300 CEOs were asked, 36% of them estimated a growth in employment for the upcoming year, according to an article in HR Portal. On the other hand, according to the Hungarian National Bank’s report of the past 7 years, a zero-point increase (about equal increase and decrease in employment) was observed in various industries of Hungary (indicated in the chart below). From our personal experience, out of 100 companies, about 90 are relying on inner resources for recruitment or have cost containments at the moment.

What are the unique characteristics of the labor market in your country that distinguish it from the others? 

Eszter: Hungary has a strong agricultural profile among the countries of Europe. A top 100 list of companies with Hungarian ownership was published recently, where the majority have either an agricultural, or food-processing and manufacturing profile. The companies that are eagerly settling in Hungary are car manufacturers. Mercedes Benz, as well as BMW are making huge developments in the country currently. Hungary is also home to many SSCs of multinational companies. The other resources that Hungary is rich in, are historical and natural sights, thus the tourism and hospitality industry is also prosperous, especially in the countryside. And, as one of the industries that are prospering worldwide, IT companies are also prevalent here. Their gaining of ground can be found also in hospitality, through online booking systems which are popular among guests.

In which sectors or regions do you currently see the greatest threats/difficulties? 

Eszter: South and North Hungary have the highest ratio of residual employees, however, the area that is lacking the most employees is North-Western Hungary, which takes a contradictory picture. The ratio of the non-working society, the ones who omit from the educational and working system, is around 9,8%, and most of them are the younger generation. Next to this, another threat to Hungary is the increasing ratio of the retired community, which are members of the “baby boom” generation. By 2030, 300,000 of the currently employed will retire, leaving a big weight on the shoulders of the younger generation. One solution for this could be to begin to integrate the non-working population with part-time positions, thus including them in the blood circulation of the workforce.

What can be said about the leaders of Hungary, is there something remarkable about their personality?

Eszter: In the way they manage their companies, leaders and CEOs are different. However, what we notice with each of our clients is that they are all strong-willed individuals. This makes the collaboration either very smooth – when there is mutual understanding – or quite difficult, which results in longer projects – see an example below. If a company would like to stand their ground nowadays, strong will is a must, because there is huge competition for the resources – meaning employees, as well as material resources.

What do you think will be the biggest challenge in managing people in 2025, and how can AI influence the recruitment process?

Eszter: In Hungary, one of the biggest challenges is that the ratio of employees doing simple jobs is the 2nd highest in the EU, which brings us a lot of uneducated workforce. This is an advantage from the view of manufacturing companies, where a lot of shift work should be done. On the other hand, out of 300 CEOs, about 144 (48%) complained about the lack of an educated workforce. AI technologies can help find good quality candidates, however, they don’t necessarily find all of the best quality options. According to Forbes, the “invisible workforce”, i. e. passive job seekers, who are not active on social platforms, may be overlooked by AI search engines. Despite this fact, many multinationals use platforms like HireVue, Datapeople, or ChatGPT. (For executive recruitment, the roles of human-driven ACs and interviews are still important). From our consultancy experience, it is also true, that sometimes only a human eye can spot the sensitive details in a candidate’s profile, which can make them perfect for the job. The same position can be found with various names on social platforms.

Forbes also talks about an extreme candidate-company mismatch that is experienced in the Hungarian market, because well-educated candidates are becoming rare to find, and on the other hand, companies don’t offer very high wages. This is somewhat a surprising situation, as this year job seekers risen by 20% compared to the year before.

What can be said about the length and success rate of search & selection projects nowadays, introduced also through concrete examples? 

Eszter: We have projects, where the match is created fast (within 4-6 weeks), because we have an extensive candidate database, and we have the professional knowledge to find good quality candidates. A challenge however, that we face more and more is the mismatch, mentioned above, as sometimes our clients, have a certain picture in their mind about the ideal employee, and only a few candidates fall into that category. Finding these special candidates may take 4-6 months even. We also have had executive search projects, where after a long recruitment process, the client decided to fill the position with inside resources. 

Many companies are putting inside resources to recruit candidates, however, in many cases, they fail to find the best quality and most importantly – trustful – candidates, who can be counted on in the long-term. Experience shows, that finding that kind of candidate, the professional eye of a consultant is often needed.

As HILL International in your country, what is your contribution to making companies more successful?  

Eszter: At HILL International Hungary our goal is thus to keep providing high-quality services where we can serve our clients the best ways and to take the weight off their shoulders to do the extensive work themselves. We believe that there is a stable foundation in our professionalism that we can build on, even if the economic situation brings us challenges. We can turn difficulties into possibilities, all we need is a professional eye that creates and organizes resources, so that the least time goes wasted.

Thank you for the interview!

Contact - International. Regional. (hill-international.com)

 

References: 

https://www.hrportal.hu/hr/kiemelten-fontos-a-magyar-munkavallalok-megtalalasa-es-felvetele-20240304.html 

https://ujszo.com/reklam/magyarorszagi-munkaero-piaci-kilatasok-trendek-kihivasok-es-lehetosegek-2024-ben-a-jooble 

https://forbes.hu/tamogatoi-tartalom/2024-a-valtozasok-eve-a-munkaeropiacon/ 

https://www.ksh.hu/gyorstajekoztatok/fem/fem2401.html 

https://www.vg.hu/vilaggazdasag-magyar-gazdasag/2024/02/kiderult-hanyan-dolgoznak-magyarorszagon-es-mekkora-a-munkanelkuliseg 

https://magyarnemzet.hu/gazdasag/2024/02/kiemelkedo-a-kecskemeti-mercedes-bovitese