Companies

Shortage of skills in Europe makes HR clients to look East

The wage arbitrage advantage that India enjoys will take a long while to disappear, said Robert-Jan van de Kraats, CFO and Vice-Chairman of the Executive Board of Randstad Holding NV, a leading global provider of HR services.

Mr. Kraats is here to attend the company's board meeting, being held for the first time. In an interview with The Hindu, he said the wage arbitrage advantage for India “will take many years to disappear.'' Not surprisingly, he felt that India offered attractive opportunity for a company like Randstad.

According to him, the wage cost per hour in Europe is around euro 20, in Poland about euro 4 and in India as well as China even less than euro 2.

He said the wage cost coupled with the fact that there was a huge shortage of skills in Europe made it imperative for clients to move towards the East. The recession-forced reduction in businesses had not been coming back in Europe. The unions in Europe were veering round to accept that work would move to the East, where the wage levels were low. Events of the past, Mr. Kraats said, had led to smartness in some parts of Europe.

In Germany, for example, labour cost per hour had been stable for quite some time now, thanks to increased work hours. There was no staffing sector until 2004. Temp staff or flexi workers had now become an accepted part of the German system. “Flexi work is much better than no job,'' he said.

Flexi work had lot of positives. For a worker, it ensured a job. For the employees, it got them better rates per hour. According to Mr. Kraats, the efficacy or utility of the flexi job could be evaluated through the awareness indicator. In the Netherlands, pension rights were given to a worker who held flexi job for a longer duration. People no longer looked down upon a temp staff in the Netherlands, he said. Mr. Kraats felt that the uncertainty notwithstanding, a flexi job offered lots of advantage, especially if somebody was not willing to stick to one organisation but keen on gaining experience in multiple work places.

He welcomed the removal of floor wage rates in Germany. He felt that a clear policy push was needed in India to expand the organised labour market so as to facilitate the nascent staffing industry to play a positive role in this dynamic environment.

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Printable version | May 29, 2020 5:17:51 AM | https://www.thehindu.com/business/companies/Shortage-of-skills-in-Europe-makes-HR-clients-to-look-East/article15534158.ece

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