Elena Secuianu and Maxime Driesen UNIVERSITY OF ANTWERP

1

What is the attitude of Belgian companies towards international recruitment as a possible solution for the increasing shortage of knowledge workers?

Elena Secuianu and Maxime Driesen

UNIVERSITY OF ANTWERPMaster of Applied Economic Sciences - Business AdministrationStrategy and organisation

Promoter:Prof. Dr. Carolyn Declerck

Be Wanted:Marc Van Hoof, Tine Soers & Koenraad D’helft

Master thesis

2

• Unemployment rate 2012: 7,4%

• Certain vacancies remain openDemand for highly skilled employees is growing strongly

• Mismatch at the labour market: bottleneck professions

• Tension indicator = number of unemployed job seekers per vacancy- Belgium: low tension indicator

tight labour market- Important factor: aging

retirement of the baby boom generation

Current situation of the labour market

3

• Causes on the demand side- Nature and image of the function/

business/sector- Recruitment behavior and selection

procedures

• Causes on the supply side- Income- Geographical mobility- Qualifications- Labour market behavior

• Causes due to intermediaries- Lock in-effect- Alignment between offered courses

and the needs of employers

• Environmental factors- Economic cycle- Demography- Government policies- Education

Causes of the bottleneck professions - VDAB

4

• Paradox of the labour market (worldwide):WEF: “Movements such as the Arab Spring and Occupy Wall Street are fuelled in

part by anger about high youth unemployment and the mismatch between the skills that people have and those demanded by business. Understanding and harnessing talent mobility is now more critical than ever.”

• Imbalances in human capital markets: talent shortages high unemployment rates

• Talent Mobilityapply when it is a win-win solution and when it is feasible

International recruitment – Is it a solution?

5

Purpose of our empirical research

General objective:

Investigate the attitude of Belgian companies towards international recruitment.

Methodology:

• Quantitative research – Survey1. Are Belgian companies aware of shortage in knowledge jobs? Does it affect

their business? Do they expect a greater shortage in the future?2. Are they willing and prepared to fill in vacancies with international recruits?3. What are the experiences of firms who have hired highly educated workers

in the past?

• Qualitative research – Case Study

6

• Number of respondents: 53- Experience with international recruitment: 29- Mostly visitors of the HR Xpo (Kortrijk), however equal distribution over Flanders

• 64% is currently experiencing a shortage of knowledge workers- 51% expect a larger shortage in the future

• Most critical functions- Engineers (VDAB 2012: 0,6)- Technicians (VDAB 2012: 1,6)- Informaticians (VDAB 2012: 1,7)

Quantitative research - survey

7

Negative impact on continuity

• Most important causes: - number of graduates too low- qualitative gap between education and required competencies

Administrative assistant

Distribution

Salesman

Marketeer

Representative

Finances

Human Resources

IT specialist

Engineer

Technician

1.00 2.00 3.00 4.00 5.00 6.00 7.00

8

Current handling of the deficit

International recruitment from sister companies

International recruitment via third parties / recruitment agencies

Internal mobility (detachment on project basis)

Initiatives towards educational system

Investments towards campus recruitment / employer branding

Redistribution of tasks within existing organization

Vacancies remain open

0% 10% 20% 30% 40% 50% 60% 70%

• 2/3 of the vacancies remains open

• Redistribution of job responsibilities: durable solution?

• 30% willing to recruit internationally

• What holds them back?

9

Negative reactions of current employees

Financial costs

Time-consuming

Retention problem

Equivalency diplomas / competency differences

Legal and administrative problems

Cultural differences / integration

Language differences

0% 10% 20% 30% 40% 50% 60% 70%

Difficulties

Companies who cooperated with an external recruitment agency consider all difficulties as less restraining compared to companies who have handled it internally. All differences are significant or marginal significant.

10

Advantages

Better quality / knowledge

Higher flexiblity

Higher creativity / synergies

Extension contacts

Diffentiation among employees

Faster completion of vacancies

1 2 3 4 5 6 7

Although companies with experience value the benefits of international recruitment slightly better, the difference with companies lacking experience is not significant.

11

Added value of an international recruitment agency

Negative reactions of current employees

Retention problem

Financial costs

Equivalency diplomas / competency differences

Language differences

Cultural differences / integration

Legal and administrative problems

Time-consuming

1 2 3 4 5 6 7

12

Workers - low level of education

Workers - high level of education

Employees - low level of education

Employees - high level of education

Executives - low level of education

Executives - high level of education

Management - low level of education

Management - high level of education

0% 10% 20% 30% 40% 50% 60% 70%

Foreign recruitment per statute

International recruitment is often used for high-level functions.

13

South America

Australia

Africa

South Asia

North America

East Asia

Northern Europe

Southern Europe

Eastern Europe

Neighbouring countries

0% 10% 20% 30% 40% 50% 60% 70%

Geographic preference

International recruitment mainly from neighbouring countries.

14

Recruitment process

Integration process

General

Performance of foreign labor

1 2 3 4 5 6 7

Satisfaction

Companies who cooperated with an external recruitment agency value a slightly greater satisfaction (only based on integration and recruitment process).

15

• In-dept interview with Vicky Welvaert – HR Director of ASCO Industries

• HQ in Zaventem with circa 1000 employees

• ASCO Industries is a world leader in the design and manufacturing of functional components for the aerospace industry.

• Production of high qualitative components through continuous technological innovation and creativity

high need for technically skilled workers (CnC-operators)

Qualitative research – case study

16

• National solutions:- Redistribution of tasks- Employer branding- Multiple recruitment channels- Close contacts with technical schools

• International solutions:- 20 (technically skilled) workers from Poland- Profile, background, language- Cooperation with a recruitment agency

ASCO Industries

17

• Potential obstacles1. Legal and administrative difficulties2. Cultural differences3. Equivalence of diplomas4. Language and integration

• Advantages of international recruitment- Finding the right workers to fill the vacancies- Increase of the differentiation and creativity

No disadvantages if one cooperates with an external recruitment agency.

ASCO Industries

18

• Strong congruence between survey and case study

• Most fundamental obstacles: - Language and cultural differences- Inequivalence of diplomas- Legal and administrative conditions- Personal restrictions

• Most critical functions- Techinicians- Engineers- Informaticians

Conclusion of empirical research

19

• Divided opinions regarding the added value of an external recruitment agency- Survey: moderate satisfaction of international recruitment- Case-study: high satisfaction of international recruitment

potential obstacles can be overcome!

• Belgian companies do not (yet?) consider international recruitment as a full solution for the increasing shortage of knowledge workers

Conclusion of empirical research

20

1. 72% of the respondents indicated that they would rely on the services of an external recruitment agency, although in practice this often not the case.

Personal conviction vs. general organizational policy?

What are the influencing factors? (e.g. recruitment budget)

2. 40% of the respondents indicated their willingness to recruit from abroad, although only 20% of companies actually made use of this solution. Why is this?

3. Difference between VDAB-analysis (2012) and own research regarding the importance of aging on the Belgian labour market.

Literature: very decisive for the shortage of knowledge workersSurvey: moderate impact on the shortage of knowledge workers

Future research recommendations