Specifics of the Bulgarian HR market for 2023 through our consulting business

Specifics of the Bulgarian HR market for 2023 through our consulting business

What Were the Specifics Observed in the Bulgarian HR Market in 2023?

We all experienced an unforgettable and unprecedented year – this is true for both business and our personal lives. The past year saw the coronavirus pandemic, which led to a business crisis and required rapid adaptation. At Horizons, we believe we have successfully navigated this adaptation by striving to be even more flexible and ensuring our services bring increasingly meaningful benefits to businesses in Bulgaria.

Horizons is a consultancy firm with 21 years of experience in the Bulgarian market, specializing in recruitment at managerial and expert levels. We combine the efficiency of the classical approach with best practices in direct contact and project management in the field of human resources. We offer a variety of career development opportunities within the context of different projects, companies, and functions.

Here is a Brief Summary of Our Observations in the Following Areas:

  1. Business Environment and Challenges
  2. Candidates – Characteristics of the Bulgarian HR Labor Market
  3. Clients – Specifics and Trends in Our Work with Them
  4. Types of Positions That Were Most in Demand Over the Past Year
  5. Interesting Cases We Worked On

1. Business Environment and Challenges

  • Government Measures for Business During the Lockdown and Crisis

Our observations show that the government measures for business during the crisis were untimely. They were slow to support struggling companies, and the application and disbursement of funds for small business projects happened slowly, failing to preserve many jobs. Many companies did not immediately lay off employees but instead tried to use reserves from paid and unpaid leave, and reduced working hours. This created hidden unemployment, which will become more apparent in the future but has already significantly reduced the incomes of working people.

  • Decline in Our Business During the First Lockdown

The unprecedented conditions caused by the pandemic crisis initially had a strongly negative impact on us, with a huge drop in our work and projects. We had to part with a small part of our team, but we managed to retain the core employees and relied on them during the subsequent recovery. Over the summer, we compensated for much of the spring decline and even improved our results compared to the previous year.

  • New Services We Offer

We quickly adapted to the new situation for the world and business by introducing new and more flexible services.

  • The New Office Culture

Remote work, which was initially well-received due to the anti-epidemic measures, is now evolving. After many months of working mainly from home, employees are seeking more flexible and hybrid work arrangements, combining remote and in-office work. We believe that office culture is changing significantly but will not disappear entirely. Hybrid forms of combining remote and office work are likely to become established in the medium and long term. Flexible coworking spaces and the concept of hot desks will be an economically advantageous and flexible option for employers, combining the need for normal human interaction with a safe work environment.

  • Business Model, Sustainable and Ethical Relationships

We are known for our engagement-based payment model and exclusivity in project work. Our analyses for the past year show that we have a 100% success rate, or close to it, for projects where we were engaged as an exclusive external partner for recruitment or executive search. Our observations indicate that many purely success-based recruitment models dilute client engagement and the message to the labor market. Business ethics are also compromised when a client works with multiple providers for the same HR service.

  • Clients from the UK

We have seen an increase in the number of clients and inquiries from the UK due to changes in the business environment following Brexit.

  • The Bulgarian Recruitment Market

The Bulgarian recruitment business is very fragmented. There are too many small firms with low capacity to serve large employers and guarantee high success rates. The quality of many companies is questionable, and our sector took a serious hit from the first lockdown and suffered from the crisis.

  • International Procurement Practices, Inadequacy, and Poor Market Assessment of Multinational Companies

As we noted, our business segment is characterized by a large number of small firms willing to make many price and ethical compromises when negotiating with large employers (clients). Most of our large international clients try to apply their international procurement practices, which, unfortunately, are highly inadequate and difficult to apply to our small and fragmented industry. Additionally, they distort the labor market and lead to many questionable and unethical practices.

  • Freelancers in the Market

The market, competition among employers for a limited number of qualified candidates, and the insufficient professional level of some recruitment companies have led to the emergence of many freelance specialists offering similar recruitment services. We have noticed an increase in their number. Unfortunately, their practices are quite controversial and without reaction from regulatory bodies such as the Employment Agency and the Labor Inspectorate. Sadly, they often do not lead to more satisfied companies (clients) with more hired employees but instead lower the professional level of the service, introduce questionable and unethical practices, and do not comply with all legal frameworks (Employment Promotion Act, GDPR, etc.).

  • Bulgarian Employment Confederation

In 2020, Horizons Bulgaria became a co-founder and member of the Bulgarian Employment Confederation, which was established by the largest and leading HR companies in the country. The goal of the confederation is to create a sustainable partnership with all companies in the HR services, recruitment, and staffing sectors to build a better organized, functioning, regulatory, and labor environment in Bulgaria. It also aims to help Bulgarian employers receive good quality and ethical standards in HR services, gather market information, facilitate and advise foreign investors in the country on the labor market and its opportunities. BEC supports the two most important sides of the market – employers and employees.

  • We Became Finalists in the Annual Awards of BAHU for 2020

The category in which we are nominated is “Best Project by a Small/Medium Enterprise.” Our successful project is a Chatbot, a virtual recruitment assistant that optimizes and automates the work of recruitment specialists.

2. Candidates – Characteristics of the Bulgarian HR Labor Market

  • Online Interviews and Business Meetings

The epidemiological situation necessitated the HR market to move largely online over the past year. We adapted to this specificity, and it can be said that over 80% of our business has shifted online, with interviews and meetings with candidates and clients mainly conducted virtually.

