NESsT Empowers: Executive Summary (English)

NESsT Empowers Executive Summary

Written by Izabela Przybysz and edited by Nicole Etchart

NESsT Empowers: Research Executive Summary

ABOUT NESsT

NESsT provides dignified jobs for people facing the greatest barriers to work in emerging market countries. We achieve our mission by raising philanthropic capital to invest in social enterprises that create employment for the poorest communities facing isolation, discrimination, lack of job skills, and poor education. Our investments help transform communities so that all people are self-sufficient and empowered to determine their own futures. NESsT has been at the forefront of social enterprise development, conducting research and documenting lessons learned and best practices.

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NESsT Empowers: Research Executive Summary

4 NESsT Empowers 5 Methodology 6 Executive Summary 9 Table 1: Soft Skills 13 Table 2: Generic Hard Skills 16 Table 3: Specific Hard Skills 17 The Potential of Social Enterprises to Close the Skills Gap

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NESsT Empowers: Research Executive Summary

NESsT Empowers NESsT Empowers invests in social enterprises that generate dignified employment opportunities and engages with corporations to partner with social entrepreneurs in designing demand-led workforce curricula and preparing at-risk communities for labor inclusion. The program has created more than 3,500 skilled employment opportunities. In the next five years, the goal is to scale NESsT Empowers by doubling our impact and creating 7,000 skilled jobs.

NESsT Empowers in Poland is a collaborative initiative made possible by funding from:

NESsT EMPOWERS IN POLAND As part of the NESsT Empowers initiative in Poland, NESsT has conducted an analysis of Poland’s highgrowth industries to map out their job skills needs. The analysis was designed to inform the selection of target industries that show the greatest potential for the longterm, skilled employment of youth and women.

According to the findings, the business processes outsourcing and IT sector is generating 20,000 jobs annually in Poland. The dynamic growth of this industry gives an opportunity for dignified employment of young people and at-risk women. The challenge is to provide these groups with short-term and high-quality job training, and prepare them to work in the sector. As you will learn from the conclusions to follow, social enterprises have great potential to answer this need in collaboration with corporations and public institutions.

Based on the analysis, NESsT will now launch the second phase of the NESsT Empowers program which seeks to identify and support social enterprises that offer vital training, placement, and employment to young people and women in the business processes outsourcing (BPO) and IT industry. Visit our website and find out more about the NESsT Empowers open window for social enterprises in Poland: nesst.org/poland.

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NESsT Empowers: Research Executive Summary

Methodology The analysis for the NESsT Empowers program involved an in-depth review of the following: (i) information collected for public purposes and made available as Internet databases such as the Local Data Bank of Poland’s Central Statistical Office, (ii) data from the Human Capital in Poland project of the Polish Agency for Enterprise Development, and (iii) data provided by Eurostat, the European Union statistical authority. The research also made use of national studies on selected aspects of economic growth, vocational education, and labor market opportunities in relation to at-risk groups.

The second phase of the analysis included 18 interviews with representatives of firms that operate business services centers or are working in the new technologies sector, four interviews with people representing public institutions, and five interviews with representatives of non-governmental organizations. The research was conducted in Warsaw, Łódź, Cracow, Wrocław, and the Tricity area.

Co-founder Rudolfo Prieto consults with two students who are working in Laboratoria’s Web Shop on a website design they are creating for a client. Laboratoria trains young women in coding and web development, allowing them to gain access to jobs in the competitive IT sector of Peru.

(Photo: Laboratoria)

LABORATORIA Laboratoria is a technology social enterprise based in Lima, Peru, that empowers young women from low-income backgrounds by giving them access to education, work and job placement in the digital sector. Laboratoria is a good example of the type of business model that could increase women’s access to jobs in the BPO/IT sector in Poland.

