Budapest Business Journal

Q&A: Christopher Mattheisen is leading Magyar Telekom into new territory 〉PAGE 32

BBJ

VOL. 18, NUMBER 08

Budapest Business Journal

Ft 1250 | €10 | $15 | £7.5

HR 2010 I APR 23, 2010 – MAY 6, 2010

€894

million of FDI last year has put Hungary back at the top in the region 〉PAGE 4

HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU

THE VICTOR Hungarians have given Fidesz a huge majority. But how will it use its historic opportunity? 〉PAGE 5 EDITORIAL 〉PAGE 35

THERE IS A QUIET REVOLUTION IN HUMAN RESOURCES, WHICH WAS SPED UP BY THE CRISIS. EXPECT NEW ROLES FOR PROFESSIONALS AND NEW MARKET DIVISIONS. ALSO, LISTS INSIDE ▶▶ HR gets involved in strategy

〉PAGE 10

▶▶ Outsiders: unemployment

〉PAGE 12

▶▶ HR befriends social media

〉PAGE 15

▶▶ Managing talent

〉PAGE 16

▶▶ Computing people power

〉PAGE 17

▶▶ Recruiters seek new jobs

〉PAGE 18

▶▶ Are temps here to stay?

〉PAGE 22

▶▶ Headhunters fear falling fees

〉PAGE 25

Holiday vouchers remain popular despite predictions Employers are expected to purchase at least as many holiday vouchers in 2010 as last year, adding up to about HUF 50 billion worth of tax-free holidays for employees.

This is good news for smaller Hungarian hoteliers, as much of their services are paid for in vouchers. 〉PAGE 4

9 771216 730005

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Photo: Csaba Pelsőczy / Fidesz.hu

Summer camps in Hungary Like most families, foreigners in Hungary have the option to send their children to summer camps. There are also services specifically for guests from other countries, and Hungary’s summer camp culture in general is thriving as ever more parents send their kids here for summer. 〉PAGE 29 BUSINESS

Paving the road to Scotland Scotland is not typically considered one of the top investment destinations for Hungarian businesses. Now, however, some entrepreneurs are trying to help form connections – and they, at least, are already profiting from these new opportunities. 〉PAGE 9

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2 NEWS

Budapest Business Journal | Apr  – May 

There will be no tax cuts in 2010, said László Kövér

NEWS in brief

of the election-winning Fidesz party. The government that will soon take office lacks the means to immediately enact the promised cuts, but the cabinet will instead complete its cycle of promised burden reductions by the end of the next term.

ZUSCHLÁG SENTENCED PRISON VOLCANO GROUNDSTO AIR TRAVEL eruption of theJános Eyjafjallajökull volcano FormerThe socialist politician Zuschlág was under a glacier Iceland caused global sentenced to eight andin a half years in prison by disruption in air traffic, as the cloud of the Bács-Kiskun County Court. The extraordinarily ash emitted madeoftravel dangerous.

The strict verdict is the result an 18-month police International Air Transport Association investigation. Zuschlág and his 15 associates were said that the halt in funds commerce wassocialist causing accused of siphoning state through $250 million in losses a day.

In Hungary, party youth organizations, and channeling them the into closed the after privatenational pockets airspace as well aswas being linked today corruption the eruption; the ban wasgrants. lifted the following cases related to EU development Tuesday. National airline Malév said it was forced to cancel roughly 150 flights.

ECONOMY

MNB: plenty of wiggle room Hungary’s improving economic outlook, recovering market sentiment Deficit at 82% of 2010 target and the strong forint will give the The Finance Ministry expects central bank (MNB) enough wiggle the general government deficit room for further monetary easing, to reach HUF 719.4 billion at MNB deputy-governor Ferenc Karthe end of May, which is 82% of valits said. Hungary’s higher-thanthe full-year target. The ministry expected 5.9% inflation reading is standing by its full-year cash- for March is no cause for concern flow-based deficit target of HUF as inflation is likely to come down 878.9 billion, or 3.8% of GDP. At close to the MNB’s 3% target by the the same time, the soon-to-be- end of the year, he added. Economic governing Fidesz party expressed researcher Ecostat expects MNB to strong criticism of the outgoing hold the benchmark rate at its curgovernment, saying that it had rent level at least until August. already narrowed the prospects of the new leadership through Home auction approval Lenders must seek the approval of wasteful spending. financial market regulator PSzÁF Greek crisis could hurt forint before auctioning homes under foreHungary faces the risk of cur- closure, PSzÁF said in a statement. rency depreciation if the Greek The requirement is intended to make fiscal crisis spreads, a study by the process of auctioning homes unLombard Street Research said. der foreclosure more transparent The country’s dependence on and cheaper. Lenders will not be foreign currency loans, a high required to seek PSzÁF’s approval if level of government debt and an the auction has been mandated by a expected rise in the budget defi- court, such as in a mandatory liquicit make it vulnerable. dation procedure.

Huge fines for financial misdeeds Financial market watchdog PSzÁF has raised fines and broadened the scope of its punitive measures against businesses that breach financial regulations. Institutions are now liable to pay a minimum penalty of HUF 100,000, which can go up to HUF 20 million for investment or pension funds, HUF 50 million for finance and investment companies, and HUF 100 million for banks and insurers.

In severe cases, however, PSzÁF will be entitled to levy fines of up to HUF 2 billion.

Széchenyi Card 2.0 on the way The professional preparation phase is over, and now only a political decision is needed to start the SME investment support program Széchenyi Card 2.0, said László Parragh, chairman of the Hungarian Chamber of Commerce and Industry (MKIK). A business could apply for a HUF 50 million investment loan for 3-5 years. According to Parragh, this amount is realistic, since Hungarian SMEs are normally not strong enough to get more than HUF 7 million-HUF 8 million on loan.

NUMBERS

in the news

5.5% the new forint base rate after the National Bank of Hungary (MNB) decided to cut the benchmark by 25 basis points to a new historical low. The cut was in line with expectations.

46

th

Hungary’s position on the Networked Readiness Index ranking in the World Economic Forum’s Global Information Technology Report 20092010. Last year, the country was ranked 41st.

POLITICS

WORLD

Renegotiation with IMF expected Hungary’s new center-right government will seek a new deal with international lenders and plans to make it easier for ethnic Hungarians in neighboring countries to obtain dual citizenship, foreign minister-designate János Martonyi said. Martonyi said the new or extended agreement with the IMF should take into account Fidesz’s goals to boost the recession-hit economy. He also said the issue of granting easier access to citizenship for ethnic Hungarians beyond the borders would be part of the next government’s agenda.

Lech Kaczynski buried The remaining leadership of Poland laid to rest their President Lech Kaczynski and his wife, who, along with 94 other senior politicians, perished in a plane crash. They had been heading to the Katyn forest to mark the 70th anniversary of the massacre of 22,000 Polish officers and intellectuals by the Soviet secret police. The tragedy sparked a widespread expression of condolences from state leaders and organizations worldwide.

Greece told to brace for IMF bail European Union finance ministers LMP not stepping aside told Greece to brace itself for the The LMP opposition party, which International Monetary Fund’s conhas successfully made it into Parlia- ditions for granting a bailout packment, said it would not be withdraw- age to the debt-stricken nation. The ing from the election contest in the IMF may demand that Greece cut second round to favor local candi- pension payments and spending on dates of the governing socialist MSzP. civil servants as a condition of the Although MSzP recalled four of its loan. Greece’s biggest union warned nominees hoping that the combined that it would call more strikes if the LMP-MSzP vote would be enough government proceeds with the pento take seats away from first round sion overhaul. landslide winner Fidesz, LMP stated that it will stick to its independence.

Focus on competitiveness The most important task of Hungary’s new government will be to reestablish the country’s economic competitiveness, said Zsigmond Járai, an economic expert for opposition party Fidesz. There will be some measures that the new government can take right away and some that will take years, he said. The new government will take immediate steps to cut taxes, reduce bureaucracy and clamp down on corruption, he added.

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Budapest Business Journal | Apr  – May 

COMPANY news HANKOOK TO DOUBLE CAPACITY

Hankook Tire Magyarország, the Hungarian unit of Korean tire manufacturer Hankook, will hire 450 workers this year and 250 more next year to accommodate a planned 100% increase in production capacity at its factory in Rácalmás to 10 million tires per year by 2011. It will hire graduates of a four-month training course it launched last year for unemployed people in the region. The company employs 1,270 workers at its factory, which currently produces about 15,000 tires a day.

NEWS 3 State-owned Hungarian power holding MVM expects to acquire stakes in German utilities giant E.ON’s electricity distributors in Hungary by the middle of the year.

Due diligence on E.ON’s three regional electricity distributors in Hungary has been completed, and the appraisal of the companies is now underway. MVM CEO Imre Mártha said he hopes that a contract on the sale could be signed by the summer.

László Akar, Miklós Kamarás and Ernő Kemenes, members of en- Bourse-traded mortgage bank UniCredit Nyrt said its after-tax ergy giant MOL’s board of directors announced their resignation profit fell by more than half to HUF 830 million in 2009 as the bank effective as of MOL’s annual general assembly on April 29. Their faced write-downs and was forced to set aside extra provisions in posts could be taken over by Zsigmond Járai, László Parragh and the wake of the global economic meltdown. UniCredit’s total assets CEZ’s Martin Roman, according to a draft assembly resolution put fell 3.2% to HUF 140.1 billion, the stock of outstanding loans fell forward by MOL.

by HUF 3 billion to HUF 55 billion, while the stock of long-term mortgages rose marginally to HUF 30 billion.

Hungary’s ELMIB has signed an agreement with Serbian agribusiness Velvet Farm to build a €4.9 million biogas-fueled power plant Danish medical supplies company Coloplast has opened a packagin the Vojvodina region of Serbia. A 50-50 joint venture called Bio ing and distribution center at its base in the Hungarian city of Tata.

Power, the first of its kind in Serbia, will be established by the two Functions relocated to the new hub will open up space for addicompanies for the 1.2MW plant, which is expected to start trial op- tional manufacturing lines at its plants in Tatabánya and Nyírbátor. eration in Q1 2011.

New hires are planned, and almost 100 people will be employed to run the 4,200 square meter facility.

Mil-Power Bioenergetikai Kft has broken ground on a HUF 1.1 billion biogas-fired power plant in Pusztahencse, south Hungary. The plant will Allianz Real Estate Germany GMBH has completed the acquisition of use 40,000 tons of biofuel to generate more than 7 GWh of power a year 50% of Allee Shopping Center in Budapest for a price exceeding €100 starting the second half of 2010. The project has won nearly HUF 500 mil- million. This is the first major investment transaction seen in the Hungarian capital since property markets fell, and it is the first acquisition of a lion in government grants supporting the investment. shopping center by Allianz outside Germany.

Swedish property developer Skanska has announced the launch of a new project in Budapest this year. The Green House office com- Property developer Orco said it completed a €7.1 million capital raise plex is to be completed in 2012 and is to house 17,500 square me- through private placement. Orco issued 1,420,000 new shares that were ters of office space. The facility will be built so as to meet strict subscribed by Lansdowne Capital, which is an affiliate of SPQR Capital, environmental requirements and will be nominated for LEED and and by Neptune Invest and Alandia Investissements. The shares acGreenBuilding certification, Skanska managing director Andreas count for 10.55% of Orco’s registered capital.

Lindelöf said.

NanGenex, a Hungarian company that has developed a technolRussia’s TVEL is considering bringing production of nuclear power ogy to synthesize nanoparticles, has established a unit in London to plant fuel to Hungary. TVEL is interested in participating in the further develop and sell proprietary formulas of two cardiovascular construction of two new units, with a capacity of 1,000MW each drugs. The unit, called NanoForm Cardiovascular Therapeutics, at the Paks nuclear power plant. The company already supplies is in “advanced discussions” with strategic investors and pharmaabout €50 million worth of fuel to Paks each year. ceutical partners to bring the products to market, said chairman Ferenc Darvas.

Two Fehérgyarmat plants producing electric cables for the automotive industry, Fipkersz and Relabor, are to be closed down by July Frozen-food company Nádudvari Élelmiszer has completed a 20 in resulting in the loss of 400 jobs. The production of electric HUF 150-million investment to produce breaded cheese and frozen cables will be moved to Ukraine and Romania. ready meals. The company, which employs 170 workers and has annual sales of HUF 3 billion, is 100% owned by Hungarian investors.

Hungarian textile company Pannon-Flax said it targets a small Its main lines are milk and dairy products, meat and meat products, profit of HUF 40 million on revenue of HUF 2.5 billion in 2010. and frozen foods.

The firm’s targets show operating profit reaching HUF 140 million.

Pannon-Flax booked a consolidated net profit of HUF 24 million on KJ Publishing Kiadói Kft, a project company of Hungarian IT firm econet.hu, signed a contract with the Sanoma publishing revenue of HUF 2.28 billion in 2009. house for the purchase of free program guide magazine Exit. KJ MKB Bank’s parent Bayerische Landesbank (BLB) still plans to float Publishing has already paid 50% of the unspecified purchase price MKB shares on Germany’s stock exchange in the medium-term. The par- for the magazine, having acquired 20% earlier on. The costs of the ent bank’s aim is for MKB to become ready for an IPO on the German transaction will come from an unnamed financial investor. bourse by 2013. However, BLB is still in consultation with the European The Walker and Williams Investment Group held the topping Commission regarding the future of its Hungarian unit. off ceremony of the first phase of its giant TóPark multi-use real CIB Bank recorded a net profit of HUF 4.08 billion in 2009, down from estate investment project. The stage of the project underway in the HUF 23.39 billion in 2008. Its after-tax profit fell to HUF 4.53 billion last outskirts of Budapest coasts €138 million and will result in 75,000 year from HUF 25.99 billion in 2008. square meters of office and 15,000 square meters of retail space.

IKARUS, RÁBA TEAM UP TO MAKE NEW BUSES Hungary’s Ikarusbus and Rába are teaming up to make a family of buses that they aim to sell primarily to the state and local councils in Hungary. The companies expect to get orders for at least 300-500 buses on the domestic market, but more orders could come from Ikarusbus’ traditional eastern export markets.

Talks on the new bus family have also commenced with Moscow.

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4 TRENDS

Budapest Business Journal | Apr  – May 

ECONOMY

ECONOMY

ENERGY

TOURISM

Heating up

Investment magnet

Running on fumes

A welcome escape

A rise in energy and food prices boosts inflation for pensioners.

Hungary recaptures position as top FDI target in Central Europe.

Hungarian fuel sales plunge as prices approach record highs.

Holiday vouchers remain popular in 2010 despite tax changes.

5.6%

€894mln

12%

HUF50bln

inflation in February, the highest in the EU

FDI in Hungary last year, 3.5 times Slovakia’s

year-on-year decline in Hungarian fuel sales

expected 2010 voucher turnover, matching 2009

While Slovakia was a “teacher’s pet” in analysts eyes for many years in terms of attracting foreign direct investment, Hungary has quietly regained its leading position in the immediate CEE region, even as the economic crisis depressed FDI everywhere.

ITD, the Hungarian investment promotion agency, attracted 27 large investments totaling €894 million last year, creating 5,500 new jobs. By contrast, 30 companies invested in Hungary in 2008, bringing €1.55 billion and creating 8,100 jobs. Through mid-March, ITD has already signed 11 investment contracts this year, attracting €500 million and about 2,000 jobs.

Despite the strong overall numbers, the story is a mixed one. FDI in 2008 was boosted by a single project, the planned MercedesBenz plant in Kecskemét, which creates 2,500 jobs. At first, the Mercedes investment also raised high hopes among Hungarian car part makers and other potential suppliers, but only 30%-40% of the components will initially be procured from Hungary, according to local auto suppliers’ organization Hirös Klaszter.

Still, Hungary has managed to stay ahead of Slovakia, whose investment agency SARIO registered a more than 50% drop last year.

Slovakia, which also competes mostly for auto industry projects, attracted just eight new investors in 2009, spending €244 million and creating 2,600 jobs. The largest investor was Taiwanese LCD screen maker AU Optics.

In 2008, 34 foreign companies created a total of 4,600 jobs in Slovakia, investing €540 million. This was disappointing compared to 2007 figures, when 64 companies invested €1.28 billion in Slovakia, providing work for 14,700 people.

Eastern Slovakia is gaining ground at the expense of the Bratislava area, with the mayor of Kosice currently negotiating with three large investors. Yet Hungary still appears to be winning more money: in early April, South Korea’s Samyang chose Jászberény to set up a new production facility for € 10 million. KT

Fuel consumption in Hungary fell by an estimated 12% year-on-year in the first quarter of 2010, registering the lowest first-quarter figure since 2005 as soaring fuel prices have apparently kept cash-strapped motorists and shipping companies away from the pumps.

The Hungarian Petroleum Association said that its member companies, which control more than 80% of the market, sold a total 644 million liters of vehicle fuel in Q1 2010, compared to 732 million liters in Q1 2009.

Within the total, gasoline consumption was down 15% yr/yr to 299 million liters, while diesel consumption fell by a more modest 9% yr/yr to 345 million liters.

A year and a half into the global economic crisis, falling consumption of a product or commodity shouldn’t be making headline news. But so far, fuel sales in Hungary have been remarkably resilient. In 2009, sales were up 0.4% compared to 2008. Gasoline sales fell just 2.2%, even as 100,000 Hungarians lost their jobs, while diesel sales even rose.

While fuel sales are generally consider-ed only mildly sensitive to price changes, many observers still attributed stable 2009 fuel sales to a fall in prices; average gasoline prices last year were 4% below 2008 levels, while diesel prices dropped 12% yr/yr in 2009.

It is the same trend playing out even stronger in the first quarter of 2010, only the other way around. Average diesel prices in Q1 were 19% higher than a year earlier, while average gasoline prices shot up 29% yr/yr, reaching a record high HUF 330 per liter by end-March.

Besides higher oil prices, retail fuel prices were also boosted by excise tax hikes.

Analysts cited by Portfolio.hu note that data may be slightly distorted by “fuel tourism” – while the weak forint attracted fuel buyers from neighboring countries to Hungary at the start of 2009, the strong forint may have caused an opposite flow early this year. Motorists may also have filled up their tanks ahead of scheduled New Year tax hikes, cutting into Q1 sales this year. BSz

Contrary to gloomy forecasts, Hungarian employers ordered holiday vouchers – a favorably taxed “contribution in kind” that employers can give their workers instead of cash – worth more than HUF 11 billion in Q1; roughly the same amount as a year earlier. In March 2010, turnover was HUF 6.8 billion, a HUF 100 million increase compared to March 2009, Mihály Karácsony, president of the Hungarian National Holiday Foundation (MNÜA) told the daily Napi Gazdaság.

Karácsony said it would be irresponsible to give a long-term forecast under the current economic climate, yet he reckons that – based on year-to-date figures and the vouchers’ popularity – a HUF 50 billion turnover is likely for this year. In 2009, the MNÜA issued vacation vouchers worth close to HUF 50 billion, HUF 9 billion more than in 2008, when Hungarians used vouchers worth HUF 41 billion at commercial accommodations.

The 15,000 service providers that accept vouchers countrywide can count on an average 20% extra spending from voucher owners. This is a clear benefit to service providers and the state alike, as the extra consumption of approximately 400,000 Hungarians is channeled into the domestic economy in a legal and controlled way.

In terms of commissions, no providers pay more than 6% commission on vouchers, which, according to Karácsony, has turned out to be a more economic way of financing than other voucher-based options. What’s more, commissions paid to the MNÜA get recycled into new vouchers, and therefore further spending – the MNÜA recently handed out vacation vouchers worth HUF 3.2 billion to low-income pensioners, the disabled, families with at least two children, and students.

In the restaurant segment, it is meal vouchers that primarily generate turnover. Restaurants generate HUF 280 billion annually with meal vouchers. 1,357 restaurants also accept vacation vouchers as a form of payment. ZsV

Hungary’s year-on-year inflation rate has been ticking up since late last year and is now the highest in the EU, reaching 5.6% yr/ yr in February and 5.9% yr/yr in March due to rising fuel and food prices. With a natural gas price hike taking effect at the start of April, the price index may climb further – especially hurting pensioners and the poorer segment of the population.

According to the Central Statistical Office (KSH), higher-than-expected inflation is partly due to the above-average price increase of food items, and an unexpected rise in clothing prices, which had been declining until now. The price of fuel also reached record highs in the first months of 2010 (see separate article to the right), and a 10% increase in gas prices was announced in April.

This is bad news for those who believed in the 4.4% inflation rate predicted by the National Bank of Hungary (MNB) for 2010.

“It is quite obvious that the MNB’s inflation target cannot be met this year, but it is still unlikely that the central bank will try to reduce inflation by increasing interest rates,” an analyst opined.

Pensioners are especially likely to suffer. The statistical office has a separate “pensioners’ price index,” which assigns a higher weight to goods such as food, household energy and medical services, and a lower weight to household appliances and other durable goods, the prices of which are typically going down. Pensioners’ inflation caught up with the headline index in February and March, and the gap between inflation for pensioners and the economically active general population is likely to further narrow.

This will most likely be driven by rising gas prices, which are governed by the Hungarian Energy Office (MEH) and opaque commercial contracts between gas suppliers and wholesalers, and which could rise by a total 15%-17% this year, according to the MEH. KT

WORST IN CLASS

SEED MONEY

ECONOMY MODE

GIVING A BREAK

Year-on-year inflation in February 2009 Source: KSH

Foreign direct investment in 2009 (€w mln) Source: Napi Gazdaság, BBJ

Year-on-year changes in fuel consumption in Hungary Source: Hungarian Petroleum Association

Holiday vouchers issued by the Hungarian National Holiday Foundation (HUF bln) Source: Hungarian National Holiday Foundation

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BUSINESS 5

Budapest Business Journal | Apr  – May 

Going for two-thirds The first round of Hungary’s 2010 general elections brought no major surprises. Now, the few dozen constituencies that will be called on to take part in the second round of voting on April 25 have just one question to answer: should center-right Fidesz be handed what could essentially be called absolute power?

PÉTER KÓCZIÁN The fall of long-established parties brought a loan to Hungary, leading to speculation that notable surge in support for new parties such as the annual deficit will be allowed to run higher LMP, the recently founded political party that than the roughly 4% targeted by the MSzP govbeat all expectations by taking 7.44% of the vote. ernment while in office. Among the scenarios LMP was in the right place at the right time, outlined by the party, a completely new pact is and was able to pick-up protest votes as well as also a possibility. support from a disappointed liberal voter base.

Other things that have come to light show Now, the party has a chance to go even further. that the Fidesz governIn an attempt to thwart Fidesz’s effort to gain ment would be aima two-thirds parliamentary majority, the socialing to revise taxes ists have withdrawn in four districts in favor of so as to favor famithe LMP candidate. If the fledgling lies more, and it is also

BBJ GERGŐ RÁCZ

Hungary’s soon-to-be prime minister Viktor Orbán accepted his party’s landslide victory in a manner more somber than joyous. In what many viewed as a commendable display of statesmanship, even during a moment when he and his supporters should have been over the moon, Orbán was delivering a simple but key message to his camp: the hard work is only just beginning.

