The Portuguese market is far larger than it may initially appear with a population of 10.6 million people and a gateway market of about 250 million people in the Portuguese speaking countries. Since 2012, Portugal has enacted a series of labor-market reforms to increase flexibility and productivity.
Between 1976 and 2001, the number of students enrolled in Portuguese universities grew faster than in any other EU country. This could be due to the fact that Portugal used to have very low literacy rate and the lowest rank in the OECD Educational Attainment index. Today, significant changes have been made to improve the educational level in Portugal. The country now has about 35 percent of its 20-year-old population enrolled in higher education levels and one of the country’s goals is to have an additional 100,000 new graduates during the next four years, according to the Science and Technology Park of University of Porto. The goal is set to be achieved with the help of an additional investment of 100 million euro.
Ease of Doing Business in Portugal
The World Bank’s annual Ease of Doing Business index rated Portugal to be the 25th easiest economy to do business in out of 190 countries. Portugal is rated 32nd for the ease of starting a business, and it takes an average of 4.5 days and 5 procedures. Portugal shares the first place for trading across borders with 17 other nations and ranks 7th for resolving insolvency.
Politics and the economy
The Portuguese economy looks set for its strongest expansion in almost two decades, according to the Financial Times. Growth is accelerating twice the speed of eurozone average in the first quarter of 2017. The GDP figure in the first quarter of 2017 was $50,422 million. Both consumer and the economic climate indicators were rising in June to their highest level in well over a decade. Domestic demand is predicted to rebound weakly because of high private sector indebtedness. The employed population in Portugal was around 4 643,000 in the fourth quarter of 2016, and the latest recorded unemployment rate is at 9.8 percent.
Portugal has enjoyed six record years in a row for tourist arrivals; the National Statistics Institute (INE) recorded almost 11 million foreign visitors stayed in Portuguese hotels in 2016 after 9.7 million in 2015. The estimated revenue was 2.9 billion euros, about 10 percent of Portugal’s GDP.
What to keep an eye on
Improvement in education levels. If the goals for education are met, the younger generation will be more qualified and have an entrepreneurial attitude with a more international outlook.
We had a chance to interview Alex Usmanov (CEO, Novus Headhunting). We asked Alex few questions about the headhunting and recruiting market in Portugal:
How do you see the situation at the moment?
I think I can summarise the overall trends in the market that are not only applicable to recruitment.
As per some recent statistics and news, there is a tremendous growth of tourism and foreign investment into businesses as well as real estate in the country. However, there should be significant improvement in terms of bureaucracy and ease of doing business in general.
More relaxed taxation rules for new businesses, at least in their first year to give them a better opportunity to establish themselves. The amount of paperwork and the cost of it required to set up businesses as well as invoicing policies may work for old fashioned businesses but not for a young mind that would rather create an awesome product or a service instead of dealing with the above.
All this will have a positive impact on the headhunting market with increased numbers of companies and employees required.
Are there some industries in Portugal which are growing faster than others?
As you may know, WebSummit has made quite a splash in Portugal over the last two years, with around 60,000 people from all over the world gathering in Lisbon. It is mostly tech and internet companies, which in my opinion influence the local market to work in that direction. Plus there is a number of tech companies that were born in Portugal and are well known globally.
And of course as I mentioned earlier – real estate and tourism. So everything that has to do with the influx of foreign people and investment in a newly discovered European gem.
What kind of roles and talent are companies looking for?
At the moment companies are hungry for good tech talent, so all stacks of software development comes at number one, I’d say. Then all the functions alongside of it, design, marketing, operations and business development. That is for both startups and well established players.
I must also add that this is exactly where the following issue comes up: many companies are looking for that talent rather than inviting candidates to join their project. Because – “Hey, we need someone like you and this is what we can provide short and long-term – if you’d be happy here whilst solving these issues for us” sounds much better than “You need to have 10 years of experience, a PhD and be okay to work long hours”. Many of these profiles are spoilt for choice and being bombarded by internal and 3rd party recruiters daily, this creates a “desperation circle” of constant follow ups and annoyance from both sides.
This is what will differentiate those who are “looking for talent” and those that are good at actually finding it.
Is there some kind of talent shortage in Portugal?
Since the influx of foreign workforce is not that big in Portugal yet, due to low salaries compared to central and Northern Europe, there is shortage of multilingual profiles.
Being able to build a product relatively cheap in Portugal, many startups looking at foreign markets for business development – France, Germany, UK, the Nordics, you name it. However, the main issue is to find, attract and keep talent that can provide the skillset, language knowledge and willingness to relocate.
It has also to do with how open the companies are and what they have to, offer of course. As some startups are pretty lean, you have to ensure that the candidates are fully invested in the product and the company, for the opportunity and the challenge to compensate for the salary and package.
Are companies looking mostly for Portuguese people, or are they also interested in people from abroad?
I think I answered that question already, but maybe what I can also add is that Portuguese language is needed in most of the workplaces, which sometimes makes it a little tricky for foreigners to find an opportunity here.
Despite the young generation or those who went overseas to study there is still a language gap, or what I call a “language scare”, when some people are not comfortable using another language to communicate, so it helps a lot being able to speak the native language.
In the startup world however, a younger generation prevails and language knowledge is spot on.
How do you see the development of recruiting and headhunting markets and practices in Portugal over the next couple of years?
I see growth of recruitment platforms that offer quick solutions to often complex recruitment requirements. I also see that larger recruitment businesses are favourable when it comes to picking a recruitment service provider as a lot of business trust is based on reputation and time in the market.
There is lot that has to be improved in terms of recruitment processes in Portugal and in fact, also globally.
The hardest part is to build a relationship with the client once you get to talk to them which can be tricky not being a fully local company or due to the language sometimes. There is also a lot of so called “traditional” or averse to change approach to finding and employing people for the businesses.
My hope is that businesses would soon turn around and focus on the quality rather than quantity of their recruitment methods, start focusing on which challenges and conditions they actually can provide for the potential employees rather than trying to simply fill a job. And finally, a shift to a retained assignment-based headhunting practices is what businesses should aim for if they want to improve how candidates see them and their companies and to pay for actual service rather than for a bunch of somewhat matched CVs.
Recruiters are hired to fill jobs that the client doesn’t have time, skill, network or ability to fill, so if together with the clients we can rebuild that trust bridge, I would consider that to be a major development.