2016 could be the first year that European office employment levels surpass the previous peak of 2008, according to Colliers International’s latest research ‘EMEA Offices: Is Flexibility the Future?’.
The report shows that office-based employment levels in the EU have grown by 5 million, representing a 4.3 per cent increase over the last 10 years and surpassing the previous peak of 2008.
“An increase of only 4.3 per cent may seem marginal,” said Guy Douetil, Head of EMEA Corporate Solutions for Colliers International “yet, if you take into account the significant impacts of the trend towards outsourcing and offshoring in the EU, the global financial crisis from 2008 to 2012, and the impact of austerity on both the public and private sectors, the outlook for office employment in the EU is actually a positive one.”
The research shows the extent to which outsourcing of services has had a positive impact on certain areas of the EU, including South-Eastern Europe, Central Europe, Central and Eastern Europe and the Baltics, which all reported growth of between six and 15 per cent, albeit off a low base. The report also highlights that the UK & Ireland have seen significant growth in office-based employment in the last 10 years, reporting a 9.8 per cent increase between 2005 and 2015.
Damian Harrington, Head of EMEA Research, said: “This growth has been driven by the ability of these liberal economies to react to change, re-balance and attract private sector investment. It also reflects their more flexible approach to employment, with both contractual and self-employment increasing post global financial crisis in order to help spark an increase in employment. There has also been positive growth in the Nordics for similar reasons, with the tech sector playing a major part in the transformation of these markets.”
However, the report clearly shows that there are winners and losers in the EU when it comes to employment growth. In Western Europe for example, growth has been far more muted, showing only a 1.8 per cent increase in office-based employment. And in Southern Europe, there has been negative office-based jobs growth since 2005, with a decrease of 4.6 per cent.
Harrington added: “Germany has recovered but has been held back by a lack of capacity in the labour force. Whilst, France is in a similar muted growth position, but has been held back further by an inability to increase flexibility into employment.
“In Southern Europe, jobs growth has been more problematic. Spain and Italy have been hamstrung by restrictive and inflexible labour laws and both of these major economies, alongside smaller economies of Portugal and Greece have unwanted youth unemployment rates above 40 per cent. The good news however is that, due to regulatory reforms making it easier for firms to operate more flexibly, a turnaround for these Southern European counties is in the offing.”
Over the last decade, Serbia has increasingly transformed into an attractive alternative outsourcing destination, significantly standing out from other countries in CEE region. Already several US and Western Europe companies have moved their sections of their services and production lines to Serbia in an effort to leverage competitive workforce talent with high skills and education, updated with global international trends, whilst engaging them at more competitive prices.
“One of the first to invest in outsourcing in Serbia was the leading IT giant Microsoft. In 2005, the Microsoft Development Center (MDCS) was established in Belgrade which today engages more than 130 high skilled IT professionals. One out of the four R&D centers in Europe, it has helped fast-forwarded the future of the Serbian region setting it as one of the elite places for R&D throughout Europe.” Commented Uros Vukomanovic, General Manager | Serbia.
Serbian based companies are no strangers to outsourcing as well. However, instead of outsourcing services over a long term period, they prefer to outsource departments such as IT, Marketing, HR, Finance on a case by case scenario as the need arises. This gives them the opportunity to minimize risks by relaying on the expertise of external partners, reduce space from the release of space from their establishments, while at the same time to focus the disposal of their resources towards the realisation of their primary corporate goals.
Differentiating from the rest of Europe, Serbia is mostly governed by traditional full time office base work environment and is expected to remain so for the foreseeable future. However, from the alternative flexible ways of employment, remote working comes in second, although still behind with a gap from full time office base employment. Mostly reserved for freelancers and subcontractors, they are usually hired online by companies and individuals worldwide. Working from home is a preferred practice mainly from the IT sector and individuals providing customer service support, while in other job functions it remains still largely unavailable.
“With Serbia taking irreversible steps towards joining the European Union, we expect to witness the more dynamic entrance of New Ways of Working in Serbia as the process unfolds.” said Ana Vukovic, Managing Director | Greece & Serbia. “When the rest of Europe is now “downsizing” the space to approximately 10 sqm/workspace, that is already the prevailing dynamic in Serbia. Therefore we expect in the near future to witness an increasing demand for creative and progressive ways of work such as desk sharing, in order to follow international trends and further reduce costs.”