Fidesz will have the luxury of dealing the necessary blows to the public backed by what will certainly be a comfortable Parliament majority. The party is already teetering on the verge of a two-thirds majority, which basically translates to absolute power according to Hungarian law, and gives whoever wields it the opportunity to enact in-depth changes, including the revision of the Constitution.

In the meantime, the socialist MSzP is coming to terms with a historic defeat after eight years in power, even though it had no realistic chance of achieving better results. As things stand, the party is set to undergo a complete overhaul, with many old party prominents withdrawing from the spotlight. The mantle will likely be inherited by the premier candidate Attila Mesterházy, and the name of the party may also be changed. Apart from its overall performance, MSzP also has to endure major changes in the political landscape in individual constituencies. Traditional strongholds have slipped from the party’s grasp in a spectacular fashion, and the socialists only have hope of winning seats in two Budapest districts. party were able to secure parliamentary seats apparent that the party would not be looking through the victory of one of its individual can- to modify existing simplified taxation methods, It must also be noted that 2010 saw the demise didates, that would be quite an achievement. such as the simplified business tax (EVA) or the of two political groups that have had a historic Radical right-wing Jobbik was in similar simplified contribution tax (EKHO). These can role in shaping the fate of the latest Hungarian shoes: it was new. And even though it did not be interpreted as the realization of earlier promrepublic. The liberal SzDSz was already on a become the second largest parliamentary group ises to ease the tax burden, in turn aimed at downward slope, bearing the weight of infight- in overall party rankings, it will nonetheless be improving overall welfare and creating a more ing that culminated in fraudulent party elections, a force to be reckoned with. The party raised competitive business environment. while the party also carried the burden of János strong support, especially in northeast Hungary, Also on Fidesz’s immediate agenda is the Kóka’s reign, whose outspoken free-market rhet- where rural areas and rust belts plagued by high reorganization of diplomatic services as well oric made him an almost mythical nemesis to unemployment, crime and ethnic tensions pro- as a thorough review of the municipal system, the right wing. However, the attempted rejuve- vided fertile ground. long considered one of the bottomless pits of nation of the party and the appointment of Attila the central budget. Fidesz has said it will take Retkes to take chairmanship buried the party AND NOW WHAT? the opportunity to begin a far-reaching investigation into corruption cases. even further and robbed it of any hope of even nearing the 5% benchmark.

When it comes to specifics, there is still Regardless of individual measures, Fidesz is SzDSz was only too happy to team up with little in the public domain about what the expected to pursue a stringent set of fiscal polithe conservative-liberal MDF, apparently think- Fidesz government will actually do. And cies, which means that further sacrifices will be ing that the partnership would allow it to piggy- even the planned steps that have been leaked required from the public. Orbán has the advanback into Parliament. As it turns out, the liberals should not be taken as a certainty, because tage that, while the pill the Hungarian public will contributed to the coup de grace that banished party reps have repeatedly stated it will only be forced to swallow is distasteful, the apothecary the MDF from Parliament after 20 years of rep- be able to finalize its policy direction once it administering it is currently one of the most popresentation, and also ended the rule of party is fully familiar with the state of the national ular politicians in the country. If disciplined and chairwoman Ibolya Dávid, who was known as economy and its public finances, which can stringent budgetary policies are observed, Orbán and his government may not immediately bring the mastermind behind the clever tactics that only happen when it has assumed power. had preserved the party. This time, though, she Among the measures already being tested on paradise to earth, but they may be able to put the missed her target and resigned from her post the general public, Fidesz said it would com- country on a much-needed path to sustainable immediately after the results came in. mence the renegotiation of the IMF-led rescue economic growth. ■ HISTORIC FAREWELLS

POLITICAL COMMENT BY

A VERBAL DIVIDE There is a big difference between campaigning and governing. Fidesz has made that all too clear recently.

Gone are the days when the conservative side was clamoring for an extra pension, the 14th monthly installment, in a race to outmaneuver the socialist MSzP. Though that may have been the case in the last election campaign, this time around there are no doubts about the party’s ability to govern. The stock market is riding high, investors are not losing their nerve faced with the prospect of a strong Fidesz majority in Parliament.

Fidesz leader Viktor Orbán is famous for his double talk. When meeting with foreign dignitaries and business professionals behind closed doors, he always asks them to make a distinction between what he says publicly and in private.

Orbán is very skilled in persuading people.

Voters believe in his promises just as businesspeople do, even though very different commitments are made to the two groups.

〉FIDESZ WANTS TO STREAMLINE THE COUNTRY’S ADMINISTRATION SYSTEM, NOT TO RESTORE THE KINGDOM On the campaign trail Orbán was still talking about lowering taxes. During the last days, László Kövér, perhaps one of Orbán’s closest associates and a favorite of Fidesz core voters, said that taxes could only be lowered at the end of their term, and added that this would only be true in the business sector. The general public must wait six years to see their taxes drop.

The likely two-thirds House majority will surely lead to some structural reforms in Hungary’s political structure. Municipalities, national institutions and their local branches, the political representatives of local communities are the likely losers of the landslide election victory.

Fidesz wants to streamline the country’s administration system, not to restore the kingdom as their irritated critics sometimes claim, half-jokingly.

But these are only the popular issues. Everyone understands that change is needed in these areas. But no one knows how people would react when faced with the reality and the difficulties of managing the still vulnerable economy, which could compel Orbán’s government to make further cuts to the budget.

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6 BUSINESS

Budapest Business Journal | Apr  – May 

Slow growth in corporate R&D Further tax breaks have been given to subsidize the research and development of Hungarian companies. This could advance an industry that could be a key factor in recovery. But easing tax burdens might not be enough.

Large automotive companies have over the years shifted from assembly to a higher level of production, like motor manufacturing. Companies already active in Hungary are recognizing that the Hungarian brain, as well as its wide availability, is an asset in the field of R&D. This is the reason why in the last few years many automotive companies – such as Audi, Bosch, Thyssen Krupp, Knorr Bremse, FZ, Hankook – have chosen Hungary as not just a production center, but as a develBBJ PATRICIA FISCHER opment one as well.

As for the IT industry, it can rely on accumulated There are more than 50 multinational companies knowledge in software development. “Thanks to engaged in R&D activities in Hungary accord- the outstanding intellectual value added by local ing to foreign investment promotion agency ITD employees, many international companies, like Hungary. FdiMarkets (a Financial Times database Nokia Siemens Networks, SAP, Ericsson, IBM, of investments) data shows that Hungary attracted Cisco and TATA have their development divisions a record number of R&D projects between 2003 in the country and supply their parent companies and 2008. With some 44 new investments during from here,” Gölöncsér said. “Multinational comthis period, Hungary ranked 24th on the global panies’ collaborative ties to universities further list. The majority of the investments were in the enhance the R&D activity of these companies.” automotive, pharmaceutical and software development.

IT’S NOT ONLY ABOUT TAXES However, the pharmaceutical industry is overrepresented, since Hungary can boast the most Over the last few years, there have been two highly-developed pharmaceutical and biotech- main tendencies in terms of FDI to Hungary. The nology sector in Central and Eastern Europe, amount reinvested by companies that are already ITDH’s project manager in charge of invest- in Hungary has grown; but these and new investments, Balázs Gölöncsér said. ments were mostly restricted to activities requirThe pharmaceutical industry has a long tradi- ing higher levels of added-value.

According to ITDH, this is in line with the tion and an international reputation as Hungary used to be the supplier of the former Soviet Union. ambitions of the Hungarian government, namely Thanks to an advanced life science sector, many to change the image of the country from an investmultinational companies such as sanofi aventis, ment target offering cheap labor for low addedEgis-Servier, Richter and Astra Zeneca have cho- value industries, to one of an economy relying on sen Hungary as the base of their R&D activities. services and high added-value. Although it is not

ANNUAL R&D SPEDING IN HUNGARY (HUF BLN)

yet known what the next government’s approach to the issue will be, continuing on this path would definitely be a key driver for the economy, said Ildikó Adamecz Raj, partner at tax advisory firm BDO Forte.“The development of the R&D sector could give Hungary a necessary competitive edge for decades,” she told the Budapest Business Journal. “But in order to attract more R&D activity, Hungary should provide stable economic conditions, as well as a predictable and consistent political environment.”

Creating more attractive taxation is not enough in itself, agreed Béla Szolnoki, tax partner at BDO Forte. “Taxation is only one factor that might attract R&D centers to the country. Making it possible to deduct the full value of R&D investments realized in-house from the local business tax base is a good thing. But this should have been done several years ago. A lot depends on the government in office, as they have an important role in insuring the necessary sources,” he added.

R&D is an area of key importance for the European Union as well as the Hungarian government, ITDH says. “Both EU and state funds are available for R&D projects,” Gölöncsér said. “The Economy Ministry approved a transparent subsidy system in January which aims to provide funding for priority R&D projects.” As a result, the agency expects further increase in investment.

ronment can be in influencing decisions on development ventures.

The European Spallation Source (ESS) center, planned to be the world’s most significant research facility for materials and life sciences using neutrons, has been on the road map of the European Strategic Forum on Research Infrastructure (ESFRI) since 2006. At the beginning, there were three possible venues: Bilbao in Spain, Lund in Sweden, and Debrecen in Hungary.

Spain withdrew its bid, and Sweden, as a result of informal negotiations, got into a position that made it possible to start the design review phase of the project. That means that Lund has already launched the two-year design process, László Rosta, head of ESS Hungary Zrt told the Budapest Business Journal. The Hungarian government, while formally not withdrawing its bid, decided not to get engaged in further negotiations regarding the possible venue of the center at the end of 2009, ITDH said.

In spite of the fact that Hungary submitted a cheaper bid of €1.2 billion than Lund’s €1.5 billion budget, it seems now that Sweden was more successful in its communication, which turned the balance in its favor.“I think the reason why Hungary fell behind was the lack of strong government determination,” Rosta said. The turn of events in Hungarian politics at the beginning of 2009 overshadowed the case of the ESS center.

RECENT SETBACKS “Saving the economy was obviously more important and there was not one prominent poliAlthough the R&D sector has seen a boom tician who could have represented the ESS case in over the last several years, and ITDH is optimis- high level diplomacy,” Rosta claimed. tic about the future, one recent example perfectly Failing to host the center, Hungary is now aspirillustrates how important a steady political envi- ing to be a supplier of ESS in Lund. ■

Photo: Gábor Garai

LeaderSHEs recognized in Vienna

The LeaderSHE Forum, an international conference and award for promoting female leadership in business, politics and society, was organized for the fifth time in April in Vienna. Several prominent politicians, entrepreneurs and media delegates from Europe to Egypt convened at the event, among them representatives from Hungary. The forum was also attended by Isabel Aguilera, the former country director of Google for Spain and Portugal (now running her own company Indra Sistemas), who was earlier selected as one of the world’s 50 most influential executives

by Fortune Magazine.

Two Hungarian women are also on the list of recipients awarded in appreciation of outstanding performances as a female leader. Ildikó Polgár-Májer (right of picture), founder and CEO of ValDeal Innovation Zrt, was distinguished for establishing an integrated innovation and SME management company in Hungary, while Zita Gurmai (left), socialist MEP, was honored by the organizer Forum Invest with a special prize for her dedicated political activity as the president of the women’s organization within the Party of European Socialists.

The Budapest Business Journal, as one of the award’s supporters, would like to congratulate all of the nominees and winners: Ioana Filipescu, managing director of Raiffeisen Investment Romania; Sasha Bezuhanova, director of public sector at HP Central and Eastern Europe; Henryka Bochniarz, president of Boeing CEE; Gordana Kovacevic, president of the biggest Croatian knowledge and technology exporter Ericsson Nikola Tesla; and Zhanna Savrylova, founder of the “Third Age” University in Ukraine. BBJ

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BUSINESS 7

Budapest Business Journal | Apr  – May 

The most cautious bank: K&H An almost complete stop in lending has allowed Hungarian banks – among them, K&H – to retain liquidity in the crisis.

But at what price?

BBJ GABRIELLA LOVAS

K&H Bank, the Hungarian unit of Belgium’s KBC, has strengthened its credentials as one of the most cautious banks in Hungary, reporting a loan-to-deposit ratio of less than 100% at the end of 2009, while the bank’s operating efficiency also improved. However, K&H’s profits still declined due to its sizable risk reserves, and the bank’s future remains uncertain, as KBC won’t rule out the sale of a minority stake in the bank through a public offering.

K&H Bank’s loan-to-deposit (LTD) ratio – a bank’s loan stock as a percentage of its deposits – fell to 91% at the end of last year, a unique figure that is well below the 142% average of Hungarian commercial banks and is a sign of increasing caution by both banks and customers amid the economic crisis.

However, risks stemming from the crisis are still preventing K&H, and many of its peers, from improving their profits.

According to preliminary figures published

by K&H, the bank’s stock of corporate deposits grew 6.7% to HUF 1,647 billion at the end of last year, while total deposits fell 10% to HUF 1,744 billion. Meanwhile, total lending also fell by almost 10% to HUF 1,560 billion, although

retail loans remained flat at HUF 709 billion.

While K&H’s LTD ratio may be unique, its decline fits the overall trend, as the entire Hungarian banking sector’s LTD ratio showed a steady downward trend throughout last year. K&H’s LTD ratio was 104% in 2008 and 110%-115% before the crisis. The same ratio at Hungary’s biggest bank, OTP, fell to 121% in 2009 from 134% in the previous year.

The banking sector’s average ratio peaked at 162% in Q1 2009 and fell below its pre-crisis levels at the end of last year.

The decrease in the LTD ratio, which is an important measure of liquidity in the banking sector, was not a result of growing deposits, but rather that of restrained lending, according to Ádám Farkas, chairman of financial watchdog PSzÁF. Farkas said earlier that the Hungarian banking sector’s liquidity showed a reassuring picture, which he partly attributed to the fact that foreign parent banks are backing their subsidiaries with financing – although this was not the case with K&H last year, as KBC did not place any new deposits with the group.

According to central bank information, the private sector increased its savings in 2009, while it took out significantly fewer loans, in line with the deterioration of the macroeconomic environment. The private sector could maintain its net savings position until 2011 or 2012, thus the LTD ratio may further decrease. This process might be slowed down by increasing demand for investment vehicles other than bank deposits, such as government securities or investment certificates.

SECOND BIGGEST IN HUNGARY

Czech banking unit and forgo any acquisitions in the medium-term, while retaining banking K&H saw its after-tax profit fall 61% to and insurance operations in core markets.

“In order to free up capital, KBC intends to HUF 10 billion in 2009, as the bank was forced to set aside risk reserves totaling HUF make a public offering of a minority stake in 40 billion due to the downturn of the econ- its Czech subsidiary CSOB, to be listed on the omy and a non-performing loan stock that Prague Stock Exchange, and a similar transmade up 5.4% of the total. Due to some seri- action can be set up in the future for selected ous cost cutting, operating profits showed a other Central and Eastern European subsid17% increase last year to HUF 57 billion. The iaries, such as K&H bank,” KBC told the BBJ cost-income ratio fell to 58.7% reflecting the when asked about plans regarding the Hunimprovement in operating efficiency. garian unit. KBC is keeping an eye on its subK&H Bank remains the second largest bank sidiaries, and if a favorable opportunity arises, in Hungary with total assets of HUF 3,064 bil- the sale of a minority stake through the stock lion as of December 31, 2009, down 4% from 12 exchange could be a possibility. “But there is no months earlier. By contrast, market leader OTP decision for K&H at the moment, about either Bank reported HUF 9,775 billion total assets at a date or a stake,” bank officials added. ■ the end of last year. K&H has almost 850,000 retail clients and a network of 242 branches.

Its market share on the insurance market, a NEW CEO strategic segment for the KBC group, reached an all-time high of 5.1% in 2009. The company Hendrik Scheerlinck, currently chief was ranked third in the life insurance segment financial and risk officer at CSOB, will with a 12.7% market share.

ON THE BLOCK? Regardless of its performance, the future of K&H Bank remains in limbo as its parent company is weighing options on how to repay a EUR 7 billion government bailout at home.

KBC has to reimburse the Belgian and Flemish regional governments by 2013, through asset disposals and winding down businesses. KBC has already said it will sell its merchant banking and private banking arms, float part of its

become CEO of K&H Bank and country CEO of all Hungarian operations as of April 29. The appointment is subject to the approval of the Hungarian authorities. Outgoing CEO Marko Voljc will be appointed CEO of KBC’s Central & Eastern Europe and Russian business unit and a member of KBC’s executive committee at the group’s headquarters in Brussels.

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8 BUSINESS

Budapest Business Journal | Apr  – May 

Magyar Telekom enters new markets Hungary’s incumbent operator is venturing into uncharted markets in an effort to open new paths of growth to compensate for a saturated telco market. The BBJ has learnt about some shifts in the company’s focus.

BBJ ANIKÓ JÓRI-MOLNÁR

Judging from Magyar Telekom’s newly approved dividends, Hungary’s largest incumbent operator has a shining bill of health. The company will pay a HUF 74 dividend per ordinary share (of HUF 100 face value) from its 2009 profit, the most any listed Hungarian company is paying. The Magyar Telekom Group had a balance sheet total of HUF 1,166 billion and an after-tax profit of HUF 93.3 billion (according to IFRS standard).

As a further vote of confidence, the shareholders granted the management leave to purchase a maximum of 104,274,254 of ordinary shares (of HUF 100 face value) in Magyar Telekom, with certain conditions. This amounts to 10% of the total shares. “However, the company’s primary move for remunerating shareholders is still the dividend,” Christopher Mattheisen, ChairmanCEO of Magyar Telekom commented.

So it might seem surprising at first glance that Nomura downgraded the company’s stocks to ‘Reduce’ from ‘Neutral’. Nomura analysts think that the company’s revenues and EBITDA will decline in the next two to three years and pos-

IPTV is one of the telecom giant’s most successful ventures: it now has more than 1 million subscribers

sibly longer, as online news portal Portfolio. hu reported. Nomura has also lowered its target price for MTel to HUF 745 from HUF 760.

Essentially they look at the company as a “relatively expensive telecom stock” within an increasingly saturated Hungarian market.

And saturation is just part of the market’s problems: convergence has led companies that were operating in previously separate markets to compete with each other for customers, leading to much sharper competion. Phone lines, internet, televion – what was three markets is now one.

EXPANDING Magyar Telekom’s management sees the market changing and is actively looking for ways to get out of the “high demand-low price” trap. Shareholders have agreed to the further expansion of the services portfolio of the company, while expanding to areas of operation other than telco, which has long been a strategic goal. Now, with the amen of the assembly, MT can enter the energy market as a service provider and proceed with building its home security and healthcare services as well. Fighting the effects of downturn in business has resulted in a review of the existing activities, and the selection the two areas of growth: television and system integration. In fact, in the latter area, with the ownership of system integrator KFKI, market share of MT grew to 13.5% in 2009 from 11% a year before; some further improvements are expected in the year to come.

In the IT services market, unlike in the company’s traditional business, such a percentage can easily mean leadership. And because of the fragmentation, Magyar Telekom sees opportunities for further acquisitions.

And not only in IT: cable acquisitions might also appear on the mid-term agenda. “We’re relatively agnostic about how we deliver high speed internet capability. Even if there is an opportunity in fiber, it may not make much sense to rush and build capabilites if we think we can already provide them through the cable network,” said Mattheisen.

While holding to this idea, MTel is continuing to expand its next generation broadband

network. Last year, it built about 170,000 fiber-to-the-home (FTTH) connections and upgraded 370,000 cable connections. This year’s target is another 50,000 in FTTH, and a 220,000 increase in cable.

SATISFIED WITH CONTENT As for the other area in strategic focus, nothing less than the number one position is being targeted on the television market. Considering the domestic consumption, Hungarian telcos can invest into the loyalty of TVviewers as easily as they built a solid core business from this service. The combination of traditional distribution channels, IPTV and satellite TV has already taken MTel to second place in terms of market share, and official trust is put in the aim of reaching the number one spot, which might be a matter of a couple of years only.

Content-wise, MT launched two TV channels last fall: Life Network and Ozone Network. Instead of the advertising revenues in mind, the channels are supposed to be platforms for compelling applications developed or being developed. But unlike a traditional channel operation, where the revenue mark is to get advertisements on the displays, these platforms will get more sophisticated and in the end, when all synergies are used, allow more targeted advertising. Smartphone applications for iPhone and others are being developed and integrated to social site iWiW, the IPTV platform and to mobiles. “We want to build social network capabilites into all our core products,” Mattheisen says. ■

Private banking unbroken The crisis did not have a negative impact on the Hungarian private banking (PB) sector.

Yet, the number of private banking clients, currently a little more than 40,000, is expected to contract in the future due to increasing entry limits, participants said at the first private banking conference organized by financial advisor BloChamps Capital. The PB sector is as yet in its infancy in Hungary, but the number of clients had increased during the crisis, the participants agreed.

According to István Karagich, finance director of BloChamps, the trend was due to fierce competition among banks in deposit interests. Cur-

rently, entry limits at different service providers vary from HUF 10 million to HUF 100 million.

Although professionals differ regarding the optimal limit, they agreed that it should be determined based on the business model of the given financial institution. Another hot issue in the sector is pricing: participants said that the pricing policy of market players should be asset-based, as the current structure is not profitable in the long run.

While it is common practice in Western European countries, Hungarian clients are rather price sensitive and introducing an asset-based price policy here might not be an easy task for banks and financial institutions. BBJ

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BUSINESS 9

Budapest Business Journal | Apr  – May 

Hungarians heading north Corporate matchmakers try to establish links between Hungarian and Scottish enterpreneurs.

BBJ ZSÓFIA VÉGH

Building personal relationships in the 21st century is no easy job. Earning the confidence of people who have trust issues – a common phenomenon – is challenging. Establishing business contacts may prove to be even harder, especially if you are looking to do business abroad. In a foreign country, not only do you have to overcome the difficulty of finding a market, you also need to be aware of cultural and business peculiarities typical of the place. Even with the help of tools like the web, your networking attempts may well fail. To succeed, you need someone to put you in touch with the right people.

Take Scotland, which has a lot to offer in business terms. It is an outward facing country according to Jock M. MacKenzie, a Budapestbased Scottish strategic and investment advisor.

“Scotland is not as wealthy as London inasmuch as London is a financial center. Yet in terms of innovation, research and adding value it is probably one of the forefront countries in the world.”

And it is doing its best to enhance its reputation. Since its election in May 2007, the devolved Scottish government has pledged to make the country more investment-friendly by lowering tax burdens or providing grants. According to data from Scottish Development International,

an agency aiming to broaden Scotland’s international appeal, larger companies conducting research and development in Scotland can claim an extra tax-deductible allowance of 25% on top of the existing 100% first year allowances of a company’s R&D spending.

