Estonian recruitment agencies: more clients, same turnover

TALLINN - The 2.6 percent economic growth registered in the last quarter of 2009 is mirrored in January’s labor market data, where the number of job offers and optimism has grown. The new year of 2010 has started with positive news, to some extent. Standard&Poor’s upgrade of Estonia’s credit rating, from negative to stable. The glimmering goal of euro adoption, after harsh budget cuts, is a positive signal to investors. The government has managed to keep public finances in order, hence fostering economic stability. The government is also seeking to ease the employment situation by stimulating entrepreneurship and workplace creation in co-operation with the private sector, in order to guarantee sustainability and productivity.

Many Scandinavian, and numerous Finnish companies, have moved their activities to Estonia due to its favorable market conditions. Only a week ago, Incap, the Finnish manufacturer of electronics, announced its intention to concentrate the production of electronic parts on the island of Saaremaa, in Estonia, according to BNS. Swedish packaging producer NEFAB announced its plans of moving their production from Swedish factories to the vicinity of Tallinn, Aripaev reports.

The tendency is expected to continue following this path, the first effects on the employment market should bring visible results in statistics soon. Some companies, such as BLRT Grupp (Estonian ship repair company, a major employer in the Baltic Sea region), hired a skilled workforce from China, in spite of the amount of free labor available domestically. That is because the Estonian government has eased conditions for bringing foreign labor to Estonia, in order to guarantee a more flexible labor market for investors and industries, and thus guarantee economic stability and sustainability. The common understanding has been that if the economy has been restructured, it is important to favor the movement of labor, from less sustainable sectors to the more productive one’s, instead of favoring the retention of existing workplaces.

The situation is not rosy, but stabilizing in the labor markets. The overall unemployment rate, according to Statistics Estonia, was 14.4 percent as of February 2010. According to Expressjob, most of the unemployed in the country were located in industrial eastern Estonia, as well as in southern Estonia. This is good news for potential investors, now guaranteed an availability of a number of skilled labor. According to experts, the unemployment rate will definitely decrease in 2011.
CVO Group, founded in 1996, is one of the biggest Internet recruitment agencies in Estonia and the Baltics, operating with portals such as CV-online, and managing a database of CVs of about half of Estonia’s working-age labor force.

The company has a dominant market share also in Latvia and Lithuania. The CEO, Agu Vahur says they have seen a wave of optimism with the coming of the new year. “Some 1,300 new job offers were channeled through our portal during the first month,” he says, adding that 2009 was characterized with more CVs and 20 percent less job offers. The CEO sees a certain polarization in the employment market. There are sectors where a single job announcement causes a wave of 1,000 job applications, while for other employers they have to build a dialogue with a handful of candidates and talk them into changing jobs. Vahur says the peculiarity of these current days is that employees have become more loyal to their employers, hence are less open for change discussions. In spite of the recent economic recession, the number of people willing to work abroad has not grown significantly, according to the statistics of CV-online.

The number of job-offers is to grow significantly in the second half of 2010, which is good news for recruitment agencies who have managed to grasp an even bigger number of CVs among job seekers. The recession has reconstructed the economy. Vahur sees new workplaces being related to the exporting industries. Now with the re-organization of the headhunting sector, it will be difficult for new companies to move to the market; the market situation favors old players.

Paavo Heil, CEO of CV-Keskus, based in Estonia and active in the Baltics and Hungary and member of The Network (a global online recruitment organization), says their business has grown at the pace of a skyrocket in the past two years. In 2009, a total of 100,000 CVs were inserted into their online systems in Estonia. Among employers, the portal has been especially popular with SMEs (small and medium sized enterprises) with up to 25 employees. “January 2010 brought 50 percent more job offers compared to the same month of the previous year,” says Heil, discussing the brisk market. Now, 40 percent of CV-Keskus’s transactions are made with new clients. The most popular with jobseekers are the posts of shop-assistants and service sector jobs, as this was the sector that was hit the most with the economic slowdown, freeing much of its labor, and also because people assume these jobs need no specific skills or qualification.

The month of January saw about 65 percent of transactions with new employers, out of the total client portfolio of the company. “The markets have stabilized, exports have started to grow again and positivism towards euro-adoption expectations has spread liveliness among employers,” explains Paavo Heil about the positive mindset of today’s enterprises.