Putting the right people in the right place is part of business management ‘101,’ an idea that, these days, applies equally to the private and the public sectors. Our recent report on economic mobility, jobs and gender in Serbia - part of the report ‘Voices of Europe and Central Asia’ - reveals that even though this is ‘101,’ it is not yet understood in Serbia.
One of the more striking conclusions of the report is that Serbians continue to believe connections matter a lot more than education, experience, or effort when it comes to finding a job: 37% of men and 48% of women we interviewed believe connections are the key factor in leading a household up the socio-economic ladder.
Unemployment remains high in Serbia and there is a scarcity of vacancies in the formal sector, where the jobs that a lot of people in Serbia aspire to exist. According to those who participated in focus group discussions, the problem of finding a formal job is exacerbated by the practice that new employees are hired based primarily on an exchange of favors and/or ‘connections.’ Recently published survey material from the popular job search portal ‘Infostud’ confirms the same pattern.
As a result, potential employees consider having personal or political connections as the only way to get a job, which leads to frustration and discouragement among job seekers.
For example, an unemployed man from an urban community listed several ways to find a job, but believes that the chances of finding a job are slim:
“Not many people get a job with the help of the National Employment Service, it is there just for statistical purposes at the national level. Ads also don’t help much. You can’t turn to anyone but your friends, and you can give money and pull some strings. Today, any job can be bought.”
“I applied [to work] in GSP, they didn’t even inform me that I didn’t pass. I have work experience, I have been driving for 10 years, and they hired a boy of 21 with no driving experience because his dad used to work in GSP,” says another unemployed man.
Let’s be clear: the ability to rely on one’s social capital to get information about jobs is not necessarily a bad thing; this can be the result of efforts and investment in building a personal network. The problem, however, is that such social capital is unequally distributed, which dramatically reduces the chances for young people, women, or those from poorer households to find meaningful employment. The limited number of jobs that are around is redistributed within a limited circle of ‘known’ candidates - thus creating groups of the ‘permanently excluded.’
Young people in particular find it hard - if not impossible - to gain employment, even when they are well qualified. In our study, a young woman from urban Serbia complained about employment that is based on party affiliation:
“Some people get involved in politics for personal benefit and some because of the ideology they follow. The problem is that many people find employment in this way. Of course, it is not sufficient just to be a member of a political party, you have to have good contacts as well. Those with high positions don’t hesitate to employ their friends, family, but also members of their political party.”
Lacking connections, young people often settle for informal jobs or work as waiters, shop assistants, and seasonal workers on the land, or opt to migrate - which, in the end, deprives Serbia of its main asset for the future economy.
One important quality that can be brought in by foreign investors is a system of merit-based recruitment processes, which can help defy the perception of a ‘closed’ labor market. Serbia would not be the first country where recruitment and career management practices are changed by external actors, with Ireland being one notable example.
There is some evidence that this is starting to have an impact in Serbia. For instance, Delhaize - one of the top employers in Serbia - uses transparent hiring criteria for all jobs - from services to operational and managerial – by advertising job openings and keeping applicants informed. Another major employer, Telenor, has mechanisms in place to ensure that knowledge, skills, and competencies for a particular job remain the main criteria for selecting candidates. Over the past ten years in Serbia, the company has also placed an emphasis on transparency in the hiring process by providing feedback on its outcome.
Failure by employers to inform candidates about the end result of a recruitment process is the one indicator that has not improved over the past 7 years, according to the Infostud survey. So there is room for improvement here!
From the interview material in our study, the demands of young Serbians are clear: create more transparent ways of connecting people to jobs and make merit prevail over networks.
This is something that can be stimulated by the know-how that foreign companies bring. At the same time, Government should lead by example by applying more rigorous and merit-based procedures for new hiring, especially as Serbia moves to nurture the specialized skills it will need for a successful EU accession process.
A lot more could also be done to better connect new labor market entrants and other vulnerable workers to jobs. For youth, programs that help their school-to-work transitions, job fairs, and apprenticeships could be strengthened to help bridge the information gaps in their job search. For women, enhancing access to preschool and childcare opportunities is a critical issue, as well as better management for re-entering the job market after maternity leave.
A combination of external know-how, good practice, and the Government leading by example would hopefully help change this rather alarming perception that our study revealed.
 City Transportation Company, public service.