Laboratoria recruits women with promising talent and offers them an immersive coding and personal development program. The program is free of charge and includes five months of courses in web development, technical entrepreneurship, personal development and English. Upon graduation, Laboratoria hires a number of students to work as developers in Laboratoria’s Web Shop and connects others with tech companies in need of talented coders.

www.laboratoria.la

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NESsT Empowers: Research Executive Summary

Executive Summary THE SITUATION OF YOUTH AND WOMEN IN THE LABOR MARKET For many years people have felt it is hard to find work in Poland. According to data for 2015 provided by Poland’s Public Opinion Research Center, almost 70%1 of Poles say the employment situation is bad or very bad. In addition to this, the jobs that are offered in Poland are not well paid. This is confirmed by data from the Central Statistical Office, which shows that in 2013 more than 1.4 million2 workers did not earn more than the statutory minimum wage.

It is also often the case that having a job does not provide a sense of security. Over a third of people who do have a job (35%3) are afraid of losing it. Many people in Poland work under short-term contracts governed by the Civil Code, and not under formal contracts of employment governed by the Labor Code. Worse still, many other people work in the shadow economy.4 This kind of employment does not create much opportunity for career development, makes it difficult for people to plan their future, and does not provide them with the satisfaction they need from day to day.

Although unemployment in Poland is currently running at the relatively low rate of 10%,5 low wages and forms of employment that do not guarantee a decent wage mean that the proportion of people living in poverty fluctuates

around 17%.6 Two social groups face a particularly difficult situation on the labor market: people under the age of 30 and women.

In general, the beginning of a person’s working life is not easy, and young people who are looking for work usually do not know where to begin their searches. In addition to this, it is currently particularly difficult for people under 30 who do not have much work experience to find permanent jobs. Employers value them less highly than people who have had previous jobs. This creates a vicious cycle: it is difficult for young people to find work because they do not have the experience, and it is difficult to gain experience if employers do not give them the opportunity.

Another factor is that because they are convinced their prospects are poor, young people often do not see that it is possible to change their situations. In some cases they do not try to find work at all, or they do so without any real commitment, and they do not try to improve their qualifications or gain ones that are in greater demand on the labor market.

In Poland this group belongs to a larger group of people – referred to in the literature as NEET (not in education, employment, or training) – who make up no less than 22.7%7 of the population under 30. It should be stressed that two-thirds of this group are women. This is partially due to family commitments, as it is hard for them to

¹ Komunikat z badań CBOS [Public Opinion Research Center Report], Warsaw, April 2015: http://www.cbos.pl/SPISKOM. POL/2015/K_053_15.PDF. ² Data provided by the Central Statistical Office of Poland, 2013.

3 Komunikat z badań CBOS [Public Opinion Research Center Report], Warsaw, April 2015: http://www.cbos.pl/SPISKOM. POL/2015/K_053_15.PDF. 4 Also called the underground, informal, or parallel economy, the shadow economy includes not only illegal activities but also unreported income from the production of legal goods and services, either from monetary or barter transactions. Hence, the shadow economy comprises all economic activities that would generally be taxable were they reported to the tax authorities.

Friedrich Schneider and Dominik Enste, Hiding in the Shadows: The Growth of the Underground Economy, IMF, 2002.

5 Data provided by the Central Statistical Office of Poland, May 2016.

6 Ubóstwo w Polsce w 2015 r. [Poverty in Poland in 2015], Central Statistical Office of Poland, Warsaw, 2015.

7 Data provided by Eurostat, 2015.

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NESsT Empowers: Research Executive Summary

find a job that allows them to combine it with domestic responsibilities. Flexible forms of employment are still rare. As a result, unemployment among women is two percentage points higher than among men. The situation is particularly difficult among young women – 33% of women under 24 are looking for work.8 Women are also more often at risk from long-term unemployment. Data from Labor Offices in Poland show that in 2014, 41.6% of registered unemployed women had been unemployed for longer than a year, while in the case of men this figure was 34.9%.9 It is also important to note that women earn less than men. In 2015 women earned an average of zł 3,400 gross per month, while men earned an average of zł 4,200.10 The labor market in Poland does not give young people and women sufficient opportunity for career development, promotion, or stable employment, or to combine family and professional responsibilities.

