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Heading East, Going West

31.03.2008

“We wish to become one of the largest companies in the field of personnel outsourcing. We want to achieve the position of the leader in Europe” declares Tomasz Szpikowski, the president of Work Service, during a recent interview conducted by Rafał Suś. The Wrocław based company intends to make its debut at the Warsaw stock exchange soon.

Rafał Suś (RS)
You announced that you plan to enter the stock exchange in the near future. Does the risk concern you?  After all the stock exchange has been very volatile lately.

Tomasz Szpikowski (TS)
Of course we are concerned about the recent bear market, despite the best planning, not all events can be unerringly predicted. On the other hand, the Financial Supervision Authority has confirmed our prospectus and we are ready to launch the IPO.  The Warsaw Stock Exchange has recovered the losses and there are always investors seeking opportunities with a high potential return. So we are calm and confident concerning our debut.

RS
How are you going to use the proceeds generated from the IPO?

TS
We intend to continue the acquisitions of both  domestic and foreign companies. We will take over similar  companies with a strong standing in the market. We wish to become one of the largest companies in the field of personnel outsourcing. We want to achieve the position of the leader in Europe.

RS
This sounds rather ambitious

TS
We have already  established ourselves as the leader in Central and Eastern Europe. We will increase our existing presences  in both the  “old” EU and the new member countries as well as attacking the markets in Eastern Europe.

Work Service already has  active subsidiaries in Germany and the Netherlands, plus in Russia and former countries of the former Soviet Union, including Tadzhikistan, Kazakhstan and Armenia. The old Soviet Republics are a virtual human resources gold mine for us, especially in securing qualified staff for Moscow based companies where the wages are considerably higher. The Eastern market has incredible potential; it has grown immensely and thanks to continued growth we will realize high margins on our business activity. Of course, these high margins are contingent upon using  efficient and proven  recruitment methods. For example, we avoid labor intensive and costly challenges such as searching for people in Moscow to work in Moscow.  The leader will be the first company that gains full regional experience to serve a particular market while indentifying both the risks and potential. It is probable that Work Service will earn the rank of number one company for the East within the next 5 years. It’s a  question of implementing a  good strategy.  We copy the Polish model which has been perfectly proven.

RS
What’s the position of Work Service in the British Isles?

TS
Our UK company is in very good shape; we take advantage of the popularity of this location for economic migrants from Poland.  Our London office covers Great Britain and Ireland with its business activity, that of securing employment in locally based companies for the now famous Polish worker. Poles eager for  the support of a qualified Polish agency to seek work in the UK has fueled our growth there.

We should also mentioned the other countries where we operate. Our company in the Czech Republic has been getting on well placing us in the forefront of employment agencies in our southern neighbor. For Czech customers we implement employment projects based on staff recruited from Poland and our subsidiary in  Romania. The business activities of our foreign offices combined with co-operation with local partner agencies,  enable us to place  staff in Poland. At present, we have recruited workers from Ukraine and as far east as Vietnam.

RS
Are international recruitment efforts the only means of coping with staff shortages in Poland?

TS
The market demands increase and at the same time it is increasingly more difficult to acquire good employees. Many business sectors, for example construction, already suffer from serious staff shortages. The resulting rise in remuneration increase the labor costs at all effected companies.  In this case, workers from lower wage countries are an attractive alternative.

We also reduce staff churn rates with our unique loyalty program that provides our placed staff with additional incentives, which builds loyalty. This helps us retain staff at our company and at our customers’ enterprises.

RS
So, staff has become mostly-searched  and scarce commodity.

TS
Well, on one hand the shortages causes difficulties, but on the other hand it is a good situation as we can win higher profits by providing qualified staff.  Our current achievement and focus is conducting effective search, recruitment, and staff acquisitions from other companies by persuading potential recruits that our offer is better, with more interesting terms and conditions. Initially, the most  important issue is to securing  workers.  Secondly is the training to make the placed worker productive as quickly as possible. Then we take up increasing employee loyalty and affinity with the company to reduce rotation and sick days.

RS
In what way do you achieve reducing sick days for example?

TS
We’ve developed special motivation systems, for example rewards for the most consecutive days worked without taking up sick leave.

RS
Is it true that you promote a healthy life style by taking care about ones health to prevent illness?

TS
Let’s not ridicule these efforts as this positive reinforcement rewards really help. Obviously, we also have to possess control systems. If a person calls in sick often, we check if these are not fictitious ailments.  This way we eliminate slackers , consequently, contributing  to the quality of services provided by us and increasing customer satisfaction.

RS
At times do HR companies such as Work Service are unable to  meet customers’ expectations and find it impossible to deliver staff in a suitable amount of time?