Still, Hungarians rarely see Scotland as a place to invest. Even if they do, they do not know much about local customs, negotiation rules, or who they can turn to for help. Fortunately, there is a high number of agencies to prepare the ground for them. Tímea Kárpáti of Polaris Management deals with individual companies wishing to estbalish businesses in Scotland. She and Ian Trail, an independent business consultant who has been representing ITD Hungary in Scotland since 2004, run a “two-handshake service” for potential investors. Through their partners’ network they attempt to find the “perfect match” for their clients.

One such is Gábor Póka, the founder and owner of engineering company Poka3D, who believes in the efficiency of these “matchmakers”.

Specializing in building steel structures, plant designs and the like, the company has been hired by companies in Norway, Austria and Sweden. (Currently they are planning buildings for an Austrian cement factory.) Upon hearing of a business opportunity in Scotland, he commissioned Polaris. The company and its Scottish partners handle all aspects of contact building. They set appointments, talk with possible partners in advance and even provide a culturalbusiness guide. “Although no deals were made in the end, we have been in touch ever since, looking for another opportunity”, Póka said.

From the list of business advantages Scotland has to offer, its high-level research reputation cannot be ignored. Its knowledge-driven sector is world-famous, life-sciences are worth £3 billion and are growing at 7%-8% annually.

According to Scottish Development International data, more than 25% of all R&D projects which went to the UK in 2007 were secured by Scottish universities, as well as 20% of all the UK’s bioscience research funding. Yet it was vandalism and high fruit prices that helped establish another Scottish-Hungarian tie.

Cherries are not grown in Scotland; so far no one has attempted to cultivate this fruit under such climatic conditions. A kilo of cherries costs anything from HUF 1,200 (2nd class) to HUF 3,000 (1st class). Professor János Apostol, a specialist at fruit and decorative plant research

firm Érdi Gyümölcs- és Dísznövénytermesztési Kutató - Fejlesztő Nonprofit Közhasznú Kft is however, more positive regarding the prospects.

“If cherries can be grown at the Norwegian fjords, Scotland will do, too.” Half a year ago the professor was requested to test if Hungarian cherries can grow in Scotland. “We agreed on a common cherry cross breeding project with the Faculty of Breeding at the University of Edinborough. Once we receive the EU funding, the work can begin.” The Kht intends to sell cherries in Scotland if tests prove positive.

Testing has already begun with 20 trees donated by the professor to the residents of Motherwell to replace those destroyed by vandals. If they survive the winter and bear fruit, the evaluation of future business prospects and another fruitful ScottishHungarian business cooperation can start. ■

BBJ SPECIAL REPORT

HR 2010 The lack of hiring in the crisis has brought many HR firms to the brink of bankruptcy. However, there was a quiet revolution going on in the profession even before the crisis: new business models and technologies are now changing the way HR-professionals work and what their tasks are.

This report

More strategic roles for HR-professionals In today’s knowledge economy, people are becoming the most important resource a company can have.

Yet those who are responsible for attracting and keeping talented workers are often politely sidelined when it comes to making strategic decisions. How can this change?

ican Tobacco Hungary. “So administration has its importance in HR too, and its role will always be just as important as strategy.”

But to become more than just being an administrative body dealing with hiring and managing everyday issues at the firm, HR departments need to be involved in decision-making and have their voices heard within the organization.

For most of its history, HR departments have mainly focused on the administrative aspects of human resource manageBBJ PATRICIA FISCHER ment. However, with the growth of information technology, the need for HR staff While an increasing number of compa- to do this type of work is disappearing. nies are recognizing that a good human Much administration can now be done by resources strategy greatly contributes to automated information technology solucompetitiveness, there are in Hungary tions that are either hosted by the comstill a large number of firms (and not just pany or outsourced. small ones) that treat HR only as part of the administrative background of the orga- KNOWING BUSINESS, TOO nization. Is HR ready for a bigger role in Hungarian businesses?

What is needed in order for HR to become “HR can only have a strategic role in compa- more of a strategic partner for finance direcnies where the basics are well-organized,” said tors and CEOs? As opposed to the practice Zsuzsanna Tóth, HR director of British Amer- of previous decades, HR directors now need

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SPECIAL REPORT 11

Budapest Business Journal | Apr  – May 

to be well-versed in the wider business environment the company operates in. Increasing the effectiveness of human resources at a company is key for business success, so HR professionals also need to take a proactive and preventive role in strategy.

Change is required both in the skills of individuals managing HR issues and in the way the HR function is organized and carries out its activities. HR not only needs to have competencies related to the business issues involved in strategy and strategy development, but it also needs to be able to contribute to organizational design and change of management.

Of course, HR-professionals are not in a position to completely abandon the basic responsibilities associated with workforce management. But these responsibilities need to be fulfilled in an effective and cost-efficient manner, either through outsourcing or with the help of information technology.

“We need to take the approach of HR for business instead of HR for HR,” Tóth explained, adding that if the HR team of a company does not master the business approach, it will not be able to contribute to the development of the company. By contrast, strategic partnership can give the company the necessary competitive edge, which is especially important in today’s challenging economic environment.

HR director of Vodafone Hungary told the Budapest Business Journal. “HR has to continuously challenge management in order to boost development.”

The HR team of Vodafone, which was awarded the title “The HR team of the year”

by Hungarian recruitment agency association SzTMSz in 2009, succeeded in challenging not only management, but also employees. According to Gothárdi, the key to this was that they kept employees motivated even during rough times, and involved them in important company decisions as well.

“Our ‘bright idea’ program invited the participation of employees in the company’s costsaving program. We received lots of great ideas from our employees and we incorporated several of them into the company’s efficiency-improvement program,” she said, adding that the program helped a great deal to maintain positive attitudes and motivation among employees during the crisis. And, as Gothárdi said, the HR department’s showing of a good example also helped the company through rough times.

“We had one of the smallest departments within the company before the crisis, and when we needed to save costs, we were able to tighten the purse-strings by merging different positions in our team as well. Of course there have been staff changes at the firm, but no mass layoffs have taken place since the beginning of the crisis.”

SPEAKING UP PRAGMATIC APPROACH However, many companies in Hungary still lag behind in terms of having strategic HR within the organization. Although many conferences and professional roundtables are held regularly on the topic, HR departments at many firms are still not able to get involved in strategic decisions.

This, of course, depends not only on the professional preparedness of the HR team, but also on the other members of the management. If the CEO recognizes the importance of human resources and its strategic role, the company can profit a lot from it. Of course, the implementation of a strategic partnership with HR can be very different, depending on a company’s stage of development.

“With a relatively young company, the emphasis is more on recruitment and motivation issues. However, when a firm gets more mature and reaches the next level of development, strategic partnership with HR is increasingly important,” Ibolya Gothárdi,

Naturally, HR priorities need to be in line with business priorities; otherwise, grandiose HR strategy proposals will remain just that. Therefore, if today’s HR professionals want to create a well-functioning strategic partnership with management, they need to be pragmatic leaders as well as good professionals. But while the profession is aspiring to gain recognition in the field of strategic HR, formal education still mostly focuses on theoretical knowledge.

Opinions vary as to when a greater number of Hungarian companies will be able to implement strategic HR within the organization, but discussions on the issue are now taking place daily and are increasingly in the limelight. The more it is discussed, the sooner the time may come when strategic partnership between HR and management will become a reality even at smaller firms in Hungary. ■

[ EXPERT OPINION ]

Restrictive covenants in employment contracts mployers can have a genuine interest in preventing employees from becoming involved in a directly competing business after the termination of employment. Employers may sometimes have reasonable concerns that, after the termination of the employment, their former employees will exercise their skills, knowledge or customer relations to the benefit of competitors. Therefore, in the past two decades it has become a widespread practice in Hungary to include restrictive covenants in employment contracts, especially for employees who possess substantial information related to their employers’ business.

E

ments should unambiguously define the exact scope of the restrictions, their geographical scope and their duration.

Gide Loyrette Nouel Budapest The reasonableness of a restrictive covenant may depend on the particularities of www.gide.com the matter at hand (e.g. their employee’s position, the information and knowledge WHAT IS A RESTRICTIVE COVENANT? that the employee might have gained durGenerally a restrictive covenant is a coning the employment, etc.). For example, a tractual clause whereby an employee is covenant preventing an employee from legally required to refrain from pursuing cerworking for a competitor for a period of 12 tain types of activities that may violate the months anywhere within Hungary could employer’s rightful economic interests after be a reasonable restriction for a national the termination of employment. sales director, but may not be deemed These covenants may take various forms appropriate for a salesman who only deals depending on the nature of the restricwith people in the immediate locality. tion included. The most common types of The appropriate compensation depends on covenants are noncompete clauses, which the actual circumstances, but, in general, 50% directly prohibit employees from comof the employee’s average salary for the given peting with their former employer; and term is regarded as appropriate. non-solicitation clauses, which prevent A party who considers a provision invalid employees from entering into working or too extensive may request the court to relationships with the employer’s clients, invalidate or modify the provision to bring or from recruiting their former colleagues. it in line with the compensation that is proIn Hungary, restrictive covenants are vided in exchange. In this case, the court generally included in employment con– after considering all circumstances – may tracts and survive their termination, but modify the restrictive covenants or even they may be also set out in a separate declare them invalid. agreement concluded at the time of termination of employment.

REMEDIES FOR A BREACH OF Restrictive covenants should not be conRESTRICTIVE COVENANTS fused with the general noncompete obligation set out by the Hungarian Labour Typically, non-competition and nonCode, which applies throughout the term of solicitation clauses are subject to a conemployment. This states that the employee is tractual penalty (“liquidated damages”), obliged to respect the employer’s economic so that the employee could be ordered to interests, and is not allowed to undertake any pay a penalty in the event of violating a conduct that may jeopardise these interests. restrictive covenant.

However, restrictive covenants that survive If a restrictive covenant is challenged and the term of employment are subject to spethe court considers the amount of the concific validity conditions. tractual penalty to be excessive, it may order

dr. Nelly Prokec dr. Dániel Gera

VALIDITY OF RESTRICTIVE COVENANTS After the termination of employment, employees may only be required to remain subject to restrictive covenants (i) on the basis of an agreement, (ii) in exchange for appropriate consideration, and (iii) for a maximum period of three years.

In addition, restrictive covenants may only be valid if they contain reasonable restrictions. A restriction may only be reasonable if it is not drafted too widely. Courts have repeatedly affirmed that a noncompete obligation may not be broader than is required to protect the employer’s legitimate interests, and may not contain disproportionate restrictions for the employees.

If a clause is challenged, the onus is on the employer to prove that the restrictive covenant is reasonable. For that purpose, agree-

a reduced penalty. Before making such a decision, the courts usually analyse all the circumstances, in particular whether the amount of compensation and the amount of the penalty are balanced, the significance of the employee’s breach of contract and the damage suffered by the employer.

The issues that need to be considered in relation to restrictive covenants vary considerably from case to case, and – as the scope and validity of such covenants strongly affect the employer’s interests – it is recommended that employers seek professional guidance when drafting or enforcing a restrictive covenant.

NOTE: ALL ARTICLES MARKED EXPERT'S OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

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12 SPECIAL REPORT [ EXPERT OPINION ]

Expertise in integration

P

fizer is the No.1 in the pharma sector and after acquiring Wyeth in 2009, that position has become more significant than ever. Our diversified global health care portfolio now includes human and animal, biologic and small molecule medicines and vaccines, as well as nutritional products and many of the world’s best-known consumer products.

BOGLÁRKA KŐSZEGI HR DIRECTOR PFIZER PHARMACEUTICAL LTD.

Consistent with our responsibility as the world’s leading biopharmaceutical company, we also collaborate with healthcare providers, governments and local communities to support and expand access to reliable, affordable health care around the world. In the last couple of years, Pfizer has gone through several mergers and acquisitions; these experience and the strong willingness locally and centrally to run a smooth Wyeth integration resulted in a role model process for companies.

Our basic principles during this period were to keep/manage/develop all our talents, to achieve a best fit for all positions, make quality upgrade in human resources, to fill all key positions, limit business disruption and became an equal opportunity employer. We had some difficulties as the preparation phase for the integration to almost a year and we had to keep everyone motivated despite the uncertainty, and this period required

hard work for those involved. A major challenge was that we had to plan without quality information from the other company for a certain period and had to compare people without having the same background on performance and talent. We had success with the new, locally developed Pfizer buddy concept, under which every Wyeth colleague had a dedicated Pfizer colleague to help, inform and coach during the integration.

This created a very good inter-per-

sonal environment in which to get to know each other and to minimize gossip and tension.

As a result of detailed conceptual preparation, compared to a many large-scale mergers, downsizing was limited: 45 positions (22%) went. The majority of them were temporary or rented employees; deployment impacted both companies equally. We run an extremely objective selection methodology based on a talent grid and performance management. We supported leaving colleagues with much more favorable packages than the legal obligation and an outplacement program to help them find new work.

The life of the new, integrated company begun December 11, 2009 with two full Merge Days to help employees close the past and focus on the future. During the Merge Days and in March 2010 we invested a lot of efforts with professionally organized team building sessions.

For the colleagues at new Pfizer we developed detailed training plans, including capabilities training and in less than a month we were able to run handover and trainings.

After a quarter period of time we are now focusing on our Culture Change project, which provides full scale analysis of both business cultures, building on each a new, strong culture to achieve a competitive advantage, and preparing the company for moving to a new open-air office where managers – even the country manager – are sitting together with all other colleagues.

Planning the new office is co-ordinated with employees to best fit the needs of different departments.

In the meantime we are proud to offer very healthy career paths and many opportunities for the future to our Pfizer employees.

NOTE: ALL ARTICLES MARKED EXPERT'S OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

Budapest Business Journal | Apr  – May 

Unemployment in growing disparity As unemployment levels rise on a global level, Hungary faces additional challenges due to infrastructural barriers that hinder the re-integration of those who find themselves on the ‘outside’ of the labor market.

BBJ KATIE ROWLAND

The current level of unemployment in Hungary is 11.4%, up more than three percentage points since the first quarter of 2008. Rising unemployment is not a phenomenon unique to Hungary, as global trends have also shown a steady rise since the crisis struck. An overall decline in consumer demand, more prudent lending and job cuts in the public sector have all contributed. Hungary’s problem has been further aggravated by its reliance on income from exports, dashing hopes that the nation’s economy can somehow escape the global crisis and its negative effect on demand.

The export market’s decline has reduced the number of employees required in the manufacturing sector, and the economic crisis has reduced headcount in the financial sector, according to Hungary’s National Action Program for National Development.

The industrial sector was the first to be affected as factories closed down and redundancy grew. The same happened in tourism, as lower disposable income discourages additional holidays. The majority of visitors to Budapest stay only one or two nights, suggesting their visits are mainly for business, rather than leisure, purposes.

In addition to the officially recorded levels of unemployment, Hungary has a substantial proportion of inactive people in its population.

In 2009, it was estimated that around one third of the working-age population were inactives, meaning they had no job, were not looking for one or would be unable to start working if one was available. The economically inactive may prove to be severely detrimental to Hungary’s recovery program, as they place a heavy burden on health and social benefit systems and are not easily integrated back into the labor market.

Those who exist outside regular employment or job-seeking find it difficult to integrate back into the legal workforce. When compared to other developed countries, the level of long-term unemployment in Hungary is especially high. Inflexible employers and a mismatch between the skills demanded and those held seem to be the main reasons why, within several subgroups of the population, getting back into working life is more than a case of simply answering a job ad. Women, the homeless, the Roma, the disabled and students are often barred from employment for reasons that extend far beyond their willingness to work.

These disadvantaged groups present workforce problems of a scope that extend way beyond the current crisis. Finding solutions to the problems keeping them from employment would unleash a lot of potential for growth of the Hungarian economy. And, obviously, not finding solutions will hold the country back.

UNEMPLOYMENT LEVEL IN HUNGARY PER QUARTER

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SPECIAL REPORT 13

Budapest Business Journal | Apr  – May 

Hungary: between outsiders and insiders WOMEN - Hungarian women spend more time away from the labor market due to childbearing and rearing than mothers in most EU countries. There are many nurseries offering private childcare services, but costs are high, and mothers who expect to earn lower salaries see no point in spending most of it on care for their infants. Free public services are available, but there are less places than children. If a new mother wishes to return to work, she must try to find parttime employment, as is commonly practiced by mothers in other countries. Yet, in Hungary, part-time jobs are scarce. Employers do not benefit from offering hourly rates and have no incentive to promote this type of employment. Consequently, new mothers typically stay at home whilst their children are young. They may eventually decide to try to return to employment, but often face difficulties finding employers who are willing to hire women who have spent a long time out of work.

STUDENTS - In 2007, less than 4% of the 15-64 age bracket was employed part-time in Hungary, compared to an average 17% in Western EU countries. The low level of flexible employment and part-time employment opportunities restricts students from pursuing employment and internships while they study. It is common in other countries to see students working in restaurants, cafes and shops, but here that sight is rare. This factor restricts the growth of general skills for new graduates and means that, when they graduate in a particular field, their possible areas of employment are low. In addition, the skill sets students are learning in vocational training do not always match those the labor market demands. Hungary’s National Development Plan has set up a ‘Career Tracking System’ that seeks to analyze market demand and adapt school curricula accordingly. Unfortunately though, this is a long-term project and still in its primary phase.

also be linked to the fact that employers are not familiar with state subsidies that have recently been introduced for companies that hire disabled persons. Traditional negative attitudes toward hiring disabled workers are widespread, and many managers do not consider those from this minority capable of doing the task required or worth the extra effort, despite the fact that the government may pay up to 70% of their salary.

THE FUTURE FOR HUNGARY

Hungary now faces a dual challenge; it must tackle a budget deficit while simultaneously making the necessary investments to increase adult education and bridge the outsider-insider gap on the labor market.

As the market moves away from agriculture and manufacturing toward services, it will be essential for the next government to take measures to increase job mobility, increase minority employment and encourage flexible employment. This must involve HOMELESS - Prior to the democratic DISABLED - The employment rate among improving the quality of human resources transition, homelessness only occurred the disabled in Hungary is around 8%, in the public sector, facilitating access to when people actively ‘opted out’ of state whereas it is as high as 50% in other coun- training and providing targeted support benefits and housing systems. The situa- tries. This may be due to a much lower level to social partners and non-governmental tion today is vastly different, and the num- of education in this minority group. It may organizations. ■ ber of homeless is now estimated to be around 25,000. Péter Győri, chairman of EXPERT OPINION ] the Hungarian Shelter Foundation, noted [ that there is no specific data as to the number of people who are at risk of imminent eviction. Those who find themselves on the streets face obvious challenges in finding work. They have no address, no internet access and limited mobility. Temporary shelters are overcrowded and support in finding employment is low. There ■ provide development opportunities, in are several services that seek to offer street good and bad times in a creative way work to the homeless, but the pay does little to reduce work on the black mar■ focus development on positive performers ket, which yields much higher short-term who find constructive ways to get their results MANAGING DIRECTOR rewards to the homeless.

■ say goodbye to individuals who do not contribute (skills or attitude) ROMA - The recent surge in support for he war for Talent started more ■ put your people in the positions where they the far-right Jobbik party was a clear indithan 10 years ago, when the can be most successful and where their skills cation of national feeling towards minoreconomy was growing and and interest match what the job requires ity groups in Hungary. This minority has companies were growing shouldered the blame for many prob■ challenge people and give them as much quickly. Now, the term is still lems and is accused of ‘Gipsy crime’ by responsibility as possible timely.

Today, a company’s sucextremists. Hungary holds one of the largcess is highly based on its tal■ attract the right Talent: it will bring energy est minority groups of Roma in the world, ented workforce – not only managerial and new ideas to your business around 10% of the total population, predicted to rise to as much as 25% by 2050. excellence is playing an important role but all professional areas need the brightest peo- Those companies which are able to keep the For a number of reasons, the Roma are ple on board. In the past few years, many best and brightest of its talent onboard and largely unemployed and find that they are companies have realized this and have been who are attracting new talent will recover discriminated against in job applications. making great efforts to attract and keep the more rapidly and more successfully than their In addition to the discrimination they most talented professionals. competition when conditions improve. face, the Roma in general are less well During last year - when the priority for Great companies take the risk of pushing qualified than the larger population and many businesses was to survive, meet set their people to be better. They are repaid only an estimated 1% hold higher educa- targets, change strategy or complete reorbecause their employees become increastion degrees. Segregation exists at every ganization, less attention was generally ingly loyal to the company that has helped level of education and results in only a being paid to people. Now that economic to push their boundaries, and they will be small percentage of the group obtaining circumstances are stabilizing, the focus attractive to the brightest Talent. either academic or vocational training. should be on our Talents again.

During the current elections, every party But what are the winning strategies? has cited the ‘Roma issue’ as being one of ■ involve people in: strategy development; the most pressing. Steps must be taken to development of new products or services and improve equality in education for Roma improvement of the processes and efficiency children and access to vocational training of your organization www.profipower.hu for adults. But negative attitudes toward NOTE: ALL ARTICLES MARKED EXPERT'S OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY this minority will be harder to conquer.

The war for talent continues ILONA JANKOVICH

T

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Budapest Business Journal | Apr  – May 

SPECIAL REPORT 15

HR befriends social media Market players agree that there are serious ethical issues with the use of social networking websites in recruitment. Many recruiters now routinely look at people’s online posts, blogs and personal profiles, and use them as part of their assessment. Meanwhile, borders between social and professional sites are blurring, as Hungary’s leading social network iwiw has just added a job search application.

should not be surprised that anybody might see it. However, recruiters should have sufficient discretion, and a sense of ethics, to use information meant for private purposes appropriately, managing director of the Simonyi and Tóth agency Judit Tóth told the BBJ. This is a brand new tool, and job seekers and recruiters are both still learning the proper use of social media.

Of course, recruiting through social networking sites has several advantages. Job search and recruitment have become faster and more interactive, ProfiPower managing director Ilona Jankovich said. Consultants can more easily reach those candidates who would never apply directly for a job. In fact, candidate and consultant often join each other’s social networks, BBJ GABRIELLA LOVAS whereby they get to know each other better, share friends and help each other’s activities.

“I would emphasize transparency, which means While the importance of recruiting through social that both employers and employees can check media is growing, both recruiters and job seekers out information about each other,” Jankovich have to be very careful with the use of this new said. For instance, candidates can link up with tool. Potential employees should be aware that employees of the company they are applying recruiters do check out all available information for, and ask for their opinion about how much about them, including personal information pubthey like working there. Employers also have lished on social networking sites. And there is the chance to look into the social life of potential always a risk that, if employers do not like what people do on a social networking site like Twit- candidates, and can get a much better reference the applicant says there or the groups they belong ter of Facebook. “You have to be aware that about their prior professional lives this way.

Nowadays, it is rare for a candidate not to, they will not hire them. For this reason, recruit- somebody might not want to be contacted by a potential employer through these sites, so you to appear on LinkedIn, Xing or Facebook, ers have to learn the ethical use of this new tool.

“You have to be very careful with intruding must respect people’s privacy. We never look up Hill International managing director Zsolt into prospects’ personal space,” Recruitment candidates on social sites; if we need a reference, Fazekas told the BBJ. “The best advice I can give to a job seeker is to always be yourself International regional manager John Smith we will look for a professional one,” he noted.