  • Specialists Are Less Willing to Change Their Current Jobs

Due to the crisis and the risks that a career change entails, candidates have become less willing to change jobs. As consultants who regularly use the direct approach in recruitment, we faced more difficulties compared to previous years in motivating candidates to make a change. We successfully achieved the ultimate goal of our projects, but we had several declined job offers after the intervention of a family member or partner in the candidate’s final decision to start a new job.

  • Availability of Many Proactive Candidates from Sectors Affected by the Crisis

The crisis and the measures taken have affected sectors in the service industry, such as restaurants, tourism, and hospitality businesses, small service businesses with shops in malls, and others. As a result, many laid-off and redundant specialists entered the labor market, proactively reaching out to us through our website, Facebook, or LinkedIn page.

  • Almost Every Position Requires a Headhunting Approach

Working candidates are not particularly inclined to change their current jobs given the crisis. They see this as a high-risk endeavor, and our consultants have to use a direct and/or headhunting approach to find and persuade suitable professionals to join our clients’ businesses and thus fulfill the service they hired us for.

3. Clients – Specifics and Trends in Our Work with Them

  • Bulgarian Companies Seeking International Expansion and Establishing or Developing Their Offices Abroad

A small but specific part of the business in Bulgaria turned its attention abroad. For this reason, in 2023, we had clients who commissioned us to search for key positions outside Bulgaria.

  • Inquiries from Foreign Clients

At the same time, a significant number of foreign companies saw an opportunity in the crisis to

enter the local labor market or remotely integrate highly qualified Bulgarian specialists into their international teams. Some of them reached out to us, commissioning specific market research on the local business market. Some started operations here, while others were surprised by what they discovered. We still maintain contact with some of them who have not yet decided what to do and assist them with information regarding this decision.

  • Temporary Employment

Temporary employment, also known as staffing services, is a business service where one legal entity (temporary work agency) hires and provides staff to another legal entity (user company) under its management and control. Temporary hiring and staffing combined with remote work are becoming increasingly popular. However, some teams still require physical presence and personal interaction to do their jobs. This service represents a flexible solution for companies that need new or additional employees but do not wish or are unable to hire them permanently or are in the process of establishing their legal entity in the country.

In this regard, to reduce unemployment, we would recommend that forms of employment be legislatively liberalized to facilitate such forms of part-time or temporary work. They are in demand and fit well in times of crisis, providing flexibility for both employers and employees.

  • Increase in Salaries

Despite the crisis, employee salaries are gradually increasing, as well as overall personnel costs. At the same time, household expenses are rising, as not all employers are willing to cover electricity, internet, and heating costs for the time when their employees work from home.

  • Difficulties in Finding Good Specialists

The trend of difficult and increasingly problematic finding and hiring qualified personnel persists. Working candidates factor in the increased risk of change in their salary expectations, and the shortage of knowledgeable and capable employees is still significant. This forces employers to pay higher costs for both attracting and retaining them.

  • Unfairness and Difficulties in Paying for Services

Unfortunately, like many other businesses, we also suffer from the unfairness of some of our clients regarding the payment for already completed work and finished projects. The overall intercompany indebtedness affects us directly, as we provide a business service.

  • Increased Offer of Low-Skilled Specialists from Recruitment Agencies in Poor Countries

Bulgaria had just started to become interesting for importing personnel from other countries, and the import of personnel had just begun to gain momentum before the pandemic. We have noticed an increase in inquiries from recruitment agencies in poor countries in Asia, the Middle East, or the Far East, proactively offering us low-skilled specialists who are currently unemployed in their home countries.

4. Types of Positions That Were Most in Demand Over the Past Year

  • The most sought-after positions were in the IT, ITO, and BPO sectors. In these sectors, we searched for various types of specialists, mainly at an expert level, with more than 3-4 years of experience.
  • IT Hubs and Shared Services Centers – most of these types of business centers were established and started operations in Bulgaria over the past year. Clients from such centers most often commissioned us to search for experts they could not find or were too expensive in their countries.
  • Significant reduction in the demand for middle and top-level managers (CEO, CFO, COO, etc.).

Businesses also played it safe and decided to retain or optimize their current management team, focusing mainly on expert positions and only where they were absolutely necessary.

5. Interesting Cases We Worked On

  • Relocation of Specialists Who Are Not EU Citizens

We had an interesting case for our client in the IT sector. Our search was for an extremely niche and rare specialist. We managed to find and attract such a professional, who was not available in Bulgaria, and relocated them from a non-EU country to Bulgaria.

  • Exclusive Partnership with a Company Using Several of Our HR Services

Shortly after the start of the first lockdown, we won and attracted a partner from the gaming business sector. Our partnership includes several services, including recruitment and staffing. The company did not have operations in Bulgaria and chose our country to start an entirely new “office.”

  • UK Company Chose Us as a Partner and Provider of HR Services Entirely Online

An intensively growing British company, affected by business changes after Brexit, entered the Bulgarian market during the first lockdown through a partnership with us. This happened and continues to happen entirely online, without any employee of the company visiting Bulgaria. We hired a team of highly qualified employees who currently work in temporary employment. We continue to expand their team in Bulgaria.

Covid-19 accelerates changes towards digitalization worldwide but also caused a significant economic crisis. Management will need to be more adaptable and flexible than before and offer flexible employee packages to attract the right talent.
The traditional office model has changed, with remote work and team interaction entering many previously unthinkable areas, including recruitment, hiring, and personnel management.
We need to show flexibility, adaptability, and creativity while adhering to legal frameworks, new business needs, and the uncertain and unpredictable environment.
We are faced with the challenge of applying new ways of attracting, retaining, and managing remote talents.

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