Executive Search in Greece – 2019 Outlook

Elections Bring Hope for Change

2019 is an election year for Greece after four years of far-left governance. The economy is still in Dire Straits having lost 30% of its value during the crisis.

Unemployment is still high at about 20% from a high of 27%.   This reduction should be a worthy achievement but has, in fact, been accomplished by cutting the minimum wage almost in half and encouraging part-time employment which keeps people employed statistically but does not allow a large number of them to make a decent living.

Tax is extremely high (only 30-40% of the gross income of a person actually goes into his/her pocket after tax and social security).  Corporate tax is at 29%, the tax on dividends at 15%, the solidarity levy at 10% and social security contributions for board members at 26.7%, which amounts to 81 percent of profit distribution.

Education, health lag behind

State education, health services, policing (security) are inadequate despite the high tax rate, and the Government seems to be investing in communication – with a view to control — rather than encouraging investment and growth in the country.

Relations with Turkey have become extremely tenuous and relations with Russia are at an all-time low. Relations with the USA are on the positive side, although President Trump seems to move from one side to the other on Turkey, based on current affairs. Relations with China are positive, with some important investments completed such as the operation and development of the Piraeus port by Cosco.

On the positive side, the internal devaluation that has taken place has brought the economy to a point where it is ready to sky rocket given the right circumstances. Labor cost is low relative to the rest of Western Europe and, combined with a high-quality and well-educated labor force, Greece is competitive in developing IT and other technology hubs in the country offering a more expensive but very competent alternative to the east.

Multinationals on the sidelines

Multinational companies are taking a “wait and see” stance regarding the country given the stagnant economy, the high tax rates, and a not-positive environment. Tourism is an exception where some major investments are taking place in the face of a combination of factors (numerous tourist sites, extended summer season, problems facing traditionally competitive tourism destinations in the area).  Shipping is also strong, although business interests and operations are mostly abroad.

In a good scenario, the upcoming elections will bring a strong government that will develop a business-friendly environment (tax reforms, protection from ideologies and corruption, partnering with investors for the country, much needed reforms which have been grossly delayed) and will allow for the country to start moving towards its potential.

Executive Search Outlook

The Executive Search business is moving along at a steady pace. Given the “wait and see” attitude of multinationals, executive positions based in Greece have become a lower priority: Country Managers are taking the place of Managing Directors, having mostly Commercial responsibility rather than full responsibility for a subsidiary.

On the flip side, this has given room for Greek companies to become larger, either becoming representatives of multinationals or growing their own business where competition is not as aggressive. They have begun to experiment with more sophisticated tools in recruiting or HR operations, which were not of interest to them previously.

The most senior and competent people as well as the younger and hungrier people find opportunities to leave the country and find a life elsewhere.  A large number of them will consider returning for the right opportunity, even if it is not as well paid as abroad.

An interesting by-product is the fact that our networks of Greeks at his point in time extends globally, allowing us to have insight into multiple industries and areas of the world.

For information contact: Nikos Yannoulatos, Cornerstone Greece