Other recruiters believe that if you post some- and do not try to hide who you really are,” told the Budapest Business Journal. Recruiters should not make judgments based on what thing on the internet for everybody to see, you he noted. “For example, revealing a candi-

date’s extreme hobbies may be a great way to socialize with a potential employee with the same interests.”

SOCIAL VERSUS PROFESSIONAL The social networking portals most widely used by recruiters are professional sites LinkedIn and Xing, and social sites iwiw, Facebook and Twitter. Professional sites are less problematic, as members are well aware that these sites focus on business network development, and behave accordingly.

However, the borders between social and professional sites have started blurring. Besides collecting information about prospective employees, recruiters are now also creating their own accounts on social sites. Hill International has just announced that it started publishing ads on Twitter. Media companies Sanoma and Origo have recently launched a new iwiw application Állásvadász (“job hunter”), which invites members to use the social site for job searches as well. Iwiw has 4.4 million registered users and 2.1 million visitors per day on average. Iwiw applications including Állásvadász had on average 250,000 users per day in January, up from 180,000 at the end of last year.

Recruiting through social networking sites is not the most significant source of job candidates now in Hungary, but it is growing. All recruiters agree that this is just a new tool that will not do the whole job. While traditional methods will not disappear, social media is changing the way candidates look for jobs and the way recruiters and employers seek qualified applicants. ■

16 SPECIAL REPORT

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Budapest Business Journal | Apr  – May 

How to get and keep the talent Most businesspeople dream of having a workplace where all their employees support the company the way they would root for their favorite football team; where employees are loyal and are constantly thinking of new ways to improve productivity. For Hungarian businesses this remains a dream, as they struggle to improve efficiency.

BBJ KATIE ROWLAND

The nation was recently ranked 22nd out of 27 EU countries in terms of innovation in a survey by the European Commission.

For some reason, many Hungarians are not induced to work to the highest level of their ability, or to do their utmost for their company’s success. This may have something to do with a national minimum wage of just HUF 73,500 (around €277), compared to €1,000 in Austria and €307 in Slovakia. Addressing salaries may have a small positive effect on the motivation of workers, but there are other ways a company can improve morale.

FEELING AT HOME Experts suggest that a strong team culture among employees will substantially benefit the company. Employees who communicate well and enjoy their time spent at work are more likely to stay longer and project a positive image of the workplace that will attract new employees.

YSoft, a Czech company that offers printing solutions, is now present on three continents, having been formed by a couple of students in their dorm room. Despite

rapid expansion, the company’s employees are still 70% Czech. Many of the current employees studied together and grew up in the same town. Some have known each other for ten years and consequently think of the company as a group venture.

The owners of the company have refused offers to sell to foreign investors, because they want the business to remain Czech and to maintain its strong core.

Foreign direct investment has obvious benefits for Hungarian companies, but may also harm the strength of the team and employees’ pride in their owners.

Since the fall of the Iron Curtain, privatization and capital investments were inevitable, yet the widespread presence of foreign owners is thought to have had a huge impact on the essence of ‘a Hungarian business.’ Employees are not proud of their company and do not feel obligated to act in the interests of shareholders.

In order to change this attitude, managers have to take steps to encourage employee loyalty and strengthen the heart of the Talent often gets buried under a pile of CVs at Hungarian businesses business. In times of economic depression, offering shares to employees and making cantly since the 1990s, and has moved innovation. EU funds for innovation have them partial owners of the company is not away from a largely compartmentalized become available, but the greatest proalways a suitable option. Instead, it is HR approach toward a European-style system portion of R&D costs is still payable by departments that must attempt to bridge that offers a broader curriculum and an the business owner, particularly at smallthe gap between different levels of employ- interdisciplinary approach. Yet, employers and medium-sized businesses. ees and to improve communications. still see a biology or literature degree on A medium-term strategy plan in 2008 the applicant’s CV and automatically dis- foresaw that by 2013, Hungary would HIRING THE RIGHT PEOPLE miss the candidate for positions outside become “a country where knowledge this field. A greater emphasis on intern- and innovation are the driving engines Traditionally, job applicants are filtered ships and work experience opportunities of the economy. Companies with domesaccording to their qualifications and pre- would give businesses the opportunity to tic financial interest should appear on the global market with competitive prodvious job experience. While many global assess a much wider set of skills. ucts.” In light of the recent EU rankings companies give aptitude and personalon innovation levels, it appears that the ity tests as well as internships, Hungar- ENCOURAGING INNOVATION realization of these goals is unlikely by ian employers tend to choose their new An employer’s ability to promote inno- 2013. However, businesses voicing a need employees based on their CVs, thereby avoiding a huge pool of applicants who vation and development can only go so for innovation may induce the incoming hold potential skills and creativity. Uni- far, and many businesses look to Hunga- government to re-assess funds available versity education has changed signifi- ry’s government to boost financing for to Hungarian businesses. ■

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SPECIAL REPORT 17

Budapest Business Journal | Apr  – May 

Calculating the power of people The upturn of the job market will present new opportunities for the human resources-focused IT market, which should therefore come up with much more sophisticated products and services to meet client demand.

BBJ ANIKÓ JÓRI-MOLNÁR

Finding a job is definitely one the hardest tasks, and once you are employed, you are faced with many difficult issues related to your employment.

However, sitting on the other side of the interview desk can be just as difficult without proper IT-support. One major conclusion that the developers of software for human resources departments are drawing is that people demand the same kind of interactivity when using HR aids that they receive from other computer applications.

So 2010 will likely see companies recognizing the importance of involving employees in HR processes, resulting in a major development of interactive platforms and self-service systems, according to one of the leading market players, NEXON. Last year the company deployed hundreds of webbased services to companies.

“Web-based services could be especially useful for companies that have several sites. For example, if one of the authorities decides to drop by for an inspection, all data about employees can be instantly provided,” says Katalin Sáfár, sales director of VT-SOFT. Her company has also registered growing interest in these types of services, which administer a wider range of issues,

like “cafeteria” non-cash contributions and the registry of working hours.

Market players agree that even if a recovery does begin this year, a major increase cannot be expected in the sales of new software licenses, even though new software deployment by SMEs is supported by EU funds. Instead, the use of Software-as-a-Service is likely to prevail.

Various products are also under development for niche markets, defined by various HR work stages. IRS Hungary’s freshly launched product, for example, focuses on supporting job interviews. Besides the usual data management and analysis features, it also helps with the decisionmaking process through its competency catalogue and interview question database.

“There is a lot of demand for technological support for applicant valuation to become more objective and to compare interview answers,” says IRS business development manager Andrea Balázs. IRS also offers training for HR managers to help them get the most out of the package. As a future development, Balázs mentions the possible expansion of competence measurement to also include talent management, in line with international trends.

OFFERS FOR EVERY SIZE All of this might be science fiction for technological novices. (According to companies involved in human informatics, technophobia has very little to do with company size.) The use of HR software depends more on the profile of the company and the frequency of new hires – usually ten-20 people per year is the cut-

Putting the man (or woman) into the machine

off point where such applications start making sense. Competence management and recruitment [software] can be essential for manufacturing companies, where there are high quality management expectations and fluctuation is high,” Sáfár of VT-SOFT cited as an example.

However, there is a distinction among companies based on size, involving the type of human informatics products they use. “Hard HR,” which includes accounting and social security administration, is something that cannot be done without software, so it is usually used by smaller companies as well, although it is a relatively large investment. Businesses can save money by buying boxed software, but then they must learn to use it themselves, which is often the hardest way.

As we go from small to midsize to large, “hard HR” gets complemented by so-called “soft” products, which help the processes of recruiting and performance measurement through standardization. Large multinational companies normally get an HR module for their enterprise resource planning system (such as those provided by SAP or Oracle) and the decision about the type of software is made by international management and handed down to all local units. However, such products could also be useful in less centralized business environments.

What companies of all sizes can benefit from, as far as financing goes, is outsourcing, which is becoming increasingly popular.

Without any major investment, it can support even major fluctuations in the workforce, and costs are easy to plan. This line of business has brought a 20%-30% increase in revenues for human informatics companies. ■

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18 SPECIAL REPORT

Budapest Business Journal | Apr  – May 

Recruiters seek new jobs

BBJ

RECRUITMENT FIRMS ANALYSIS

-44% Change in aggregate net revenue from placements of listed firms

In the past year and a half, the recruitment market has had to face an unprecedented backslide. “We have experienced a 60%-70% decrease in the number of job advertisements, while the number of filled vacancies shows a similarly significant setback,” says András Kovács, business unit manager of Grafton Hungária Kft. “These are very hard times. Our usual 500 job offers fell to 170 by the summer of 2009.

Now we have 230 ads, which is a remarkable improvement, but the numbers of September 2008 are still out of reach.”

Meanwhile, thousands of people have lost their jobs. But despite a choice from among 480,000 registered job seekers in Hungary, it is still not easy to find the right ones to employ. “It is mostly poorly qualified people who have lost their jobs, but companies usually hunt for skilled and qualified labor when hiring HR companies or headhunters,” says Beáta Fürjész, head of Karrier Hungária Kft and leader of the labor broker unit of the Hungarian Association of Recruitment and Executive Search Companies.

Besides the aim to cut HR costs, this contradiction is also the reason why an increasing number of big multinational companies tend to manage their labor demand without involving HR experts. Instead, they focus on reinforcement training and offer career opportunities for newly graduated

RECRUITMENT TRENDS: STRICT(ER) SCRUTINY To keep up with changes in media consumption habits, employers have had to gain new labor force search techniques. While simply advertising a job opening was enough a few years ago, nowadays direct search techniques are much more preferred. Personal contacts and networking have come to the fore, and community websites have emerged as a new tool for recruitment and selection. “When clicking on an applicant’s profile or joining their group on a community site, you can find information about them that is not displayed in a CV or in any other formal document,” says István Kispál, head of the Budapest College of Communication and Business. (for more on social media and recruitment, go to page 15) Due to the oversupply of candidates generated by the economic crisis, wannabes also have to take a more active role in job seeking. Personal branding has appeared as a new trend. Job seekers act proactively and often try to raise recruiters’ interest by creating their personal portfolios on the internet, writing blogs or building up social networks.

Another side effect of the oversupply of candidates is that more and more companies want to replace their managers with more experienced professionals for the same salary, or to hire new managers with the same skills for less.

A sign of increasing mistrust is that companies tend to give more heed to auditing candidates’ job experience.

Carefully verifying job references is a new and important trend.

The prevalence of Assessment Centers / Development Centers (AC/DC) has increased in the selection process. Interestingly enough, AC/DC was invented

by German psychologists to test officer candidates during World War II. Nowadays, this testing technique is popular primarily among multinational firms, and involves job-related role-playing, interviews and psychological tests.

talents, but realigning their existing work force is also a common method, which puts HR companies into an even harder situation when trying to make a living.

However, this approach is not suitable for all cases, leaving some crumbs for the HR experts to pick up. But to survive, recruitment companies have had to lower their prices.

“The crisis has consolidated the HR market.

Some have gone out of business while others have to face serious financial problems,” says Fürjész, who underlines the importance of reviewing business procedures and offering more efficient and creative solutions.

Recruitment companies and headhunters now have to provide a much wider range of services than before. Nowadays, their task is not to simply pick the right person for a given position, but to constantly serve market information and to take part in labor optimization. Continuous consultancy has become a major requirement.

STRATEGY? NOT NOW, THANKS! As with any other business process in times of crisis, HR policies have become difficult to plan. “Conditions change day by day, demanding an instant HR response,” adds Fürjész. “Flexibility and agility are essential.”

In such circumstances, a long-term HR strategy is the privilege of a few. “It is tomorrow’s tasks that are the question, not strategy,” notes István Kispál, head of Budapest College of Communication and Business. The latest HR Benchmark survey seems to support his opinion: the study concluded that more than half of the companies surveyed did not have an HR strategy at all (53%), and even those that had one paid little attention to purposeful workforce planning like career management (6.9%) or employment policy (2.8%).

“There is only room for strategic HR if the company considers human resources management as a partner,” says Mária Gombás, senior HR consultant of Work Force Kft. “To become strategic partners, HR professionals have to have an economic approach and present cost-efficient solutions,” adds the expert. “By pointing out cost-cutting possibilities, this acknowledgement becomes achievable.”

When it comes to the future of HR, experts have outlined several possible scenarios, but all of them hint that old approaches may no longer work. “Those who have learned to swim may not ask the swimming instructor for help in the future,” says college leader Kispál, referring to the great number of companies that have become well-versed in handling their human resources issues without professional help. Gombás points to a number of business lines HR consultants may want to focus on: the appropriate employment of temporary workforce, training programs and work force rotation could provide a basis for the future of recruitment. ÁV

MOVING ON ➔➔

Focus Consulting Pannonjob Workplus Trenkwalder Work Force Randstad

➔➔➔

Just like every field of business, the human resources recruitment market has also been hit hard by the crisis. While some are paralyzed by shrinking demand, others are retooling their competency to stay alive. Will HR be able to redefine its role and establish its strategic position in a post-crisis world.

+6 places +5 places +3 places -4 places -3 places -2 place

The largest changes in the list

MARKET NEWS Industry association welcomes new member Work Force Kft has become a member of the Hungarian Association of Recruitment and Executive Search Companies (SzTMSz) after meeting the strict professional requirements of the association. During the seven years that Work Force has spent on Hungary’s human resources market, it has built up a nationwide network: in addition to its Budapest head office, Work Force offers full-scale HR services in six bureaus around the country from Szombathely to Békéscsaba. The company has managed to double its revenues every year and is now ranked consistently among the top 20 recruitment agencies operating in Hungary.

CIB collects “HR Team of the Year” prize CIB Bank, Magyar Telekom and Vodafone were honored on March 5 at the 3rd “HR Team of the Year” award ceremony by IVM-Bridge Ltd. Besides the goal of honoring HR teams who did most to enhance the strategic position of HR within their companies, prize founder IVM-Bridge said it paid extra attention to CSR this year.

CIB Bank’s application proved that HR is well acknowledged as a strategic partner of the company’s top management, while their flexibility and breadth of view was judged exemplary. The jury found the CSR activities of Magyar Telekom and the creativity of Vodafone’s HR team commendable as well.

New regulations for temporary staffing A number of new rules for temporary staffing will come into effect in the near future, with the aim of enhancing the equal treatment of employees. One of the most crucial changes is that no gap will be allowed between the salaries of temporary and payroll employees starting this summer. It is also noteworthy that by the end of 2011, all temporary workforce agencies must adopt an EU directive requiring that employee posts must be temporary and cannot be extended for months or years.

BME holds 30th job fair Keeping up a 30-year tradition, the Budapest University of Technology and Economics (BME) held its spring job fair on April 1415. Aspiring young professionals were able to sample more than 1,400 job opportunities offered by 138 companies, a slight improvement compared to the 2009 autumn job fair when only 100 companies attended.

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SPECIAL REPORT 19

Budapest Business Journal | Apr  – May 

RECRUITMENT AGENCIES[1]

The BBJ’s Book of Lists contains 100+ sector-specific listings of leading companies. The Book of Lists comes free with a BBJ subscription, or can be ordered separately by e-mailing Eva.Bercesi@bbj.hu

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Senior executives

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No. of people in database on Jan. 1, 2009 No. of offices worldwide

Ownership (%) Hungarian Non-Hungarian

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545 296

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Ilona Jankovich Anita Galbács Beáta Rakos-Szegleti

1024 Budapest, Lövőház utca 39.

(1) 487-5050 (1) 487-5051 info@profipower.hu

406 280

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– Grafton Recruitment B.V. (75), Niall Keyes (25)

Tamás Fehér Miklós Hanti Zsuzsanna Dávid

1053 Budapest, Károlyi M. utca 12.

(1) 235-2600 (1) 235-2601 info@grafton.hu

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30

10

12 140

30

40

30

17–25 17–25 17–25

3 months 4–6 weeks

¸

¸

¸

¸

¸

–

¸

Ÿ

Tímea Bíró (40), Mónika Feichtinger (30), Kristina Jilly (30) –

Mónika Feichtinger – –

1092 Budapest, Ráday utca 51.

(1) 336-2910 (1) 336-2911 info@focusconsulting.hu

198 105

198 119

10

50

40

–

Ÿ

15

75

10

– 20–25 –

3 months 1-4 weeks

¸

Ÿ

– Hays Plc. (100)

Tammy Stellini Marketa Villa-Pokorna Judit Üveges

1075 Budapest, Madách Imre utca 13–14.

(1) 501-2400 (1) 501-2402 hungary@hays.hu

162 81

1,012 496

–

50

40

10

20 750

1

18

81

– 100 –

3 months 1–8 weeks

¸

¸

¸

¸

¸

¸

¸

46,000 5,200

– Randstad Holding N.V. (100)

Pedro Lacerda Mária Vagyon –

1051 Budapest, Bajcsy-Zsilinszky út 12.

(1) 411-2090 (1) 411-2091 info@randstad.hu

143 80

1,971 848

23

57

15

5

18 433

6.50

13

80.50

80 100 20

2–4 months 2–5 weeks

¸

¸

–

¸

¸

–

¸

33,000 3,600

– Kelly Services Inc. (96.70), Kelly Properties Inc. (3.30)

Anikó Jónás Mariann H. Tóth Judit Polner

1062 Budapest, Aradi utca 8–10.

(1) 354-2770 (1) 354-2771 info@kellyservices.hu

130

Ÿ

12,000 5,742

Ÿ

Ÿ

Ÿ

Ÿ

3–6 months 1–6 weeks

¸

¸

–

¸

¸

–

¸

56,113 6,000

– Adecco S.A. (98.47), Adecco GmbH (1.53)

Ottó Vég Anikó Törőcsik –

1134 Budapest, Váci út 45.

(1) 323-3500 (1) 323-3529 adehudl@adecco.com

125 75

14,766 7,221

20

35

35

10

25 766

¸

¸

¸

¸

¸

¸

¸

55,000 455

Tamás Szabó (10) Trenkwalder International AG (90)

Tamás Szabó Bernhardt Rainer –

1062 Budapest, Aradi utca 8–10.

(1) 354-0933 (1) 302-7589 infohungary@trenkwalder.com

107 49

113 55

25

25

25

25

10 174

6

¸

8,600 1

Beáta Fürjész (50), Gabriella Ruff Berzéthy (50) –

Gabriella Ruff Berzéthy – –

1061 Budapest, Andrássy út 2.

(1) 354-2063 (1) 354-2061 info@karrierhungaria.hu

105 95

1,562 571

15

30

40

15

15 76

15

¸

65,370 5

– Miravo Holdings Ltd (100)

Attila Molnár – –

1024 Budapest, Lövőház utca 2–6.

(1) 345-8108 (1) 345-8199 gwh@gwh.hu

57

4,935 2,279

10

6 198

–

37,000 5

Videoton Holding Zrt (100) –

Fatime Touré, Attila Molnár Anikó Bánhidi Ilona Kovács

8000 Székesfehérvár, Berényi út 72–100.

(22) 554-170 (22) 554-191 info@pannonjob.hu

Breakdown of search methods (%)

No. of professional staff on May 1, 2009 No. of candidates placed in 2008

Total net revenue (HUF mln) in 2009 H1 2009

Company Website

Net revenue from permanent placements (HUF mln) in 2009 H1 2009

Rank

Ranked by net revenue from permanent placements in 2009 Breakdown of candidates placed in 2008 (%)

Industry specialization

Top local executive Finance director Marketing director

Address Phone Fax Email

ProfiPower Kft www.profipower.hu 1

Grafton Recruitment Kft www.grafton.hu 2

3

Focus Consulting Kft www.focusconsulting.hu

1

Hays Hungary Kft www.hays.hu 4

15

¸

¸

¸

¸

¸

¸

345

Randstad Hungary Kft www.randstad.hu 5

Kelly Services Hungary Kft www.kellyservices.hu 6

7

Adecco Kft www.adecco.hu

Ÿ 622

1

7

92

– 90 10

1

5

94

15–25 – –

3–6 months 1–6 weeks

26

68

20–25 20 –

3–6 months 2–6 weeks

20

65

12–25 100 –

2–7 months 1–5 weeks

60

40 50 10

Trenkwalder Kft www.trenkwalder.com 8

9

Karrier Hungária Kft

10

Get Work Hungary Zrt

www.karrierhungaria.hu

www.gwh.hu

¸

¸

¸

¸

¸

¸

¸

¸

¸

¸

¸

¸

Pannonjob Kft www.pannonjob.hu 11

Ÿ

10

50

30

10

30

3–6 months

Ÿ

¸

¸

¸

–

¸

–

WWW.BBJ.HU

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

¸

¸

¸

¸

¸

¸

¸

4,000 1

Individuals (100) –

Péter Marosi Ágnes Réh – –

1022 Budapest, Bég utca 3–5.

(1) 336-1730 (1) 336-1731 gradus@gradus.hu

¸

5,000 25

– Regina Kiss Tent (80), Guido Leissinger (20)

Regina Kiss Tent Lívia Gálfy Lorenzo Molinari

1023 Budapest, Bécsi út 3–5.

(1) 326-1699 (1) 326-1699 info-bp@isg.eu

Judit Kósa, Zoltán Paár (100) –

Judit Kósa Zoltán Korb Zoltán Paár

1124 Budapest, Koszta J. utca 21.

(1) 309-5452 (1) 309-5452 ipconsulting@t-online.hu

No. of people in database on Jan. 1, 2009 No. of offices worldwide

Ÿ

¸

90,000 1

László Hadi (90), Attila Dobár (10) –

–

Ÿ

Telecom and media

Pharmaceuticals

IT

34

Ÿ

Sales & marketing

32 20

3–9 months 2–8 weeks

FMCG

30

3–6 months 1–6 weeks

Manufacturing

30

8.30

16–25 100 –

Ownership (%) Hungarian Non-Hungarian

Industry specialization

Bank and finance

35 19

Guarantee to clients Search time

33 16

Fee charged in percentage of salary in first year Success-based (%) Flat fee (%)

10

3–12 months 0.5–4 weeks

Other

30

Middle management

95 44

60

18 18 –

Breakdown of candidates placed in 2008 (%)

Senior executives

38 15

No. of professional staff on May 1, 2009 No. of candidates placed in 2008

94 56

Other

47 29

Advertisement

440 228

Direct search

55 32

Placement from database

Breakdown of search methods (%)

Total net revenue (HUF mln) in 2009 H1 2009

Company Website

Budapest Business Journal | Apr  – May 

Net revenue from permanent placements (HUF mln) in 2009 H1 2009

Rank

20 SPECIAL REPORT

Top local executive Finance director Marketing director

Address Phone Fax Email

Attila Dobár György Thury Ádám Szakmáry

1094 Budapest, Angyal utca 24.

(1) 239-9922 (1) 239-9926 job@job.hu

Lászlóné Dorozsmai (40), Réka Dorozsmai-Gallasz (20) Udo M. Chisteé (40)