The situation of these groups is not easy, and it is very important to identify measures with the greatest potential both to increase access to employment and improve its quality.

EMPLOYMENT IN THE BPO/IT INDUSTRY Analysis of social and economic development in Poland shows that one of the country’s fastest growing industries, and one that is generating large numbers of new jobs, is the business services sector. Poland is one of several countries where this industry is undergoing the fastest growth. The business services sector is particularly interested in employing people with qualifications in

areas such as IT, sales and procurement (including online processes), sales and marketing support, document management, accounting and finance, cash flow analysis, business transformation, and telemarketing.

The number of jobs in the business processes outsourcing (BPO) sector is growing by about 15-20% year-on-year.

It is estimated that by 2020 the number of jobs in the industry will have increased by 250,000.11 Furthermore, employers are saying very clearly that their staff needs are going to rise, and they are already reporting difficulties with finding people to fill vacancies.

In particular, they point to problems in reaching people who have already completed their education. While employers can enjoy relatively easy access to students by arranging meetings on school and college campuses, it is much more difficult for them to target people who do not participate in the labor force and are not in any form of education.

Business services centers mainly recruit people who are just starting their working lives and do not have much work experience. The key reason is due to the fact that BPO business models are based on providing backoffice support to companies at a competitive price, which leads them to keep labor costs down by hiring prospects that have not pursued higher education in computer science and programming, or finance, accounting and other related topics. Discussions with employers showed that they believe that the types of skills needed by their industry can be found among prospects who have completed secondary or vocational education. They

Data provided by Eurostat, 2015. The figure for men is 21%.

Data provided by the Central Statistical Office of Poland, 2014.

10 Equivalent to approximately $895 for women and $1,105 for men..

11 Sektor nowoczesnych usług biznesowych w Polsce 2015 [The Business Services Sector in Poland 2015], Association of Business Service Leaders, Warsaw, 2015.

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NESsT Empowers: Research Executive Summary

also believe that people who are college graduates in the humanities can also be good candidates for these positions. Employers felt that employees can be trained in the needed skills and often have an aptitude or have been able to train themselves. They gave examples of people who are succeeding and moving up in their firms despite not having formal qualifications. These included cases of people who do not have an education in IT and who originally treated programming as a hobby or had a practical knowledge of spreadsheet data analysis.

COMPETENCY AND SKILL GAPS IN AREAS OF PARTICULAR IMPORTANCE TO EMPLOYERS Vocational education in Poland teaches students specializations that are needed by firms in the business services sector, such as IT technician, ICT technician, economics technician, office skills technician, and bookkeeping technician.

In practice, however, the knowledge and skills acquired at vocational schools are very different from employers’ expectations. Similar reservations are expressed about college graduates. Schools in Poland do not place enough emphasis on soft skills. They also do not focus enough on the practical application of knowledge or on general knowledge of how businesses operate. Information gathered during in-depth interviews with employers in the business and IT services sector was used to draw up a list of particularly sought-after skills, soft competencies, and generic and specific hard skills, which are listed in the following tables together with employers’ expectations.

Some of these competencies are reflected in vocational school programs, but employers say not enough attention is given to developing these skills to the right level.

Improving these skills during formal vocational education or training provided by organizations that are not part of the formal education system would significantly increase the chances of candidates, including youth and women, of finding employment.

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The research identified a number of opportunities for people to improve their vocational qualifications in areas that are needed by employers. These opportunities include vocational training courses, courses offered by industry organizations, and training provided by private and non-governmental institutions. However, a review of these opportunities showed that they are restricted in their accessibility and usefulness. There are no institutions that offer the following together: (i) courses intended for youth and women, (ii) courses with programs intended for people who have achieved different levels of education in different subject areas (existing courses are usually aimed at people who have an education related to business and IT), (iii) courses that align with the needs of employers and in response to their expectations, and (iv) real life experience working in the BPO/IT sector.

