Comments are closed. Previous Article Next Article Triumph over diversityOn 1 Apr 2001 in Personnel Today Thekey to success in this diverse region is considering each country in the lightof its own history and culture. Bo Jones reportsRussiais in dire economic straits,” according to the McKinsey Global Institute.”Unlike the successfully reformed ex-communist economies – such as Hungaryand Poland, where economic performance fell during the early years of reformbut surged as it took hold – the former superpower has experienced onlydecline.” Indeed, focusing in on Poland, the Institute has a brighterview, “Poland’s resurgence in the 1990s,” they say, “has been awell-kept secret. Unemployment has fallen to 10%, from 16% in 1993, and newjobs have been created at a healthy rate of 1% a year since 1994.”That’swhy Western companies are being extremely cautious about where and in what theyinvest in the region. Like any emerging economic region, there is a need for atelecommunications infrastructure and information technology (IT) development,and in the more advanced countries, specialists in these fields, such asBritish Telecom, are moving in, particularly into the countries that are seento be more advanced both socially and economically. Likewise, the bigconsulting firms such as PricewaterhouseCoopers are opening offices in mostmajor CEE locations. However, some are reportedly having a hard time gettingskilled and experienced people to relocate to these countries and findingenough local talent to fuel their real business ambitions, and this limitstheir growth and expansion.Whetheror not reports of significant development for some nations and the slow demiseof others are entirely true, one thing is abundantly clear – not only is theCEE region very different from its Western European neighbour, but each countrywithin the region has its own distinct political and social background andeconomic climate. And that means that acquainting any organisation with the HRissues in the entire CEE area is a seemingly impossible task. What firmslooking to expand into the region need to do, is carry out in-depth research ofeach country individually.AdvisesYolanta Strikitsa, head of HR consultancy at Morgan Chase’s Eastern Europeanpractice, “Before you go, you need to look at the history of each nation.The region is very different to Western Europe, even in terms of industry andbusiness development, not only socially and culturally.” She goes on,”Hungary, for example, was first to enter the developed world. Now, theyare already in the second stage of direct investment into the country, withlocal companies merging with Western multinationals. “Russiatoo,” Strikitsa explains, “is past the first stage and is facingproper investment. Before,” she recalls, “investors would go into themarket for a very short period of time. Today, there is more long-terminvestment. HR’s role then is to find expatriates who are willing to stay atleast three to five years.”Incontrast, Yugoslavia and Serbia are today where Russia was back in the early1990s, with very short-term investments only just being introduced. That means,says Strikitsa, “that you see people coming in for perhaps three or fourmonths to do bits and pieces”.Butdespite these very different stages of development that face multinationalorganisations when they move into CEE, there is one underlying factor thatStrikitsa believes unites all these very diverse countries. She notes thatpeople in the region are all “well-educated. Yes they have their labourissues and technological issues,” she says, “but you just have tofind the right understanding and cultural key for people to get working.”Indeed,her belief in the high skills levels of individuals in certain of the CEEnations is firmly supported by some of the other players in this area. Lookingparticularly at Hungary, PricewaterhouseCoopers in its Doing Business andInvesting in Hungary – 2000 report, says, “Hungary has a skilled andwell-educated workforce. Although,” it admits, “certain skills, suchas knowledge of Western languages and of Western accounting and bookkeeping,are still in short supply, this is changing as new graduates enter the market.”Andnew graduates are not only signing up for economics and financialqualifications. In Estonia, IT is the way to go. Encouraged, by the government,which plans to open a university specialising in telecommunications and IT, thepeople of Estonia are constantly being urged along the digital pathway.In1999, Hansapank, a regional bank, teamed up with IT services company MicroLinkto give away free computers to the first 2000 people to sign up for thecompany’s Internet services. Through this sort of initiative, Estonia isalready the leader among the former Soviet States in Internet connectivity, aswell as mobile phone usage and on-line banking. Reports KPMG, “More thanhalf of the population has used a personal computer and one-third of residentshave logged on to the Net.”Indeed,KPMG says, “Driving on Estonia’s highways, a first-time visitor may besurprised to see blue-and-white signposts (distinguished by the familiar @symbol) directing the traveller to the nearest spot to check e-mail.”Likewise,it seems Romania too has a bright, digital-savvy population, with the Romaniantechnology school regarded by KPMG as “one of the best in the world”.Indeed, the company says, “The Romanian labour force is oftenover-qualified. It is a well-known fact that Romanian students finish theirstudies by graduating from colleges in Western countries.”Withregard to labour rights, the West, it seems, has also played a significant rolein influencing employment legislation. “In order to ensure employees’(including collaborators’) minimum labour rights, the Romanian government hasissued legislation covering domains such as working hours, minimum wages,statutory holidays, paid vacations and paid maternity leave.”Andin Hungary too, modern Western principles have been adapted to the Hungarianenvironment through the Labour Code of 1992. Explains Mark Humphreys, HRspecialist with an IT services provider operating in the region, “TheLabour Code regulates the basic elements of employer/employee relationships.That means that under the Labour Code, workers’ councils are compulsory at alllocations with more than 50 employees.” In addition, he adds, “TheLabour Code also allows unions access to places of work and gives them officialstatus as a negotiating partner with the employees.”Itseems that Morgan Chase’s Strikitsa was right on the mark when she says thateach nation within the CEE region must be considered in the light of its ownhistory and culture. There are certainly some similarities between countries ata similar stage of economic development, with well-educated workforces andmodern labour laws. But for every similarity, there are also great differencesand a huge amount of diversity. Add that to an enormous amount of potential inmany countries and there will be some exciting and challenging times ahead forfirms expanding into this emerging market. Who’sgoing where?It’sthe consultancies, telecommunications and IT companies that are venturing intoCentral and Eastern Europe. The most popular countries for investment from these sectors are:–Hungary–Russia–Estonia–RomaniaFurtherinformation Checkout the following Web sites for more info on expanding into the CEE:–PricewaterhouseCoopers: www.pwcglobal.com–McKinsey Global Institute: www.mckinsey.com–KPMG: www.kpmg.com Related posts:No related photos.