Lászlóné Dorozsmai – –

1065 Budapest, Bajcsy-Zsilinszky út 53.

(1) 316-2800 (1) 374-0943 ahc.budapest@ ahc-international.hu

1

Individuals (49) Faro Recruitment Group (51)

Krisztina Varga – –

1083 Budapest, József körút 53.

(1) 411-0055 (1) 267-0942 workplus@workplus.hu

Job Personnel Consulting Kft www.job.hu 12

13

ahc International Personnel Consulting Kft www.ahc-international.hu

14

Workplus Kft

15

Gradus Consulting Kft

16

ISG Personalmanagement Kft

17

IP Personnel Consulting Kft www.ipconsulting.hu

30 15

18

Work Force Kft

16

19

Select HR Kft

20

Tele-Scope Kft

21

At Work Consulting and Services Kft www.atwork.hu

NR

ADAB Search Kft

www.workplus.hu

www.gradus.hu

www.isg.hu

www.work-force.hu

www.select.hu

Ÿ

6

Ÿ

5

Ÿ

30

15

35

–

25

50

52

–

16 207

–

5 110

45

15

4 89

28

14

58

Ÿ Ÿ Ÿ

30

10

4 42

20

60

20

15–20 80 20

3–15 months 2–6 weeks

3

3 43

35.92

18–20 100 –

3–6 months 4–6 weeks

Ÿ

Ÿ

Ÿ

10

53

60

15

45

Ÿ

35

35

30

–

5 40

1,011 515

30

10

50

10

6 122

66 36

35

50

15

3

10

26.30

12.80

30

65.40

51.28

20

–

30

¸

–

¸

¸

¸

–

3

Ÿ

–

¸

¸

–

–

¸

37

14–22 70 30

3–6 months 3–4 weeks

¸

¸

¸

¸

¸

¸

¸

38,000 9

Róbert Csákvári (100) –

Róbert Csákvári – –

1063 Budapest, Szív utca 7.

(1) 312-3729 (1) 354-3436 titkarsag@work-force.hu

70

Ÿ Ÿ Ÿ

3–6 months 2–6 weeks

–

3,254 1

J-Tools Kft (100) –

Noémi Csaposs Zsoldis József Zsoldis –

1016 Budapest, Hegyalja út 22.

(1) 453-2000 (1) 453-2004 office@select.hu

3 months 2–6 weeks

¸

¸

¸

¸

¸

¸

¸

28,786 1

Botond Csordás (95), Edit Rozsovits Tamási (5) –

Botond Csordás – –

1139 Budapest, Teve utca 7–11.

(1) 412-1020 (1) 350-2968 csordasb@tele-scope.hu

¸

–

¸

¸

¸

¸

–

Ÿ

3

3

94

17 100 –

–

14

86

15–20 100 –

3–6 months 3–6 weeks

¸

¸

¸

¸

–

¸

¸

3,000 1

Róbert Laczai (100) –

Róbert Laczai – –

1111 Budapest, Bartók Béla út 4.

(1) 279-0862 (1) 209-7444 andrea.balazs@atwork.hu

Ÿ

Ÿ

Ÿ

40 60 –

3–6 months 2–8 weeks

¸

–

–

–

¸

–

¸

7,000 1

(100) –

Attila Horváth – –

1052 Budapest, Petőfi Sándor utca 11.

(1) 411-0810 (1) 411-0812 office@adabsearch.hu

3–12 months 2–12 weeks

¸

¸

¸

¸

¸

¸

¸

35,000

Ÿ

(100) –

Péter Baldaszti – –

1011 Budapest, Szilágyi Dezső tér 2.

(1) 413-7434 (1) 413-7435 info@doit-hr.com

3–6 months 4–8 weeks

¸

–

¸

¸

¸

¸

¸

23,333 6

– (100)

Zsuzsa Gárdus – –

1037 Budapest, Montevideo utca 16/B (1) 439-2940 (1) 889-9810 office@itjobs.hu

12

1.50

Ÿ

83 45

–

68

29

3

8 28

NA

NA

www.adabsearch.hu

Ÿ

Ÿ

30

20

20

30

Ÿ

NR

DOIT.HR Kft

Ÿ Ÿ

Ÿ Ÿ

35

20

40

5

Ÿ Ÿ

30

30

40

15–22 100 10

NR

ITJobs Recruitment and Selection Kft

Ÿ Ÿ

Ÿ Ÿ

10

25

60

5

20 261

10

40

50

70 20 10

www.itjobs.hu

¸

¸

¸

¸

79.50

www.doit-hr.com

¸

¸

¸

Ÿ Ÿ

7

4

¸

¸

¸

10,000 2

3 72

Ÿ

–

¸

3–6 months 4–6 weeks

722 389

www.tele-scope.hu

¸

4

WWW.BBJ.HU

SPECIAL REPORT 21

www.ventiv.hu

¸

¸

No. of people in database on Jan. 1, 2009 No. of offices worldwide

¸

¸

¸

¸

Top local executive Finance director Marketing director

Address Phone Fax Email

¸

45,000 4,200

– Manpower France SARL (100)

Judit Kiss Boher Ákos Vidovics Katalin Szekeres

1072 Budapest, Rákóczi út 42.

(1) 411-1590 (1) 266-0536 manpower@manpower.hu

¸

Levente Buskó (100) –

Levente Buskó – –

1147 Budapest, Kerékgyártó utca 65/B (1) 550-0105 (1) 550-0115 mail@smarthr.hu

Telecom and media

Pharmaceuticals

Ÿ Ÿ

¸

Ÿ

¸

IT

Ÿ Ÿ

¸

Ÿ

¸

Sales & marketing

Ventiv Health Hungary Kft

¸

Ÿ

40

FMCG

NR

¸

Ÿ Ÿ

– 20–25 –

10

Manufacturing

52

3–12 months 4 weeks

–

Ÿ Ÿ

Ownership (%) Hungarian Non-Hungarian

Industry specialization

Bank and finance

52

Guarantee to clients Search time

www.tesk.hu

Fee charged in percentage of salary in first year Success-based (%) Flat fee (%)

Ÿ

50

3–6 months 1–6 weeks

Other

Ÿ

Middle management

Tesk Consulting Kft

30

Ÿ Ÿ Ÿ

Breakdown of candidates placed in 2008 (%)

Senior executives

NR

55

No. of professional staff on May 1, 2009 No. of candidates placed in 2008

www.smarthr.hu

Ÿ Ÿ

15

Other

NR

Smart HR Solutions Kft

www.manpower.hu

Placement from database

Ÿ Ÿ

NR

Manpower Kft

Advertisement

2,883 1,300

Company Website

Breakdown of search methods (%)

Direct search

Total net revenue (HUF mln) in 2009 H1 2009

Ÿ Ÿ

Rank

Net revenue from permanent placements (HUF mln) in 2009 H1 2009

Budapest Business Journal | Apr  – May 

40

10

30

20

Ÿ Ÿ

30

20

40

10

2 190

1.50

20

78.50

20 100 –

3–6 months 2–3 weeks

¸

¸

–

¸

¸

–

¸

6,000 1

Péter Tokár (86), Nándor Pataki (13), Tamás Tokár (1) –

Péter Tokár, Gábor Filáj Renáta Horváth Mónika Sztancsek

1096 Budapest, Thaly Kálmán utca 39.

(1) 279-0707 (1) 466-0549 info@tesk.hu

–

30

40

30

6 251

5

21

74

20 100 –

3–6 months 0.5–6 weeks

–

–

¸

¸

–

¸

–

18,500 1

Attila Pál (100) –

Mariann Tál Attila Szabó –

1027 Budapest, Horvát utca 14–24.

(1) 214-0657 (1) 214-0658 ventiv@ventiv.hu

NOTES: (1) The list of Recruitment Agencies only includes companies employing a direct search procedure for less than 50% of their placements.

Ÿ=

would not disclose, NR = not ranked, NA = not applicable

This list was compiled by researcher Mihály Kovács from responses to questionnaires received by Apr 19, 2010. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1022 Budapest, Alsó Törökvész út 9., or faxed to 398-0345.

Mihály Kovács can be contacted at mihaly.kovacs@bbj.hu.

WWW.BBJ.HU

22 SPECIAL REPORT

Adecco expands in Pécs The Hungarian arm of recruitment and temporary worker agency Adecco expanded its office in Pécs, southern Hungary, in February. The local office in Pécs serves Baranya and Tolna counties. By further expanding the Pécs office, Adecco’s management aims to provide its services more effectively in the area, the company said on its website. Adecco Hungary had some 4,000 placements during the month of November 2009, an all-time high for its Hungarian operation.

Temp employment bounces back in Germany Demand for temporary employment in Germany has rebounded from the recession and is once again approaching all-time peaks recorded in the summer of 2008, the head of the BZA temp agency association said, according to a Reuters news agency report. There was a sharp increase in demand for temporary services in the first two months of the year, according to the report. There were 710,000 people employed by temporary agencies at the end of January, up from 650,000 in December.

The number increased to about 750,000 by the end of February, a BZA survey reveals. The previous peak of 820,000 was recorded in the summer of 2008.

EC forecasts increasing unemployment for Hungary Decreasing employment and a higher unemployment rate is expected to continue in Hungary this year, a recent analysis by the European Commission reveals. In its regular monthly monitor, the EC emphasizes that the outlook for labor markets in 2010 is rather gloomy in almost all European countries. In a special note on Hungary, the EC said that youth unemployment has grown sharply, reaching some 30% by January.

Temp agencies were among the first to suffer from the economic crisis, but they were also projected to be among the first to recover – at least that is what the profession predicted about a year ago. Has the much-awaited upswing arrived? According to the Budapest Business Journal’s list, nearly all temp agencies suffered a loss of income in the downturn.

BBJ

TEMP AGENCIES

-18% Change in number of total hours billed by listed firms

Demand for a flexible workforce, including temporary employees, has increased due to the crisis, but companies surveyed by the Budapest Business Journal reported discernible growth only in the fourth quarter of last year.

Forecasts for this year show continuing optimism. The managing director of Work Force Kft (ranked seventh on this issue’s BBJ list, down from fifth place in the Book of Lists) said the company aims to double its total net revenues in 2010.

“We have seen our temporary employment division bounce back since last August,” Róbert Csákvári said. “Although the crisis had a marked effect on us at the beginning of last year, we have quadrupled our revenue since then.”

Many companies turned to employing temporary workers because of hiring freezes that were put in place during the crisis. Csákvári pointed to a notable upturn in the first few months of the year.

Changes in legislation regarding temp workers could put manufacturers into a difficult spot

Increased orders mainly come from the company’s existing partners, but there are a few new ones too.

Temp agencies might continue to see an upswing after the crisis. “Many companies will transform temporary workforce into staff, but I believe they have nonetheless recognized the advantages temporary employment offers, and its popularity will increase dynamically,” Csákvári said.

Attila Molnár from Pannonjob Kft (third place in the Book of Lists, but only fourth in the new list) confirmed that the expected rebound did not arrive in 2009. Pannonjob, however, is the only one among the top five on the list to report a slight increase in 2009 revenues compared to 2008. Molnár said this was due to a 30% increase in fourth-quarter revenue compared to the third quarter. As for the future, Molnár expects the market to recover by the second half of 2010.

Adecco Kft, ranked second in both the Book of Lists and this issue’s list, also projects it will double its revenues in 2010,

TEMPS NOT CONSIDERED IMPORTANT A global survey conducted by Manpower at the end of last year reveals that, on a global level, 62% of employers think that temporary workers do not have an important role in the company’s HR strategy, and only 34% admitted that they look at temp employees as strategically important parts of the firm. In Hungary, employers take temporary workers more seriously than average, and the country ranks favorably not only at a regional level, but also globally. While just above 60% of the 800 Hungarian company leaders surveyed said that the temp workforce has little to no importance in the firm’s strategy, 38% gave a positive answer when asked about the importance of the temporary workforce. In a regional breakdown, companies in northern Hungary, Budapest and the northern Great Plains gave the most positive answers: a respective 44.3%, 43.3% and 41.4% consider temp employees an important part of the organization.

When it comes to business sectors in Hungary, the catering industry tops the list, with 46.1% of respondent companies conceding the importance of temp employment, while it is the agricultural industry that pays the least attention to temporary workers, the Manpower study reveals.

More than 14% of the companies surveyed justified employing temp workers by increased labor demand in specific seasons, 7.5% said they use temps to fill jobs that require special knowledge, while 7.2% said that the main reason is the need to circumvent headcount ceilings at the company.

Interestingly, while Hungarian company leaders are seemingly more open-minded when it comes to employing non-permanent workers than other countries’ executives, Hungary is a laggard in terms of equal treatment in the areas of recruiting and training.

A little more than 55% of the queried company leaders said they treat temp workforce similarly to permanent workers, as opposed to an average 72% in other countries in the region, according to the Manpower survey.

compared to last year. “Last spring was seriously affected by the crisis in terms of placements, but we produced very good figures by the fall,” said Dániel Gönczi, regional director of Adecco and vice president in charge of temporary employment at the Hungarian association of recruitment agencies SzTMSz. “We reached an alltime high of 4,000 placements last November.” As for the first few months of 2010, the company has yet to see further growth compared to last fall, he added.

Still, Gönczi is rather optimistic about the future of temporary employment in Hungary. “As a member of the board at the association, I think the attraction of temp employment will persist.”

However, there is an issue that might greatly influence the future of this relatively young service. A new European Union directive on temporary employment will be implemented in member states by December 2011. The directive decrees that what makes employment “temporary” should be defined in some way in national legislation. It does not give guidelines for its duration, stating only that temporary contracts will have to contain the exact duration. Market players, while welcoming intentions to regulate the market, are worried about how it will be implemented in the Hungarian legal system.

Gönczi advises market players to keep a cool head. “Sure, the law in Hungary has to comply with the EU directive, but any legislation also has to ensure our competitiveness.”

Others say, however, that the longer the “temporary” period is, the better it is for both the employer and the employee – as well as the country’s economy. “It can positively affect the unemployment rate and it could also be a flexible solution for both parties on the labor market,” Pannonjob’s Molnár said. ■

MOVING ON Select HR Kelly Services Müisz Holding Work Force Get Work Hungary Workplus

➔➔➔

HR breakfast on temporary employment A roundtable discussion on the state of the temporary workforce from the employers’ point of view will be held on June 3 in the Hilton Budapest WestEnd Hotel.

The event’s organizer, legal publisher CompLex, is inviting HR professionals to discuss practical advice, labor law and current issues on the market. The event is part of the organizer’s “HR breakfast” series.

Are temps here to stay?

➔➔➔

MARKET NEWS

Budapest Business Journal | Apr  – May 

+4 places +3 places +2 places -2 places -1 place -1 place

The largest changes in the list

WWW.BBJ.HU

SPECIAL REPORT 23

Budapest Business Journal | Apr  – May 

TEMPORARY WORKFORCE AGENCIES

The BBJ’s Book of Lists contains 100+ sector-specific listings of leading companies. The Book of Lists comes free with a BBJ subscription, or can be ordered separately by e-mailing Eva.Bercesi@bbj.hu

Average no. of placements per week in 2008

Total net revenue (HUF mln) in 2009 H1 2009

Breakdown Breakdown of placeby type of ments by length (%) work (%)

Hours billed in 2009 H1 2009 13,419,516 5,111,200

14,766 7,221

8,619

8.50

91.50

88.30

11.70

5

1.80

7

1

11

73

–

3,700,000 2,200,047

12,000 5,742

3,397

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

2,127,800 840,712

2,447 1,177

Ÿ

2

98

55

45

32

2

10

3

3

50

www.pannonjob.hu

1,825,112 1,086,672

4,935 2,279

1,232

45

55

71

29

1

–

31

26

2

40

–

–

Ÿ

838

34,000

5

Manpower Kft

1,314,154

Ÿ

2,883 1,300

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

7

1,030,497 412,099

1,971 848

Breakdown of temps supplied to fields (%)

No. of offices:

Worldwide

Adecco Kft

3

Humán Centrum Kft

www.adecco.hu

www.humancentrum.hu

6,986

55,000

15

13

455

Tamás Szabó (10) Trenkwalder International AG (90)

Tamás Szabó Bernhardt Rainer –

1062 Budapest, Aradi utca 8–10.

(1) 354-0933 (1) 302-7589 infohungary@trenkwalder.com

Ÿ

Ÿ

IBM Hungary ISSC, GE Hungary, IBM Hungary, Philips, P and G Higinett, Robert Bosch

74

Ÿ

9

6

Ÿ

– Adecco S.A. (98.47), Adecco GmbH (1.53)

Ottó Vég Anikó Törőcsik –

1134 Budapest, Váci út 45.

(1) 323-3500 (1) 323-3529 adehudl@adecco.com

–

–

Ÿ

788

7,200

18

17

18

(100) –

István Medvegy – –

1075 Budapest, Holló utca 3–9.

(1) 877-0900 (1) 877-0910 info@humancentrum.hu

3

5

Videoton Holding Zrt. (100) –

Fatime Touré, Attila Molnár Anikó Bánhidi Ilona Kovács

8000 Székesfehérvár, Berényi út 72–100.

(22) 554-170 (22) 554-191 info@pannonjob.hu

6

4,500

– Manpower France SARL (100)

Judit Kiss Boher Ákos Vidovics Katalin Szekeres

1072 Budapest, Rákóczi út 42.

(1) 411-1590 (1) 266-0536 manpower@manpower.hu

3,600

– Kelly Services Inc. (96.70), Kelly Properties Inc. (3.30)

Anikó Jónás Mariann H. Tóth Judit Polner

1062 Budapest, Aradi utca 8–10.

(1) 354-2770 (1) 354-2771 info@kellyservices.hu

Other

Legal

Industrial

Sales & marketing

IT

Technical

Finance

Clerical

White-collar

Blue-collar

Pannonjob Kft 4

5

www.manpower.hu

Kelly Services Hungary Kft www.kellyservices.hu 6

285

85

15

41

59

10

3

–

33

–

51

Address Phone Fax Email

Of these, outside Budapest

2

Top local executive Finance director Marketing director

in Hungary

1

Ownership (%) Hungarian NonHungarian

1.20

Trenkwalder Kft www.trenkwalder.com

No. of No. of full-time temps in employ- database ees on on July July 1, 1, 2009 2009

Elcoteq Hungary, Procter&Gamble, General Plastics, Erste Bank, Microsoft Hungary

Major clients in 2008

Permanent

Company Website

Temporary

Rank

Ranked by hours billed in 2009

–

3

Ÿ

29

33,000

1

–

WWW.BBJ.HU

White-collar

Clerical

Finance

Technical

IT

Sales & marketing

Industrial

Legal

Other

in Hungary

Of these, outside Budapest

Worldwide

www.gwh.hu

Blue-collar

Get Work Hungary Zrt

Permanent

8

www.work-force.hu

Temporary

Work Force Kft

Average no. of placements per week in 2008

7

Breakdown Breakdown of placeby type of ments by length (%) work (%)

Total net revenue (HUF mln) in 2009 H1 2009

Company Website

Budapest Business Journal | Apr  – May 

Hours billed in 2009 H1 2009

Rank

24 SPECIAL REPORT

952,512 710,000

985 515

1,200

75

25

70

30

14

5

6

2

3

68

–

2

Flextronics, Linamar, NCR, Mars, Magyar Posta

30

36,000

10

8

13

Róbert Csákvári (100) –

Róbert Csákvári – –

1063 Budapest, Szív utca 7.

(1) 312-3729 (1) 354-3436 titkarsag@work-force.hu

797,560 329,334

1,562 571

19

65

35

85

15

10

5

3

–

2

80

–

–

Henkel Hungary, Teva Hungary, Flextronics Budapest, Henkook Tire, VPOP

602

67,925

5

4

5

– Miravo Holdings Ltd (100)

Attila Molnár – –

1024 Budapest, Lövőház utca 2–6.

(1) 345-8108 (1) 345-8199 gwh@gwh.hu

383,200 206,991

1,548 892

258

20

80

5

95

85

3

1

10

1

–

–

–

Ÿ

47

76,000

2

1

72

– Grafton Recruitment B.V. (75), Niall Keyes (25)

Tamás Fehér Miklós Hanti Zsuzsanna Dávid

1053 Budapest, Károlyi M. utca 12.

(1) 235-2600 (1) 235-2601 info@grafton.hu

375,000 156,000

530 322

150

10

90

10

90

40

–

10

–

50

–

–

–

UPC, Estée Lauder, BAT, Rexel

156

500

3

1

3

Individuals (100) –

Attila Rácz Attila Gerber Sándor Tóth

1089 Budapest, Orczy út 12.

(1) 210-9283 (1) 299-0059 hr@muisz.hu

347,832 208,268

722 389

236

14

86

–

100

Ÿ

Ÿ

–

Ÿ

Ÿ

–

Ÿ

Ÿ

CIB Bank, Unicredit Bank, Pannon, Erste Investment, ING Insurance, ING Fund Services

202

34,425

1

–

1

Botond Csordás (95), Edit Rozsovits Tamási (5) –

Botond Csordás – –

1139 Budapest, Teve utca 7–11.

(1) 412-1020 (1) 350-2968 csordasb@tele-scope.hu

294,279 135,640

1,012 496

95

–

100

–

100

17

5

–

75

3

–

–

–

Ÿ

25

60,000

1

–

5,200

– Randstad Holding N.V. (100)

Pedro Lacerda Mária Vagyon –

1051 Budapest, Bajcsy-Zsilinszky út 12.

(1) 411-2090 (1) 411-2091 info@randstad.hu

146,000 71,500

440 228

72

40

60

–

100

40

15

10

10

15

10

–

–

Ford Hungary, Sanofi-Aventis, Oracle Hungary, Samsung Electronics, Servind

14

95,000

1

–

1

László Hadi (90), Attila Dobár (10) –

Attila Dobár György Thury Ádám Szakmáry

1094 Budapest, Angyal utca 24.

(1) 239-9922 (1) 239-9926 job@job.hu

62,093 54,340

357

Ÿ

56

60

40

–

100

40

40

–

–

20

–

–

–

Győri Keksz, Boston Scientific, Nissan SCEE, Diageo, Du Pont, MTV Networks

10

50,000

1

–

1

Tímea Bíró (40), Mónika Feichtinger (30), Kristina Jilly (30) –

Mónika Feichtinger – –

1092 Budapest, Ráday utca 51.

(1) 336-2910 (1) 336-2911 info@focusconsulting.hu

66 36

14

10

90

–

100

50

30

–

–

20

–

–

–

Ÿ

Ÿ

3,687

1

–

1

J-Tools Kft (100) –

Noémi Csaposs Zsoldis József Zsoldis –

1016 Budapest, Hegyalja út 22.

(1) 453-2000 (1) 453-2004 office@select.hu

Breakdown of temps supplied to fields (%)

No. of offices:

Major clients in 2008

No. of No. of full-time temps in employ- database ees on on July July 1, 1, 2009 2009

Grafton Recruitment Kft www.grafton.hu 9

10

Műisz Holding Kft

11

Tele-Scope Kft

www.muisz.hu

www.tele-scope.hu

Randstad Hungary Kft 12

www.randstad.hu

Ownership (%) Hungarian NonHungarian

Top local executive Finance director Marketing director

Address Phone Fax Email

Job Personnel Consulting Kft www.job.hu 13

14

Focus Consulting Kft

15

Select HR Kft www.select.hu

16,456 10,232

16

At Work Consulting and Services Kft

13,000 8,500

83 45

18

20

80

–

100

50

25

–

–

20

–

–

5

Medtronic Hungária, Glaxosmithkline, MSD Hungary, Procter&Gamble

6

3,000

1

–

1

Róbert Laczai (100) –

Róbert Laczai – –

1111 Budapest, Bartók Béla út 4.

(1) 279-0862 (1) 209-7444 andrea.balazs@atwork.hu

11,000

15

25

75

–

100

54

30

–

–

–

14

–

2

Ÿ

15

47,312

1

–

1

Individuals (49) Faro Recruitment Group (51)

Krisztina Varga – –

1083 Budapest, József körút 53.

(1) 411-0055 (1) 267-0942 workplus@workplus.hu

www.focusconsulting.hu

www.atwork.hu

17

Workplus Kft www.workplus.hu

Ÿ

95 44

NR

DOIT.HR Kft

Ÿ Ÿ

Ÿ Ÿ

Ÿ

80

20

70

30

15

15

15

–

5

40

5

5

Continental, Flextronics, Veritas, Sanmina-SCI, Alcoa-AFL, Lear Corp.

