A recent poll conducted by The Estonian Institute of Economic Research showed that people in the country are the most pessimistic about their future job prospects in the Baltics, with 20 percent of Estonian families responding that they estimate the crisis will last longer than three years and feel insecure in their jobs. In February 2008, less than 10 percent of Estonians thought unemployment would grow significantly in a year. Now that number stands at 50 percent. In his year end speech, Prime Minister Andrus Ansip stated that unemployment in 2008 was the highest since 1991.
Alo Naelapea, a senior consultant and partner at Estonia's Arista Human Resource Solutions, is involved in recruitment services and competence-based management. The company has partners in Latvia and Lithuania. Naelapea spoke to The Baltic Times about the level of pessimism in Estonia regarding unemployment, and gave an overview of the employment and recruitment situation in Estonia and his own outlook for the future.
What is the situation like for unemployment in Estonia currently?
According to the Estonian Labor Market Board, the unemployment rate has increased up to 7.1 percent in February 2009. According to the most pessimistic predictions, the unemployment rate will increase up to 100,000 people 's the whole labor market is estimated to consist of only about 650 000 people.
How has the financial crisis affected your services?
The financial crisis hasn't affected us directly because consultation companies rarely operate by means of loan-money. As for the recruitment business, the clients have decreased the number of recruitment projects and frozen the outsourcing of Human Resource development programs. This is most especially apparent when it is seen among small and medium sized enterprise client sectors.
Have you had to make any changes to help cope with the crisis?
The basic measure is the reduction of costs. But it is only the first step. The strategy involves the process of diversification of service portfolios and improvement of service quality. The recruitment service providers are focusing on providing candidate assessment tools to the companies, since the companies have reduced full recruitment outsourcing in general.
Have you seen a decline in employers asking for new employees?
Certainly we have seen a decline. The employers are now focusing on labor improvement, and the availability of good competence has increased in the labor market. The good news is that we have seen interest from foreign companies toward the Estonian labor market and are now entering into the Estonian business environment.
What are your views on unemployment in Estonia? Do you think things will getworse or better? When do you expect to see something change?
Since Estonia is affected by global processes 's our inner market is very small 's and especially by Scandinavian capital, that means that the positive changes depend on our closest neighbors: Scandinavia, Latvia and Lithuania. The unemployment rate will increase during this year definitely. It's difficult to predict when the change will happen. The analysts have predicted that the world economy will become stable in 2010. The government's task is to support free enterprise and the inflow of investments and to invest in the education system.
Are you seeing more people wanting and needing work? What types of people are looking for work?
It is easier to find a new job for those people with a higher education, or who live in the capital or in the bigger centers. The problematic areas for employment are the building and real estate sectors. Those most affected are among front-line workers who have no special skills. A better situation is in the Information Technology field.