ASSOCIATION OF BUSINESS SERVICE LEADERS The Association of Business Service Leaders (ABSL) in Poland engages 180 companies in the BPO sector. Launched in 2015, ABSL Academy is a demand-led initiative to provide professional training and support development of skills much needed in BPO companies. The academy offers courses divided into three blocks: e-learning courses on BPO sector skills and knowledge; on-campus practical workshops focused on case studies analyses; and workshops developing soft skills, including teamwork, negotiations and professional communication skills. The ABSL Academy targets graduates and students, but also offers training to other people who want to retrain and start careers in the BPO sector. Eighty percent of the ABSL Academy graduates find employment after completing the coursework.

www.absl.pl

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NESsT Empowers: Research Executive Summary

Table 1: Soft Skills The first table features soft skills, including social skills that can be improved to a certain degree in theoretical classes and through leadership opportunities in secondary school, but can be vastly improved through additional training and work experience.

Soft Skills

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Employer’s Expectations

Proactive approach; able to suggest ideas that can improve how the organization works

It is very important that employees see their work in the context of other things that are done in the organization. It is important that they understand this process and are able to see when there is a need for modifications that may improve the organization and its work.

This ability is particularly important in large organizations, because optimizing and coordinating what is done allows these organizations to improve their operation.

Able to organize their own work to the best effect, enabling timely completion of assigned tasks.

This ability is very difficult to learn in school, but on the other hand employers value it very highly. Future employees have to know how to organize their work in a way that allows them to achieve their intended objective within a deadline. In practice, this means they are able to set priorities on their own, monitor the time involved, plan individual tasks, and make allowances for any delays that may occur.

Awareness of the need to extend and continuously update their knowledge; able to adapt to a changing environment.

During interviews, employers said this quality is very important. Work in BPO centers is not about routine performance of the same tasks.

The work done in these centers often has to be modified according to the needs of individual clients. The type of workers needed are those who are keen to extend their knowledge, who see the need for this themselves, and who are not afraid to take on new and difficult challenges. It is also important to be able to plan and implement the process of continuing education based on available sources of knowledge or training courses.

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NESsT Empowers: Research Executive Summary

Table1 (continued) Soft Skills

Teamwork

Ability to solve problems

Ability to express opinions, ideas, and doubts

Employer’s Expectations

Work in BPO centers is primarily work as part of a team, which means that employees are expected to be able to work actively together with others to achieve assigned objectives. It is important to be able to develop solutions in partnership with others, which includes listening to others and taking on board suggestions made by different members of the team. It is important that employees act in the interests of the team, avoid conflict, and strive to resolve any disputes that do arise.

The nature of work in high-growth companies does not consist simply in carrying out tasks in predefined ways, as it also requires people to be flexible in their reactions to problems that occur. It is important for employers that staff members are able to maintain the right perspective, look at a problem from different points of view, and find a solution, perhaps after asking other people. Many employers pointed out that employees usually adopt a passive attitude in these situations, with people expecting that someone else will find a solution, which makes the work less effective.

Employers say that in Poles do not often have the ability to express their opinions or put forward their ideas. This is probably the result of a hierarchical education system that does not foster open discussion and does not encourage teachers and lecturers to adopt a partnership approach with students.

Employers say that in corporations the ability to put forward one’s own ideas is a highly desirable characteristic. This allows the best solutions to be found while also preventing the conflicts that arise when there are many employees who do not understand decisions that are taken.

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Table1 (continued) Soft Skills

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Employer’s Expectations

Active involvement and perseverance in completing tasks related to the firm’s operations, including in particular the ability to concentrate on a single task

Many employers stressed that work in BPO enterprises often requires people to focus on completing a specific task. This involves carrying out each stage of the work with precision and paying attention to detail. The aim is to achieve high quality results, so it is important that people have the ability to plan individual stages of the work, adopt a strategy that minimizes the likelihood of error, and make sure that any deficiencies are properly rectified.

Ability to work in a multicultural environment

The people who work in business services centers represent a variety of nationalities, ethnic groups, and religious communities. It is very important that employees understand cultural diversity and approach this issue with respect, because according to employers this helps people to be effective in achieving the results that are needed.