Ÿ

20,000

4

3

Ÿ

(100) –

Péter Baldaszti – –

1011 Budapest, Szilágyi Dezső tér 2.

(1) 413-7434 (1) 413-7435 info@doit-hr.com

NR

P&P Personnel Leasing Kft

Ÿ Ÿ

Ÿ Ÿ

Ÿ

80

20

–

100

55

25

3

1

16

–

–

–

Ÿ

Ÿ

18,000

1

–

1

Mónika Tóth (100) –

Mónika Tóth – –

1015 Budapest, Hattyú utca 14.

(1) 224-9030 (1) 224-9005 cv@personnel.hu

Ÿ 11,136

545 296

11

–

100

–

100

40

10

20

–

–

–

–

30

Ÿ

33

64,872

1

–

2

– Profipower Group B.V. (100)

Ilona Jankovich Anita Galbács Beáta Rakos-Szegleti

1024 Budapest, Lövőház utca 39.

(1) 487-5050 (1) 487-5051 info@profipower.hu

Ÿ Ÿ

Ÿ

Ÿ

Ÿ

–

100

84

–

16

–

–

–

–

–

Ÿ

35

20,800

1

–

1

Attila Pál (100) –

Mariann Tál Attila Szabó –

1027 Budapest, Horvát utca 14–24.

(1) 214-0657 (1) 214-0658 ventiv@ventiv.hu

Ÿ Ÿ

1

NetworX System Kft (100) –

László Szieben – –

1135 Budapest, Róbert Károly körút 82–84.

(1) 236-9300 (1) 236-9306 –

www.doit-hr.com

www.personnel.hu

ProfiPower Kft www.profipower.hu NR

NR

Ventiv Health Hungary Kft www.ventiv.hu

Ÿ Ÿ

NR

Work Way Kft

NA

www.workway.hu

Ÿ

NA

NA

NA

NA

NA

NA

NA

NA

NA

NA

NA

NA

NA

NA

Ÿ

Ÿ

1

–

WWW.BBJ.HU

SPECIAL REPORT 25

Budapest Business Journal | Apr  – May 

Headhunters fear falling fees

BBJ

EXECUTIVE SEARCH FIRMS

-40% Change in total net revenue from placements of listed firms

DELAYED RECOVERY “I do not see a significant upturn in the course of the next six months,“ Recruitment International regional director John Smith said. Turnover will not reach 2008 levels this year due to clients’ cost-cutting measures and the resulting significant downward pressure on fees. One problem is that companies were forced to cut the number of employees and then realized they could manage with fewer people. As a result, when there is an upturn, they will not necessarily start hiring again.

There is usually an upturn in business confidence after elections, but it takes some time for this to translate into investments.

There are already some positive signs. Business activity already picked up in the first quarter of 2010, HR-Com managing director Móni Czeglédi told the BBJ, adding that this year’s client budgets include resources for hiring new employees. However, while first-quarter results are promising, the upturn in the executive search market will likely be slow and lag behind that of the rest of the economy. GL

REVENUE DECLINE 2009 was a very difficult year for everyone, with a significant drop in turnover at most executive search companies. Total net revenues of market leader Korn/Ferry decreased in line with the overall trend. Several market players have had to go through a reorganization process and were forced to cut jobs in 2009.

Another way to cut costs is to scrap top management positions at the local subsidiaries of executive search companies, by leaving only a representative office or by setting up a regional center. It is simply not worth maintaining a separate national entity under a certain size, Simonyi&Tóth managing director Judit Tóth points out. Working from a regional center is much easier in the executive search market than in recruitment, because executives are usually more “international” than middle managers; they speak foreign languages and are willing to travel for an interview.

There is also a misunderstanding between clients and the market, Tóth said. Clients have very high expectations, as they think the market is now packed with talented people desperately looking for a job – but they are wrong.

The market cannot always provide an immedi-

MOVING ON Colling Kft RSM DTM Hungary HLB Klient Holding Mazars ITL Group Fewer chairs to fill

+2 places +1 place +1 place

➔➔

These days, the main worry of all executive search companies is that the pressure on their fees will launch a downward spiral. Due to the marked drop in the number of new executive positions, several market players, including some top multinational firms, have offered steep discounts to clients in order to win assignments. Clients sometimes take advantage of headhunters’ despair and change both fees and contract terms unilaterally.

“We have heard of cases when an executive search company took on an assignment for a fee of a mere 20% of the candidate’s gross annual salary, while pre-crisis fees varied between 25%33%,” Krisztián Merényi, manager of the Hungarian Association of Recruitment and Executive Search Companies, told the Budapest

ate solution to clients’ needs. Some job seekers who have been unemployed for a long time are prepared to compromise on their salary or the position offered, but others prefer to wait for better opportunities.

Business Journal. Recruitment fees have also fallen to previously unknown depths, occasionally below 10% of the candidate’s annual salary.

“Before the crisis, there was a new foreign investor knocking on our doors almost every week, seeking top managers for their new subsidiaries,” Dr. Pendl & Dr. Piswanger managing director András Lipcsei said. Now, this is completely missing both in Hungary and in the Central and Eastern European region.

In the past, existing firms used to open new divisions as well, for which they also needed new managers. During the last year and a half, that has stopped, too.

➔➔➔

The executive search market has shrunk significantly in tandem with the rest of the economy. There are fewer new job openings in the absence of major developments or new investments. All players are worried about the downward pressure on their fees, as even top-tier multinational companies are willing to give irrational discounts to clients.

-2 places -2 place

The largest changes in the list

Direct search drives wedge into market The global crisis has brought revolutionary changes on the executive search market. As a result, the line between recruitment and executive search is blurring, as market players have been forced to open up toward each other’s market.

This has sharpened the conflict between the two segments.

seeking specialists in the fields of IT and engineering. Of course, they do not really mind being referred to as executive search firms, unlike the other way round.

There has been conflict brewing between the two segments for more than 20 years, manager of the Hungarian Association of Recruitment and Executive Search Companies Krisztián Merényi told the Budapest Business Journal. However, overlaps already exist; executive search firms say they offer only the highest quality services, but they sometimes also recruit assistants alongside top managers, Merényi noted. The association, which was set up in 2004 and now has 27 memBBJ GABRIELLA LOVAS bers, aims to bring the two camps together and improve communication and cooperation.

There are only a handful of executive search Most companies already offer a range firms in the strict sense in Hungary, including of recruitment services besides executive the market leader Korn/Ferry, Egon Zehnder, search, Recruitment International regional Dr. Pendl & Dr. Piswanger and Spencer Stuart, director John Smith said. This is because among others. These companies specialize in the there are not that many open executive posidirect search of executives only, and dislike com- tions on the Hungarian market. Recruitment parisons to recruiters, who offer a wider range of International, which is ranked second on the services. However, several market participants BBJ’s list of executive search companies, has who used to specialize in executive search only always had a more general focus, he added. are now working their way lower down the food Direct search now accounts for just 50% of all search methods used by the company. chain, due to a shrinking market.

By the same token, some recruiters are forced Hill International, ranked fourth on the BBJ’s to use direct search methods, especially when list, offers recruitment services too, for similar rea-

sons. But direct search still dominates, making up 75% of the company’s business. The Hungarian market is very small, with only a few really big companies, Hill managing director Zsolt Fazekas told the BBJ. This is why it is also difficult to specialize by sectors such as banking, FMCG or the automotive industry, or by the type of placement permanent or temporary.

Companies that have diversified their services have coped much better during the crisis than those who have not, Fazekas said.

These new services typically include organizational development, outsourcing, training, competence analysis or HR consultancy, in addition to personnel search and selection. Outplacement, unfortunately, has also become popular, as there were often more layoffs than hirings during the crisis.

Dr. Pendl & Dr. Piswanger (P&P) managing director András Lipcsei disagrees, however, saying that diversification provides only a false sense of security. He believes that specialization is important, because when a company needs to hire an executive, it is best to seek the assistance of a firm specialized in executive search. “If one has a specific health problem, one will consult a specialist rather than a GP,” he noted.

Therefore, P&P says its new services are always closely related to top management

issues. Even when there are few new executive positions to fill, executive search firms can still focus on improving the quality of the existing top management at their clients, or on gap management, assisting companies who need to replace an executive in case of unexpected events such as a scholarship or illness. Indeed, most market participants have shifted toward high value-added services like management audit, talent management programs and organizational and corporate culture development, Lipcsei said, adding that revenues from these services offset the drop in revenues from executive search. Thus P&P, which is ranked fifth on the BBJ’s list, managed to record profits last year, despite the downturn.

Lipcsei said he believes in market segmentation. P&P and its managers, for instance, have set up different brands and companies for its various services, such as Personnel Leasing for recruitment and Interim Management Resourcing for temporary management services. Separating different services by building brands could be a possible solution to the two-decadelong conflict between headhunters and recruiters. This way, it would also be easier to compare the performance of different business lines. In the meantime, communicating with each other would be a good start. ■

WWW.BBJ.HU

26 SPECIAL REPORT

Budapest Business Journal | Apr  – May 

EXECUTIVE SEARCH FIRMS[1]

The BBJ’s Book of Lists contains 100+ sector-specific listings of leading companies. The Book of Lists comes free with a BBJ subscription, or can be ordered separately by e-mailing Eva.Bercesi@bbj.hu

Ranked by net revenue from permanent placements in 2009

Breakdown of candidates placed in 2008 (%)

20

180 90

200 115

75

10

15

–

17 120

50

177

177

Ÿ

Ÿ

170 80

45

35

¸

¸

¸

¸

¸

35

15

25–33 – –

6–12 months 4–6 weeks

¸

¸

¸

¸

¸

–

Ÿ Ÿ Ÿ

12 months 6–10 weeks

12 months 4–5 weeks

¸

¸

¸

¸

¸

¸

¸

¸

¸

¸

Ownership (%) Hungarian Non-Hungarian

Top local executive Finance director Marketing director

Address Phone Fax Email

¸

17,000 2

Individuals (100) –

Bernadett Iker – –

1024 Budapest, Lövőház utca 7–9.

(1) 202-1008 (1) 202-1009 contact@nextconsulting.hu

¸

Ÿ

– Grafton Recruitment B.V. (75), Niall Ke¸ (25)

Jacques De Jager Miklós Hanti Zsuzsanna Dávid

1066 Budapest, Teréz körút 46.

(1) 577-5200 (1) 577-5202 budapest@spenglerfox.com

¸

¸

Ÿ

– Whitney Holdings (100)

John Smith Ilona Fekete –

1065 Budapest, Révay utca 10.

(1) 474-8815 (1) 474-8712 info@recruitment.hu

¸

¸

56,000 36

Katalin Varga (62.50), Zsolt Fazekas (27.50), Gábor Éles (10) –

Zsolt Fazekas Péter Dömsödi Gyöngyi Pados

1027 Budapest, Szász Károly utca 2.

(1) 201-2252 (1) 201-2252 hill@hill.hu

¸

31,500 82

Richárd Kohlmann (50) David Young (50)

Richárd Kohlmann, David Young – –

1023 Budapest, Rómer Flóris utca 57.

(1) 391-0950 (1) 391-0951 office@amrop.hu

¸

¸

Ÿ

– Neumann Leadership Holding GmbH (100)

Katalin Bereczky – –

1025 Budapest, Ali utca 8.

(1) 489-4489 (1) 489-4488 neumann@neumann-partners.hu

¸

¸

29,000 10

( ) Éva Gombás Ÿ A2H Societé a Responibilité ( ) Limitée Ÿ

Éva Gombás – –

1075 Budapest, Madách Imre út 13–14.

(1) 361-3612 (1) 361-3612 arthurhunt@arthurhunt.hu

–

19,000 97

András Lipcsei (35), Vilmos Kozáry (5) Dr. Pendl & Dr. Piswanger GmbH (55), Peter Pendl (5)

András Lipcsei – –

1012 Budapest, Logodi utca 44.

(1) 487-0241 (1) 487-0248 pandp@pendlpiswanger.hu

– (100)

Móni Czeglédi – –

1012 Budapest, Logodi utca 34/B (1) 801-8888 (1) 801-8889 info@hrcom.hu

Telecom and media

Ÿ

3–12 months 1–12 weeks

No. of people in database on Jan. 1, 2009 No. of offices worldwide

Pharmaceuticals

–

17.50–27.5 65 35

IT

30

6–12 months 5–8 weeks

Sales & marketing

20

4

30–35 – –

FMCG

50

6–12 months 2–8 weeks

Manufacturing

211 145

30

25–33 or fixed – 100

Bank and finance

211 145

Guarantee to clients Search time

Other

1,548

Industry specialization Fee charged in percentage of salary in first year Successbased (%) Flat fee (%)

Middle management

213 127

Senior executives

468 180

Other

445 109

Placement from database

Total net revenue (HUF mln) in 2009 H1 2009 Advertisement

Company Website

No. of professional staff on May 1, 2009 No. of candidates placed in 2008

Net revenue from permanent placements (HUF mln) in 2009 H1 2009

Direct search

Rank

Breakdown of search methods (%)

Next-Consulting Kft www.nextconsulting.hu 1

90

5

5

12

–

Ÿ

–

9 92

20

50

¸

¸

¸

¸

¸

–

SpenglerFox/Grafton Recruitment Kft www.spenglerfox.com 2

3

Recruitment International Kft

4

Hill International Kft

5

Amrop Hever Group/Kohlmann & Young Kft

www.recruitment.hu

www.hill.hu

www.amrophever.hu

Ÿ

100

100

–

–

–

–

20

8

Ÿ

68

80

28

20

¸

¸

¸

¸

¸

¸

¸

¸

¸

¸

¸

¸

20

8

95

5

–

–

Ÿ

90

10

–

30 – –

70

10

20

–

4 61

50

40

10

25 30 70

6–12 months 2–8 weeks

29

– – 100

3–12 months 5–6 weeks

3–9 months 2–8 weeks

¸

¸

¸

¸

¸

¸

¸

– 33

¸

¸

–

¸

¸

–

¸

80,000 3

Péter Fröhlich (100) –

Péter Fröhlich – Andrea Ribár

1126 Budapest, Derkovits utca 10.

(1) 483-2360 (1) 485-0699 fp@pbert.eu

¸

6,000 1

Judit Tóth Simonyi (33.30), György Simonyi (33.30), Béláné Tóth (33.30) –

Judit Tóth Simonyi – –

1015 Budapest, Szabó Ilonka utca 71/A (1) 214-1286 (1) 214-1286 info@sandt.hu

–

Ÿ Ÿ

Management (11) Porges Siklossy & Partners GmbH (87), individuals (2)

Ilona Gyorsok – –

1051 Budapest, József nádor tér 8.

(1) 266-5235 (1) 266-4072 psp@psp-siklossy.hu

Katalin Berkó – –

1122 Budapest, Maros utca 12.

(1) 225-3248 (1) 225-3249 budapest@accord-ece.com

Tamás Felkai – –

1071 Budapest, Damjanich utca 9.

(1) 485-0616 (1) 485-0617 yourprofile@yourprofile.com

6

Neumann & Partners Kft www.neumann-partners.hu

170 80

7

Arthur Hunt Kft

137

137

www.arthur-hunt.com

Ÿ

Ÿ

Dr. Pendl & Dr. Piswanger International Management Consulting Kft

132

230

Ÿ

Ÿ

127

127

Ÿ

Ÿ

80

10

102

Ÿ

166 58

70

5

85

110

8

–

96

2

2

9

15

–

30

41

Ÿ

10

–

10 90

20

40

40

20–30 or fixed 5 95

20

5

16 100

20

40

40

100 10 90

3–12 months 3–4 weeks

–

7 60

20

25–30 25 –

3–12 months 4–12 weeks

12 months 4–6 weeks

¸

¸

¸

¸

¸

¸

¸

¸

¸

–

www.pendl.hu

–

–

–

–

–

–

22

HR-Com Kft www.hrcom.hu

9

10

P&Bert Management Consulting Group Kft www.pbert.eu

11

Simonyi & Tóth Kft www.sandt.hu

Ÿ

Ÿ

12

PSP Siklóssy and Partner Kft

83

www.psp-siklossy.hu

Ÿ

105 74

13

Accord Group Kft

74

81

www.accord-ece.com

Ÿ

Ÿ

14

Your Profile Personnel Consulting Kft

67 27

67 27

www.yourprofile.com

80

20

–

55

45

–

–

100

–

–

–

60

10

30

–

10

Ÿ

6

Ÿ

Ÿ 85

20

60

47

47

6

25–33 – –

95

5

–

33 – –

6–9 months 4–6 weeks

Ÿ

20–30 50 50

3–12 months 2–4 weeks

Ÿ

Ÿ

¸

¸

¸

¸

¸

¸

¸

¸

¸

¸

¸

–

¸

–

¸

Ÿ 32

(100) –

¸

58,000 2

Individuals (100) –

WWW.BBJ.HU

SPECIAL REPORT 27

Budapest Business Journal | Apr  – May 

17

Kienbaum Executive Consultants Kft

¸

¸

¸

¸

Ÿ

Address Phone Fax Email

– Catro Personalsuche und Auswahl GmbH (100)

Krisztina Pulay – –

1061 Budapest, Andrássy út 35.

(1) 344-5516 (1) 344-5518 catro@catro.hu

Individuals (100) –

András Gábor – –

1026 Budapest, Riadó utca 12.

(1) 200-0850 (1) 394-1097 infobudapest@spencerstuart.com

¸

15,000 33

– Kienbaum Consultants International GmbH (100)

András Sághy – –

1062 Budapest, Andrássy út 100.

(1) 267-0944 (1) 267-0943 budapest@kienbaum.com

Zsigmond Ekler (50), Brigitta Gaál Ekler (50) –

Zsigmond Ekler Ildikó Kósa –

1036 Budapest, Bécsi út 59.

(1) 367-5000 (1) 453-2344 ekler@ekler.hu

30

60

10

Ÿ

90

10

–

33 or fixed – 100

6–9 months 6–12 weeks

¸

¸

¸

¸

¸

¸

–

5 15

90

10

–

33 – 100

6–12 months 6–9 weeks

¸

¸

¸

¸

–

–

15

5

5 81

34

22

44

20–33 100 –

6 months 4–8 weeks

¸

¸

–

¸

¸

–

–

18,000 2

15

–

–

5 19

65

25

10

25–28 – –

9–12 months 7–8 weeks

¸

¸

¸

¸

¸

¸

¸

3,000 1

Péter Lendvay (60), G27 group (40) –

Péter Lendvay – –

1037 Budapest, Montevideo utca 10.

(1) 487-9090 (1) 487-9099 bacskai.orsolya@deltasource.hu

10

5

–

4 58

40

50

10

25 – 100

6–12 months 4 weeks

¸

¸

¸

¸

–

–

–

11,000 2

Annamária Horváth (50), András Horváth (50) –

Annamária Horváth, András Horváth – –

1055 Budapest, Honvéd tér 10/B (1) 373-0250 (1) 373-0250 info@horvath-hr.hu

–

5 47

3

27 32 25

6 months 3–5 weeks

–

58,000 2

Miklós Fodor (100) –

Miklós Fodor – –

1025 Budapest, Törökvész út 65/B (70) 312-0142 (1) 200-0607 miklos@fodorhr.hu

5

30

5

Ÿ

97

–

3

–

www.kienbaum.com

55 31

56 31

95

–

5

18

Dr. Ekler and Partners Kft

40

56

www.ekler.hu

Ÿ

Ÿ

50

30

19

Delta Source Kft www.deltasource.hu

32 15

40 18

85

20

Horváth Recruitment Kft

29

37

www.horvath-hr.hu

Ÿ

Ÿ

85

21

Fodor Human Resources Kft

23

32

Ÿ

Ÿ

80

¸

Top local executive Finance director Marketing director

25–30 10 90

60

www.fodorhr.hu

No. of people in database on Jan. 1, 2009 No. of offices worldwide

Ownership (%) Hungarian Non-Hungarian

Telecom and media

Ÿ

¸

Pharmaceuticals

www.spencerstuart.com

¸

IT

58

¸

50,000

Sales & marketing

58

5–12 months 4 weeks

FMCG

Spencer Stuart Kft

Guarantee to clients Search time Manufacturing

16

Fee charged in percentage of salary in first year Successbased (%) Flat fee (%)

Bank and finance

Ÿ

Industry specialization

Other

Ÿ

Middle management

www.catro.hu

Direct search 15

Other

80

Catro Management Consulting Kft

Placement from database

60

Company Website

Advertisement

Total net revenue (HUF mln) in 2009 H1 2009

Rank

Net revenue from permanent placements (HUF mln) in 2009 H1 2009

No. of professional staff on May 1, 2009 No. of candidates placed in 2008

Senior executives

Breakdown of candidates placed in 2008 (%)

Breakdown of search methods (%)

15

5

8 55

6

77

20

¸

¸

¸

¸

¸

–

Ÿ

51

WWW.BBJ.HU

28 SPECIAL REPORT

Budapest Business Journal | Apr  – May 

NR

Antal Hungary Kft

Ÿ Ÿ

68 (2008)

NR

CVO Recruitment Hungary Kft

Ÿ Ÿ

100 (2008)

NR

Egon Zehnder International Kft

Ÿ Ÿ

442 (2008)

NR

HaRp & Partners Kft

Ÿ Ÿ

105 (2008)

NR

Hudson Global Resources Kft

Ÿ Ÿ

340 (2008)

NR

Human Value International Kft

Ÿ Ÿ

105 (2008)

NR

IVENTA Hungary Management Consulting Kft

Ÿ Ÿ

110 (2006)

