Executive Search in Austria – 2015 Outlook
Stagnant Economy Makes Job Market Tough
The economy has stagnated due to political decisions or lack of – resulting in increased taxes penalizing new businesses, international corporations, and in particular banks (bank taxes are very high). This meant that several EMEA centers of multinationals exited Austria, changed locations (ie Google) or stopped further investment, with a negative impact on executive search in Austria.
Austria is dependent on both Russia & the Mideast and less so on the US . High end retail fell 70% with the Russian crisis and real estate was similarly affected. Many Austrian companies are actually expanding to the US due to low cost labor, hire/fire freedom and state tax rates.
There is a counter pressure building to lobby the European Union regarding sanctions against Russia, especially since many leading Austrian corporations are dependent on money generated from Russia and the CEE. Germany is the most important partner for Austria after the CEE and growth in Germany is key, especially as internationally, Austrian subsidiaries made the transition a few years ago in to the “DACH” or Germany speaking regionalization consisting of Germany, Austria and Switzerland.
Within the DACH group, Austria pales in comparison to Switzerland and Germany but this structure usually transitions every few years to Austria being a CEE Center. This is a time when companies realize that establishing a business in Austria means a regional advantage, so they choose it for expansion in the entire region. Several data centers are now established here due to location and are serving a wider region.
The job market is tough for those 50 and over – no matter how talented they are — which I believe is in contrast to Germany which has many top leaders in this category. The major job growth is in the services industry –serving a wide range of industries (from FS, to industrial). B ecause of takeovers, mergers, failures and poor performers, there is a also a high replacement rate at board level, board -1, and in other key roles. This is prominent in the financial services and insurance sectors but also in the faltering industrial market. We are also being approached to assist in mergers or acqusitions.
Politics remain stable despite deep dissatisfaction as Austrian politicians and their constituents are conservative regarding change. There has not been a change in minimum wage in Austria; it is lower than in Germany and taxes have risen in mid to upper level positions. Candidate salaries are higher (self –reported) but new offers are often more conservative, a challenge for all involved.
The local stock market has been experiencing great volatility but thankfully is so small that it has little effect on the economy.
We are seeing a convergence of technologies as Austria leads the global launch of GSM technology, with Carlos Slim buying Telekom Austria (and its subsidiaries in various countries). There is also pressure on the banking and payment market to pick up in 2015 and we expect great things to develop in FINTECH.
There are many highly talented people working in Austria, both native and those from neighboring countries and thus if anyone needs talent in Austria, we would be delighted to help.