Despite being known for low- paying jobs, McDonald’s Corporation (NYSE:MCD) is now extending some generosity to its employees in terms of accommodation. However, the generous incentive is only applicable to those who are willing to travel and take up the vacant jobs in Eastern Europe. The region is currently having a shortage of qualified labor which is affecting the latent potential in economic growth. The labor shortage has been keeping executives up at night according to a PricewaterhouseCoopers director Robert Bencze.
Investors are skeptical about coming to the region for fear of not being able to find competent employees. The labor drought is worsening at the wake of every dawn, and what was once known as the land o cheap labor is now a headache to a majority of employers. There is a substantial immigration to richer European states which has resulted to not only in so many unfilled jobs but increased salaries to the remaining labor. This, of course, turns out to be a greater cost for the employer yet with no investment to show for it.
The dearth of labor is not only affecting the restaurant business
As McDonald swings into action to avert the wanting situation, Czech Republic is also suffering the same fate. The past two years has seen the number of unfilled positions grow to about 110,000 which is nearly 166%. The share has tripled in Latvia while doubling in Poland.
The automotive industry has not been left behind. PSA Peugeot Citroen and Kia Motors Corporation have been victims of unfilled positions at their local factories. Apparently, many applicants are willing to take these jobs but according to a local spokesman JozefBace, they do not have the necessary skills to run the industry.
Consequences of the labor shortage
The result is increased paychecks and in return higher corporate expenses. There is also the risk of jeopardizing inflows of foreign investment. Hungary is already feeling the loss of a car-industry project which was occasioned by the scarcity of labor. It is quality versus quantity, but the two are not balancing a situation that Dirk Wolfer, a spokesman for the German-Hungarian Chamber of Industry and Commerce says must be put to rest.
Provision of accommodation sounds an attractive recruitment tool that many other companies may apply. Apparently, companies are still jetting into the regions that have been hit by the scarcity of labor. For example, Jaguar Land Rover of Tata Motors Limited (ADR)(NYSE:TTM) is set to begin operations in Slovakia in 2018, and it is seeking 2,800 workers for the new plant. Daimler’s AG (OTCMKTS:DDAIF) Mercedes division is in the process of expanding its capacity in Hungary by 2020 hence there is still hope of reviving the current situation.
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