Ÿ

www.antal.com

www.cvo.hu

www.egonzehnder.com

www.harp.hu

www.hudson.com

www.humanvalue.eu

www.iventa.hu

NR

Kerek-S Solution Consulting Kft www.kerek-s.hu

9

Ÿ

Ÿ

Ÿ

Ÿ

70

80

50

Ÿ

75

20

10

15

Ÿ

10

10

–

25

Ÿ

15

5

21

28 or fixed 50 50

3–12 months 4–10 weeks

60

18–25 80 20

3–6 months 2–6 weeks

Ÿ

Ÿ Ÿ Ÿ

Ÿ Ÿ

Ÿ

Ÿ Ÿ Ÿ

Ÿ Ÿ

Ÿ Ÿ

¸

¸

¸

¸

¸

¸

–

4 24

10

Ÿ Ÿ

10

7 96

Ÿ

Ÿ Ÿ

Ÿ

Ÿ Ÿ

Ÿ

Ÿ

Ÿ

Ÿ Ÿ Ÿ

40

30

30

30 10 90

3–12 months 4–6 weeks

¸

¸

¸

¸

¸

35

25

25–30 – 100

3–6 months 4–8 weeks

¸

¸

–

¸

50

25

40

10

Ÿ

Ÿ

30

70

39

30

Ÿ

Ÿ

¸

–

–

¸

¸

¸

¸

¸

¸

¸

¸

¸

¸

–

¸

¸

¸

¸

¸

–

¸

¸

¸

¸

¸

–

¸

–

No. of people in database on Jan. 1, 2009 No. of offices worldwide

Ownership (%) Hungarian Non-Hungarian

Top local executive Finance director Marketing director

Address Phone Fax Email

–

31,000 1

Vera Urbán (90), Ágnes Bán (10) –

Vera Urbán – –

2000 Szentendre, Széchenyi tér 34.

(1) 489-0560 (1) 489-0561 urban.vera@synchronex.hu

–

30,000 1

Attila Balázsik (100) –

Attila Balázsik Attiláné Balázsik –

8000 Székesfehérvár, Gyümölcs utca 18.

(22) 500-600 (22) 500-601 humanity@humanity.hu

(100) –

Csaba Patkó – –

1024 Budapest, Moszkva tér 9.

(1) 336-2414 (1) 336-2418 hungary@antal.com

Telecom and media

Ÿ

6 months 4–6 weeks

5

4 20

Pharmaceuticals

Ÿ

20 90 10

IT

www.humanity.hu

20

3–6 months 2–4 weeks

Sales & marketing

10

25

20–32 20 80

FMCG

10

15

Guarantee to clients Search time Manufacturing

23

Humanity 2001 Kft

55

Fee charged in percentage of salary in first year Successbased (%) Flat fee (%)

Bank and finance

Ÿ

Industry specialization

Other

Ÿ

Middle management

www.synchronex.hu

Direct search 21

Other

27

Synchronex Consulting Kft

Placement from database

23

Company Website

Advertisement

Total net revenue (HUF mln) in 2009 H1 2009

Rank

Net revenue from permanent placements (HUF mln) in 2009 H1 2009

No. of professional staff on May 1, 2009 No. of candidates placed in 2008

Senior executives

Breakdown of candidates placed in 2008 (%)

Breakdown of search methods (%)

¸

Ÿ

¸

103,323 7

(40) Verita Solutions OÜ Estonia (60)

Norval K. Sinclair Stephen Kerkow –

1062 Budapest, Aradi utca 8–10.

(1) 505-4555 (1) 505-4550 budapest@cvorecruitment.com

¸

Ÿ Ÿ

– Egon Zehnder ( ), Finanz AG Ÿ Egon Zehnder () International AG Ÿ

Stephen Benkö – –

1055 Budapest, Honvéd utca 20/A (1) 474-9740 (1) 474-9734 ezibudapest@ezi.net

1

(100) –

Katalin Vásárhelyi Marret – –

1062 Budapest, Aradi utca 8–10.

(1) 302-3383 (1) 332-1711 info@harp.hu

¸

Ÿ Ÿ

– Hudson Highland Group Inc. NY (100)

Gábor Áron Székely Péter Kata –

1036 Budapest, Lajos utca 74–76.

(1) 430-5400 (1) 430-5401 info.budapest@hudson.com

¸

¸

25,000 5

– International Human Investments Plc. (100)

Zoltán Korpás, Bálint Vojnits – –

1062 Budapest, Andrássy út 91.

(1) 322-2490 (1) 322-2490 info@humanvalue.eu

–

¸

¸

Ÿ

– IVENTA Management Consulting GmbH (100)

Ágnes Börcsök – –

1037 Budapest, Montevideo utca 7.

(1) 430-2350 (1) 430-2355 iventa@iventa.hu

¸

¸

¸

¸

¸

¸

¸

–

–

60

Ÿ

60

24

10

6

Ÿ Ÿ

100

–

–

–

9 50

Ÿ

50

30

20

–

Ÿ

40

32 (2008) 9

95

–

–

5

5 11

30

50

20

33 – –

12 months 3 weeks

¸

¸

–

¸

¸

¸

¸

6,000 1

Individuals (100) –

Péter Kerekes Gabriella Sipos Andrea Farkas

1038 Budapest, Donát utca 49.

(1) 209-1690 (1) 209-1690 kerek-s@kerek-s.hu

80

–

–

202

80

20

–

33 or fixed – 100

12 months 6–10 weeks

¸

¸

¸

¸

¸

¸

¸

– 80

– Korn/Ferry International Inc. (100)

Vilmos Szabó, Péter Forgács Tímea Herczeg –

1022 Budapest, Bimbó út 77.

(1) 346-0600 (1) 346-0619 –

60

20

15

5

50

40

10

30 or fixed – –

3–12 months 3–8 weeks

¸

¸

¸

¸

¸

¸

¸

Ÿ

– Neumann International AG (100)

Andreas Christian Benkitsch – –

1033 Budapest, Váci út 76.

(1) 200-8800 (1) 200-8366 budapest@neumann-inter.com

6 months 4–6 weeks

¸

¸

¸

¸

¸

¸

¸

Ÿ 37

– (100)

Mónika Kecskés Simon Ashby Anastasia Alpaticova

1052 Budapest, Sütő utca 2.

(1) 328-0277 (1) 328-0278 budapest@ pedersenandpartners.com

Ÿ

Ÿ

4

10

Korn/Ferry International Budapest Kft www.kornferry.com NR

NR

Neumann International Kft

NR

Pedersen & Partners Kft

NR

Pivot Human Capital Kft

NR

Source Consulting Kft

NR

TARGET Hungária Kft

www.neumann-inter.com

www.pedersenandpartners.com

www.pivothc.eu

www.source.hu

www.targetfuture.com

Ÿ Ÿ

767 (2008)

Ÿ Ÿ

141 (2008)

Ÿ Ÿ

87 (2008)

Ÿ

100

–

–

–

Ÿ

90

10

–

33 – –

Ÿ Ÿ

14 (2008) 87

65

–

20

15

5 36

23

77

–

20–28 55 20

3–12 months 2–5 weeks

¸

¸

–

¸

¸

¸

¸

18,000 2

Csaba Csedő (100) –

Csaba Csedő – –

1124 Budapest, Tamási Áron utca 38.

(1) 769-0266 – info@pivothc.eu

Ÿ Ÿ

9 (2008)

100

–

–

–

5 61

25

50

25

25 – –

3–12 months 2–6 weeks

–

–

¸

¸

–

¸

–

28,000 4

Takács Zsuzsanna (100) –

Takács Zsuzsanna Éva Nacsa Adrienn Dankó

1137 Budapest, Radnóti Miklós utca 9.

(1) 372-0072 (1) 372-0070 mail@source.hu

Ÿ Ÿ

71 (2008)

90

5

5

–

70

30

–

Ÿ(fixed) – 100

6 months 4–6 weeks

¸

¸

¸

¸

¸

¸

¸

66,874 7

– Klemens Wersonig (100)

Klemens Wersonig – –

1051 Budapest, Vörösmarty tér 2.

(1) 429-1020 (1) 429-1029 office@targetfuture.com

Ÿ

Ÿ

Ÿ

Ÿ

11

Ÿ

4

Ÿ

4

5

Ÿ

NOTES: (1) Executive search firms on the list indicated that they use executive search methods in at least 50% of the number of placements they make within a year. (2) Management Assessment.

29

BBJ LIFE LIFE & PEOPLE

Q&A

Who's News

Christopher Mattheisen

People on the move

▶ PAGE 33

▶ PAGE 32

FEATURE

SUMMER KIDS Children's memories of the summer can last forever.

Choosing a good summer camp for your kids goes a long way towards making those memories pleasant. ▶▶ article continues on next page

FEATURE

A handful of entrepreneurs have set off to explore a budding niche market offering private jets for rent. Having thus far delivered a broad range of clients and cargo, from holidaymaking couples through businessmen hurrying to meetings to organs for transplantatio. ▶▶ article continues on next page

WWW.BBJ.HU

30 LIFE SUMMER KIDS ▶ continued from previous page For most expats trying to find a place for their kids to have fun during the summer, an obvious solution is the summer day camp of the school itself. The best-known camp among Hungary’s English-speaking community is the one organized by the American International School of Budapest. It will have its 16th season this year, ten of which took place in its current location in Nagykovácsi. Although most of the AISB’s students return home for the summer with their family, some always have to stay on due to the work commitments of their parents or other reasons.

The six weeks of camp usually see about seven to18 kids a week in two age groups. “It is not just our students who come. There are usually some children from other countries, such as Norway or Finland – although they usually have relatives or friends at AISB,” says admissions officer Gabriella Thomas, who is responsible for the organization of the camp.

Thomas adds that kids from other foreignlanguage schools in Hungary, and even some Hungarian children, see the camp as a good way to practice their English.

ACTIVE LIFESTYLE In line with the school’s profile, the camp has a definite American style, meaning it is based on activities, including a heavy dose of sports.

There’s not much room left for boredom, as activities are rotated on an hourly basis and the use of the computer room is restricted to a couple of hours a day. For the little ones, aged four-eight, the afternoons mean free play, but older kids, especially teenagers, feel a lot better if they take part in a coordinated flow of activities, according to Thomas.

Another well-known feature of American camps, the counselor system, was also

Budapest Business Journal | Apr  – May 

introduced in the Nagykovácsi camp. The camp has two types of counselors. The “real” counselors are 17-20-year-old alumni who return to the school for the summer and work together with the four or five teachers in attendance to take care of the campers.

But there are also 11th-12th graders from the school who start as assistants and participate in camp activities for just twothree weeks. At the end of the summer, they all feel enriched and more confident in their skills – and so do their campers.

International students can also try the Hungarian version of summer camps – this involves school-like classes throughout the day on a certain subject. However, not all nationalities are fond of taking school lessons in the summer. There are about five groups a year that come from countries such as Germany, Cyprus, and Bulgaria, with ten-20 students each. They, especially the Germans, often balk when told to sit through classes, as they tend prefer American-style camps.

To accommodate this, they have a special program during their stay. AJM

THREE HUNGARIAN CAMPS TO TRY HŐSCINCÉR Offering kids who love nature a chance to get hands-on experience of wildlife and adventure.

More info http://www.hoscincer.hu/ GYŰRŰK URA TÁBOR Knights, wizards, goblins, princesses and all sorts of medieval adventures.

More info http://gyurukuratabor.hu/ THE SZARVAS FELLOWSHIP Join the world’s largest international Jewish summer camp – for high school students.

More info http://www.szarvas.org/

DEVOTED TO LEARNING In an opposite setup, an international selection of kids can often be found in popular Hungarian camps, but here the motivation is quite different from that of the American school campers, as the primary goal is to learn Hungarian. PeopleTeam camps are, for example, well-established in this respect.

Having started off as language camps back in 1991, they have since expanded their offering to ten themes, including ‘Hungarian as a foreign language.’

Many of the kids in this program are children of expats, or children of Hungarian origin living abroad who are sent to Hungary for the summer to keep their language skills alive or to develop them. They often bring friends who do not speak any Hungarian.

“The children usually make new friends during camp, which is a good motivation to keep communicating in Hungarian,” says camp leader Szilvia Gémes.

Or in English, because about 10% of the total 350 kids per session are foreigners. Even if they join a Hungarian majority, there are no language problems, as programs are formed to their needs as well, and the camp promotes tolerance and acceptance. In English and German-language camps, there are native speaker teachers, but everyone else on staff speaks English, too.

HUNGARIANS GO TO AMERICA While it is common among international students to pay to come to a Hungarian (or other international) camp, Hungarians often cannot afford to do so, so some go to foreign camps as counselors, where they get paid, and hope to break even on their travel expenses. The most popular option is definitely to live the American dream; there are about 500 Hungarian college or university students who visit the US with a J1 visa (issued for work and travel programs) each year.

At the largest organizing agency, Camp California USA, some 300-400 Hungarian students are employed each year by various types of camps throughout the US. The program has just celebrated its 20th year in Hungary. “Until about five years ago, the growth rate of participants was around 10%-15% regardless of our marketing activity, proving the power of word-of-mouth marketing. Five years ago something changed: our camp leaders program started and a critical mass formed, and a larger group of people was targeted,” says former CCUSA country director Mike Mitchell, who has returned to the US to take up a government job after 20 years spent in the camp business.

The success of the program is shown by the high number of returning participants, who usually account for half of the total workforce. Females have traditionally been more active, but in special positions where physical strength matters, males prevailed. Now they’re also active in counseling, with their ratio at around 30%. Applicants are usually placed in camps that are located on the East Coast and around Chicago (the traditional camp site areas), with about 10% of camps located on the West Coast.

The skills of these students are in high demand as, increasingly, few Americans are applying for counselor positions. “For our 100 positions, we have about 20 Americans applying,” says Ann Rampulla, director of Rockyworld-Deephaven Camps (RDC) in New Hampshire. Because of this trend, camp directors have to find smart ways to hire, including more and more international workers. “A definite advantage of this change is the multicultural atmosphere that results from the majority presence of international counselors,” Rampulla argues. RDC has a long tradition of hiring Hungarian students, uncharacteristically even couples. This year, the camp employs an 11-member colony of Hungarian counselors.

There is a so-called American-clique syndrome though: while international participants tend to mix regardless of their country of origin, Americans – with their different experiences and language skills – tend to form cliques excluding foreigners. The phenomenon is well known and actively fought against by camp directors. They organize employee recreation programs and other types of group-forming activities. However, Hungarian and American organizers’ final – funny, but useful – advice is that at the end of the day, “the Americans are in the driver’s seat” so internationals ought to make friends with them.

A granny in need is a granny indeed How could anyone possibly grow up without a granny? If you don’t have one, you could adopt one.

BBJ ANIKÓ JÓRI-MOLNÁR

Next time the lonely old lady in your neighborhood asks you what the internet is for, tell her she can find grandchildren through it.

And that a couple of her contemporaries have already done so. Due to the dedicated work of a foundation created by Gábor Szabó and László Heinold, many city children have found themselves loving grandmas through the nagymama. hu website.

Actually, this is not exactly what nagymama.hu was established for. Its founders saw that city people, although unable to give up their urban lifestyles, still have a desire for rural values like traditional food, tranquility and hospitality. Meanwhile, in the countryside, people are struggling to make a living.

Szabó and Heinold set out to connect these groups by launching an internet platform which would hopefully improve both parties’ standards of living.

Little did they dream that the feature attracting most people would be the possibility to establish personal relationships. The loneliness of old people in villages and the

alienation experienced by a young city generation found an outlet on this platform, which turned out to be a great way to fill the human need for intergenerational contact. There are currently more than 200 registered users on the website, mainly grandchildren looking for grandmas, or single mothers and families who, in turn for a countryside vacation for kids and a few jars of jam, are willing to lend a hand around the house of their adoptive grannies.

As of now, grannies are still in a minority. No wonder, since very few of them are familiar with computers, let alone know how to log on to a website. The founders have spread the word about the service to mayors, emphasizing the need to assist these people. There are also good examples of grannies being extremely active not only on the website but also in real life; besides raising their own grandchildren, many have the strength to care for others. The site is, of course, open to grandpas as well. Gyulabá is one example, skilled not only in childcare, but also in yoga.

Notwithstanding the success stories or the digital literacy level, the founders are surprised about the passivity of many users, who seem to think that after registration they have nothing to do but wait for the foundation to do the rest. In fact, they should actively look for other users and contact them to really make it “the beginning of a beautiful friendship.” The founders believe in

“self-organizing methods driven by mutual inter- ally soon disappear from the site, taking ests,” secretary László Heinold told the BBJ. things into their own hands.

But the success of self-organizing efforts So the Nagymama foundation goes on is hard to measure, because most feedback with the ammunition of a few thank you letcomes from those who have problems using ters, and hopes that it can find the financing the platform. Those who can handle it usu- to continue its mission. ■

WWW.BBJ.HU

LIFE 31

Budapest Business Journal | Apr  – May 

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COMMUNICATION PHONES, GADGETS, INFRASTRUCTURE, AND WHAT TO DO ON IT – THE BBJ'S MONTHLY TELECOMMUNICATION COLUMN FOT EVERYONE WHO TALKS, READS AND SENDS

Internet to go, please

C

QUICKBITES

T-Mobile offers “green” handset T-Mobile is introducing another “green” handset in Hungary. Sony Ericsson’ s Elm is made of recycled plastic, covered with water-based coloring, and free of PVC, beryllium, bromide and antimony. In addition, the handset comes with an electronic user manual instead of a paper-based one. Thanks to the phone’s “smart packaging,” carbondioxide emissions can be reduced by 80% throughout the packaging and shipping process.

Pannon to turn off mobile TV Pannon GSM will discontinue its Mobil TV services on May 18, daily Népszabadság reported. Company officials told the newspaper that its mobile-television services, launched in 2005, have generated losses for quite some time, noting that the company has decided to concentrate on expansion of its mobile broadband and LTE networks. Pannon announced earlier this year that it would launch a HUF 3 billion (€11.39 million) costcutting program.

Mobile internet is everywhere: it’s actually fast and fun if you know how to use it properly. The BBJ offers a few tips on how to improve your experience.

BBJ ANIKÓ JÓRI-MOLNÁR

Hungarians are devoted to their mobiles, with the number of subscriptions among the highest in Europe, at 118 for every 100 residents, according to National Communication Authority data. In addition to oldfashioned voice calls and text messaging, the use of mobile internet has also started to spread like wildfire.

By the end of February 2010, out of a total of 2.76 million internet connections in Hungary, more than one third were mobile internet, its share rising almost ten percentage points in one year.

Spurred by low promotional prices, 13,000 new mobile internet subscriptions were signed in February.

Within the total number of mobile internet subscriptions, T-Mobile’s market share inched up to 47.02% on the month, Vodafone’s share dropped to 24.81%, while Pannon’s dropped to 28.16%.

As the number of users has grown, so has the need to learn hard lessons about cost saving. While data traffic is easy to control through fixed subscriptions and notification settings while you stay inside the country, going abroad presents new challenges. To address those challenges, the EU obliged mobile operators to offer services allowing users to set an upper limit for mobile internet roaming use.

Limits can be set in terms of either value or data traffic, but the default value limit can not exceed €50 in any billing period.

UPGRADING SERVICES Not only did the number of users increase rapidly over the years, but so did the coverage and speed of

mobile internet, opening the door to more sophisticated services. More than 90% of data transferred NEXT IPHONE, GET LOST! by subscribers is now over third-generation HSPA networks. These can provide speeds many times Apple’s fourth version of iPhone is still in the faster than their predecessors, and while coverage works – at least as far as people knew. Observis not nearly as perfect as it is marketed, speeds can ers have come to know that Apple develops its still reach up to 7 Mbit/sec. These compare to preproducts with the utmost secrecy and the next big thing can’t be seen until the top executives viously available speeds of just a couple of hundred decide on the launch. kilobits, so it is a quality change that many customBut, apparently, the façade has crumbled. ers are happy to explore.

Either that, or the company indulged in a marThe actual speed of mobile internet is affected by keting stunt that definitely generated all the a number of things. Geographical area is key – the publicity it could have hoped for. higher the density of people, the better the coverAs it happens, an Apple engineer, having had age, because for companies it is worth implementa few beers, lost what seemed to be a regular ing more data transmitter stations in these areas. iPhone in a bar. Someone found it, only to realNetwork capacity and status is also crucial, so it ize that the handset had features that have not is better to get information in advance about netbeen seen before. work speeds and the general traffic load in the area The “iPhone 4” ended up at the Gizmodo blog, we live in; high traffic can slow downloads. Those which drove gadget freaks worldwide into a in need of a faster connection when browsing can frenzy by publishing pictures. If reports are to also try applications that reduce loading times by be believed Steve Jobs himself called Gizmodo, removing all unnecessary elements (such as images saying the blog had something that rightfully or graphics) and leaving text only. belonged to Apple, and asked for it back.

Nonetheless, an up-to-date handset can deal Regardless of whether the story is true or just with YouTube, Facebook or Google Maps, or even an enormously successful hoax, devout Apple upload photos to picture sharing sites, assuring not users can hardly wait for the new iPhone to hit a single moment of boredom again. Or a moment the shelves. Whenever that may be. without work: news sites and e-mails can also be accessed. In these cases, security may be a concern, but today almost all major software develop- and home office (SOHO) users and home networks, ers offer a mobile version of their Internet security enabling the interconnection of phones, game or antivirus applications. consoles, PCs and laptops. In Hungary, Vodafone teamed up with the Chinese manufacturer to offer SHARING IT such a device on a subscription plan in response to user demand. The 7.2 Mbit/sec speed is not that Although most households use mobile Internet high when shared with four others, but it is fair and as a complementary or backup connection, others convenient in any place that lacks a fixed connection. rely – occasionally or by default – solely on mobile Installing and using the device really is for dummies browsing. They can feel pampered with products – you plug a USB modem (aka a mobile stick) in the such as a USB WiFi-LAN adapter. One of the first router, plug it in to the electricity, and then turn on such devices is Huawei’s D100, aimed at small office all the wi-fi capable computers in the house. ■

Call for faster mobile networks A broadband study commissioned

by Nokia Siemens Networks has shown that mobile broadband users are up to 22% less satisfied with their connectivity when compared to fixed broadband users, due mainly to slower download speeds. With nearly half of all mobile device owners expected to connect to the internet through a mobile network in 2010, operators must improve mobile broadband quality, the study concludes.

New virtual IT-solutions Leading Hungarian alternative telco GTS-Datanet has launched a new service portfolio called Virtual Services, involving cost-saving solutions for SMEs that want to use their resources more effectively. Among others, GTS Virtual Exchange offers a professional corporate mail system for a monthly fee, while GTS Virtual Backup offers automatic backup and storage of corporate data.

Pannon seeks new bases To lower operation costs, mobile operator Pannon is launching an initiative whereby property owners can bid for a chance to host the telco’s base stations. A site with a mast requires about 200-300 sqm of land, while stations placed atop buildings need an average 60 sqm.

The project will eventually cover the whole country, but will start out with selected stations in Budapest only.