Interpersonal communication

Work in services centers is in large part based on working together with others, and on exchange of information and ideas. It is therefore important to state things clearly, and to listen to others carefully and pay close attention to what they say. It is important that employees are able to start a discussion or conversation on their own initiative and encourage others to express their ideas, and they should also be able to adapt the form and content of what they say to the people they are addressing. Communication skills are particularly important for employees who serve customers directly – it is estimated that they make up 15% of people working in the business services sector. Communication skills also include writing letters and emails addressed both to other employees and to customers.

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NESsT Empowers: Research Executive Summary

Table1 (continued) Soft Skills

Resistance to stress

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Employer’s Expectations

Stressful situations occur on a regular basis in business services centers. Employees often have to work on several tasks at the same time and complete them under pressure of time, and it is also sometimes the case that they work in conditions that are not particularly comfortable, such as open-space offices. Employers say that it is important for employees to be able to concentrate on their work, including when working in difficult surroundings. It is also important that people are able to control their emotions and cope with constructive criticism.

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NESsT Empowers: Research Executive Summary

Table 2: Generic Hard Skills Most of the hard competencies listed below can be acquired without having to complete several years of study at university. All that is usually necessary is to complete a course with a program that covers the skills required by employers.

Generic Hard Skills

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Employer’s Expectations

Good knowledge of Microsoft Office, including Excel

Knowledge of this office software is required in all candidates who will have to carry out office work, and this is usually checked by testing.

Employers stress that the knowledge of Microsoft Office shown by most candidates is limited to basic skills. The biggest weaknesses concern Excel skills – candidates usually have poor knowledge of spreadsheet formulas and how to use them.

Analytical thinking skills

Analytical thinking skills are crucial for the performance of many tasks, so almost every BPO organization checks these skills with a test at the recruitment stage. According to employers, this presents a considerable challenge to candidates. In many cases they are unable to complete a simple mathematical task or carry out a basic analysis of a set of data such as a comparison of percentage distributions.

Employers see the source of this problem in the fact that during their education students only have to use formulas to solve set question types, without having a deeper understanding of what they are doing.

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NESsT Empowers: Research Executive Summary

Table 2 (continued) Generic Hard Skills

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Employer’s Expectations

Project management skills

Project management methodology is widely used in the BPO industry for a variety of tasks. It is important for each employee to understand its specific features and the most important factors that condition its success: scheduling, budgeting, risk analysis, and inclusion of all the stakeholders. In addition, in the IT industry it is very important to have knowledge of the Agile method. This method refers to a group of software development methodologies based on iterative development, where requirements and solutions evolve through collaboration between self-organizing cross-functional teams.

Bookkeeping and economics

Twenty-two percent of people working in BPO centers provide support for processes related to finance and accounting. These people need to have a basic knowledge of balance sheet structure, and understand concepts such as assets, liabilities, profit account, profit margin, and financial year. Employers say that while students in vocational schools focusing on economics do learn these topics, they are not taught the details of financial processes typically used by business services organizations.

Basic knowledge of commercial law

Business services centers operate in a complex network of relationships with customers and public partners. Employees are therefore required to have a basic knowledge of the construction of contracts, the rights of client and tenderer, and the structure of invoices and bills, and to understand issues such as liquidated damages and debt enforcement.

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NESsT Empowers: Research Executive Summary

Table 2 (continued)

Generic Hard Skills

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Employer’s Expectations

Ability to use existing data

Candidates for jobs in business services centers are expected to have strong data mining skills enabling them to search for and locate information on the Internet, such as economic data for use in analyzing markets and trends.

Ability to communicate using new technologies

The employees of BPO centers use email, advanced email functions, and instant messengers on a daily basis. These skills are not usually learned in school, but candidates do generally have a basic knowledge in this area.

Knowledge of foreign languages

Employers highlighted knowledge of English as a fundamental criterion for evaluating applicants. There is particular demand for candidates with a knowledge of a second foreign language, with the most important being Scandinavian languages, German, French, Italian, and Spanish.

