CWS 3.0: January 26, 2011 - Vol. 3.3

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Because You Asked: Eastern European Expansion

We are a global corporation considering expanding our contingent workforce program into Eastern Europe, but understand that some temporary worker markets are still undeveloped. Which markets are easier to penetrate?

-- Watchful in Woburn, Mass

Dear Watchful,
You're right to be cautious. Eastern Europe is a large and very diverse region, so each market, each country, has to be approached on an individual basis. Poland, The Czech Republic and Hungary are quite well developed. In fact, Poland's staffing industry is comparable with some mature Western European markets, with many major international staffing companies represented there.

Slovakia and Romania are less developed, but do, at least, have a proper legal framework in place to enable companies to hire temporary workers. It was announced only this month that national federations representing the staffing industry have been established in Romania, Latvia and Lithuania. This is an indication that these markets are now more established and evolving in a positive way.

Bulgaria is a country where particular care needs to be taken as the market remains unregulated despite pressure from both employers and unions to address the situation. At present, employment relations are based on civil contracts, which have no foundation in labor legislation. Agency work is limited and regulated under a contract of services. For agency workers, this means that there is little protection regarding working conditions. However, a legal review is currently in progress, so the situation may improve.

These are the most major markets, but there is also Albania, Bosnia and Herzegovina, Croatia, Serbia, Moldova and Estonia -- not to mention The Russian Federation, Belarus and Ukraine. Currently, these are all regarded as "frontier" staffing regions, so it is vital to seek appropriate legal advice before you make any plans to expand your CW programs in those areas.

That having been said, Eastern Europe was experiencing sharp economic growth prior to the global financial crisis. Similar to other regions in the world, it has recently experienced many difficulties. Though Eastern Europe is now on the road to recovery, some countries will continue to see slow economic growth and high unemployment during 2011.

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