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32 LIFE

Budapest Business Journal | Apr  – May 

Putting everything on one bill BACKGROUND

〉I DO THINK THAT, AS A SIGNIFICANT ECONOMIC ENTITY IN THE COUNTRY, OUR VIEWS ARE ENTITLED TO BE LISTENED TO

CURRICULUM VITAE CHRISTOPHER MATTHEISEN first came to Hungary in 1990 to start a consultancy for business analysis and strategic planning. From 1993 to 1996 he was among the founders of Westel 900 (later T-Mobile Hungary). From there moved on to Poland to participate in launching Era GSM for US West International.

From 1997 to 1999 headed up in London US West’s (later MediaOne). Subsequently served at BT Cellnet as business marketing and sales director. From September 2002 was a member of Magyar Telekom’s management committee and chief officer responsible for residential services. From January 2005 to June 2006 served as COO leading the wireline services line of business (T-Com).

Appointed Magyar Telekom’s CEO than elected member and chairman of the board of directors in December, 2006.

Q: How do you see the telecom market right now? Is it doing good or just ok?

A: Our business has a strong relation to GDP, but even stronger to unemployment and consumer spending power. The impact of unemployment is even more pronounced in Hungary because there are relatively fewer people actively employed compared to other countries; therefore every percentage point of difference in unemployment in Hungary is going to have a stronger impact on the population as a whole. So we are of the opinion that current increases in the unemployment rate really affect people’s spending power and thus our business. People, just as companies, have actually rationalized even their active SIM cards. If we consider telecom spending as one of the necessary things in life, we find that consumers are cutting back even on necessary expenditures. This is a particularly tough time. That’s why I am happy that we maintained or increased our market shares last year.

Q: Is there anything that could compensate for that?

A: Magyar Telekom’s strategy for some time now has been to extend our capabilities into new markets, for example television or systems integration, where we have been quite

Q: Hopefully it’s not going to require another rebranding.

A: We indeed went through a big brand consolidation in the last couple of years. Putting all the fixed line brands under the new T-Home brand was a very good move to increase brand awareness. People associate T-Home with triple play, T-Mobile with the freedom of being conQ: When do you expect the economy nected everywhere, and T-Systems with ICT. to recover?

So now our corporate brand, the ‘T’ can incorA: We see a chance of GDP growth recover- porate all the positive brand associations of the ing later this year. If GDP does start to show a offer brands. positive trend, we might see signs of recovery in our business first in the corporate or govQ: Consumers may also have heard ernmental sectors – only after that do we see about MT in the context of the investigaconsumer spending pick up. tion in Montenegro and Macedonia. Can you tell us where this case stands?

Q: IT and even television seem obvious A: In 2006 the company self-reported potenways to grow. But how can you explain tially suspicious contracts to the authorities. becoming a utility service provider?

Then we launched an independent investigaA: I need to be more precise about this. Our tion, providing all necessary cooperation and strategy is not to become a standalone electric- information that could be relevant to it. The ity company or a gas company, but we do think it investigation process resulted in an extensive makes sense to bundle such services together with final report at the end of last year, and it can offerings we already have. Our market research serve as the basis for the company to arrive at tells us that consumers think this is a logical exten- some sort of settlement with the authorities. It sion of our profile. But perhaps more importantly, is important to note that nothing in the final ICT and telecommunications are going to trans- report implicates any current senior executive form a number of industries in the next few years, or board member of the company in connecand one of these is energy services. In order to tion with any wrongdoing. capitalize on these opportunities, it makes sense to learn a lot more about how that industry works.

Q: How do you plan to steer the company away from this trouble?

Q: Still, what would this new service A: My focus on this is to cooperate, and mean to the consumers? ensure all our employees and subsidiaries A: There are two areas where we can add value cooperate with the authorities. To ensure here. One of them is smart metering. It means transparency, we have already injected a culthat instead of a monthly estimate, you can pre- ture of compliance in the company and our cisely measure household energy consumption, strategic goal has been to create a world-class and relay this information over a communica- compliance regime. Since I was appointed tions network. In practice, you can have the util- Chairman-CEO, we have taken numerous ity company come and completely replace your steps designed to revise and enhance the existing meter. But there are other solutions on company’s internal controls. the market as well, for example a clip-on extenQ: Are you planning to write a blog or sion to an existing meter that can communicate through IP or broadband connection with tweet to polish your image? other things that you have in the house or at your A: I do occasionally tweet but I do not blog. office. Also, we think that, over time, we can pro- I communicate externally only when I have vide capabilities on the billing side, and offer all something to say. If there was a specific topic services within a single bill. that I felt important to communicate on, I successful. When the core business is growing, it is more difficult for a company’s chief executive to focus people’s attention on the extension of growth areas. Thus, as a favorable incidental impact, the economic downturn has the effect of people taking those opportunities more seriously.

As Hungary’s incumbent telecommunications service provider, Magyar Telekom has been through a lot of changes in the last two decades. By the time Christopher Mattheisen became CEO, the group’s structure was almost finalized, including T-Com, T-Online, T-Mobile, T-Systems and T-Kábel.

Then, in 2008, several further steps signalled Magyar Telekom’s integration processes. T-Systems’ business organization was simplified through integration of subsidiaries, while iWiW and Adnetwork Online Marketing merged into Origo. The T-Home brand that has become the single brand representing fixed line communications and entertainment services at home, replacing T-Com, T-Online and T-Kábel brands. Integration continued in 2009 with the merger of cable TV subsidiaries T-Kábel and Dél-Vonal into the company. For 2010, Magyar Telekom sees good acquisition opportunities in the IT and cable sectors. would consider blogging, but it hasn’t happened thus far.

Q: On the other hand, a lot of expat businessmen in Hungary are taking an active political role more than usual. What do you think about that?

A: I don’t have ambitions of this kind, but I do think that, as a significant economic entity in the country, our views are entitled to be listened to. During this time of political change, we do make extra efforts to communicate our standpoints. However, if I personally were to take a stand in party politics, that would send the wrong message to the rest of the organization.

Q: Do you think you will be able to keep this neutrality?

A: I owe any government an honest and direct communication of what our views and legitimate interests are. I believe communicating the company’s views and the effects of certain political decisions to business are necessary for every company.

Q: Is there anything you regard a key regulatory issue now?

A: One of the issues that affects us is that of frequency fees. There is a new wave of wireless technology on the horizon, called LTE (Long Term Evolution), and for this to bring the maximum benefit it is extremely important how frequencies are handled. Right now the level and structure of these fees in our opinion are unfavorable to investment, and need to be reviewed. AJM – MTD

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LIFE 33

Budapest Business Journal | Apr  – May 

WHO'S NEWS

Name Bálint Bassola Current company/position Kővári Tercsák Salans Attorneys/associate Previous company/position

After having worked for almost six years at the Hungarian Competition Authority as a case officer, Bassola is moving into the Budapest office of Kővári Tercsák Salans as an associate.

His main responsibilities at Salans will include EC and Hungarian competition law as well as corporate law.

He earned his law degree at Eötvös Loránd University of Budapest and also studied in France and Germany.

He received his LLM degree from the College of Europe in Belgium.

Hungarian Competition Authority/case officer

Name Ákos Kovách Current company/position Gide Loyrette Nouel Budapest office/senior associate Previous company/position Partos & Noblet in cooperation with Lovells LLP/ associate

Having worked for Gide Loyrette Nouel between 2001 and 2007, Kovách returns to the firm after two years spent at the competition and media/telecom department of Partos & Noblet in co-operation with Lovells LLP. He has developed specific expertise in competition/antitrust and EU regulatory matters, and joins the Competition and Regulatory practice group of Gide Loyrette Nouel’s Budapest office. Kovách has been a member of the Budapest Bar since 2006.

Do you know someone on the move?

Send information to whoiswho@bbj.hu

Name Katalin Zarándy Current company/position Eckes-Granini Group/innovation director Previous company/position Sió-Eckes Kft/marketing director

Name Károly Gyurics Current company/position GTS-Datanet/domestic wholesale director Previous company/position Antenna Hungária/sales director

Zarándy will take her new position as innovation director of fruit beverage maker Eckes-Granini at the company’s headquarters in Nieder-Olm, Germany on May 1, having worked at the Hungarian arm of the company since 2007 as marketing director. After graduating from the International Business School, she joined the industry in 2001, and subsequently held marketing positions at various FMCG companies.

Name Zsolt Fábián Current company/position Erős Ügyvédi Iroda/ Squire, Sanders & Dempsey LLP/European partner Previous company/position GE C&I/senior counsel

Gyurics, with more than 30 years of experience in the telecom sector, has been appointed head of the recently founded domestic wholesale division of GTS-Datanet. Previously, he had been with Antenna Hungária in various sales executive positions from 1999. Between 1994 and 1998, he worked at Matáv in sales and marketing.

Name Andrea Dickinson Current company/position Dickinson Consulting & Communication/owner Previous company/position Ogilvy/managing director

Prior to joining Squire Sanders, Fábián served in various capacities at General Electric. Most recently he was senior counsel for GE’s consumer and industrial business in Europe, the Middle East and Africa, with a full scope of legal responsibility for manufacturing, supply chain, sourcing, sales, IT, finance, HR, and environmental, health and safety operations.

His duties also included managing a staff of lawyers and engaging local counsel throughout the region.

Fábián received his J.D. from József Attila University of Szeged in 1992.

Dickinson, former CEO of communication group Ogilvy in Hungary, has set up her own business after having spent 13 years with Ogilvy. She started her stint at Ogilvy as client service director in 1997, and was named business development director in 2000 and managing director in 2005.

Previously, she worked at BBDO as senior account director. Between 1986 and 1995, Dickinson worked at the BBC in London. She graduated from the University of Eger in 1986 and completed her MBA at the Buckinghamshire New University in 2007.

▶ Who is your favorite

▶ What is your favorite ▶ What is your favorite

hero in fiction?

football team?

Hungarian dish?

James Bond (as played by Daniel Craig).

Manchester United – of course. I am from London.

I love erős peppers – not a dish, but my favorite thing from Hungary.

▶ What is your most marked characteristic?

▶ What kind of job did you dream of when you were a child?

▶ What is your favorite Hungarian word?

ALASTAIR WHITTLE

I think tenacity and never giving up.

Igen

CEO, GREY BUDAPEST

▶ Which talent would you most like to have?

Well, apart from advertising, it would have to be in the Red Arrows, the world’s best aerobatic display team.

[ BETTER KNOW A CEO ]

Whittle has been CEO of advertising agency Grey Budapest since July 1, 2009. The British advertising professional has been in Hungary since April 2009 and is responsible for P&G, GSK and Chevrolet at a regional level. In the meantime, he also plays an important role in managing the Grey network as deputy regional director. During his two decades in the advertising business, Whittle has lived and worked in the UK, Germany, Poland, the Czech Republic and the Netherlands.

▶ What is your greatest achievement?

Waking up every day to a job I really love, and looking back at some of the campaigns and creative work that I have done for my clients’ brands and businesses. In our line of work, the only thing left at the end of your career is the work that you have created and the difference that it has made.

I would love to be able to fly (an airplane, that is).

▶ What is the trait you most disapprove of in others?

A lack of effort.

▶ Which living person do you most admire?

Margaret Thatcher – she didn’t listen to focus groups; she was a strong leader who did what was right when everyone else disagreed.

▶ What is your greatest fear?

Gábor Spielmann, our creative director

To look back and regret things I should have done.

▶ What social network sites do you use?

LinkedIn

▶ Where would you like to live?

The 12th district, or failing that, San Francisco.

▶ Have you traveled around Hungary outside of Budapest? If so, where?

▶ What is the one thing without which you cannot imagine your life in Hungary?

Not so much yet; that is the plan for this year.

The beautiful warm and long days. I love your long and predictable summers.

▶ Who are your heroes in real life?

Richard Hill – the silent assassin and unsung hero of our rugby World Cup win in 2003. He never asked for praise or sought the limelight, just excelled in what he did.

▶ What is the weirdest thing you have experienced in Hungary?

▶ What is your favorite place in Budapest?

Crossing the Chain Bridge on my way to work with the sun coming up. There is no better sight.

▶ Which Hungarian habit did you get accustomed to most easily?

People are very polite and well mannered; in England, people are so rude now.

It makes such a difference!

▶ What is your motto?

The sun always comes up tomorrow.

PF

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34 LIFE

Budapest Business Journal | Apr  – May 

Achieving a can-do attitude BACKGROUND In the past 40 years, hundreds of studies have been conducted to find out what makes a good leader. Although experts have never managed to pin down a set of skills whose possession would guarantee efficient leadership, they do agree on a few that should not be overlooked.

Communication is one; the ability to interact well with people another. Ottó Vég, the head of one of Hungary’s biggest HR consultancies, also considers these essential.

But rather than applying 21st-century tools such as Facebook to contact his employees, he relies on good ol’ personal conversation. As he put it, he was not born to be a leader, but has grown into becoming one, a process in which parenthood and soccer has also played an important role.

Q: Between being a country business manager at Nestlé and becoming the managing director at Adecco, how have your priorities changed?

A: The two positions have very much in common. The only major difference is the level of responsibility. At Nestlé, there were divisions, for example finance, that supported our work, but I had to check the costs myself. Obviously, I couldn’t make decisions on behalf of other departments, but otherwise I controlled most things. I have always preferred work where I have an overview of all of aspects of a business. The main reason why I went to Adecco – and the activity I participate in the most – is advising our clients and devising strategies. Also, I have to deal with PR and the press and even though communicating outside the company is not altogether new for me, the weight of this in my work is much higher now.

〉WHAT MESSAGE IS DECODED WITHIN THE COMPANY GREATLY DEPENDS ON HOW WELL THE MANAGEMENT PRESENTS ITS CASE

CURRICULUM VITAE

Regardless of size, communication can either boost or hamper a company’s effectiveness.

When it works, it has tangible benefits, but it is a big problem for many firms.

Ottó Vég, 40, was named general manager of recruitment company Adecco Hungary Kft last May. Prior to joining Adecco, he worked as a country business manager at Nestlé Kft in charge of B2B businesses. He was also a member of Nestlé’s board of executives. He joined Nestlé in 1994 as a sales representative; he was subsequently promoted to product manager, then key account manager in 1996. Vég graduated from the College of Trade and Catering in 1995, and speaks fluent English. He is married with 3 children.

Q: How do you encourage your colleagues to become creative?

A: The labor market was one of the hardest hit in the past two years. Little wonder that many of our co-workers experienced only modest sucQ: Are there any specific traits that make cess. In such a situation, setting an overall goal to business leaders different from other peo- make people see what to work toward and give ple? Do they need special skills? them a reason to show up in the office every day is A: I am the kind of person who doesn’t very important. At Adecco, the goal we set was to panic, which is probably because of my job become market leaders in the sector by 2012. Furhistory. Starting from the bottom as a sales thermore, all achievements should be acknowlrepresentative, and climbing through all edged. Constant managerial feedback – concernQ: Motivating people is part of your prothe rungs of the career ladder, helped me ing both accomplishments and mistakes – is a understand procedures better. great tool to show people that they matter, not to fessional duties. Where do you draw inspiIn terms of communication, CEOs do mention moral and financial recognition. ration from?

A: I am highly competitive, and I have always need some innate talent. It is difficult to Q: Do you praise your colleagues often? been so. I used to play soccer, which, like most say what makes a good communication A: Not as much as I should or could. When team sports, has a huge impact on motivation strategy; it depends on what the management is saying. Executives are always in writing an evaluation, it is generally easier to notice and the ability to cooperate with others. Winthe focus of employees’ attention: news, where there is room for improvement first. I do ning, or rather getting ahead of others, is one of including bad news, spreads like fire. The acknowledge good work, but always look for ways my main drivers. Besides smaller achievements need for clear and consistent communica- to improve it. The pursuit of perfection, without such as winning a new tender, receiving comQ: Do you find communicating easier tion is therefore indispensable. The abil- going overboard, is not at all out of my character. I pliments from a client or working with satisfied at this smaller company? ity to express oneself clearly may not be so am also rather strict on my kids when it comes to co-workers is really uplifting.

A: Establishing effective communication important at the administrative level, but studying and school. I am satisfied when they get Candidates who come here for a job interis a steep challenge at most large corpora- what message is decoded within the com- a B in math, yet right away I start to look into why view – whether eventually hired or not – often tions. Adecco has more than 4,000 contracted pany greatly depends on how well the man- they didn’t get an A. Of course, you should make admit that the main reason for their decision to employees working all around the country, agement presents its case. suggestions to help improvement. I can’t really put apply was the atmosphere within the company.

Resourcefulness is also crucial. It is a up with the I-just-can’t-do-it attitude. Often peo- Indeed, working with a bunch of people who but headquarter staff consists of around 100 colleagues, and this gives me the opportunity quality that can help companies a great ple come into my office saying ‘Boss, it doesn’t all have the same goal to work for makes me to be closer to my co-workers. At Nestlé, a deal in getting through demanding times. work’. So I say ‘I know. And what are your sugges- enthusiastic as well. separate department dealt with this task. Now Business opportunities won’t find you in tions for how to make it work?’

I know everyone by name, even those who the office. You need to go out, meet clients Regarding formal or informal channels of Q: Were you the captain of the soccer work in the countryside offices. Just the other face-to-face and appear at events to get acknowledgement, I have never had any problem team? day, I personally wrote the monthly newslet- information firsthand. Fortunately, I enjoy praising employees at any level on the corridor; A: No, I was not. Yet it probably contributed a ter, covering the activities of all departments, getting involved; I don’t intend to delegate neither is it unusual of me to, for instance, join great deal to my becoming a leader later on. detailing where the company is heading. these tasks to my colleagues. accountants for lunch to chat.

Zsófia Végh

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LIFE 35

Budapest Business Journal | Apr  – May 

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[ EDITORIAL ]

[ ESSAY ]

Investment funds cash in on interest reduction SÁNDOR VÍZKELETI PIONEER FUND MANAGER

anks’ cravings for new deposits, and the teaser high-interest campaigns they launched to this end, attracted immense amounts of money in the past year and a half. As the effects of the global economic crisis led to the lowering of the base rate to record lows, deposit interests have similarly been reduced. Although Hungarians are cautious and have grown accustomed to accumulating their savings in bank deposits, the current interest levels offered by banks are no longer appealing to them.

At the time of these campaigns, launched in response to the crisis, Hungarian customers, who traditional dislike risks, did not put much thought into where they wanted to put their savings. Obviously, they were more than happy to accept the offers with tempting interest rates.

Now, however, the interest levels are not even enough to counterbalance annual inflation, motivating larger groups to seek out means to preserve or even increase the values of their investments.

Considering the fact that there is a good chance the base rate will be taken to even lower levels, that notion is all the more valid. Under such circumstances, even if banks try to offer interest rates that are better than the market average, these could only be for the short-term and would be ineffective in achieving the desired results of convincing clients that depositing their money is a worthwhile investment. The changing deposit interest rates could bring a gradual change within the overall structure of household savings, as seen before, between 2004 and 2006.

Changing interest rates affect short- as well as long-term investors when it comes to holding on to their investments or embarking on new ones. The falling interest indicators convey a wide range of information to the actors of the economy, micro and macro alike, which together do have the ability to impact the structure of household savings. The lower interest level indicates stability in prices and the economy in general. At the same time, it also has the potential to affect households’ willingness to take risks. Based on earlier experience, this changing attitude towards bank deposits has the most notable impact on demand for investment funds.

In summation, if normal capital market conditions persist while bank interest rates and yields continue downwards, investments funds will have a far bigger share in domestic household savings.

B

Decision time

V

iktor Orbán and his Fidesz party claimed an overwhelming victory in the first election round, and are now within arm’s reach of a two-thirds House majority. The governing socialist MSzP is calling this a threat to democracy.

Hungarians understandably have bad memories of single-party rule, but we think that assuming a two-thirds majority is antidemocratic is going overboard. The Hungarian system was founded with the provision included with the exact purpose of satisfying popular will: if the majority of the country’s voters feel that a political group is deserving of this degree of trust, then they should be given power proportionate to their support.

And, indeed, the last time Fidesz formed a government, it did things that may have left bad impressions regarding its attitude towards being controlled. Some may remember that it changed the weekly order of Parliamentary meetings to a three-week rotation, introduced biannual budgets and made questionable nationalistic gestures like moving the Holy Crown around at its leisure. But Orbán and Fidesz must remember where this led: they lost the next election, proved sore losers and were wiped out a few months later in the municipal votes.

After 2002, Fidesz wrote a checklist of the mistakes that they should not commit in the future, which they had the opportunity to perfect in 2006. Hopefully, this time around, they have similar bullet points for taking control of the country. But even if Orbán has not learned this, some circumstances, most crucially the IMF-led rescue deal, will certainly remind him of the limitations.

Even if that would not turn out to be the case, a government this strong can at least be decisive.

Hungary has been incapable of making long-overdue changes because of coalition infighting. In the past few months, the minority MSzP government has put out the biggest fires, but in many cases, it tried to do so by ratifying hastily drafted bills that were either scrapped on constitutional grounds or would only stay in effect until another government is elected.

In the corporate world, it is said that even a bad decision is better than no decision. Well, the next government will surely at least be able to make some decisions.

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Media representation: Absolut Media Kft, Alsó Törökvész út 9, 1022 Budapest, Hungary Telephone (361) 398-0344, Fax (361) 398-0345, www.bbj.hu Editor-in-chief: MELINDA TÜNDE DÓRA dmt@bbj.hu, Editor: TAMÁS DEME • Proofreader: ROBIN MARSHALL • List editor: MIHÁLY KOVÁCS Contributors: PATRICIA FISCHER, ANIKÓ JÓRI-MOLNÁR, GABRIELLA LOVAS, GERGŐ RÁCZ, KATIE ROWLAND, BALÁZS SZLÁDEK, KATALIN TÓTH, ZSÓFIA VÉGH, ÁGI VINKOVITS Online news: news@bbj.hu Advertorial content coordinator: ANDREA FAZEKAS Design: ABSOLUT DESIGN STÚDIÓ (production@bbj.hu) Production: Tamás Tárczy CEO: TAMÁS BOTKA Advertising: ABSOLUT MEDIA KFT (hirdetes@amedia.hu) Sales: Viola farkas (viola.farkas@bbj.hu) Marketing: Bernadett Földi (marketing@amedia.hu) Circulation: Éva Bércesi (eva.bercesi@bbj.hu, terjesztes@amedia.hu) Printing: Absolut Print Kft

What We Stand For: The Budapest Business Journal aspires to be the most trusted newspaper in Hungary. We believe that managers should work on behalf of their shareholders. We believe that among the most important contributions a government can make to society is improving the business and investment climate so that its citizens may realize their full potential.

The Budapest Business Journal, HU ISSN 1216-7304, is published bi-weekly on Friday, registration No. 0109069462.

It is distributed by HungaroPress. Reproduction or use without permission of editorial or graphic content in any manner is prohibited. ©2010 BUSINESS MEDIA SERVICES LLC with all rights reserved.

The Budapest Business Journal’s print run is audited by MATESZ, 1034 Budapest, Bécsi út 122-124, a member of IFABC.