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NESsT Empowers: Research Executive Summary

Table 3: Specific Hard Skills The analysis contained in this report also identified a number of more specific hard competencies that are particularly sought after by employers in the BPO/IT industry.

Specific Hard Skills

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Employer’s Expectations

Knowledge of programming languages and web application development tools

Thirty-three percent of people employed in business services centers work in areas related to IT services. Employers are always looking for people with a knowledge of programming languages, application development tools, and database management systems, and say that the following are the most sought-after: HTML5, CSS3, JavaScript, Python, AngularJS, jQuery, and MySQL.

Knowledge of advanced statistical methods

An important asset for candidates is a knowledge of statistics.

This includes the ability to interpret statistical values and identify relationships of potential importance when using existing data to explain the questions being analyzed. It is important to be proficient in the use of statistical analysis tools, such as the statistical programming language R.

Protection of digital data

Business services centers use different kinds of databases in their work. It is therefore becoming increasingly important to manage them and to ensure their protection. Knowledge in this area is going to take on increasing significance, not just in the IT industry, but also in all firms operating in the business services sector. It needs to be stressed that vocational education does not give sufficient attention to these issues.

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NESsT Empowers: Research Executive Summary

The Potential of Social Enterprises to Close the Skills Gap The analysis showed that social enterprises have the potential to effectively prepare women and youth to work in the BPO/IT industry. The objective of these enterprises is specifically aimed at creating jobs for people who have difficulties finding work whether because they lack the skills, because lifetime circumstances have prevented from accessing employment and/or because they face discrimination and other barriers to entry. The focus of these enterprises is to help these communities to overcome not only their hard skill gaps, but also to address their soft skills ones, and to be able to better manage their lives and performance in the workplace.

They do so not only by providing training and ongoing support and accompaniment to women and youth, but also by providing them with opportunities to work in the enterprises themselves, in order to gain firsthand experience and be in a better position for placement in the overall labor force. Social enterprises include all of these “social costs” associated with demand-led employment by incorporating these costs in their business models and ensuring that they are sustainable in the long run.

Social enterprises involved in delivering vocational education to increase the chances of young people and women of finding work in the BPO/IT industry should give particular attention to the following measures when developing a training and placement program: •

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Promotion of the need to improve vocational qualifications in local and regional communities among people who have difficulty finding work.

Development of training programs based on flexible modules that allow people to improve the generic hard skills, social competencies or soft skills, and specific hard skills referred to in the tables (as far as is possible in the limited time available during training).

Identification of the predispositions of training program participants and diagnosis of their

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competencies, which will allow planning of individually tailored vocational development paths and optimal use of people’s potential.

Provision of training adapted to the financial capabilities of participants, and in particular the financial situation of young people and of women who do not currently participate in the labor force. For example, it should be possible for course fees to be paid in a series of moderate installments or during an extended payment period, or for training to be funded from external sources.

Development of cooperation with businesses and labor market institutions in Poland to provide continuous monitoring of employers’ needs for specific job skills.

Building networks to partner with businesses that are operating in the market and creating jobs, in order to support the employment of people aged under 30 and women, and also to offer these groups the possibility of taking up an internship or undergoing training in one of these firms.

Involvement of employees in preparing training programs and courses, and also working together with them in running these events and then employing the participants.

Validation of courses and trainings by specifying the skills and competencies that should be demonstrated by people who complete them. It would be a good idea to combine this with certification.

Making use of online training, which enables the participation of people who have a job and have to be at work during standard classroom hours, and of others who live at a distance from the venues of classroom-based courses.

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Author: Izabela Przybysz Editor: Nicole Etchart Contributor: Agnieszka Orzechowska Text Review (Polish Version): Gabriela Cichowicz Translator: Peter Nicholson

Copyright Š 2016 by NESsT All Rights Reserved No part of this publiction may be sold or reproduced for sale.

When using or quoting the contents of this publication, please acknowledge NESsT as the author and owner of the copyright

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