TS
Of course. Therefore, we constantly monitor the labor market and take full  responsibility  for customer education. As an expert in the field,  we are able to promptly assess whether or not the offered terms and conditions of work and remuneration will enable us  to successfully take up a  recruitment project.  For example, if a customer wants to recruit staff from Wroclaw and environs with monthly gross pay of 1400 PLN, we know that this is not possible. We then carefully review the project and make suggestions as to the minimum acceptable remuneration for the specific job and local conditions. If the customer rejects the suggestions, we have to turn down the assignment. Our customer base comprises companies that are able to offer attractive, market driven, terms and conditions for staff, thus ensuring our success.

RS
Do rising wages create problems for you?

TS
Well, higher wages attract staff, making our job easier.  One former practice did cause difficulties was when companies intentionally ignored the reality of wage increases and  accepted a high rotation rate from staff working a short time, then leaving to a better paid job.
The market does not allow for such practices any more. The present trend  is to pay market rates in able to retain, and not retrain,  staff , thus raising worker efficiency This is the question of strategy.

RS
And has Work Service changed its strategy or has it continually dealt only with staff outsourcing?

TS
Currently we have developed advanced services within which we include outsourcing of functions, obviously, based on suitably well-chosen and motivated staff. Participating in international conferences, we see that outsourcing is the future of the market of Work Service, that is the market of all services related to work. Therefore – as it befits a leader – we move together with the world trend. We have already applied the outsourcing of the whole production, that is not only provision of workers, but also the management of the whole company. We can give an example of an automotive company that manufactures  a luxurious brand. We created the whole production company from scratch. We choose the  location for investment where there is  still comparatively large human resource potential. Additionally, we work over projects of organization of production in food and cosmetic business lines.

RS
What hinders your business the most?

TS
Red tape and bureaucracy, such as difficulties in acquisition of work permits for imported labor. Plus we have to archived employee documents for 50 years. Additionally every time an employee changes jobs, it is necessary to mail a new tax form and conduct medical exams. It would be a great solution to have standard e-tax forms, e–invoices and electronic work certificates. Can you imagine that on an annual basis our Group spends half a million PLN on postal services alone?

RS
You and your colleagues are owners and co-founders of the company. Are you not tempted to sell?

TS
We have been planning on entering  the stock exchange. This is our method to acquire a large volume of capital required for the  continued growth of Work Service. Of course, if we have an idea for other new businesses, then we may  consider selling.  However, We steadfastly believe in our business and we are confident  that there are still a lot to be done and to be earned. After all, it  is a matter of calculation. Plus, I am just 33 years old, so I will not cash out with  several million and retire, I would die of boredom.

RS
Confidence is good but  you have had one large crisis, caused by  over-invest abroad.

TS
Yes, that’s true, that was difficult. Our loss was around two and a half million PLN. But we learned a valuable lesson. Nowadays we have implemented a clear and consistent strategy and recruited the best managers as well as  introducing ever more  efficient methods of supervision and monitoring of the company.

RS
Are you not afraid of similar crises arising?

TS
We have already gone through the worse. Our management model has significantly changed since then and there is no  danger of repetition of such a situation. The stock exchange process has led to full transparency of our business and “iron” financial discipline. Plus we employed proven and well compensated experts. They were instrumental in  drawing  our business out from the crisis and will help pilot the company in the future.

RS
But probably recruiting experts has not presented  any problems for you?  After all, it’s  you who look for people to work.

TS
That’s true, but sometimes it is the most difficult  task is to find professionals for your own needs.

From the University to the Stock Exchange

Work Service ranks among the leaders of  temporary employment agencies in Poland and the region.

International  giants, including Telekomunikacja Polska and Volkswagen rely on Work Service to delivery innovative HR solutions along with qualified staff..
The Wrocław company has won numerous awards, such as the prestigious “Teraz Polska” promotion emblem. “Polityka” recently gave  Work Service has the 425th position in its annual rankings of Poland’s top 500  companies.

The co-founders of Work Service, three students from the Wrocław Academy of Economics: Tomasz Szpikowski, Tomasz Misiak and Tomasz Hanczarek, started their business in a small room rented from the university. Purchasing elegant suits was one of the first major investments. They travelled across Poland and recruited people for temporary work on their own without staff support.

As international retailers invested in Poland, the need for temporary and seasonal workers soared and Work Service was well placed to meet the demand. Work Service has earned the trust of 1200 customers and provides gainful employment for over 100 000 workers annually.  It plans on entering the Warsaw Stock Exchange 

And a more and more demand for such work emerged as foreign supermarkets built more and more of their shops where seasonal staff was particularly wanted. After 9 years of business activity, the company has gained the trust of 1200 customers and employed approximately 100 thousand people annually. It plans to make a debut on the Warsaw Stock Exchange and it anticipates to acquire around 70 million PLN. S.W.

Privately, Tomasz Szpikowski in an avid motor sport enthusiast, even participating in car rallies. He’s 33 and lives in Wrocław where he graduated from the Department of Management and IT Science at the Academy of Economics with  specialization in Human Resources. In 1999 with fellow students, he established Work Service, assuming the duties of President.  Already in 2003 he won the prestigious “Entrepreneur of the Year” in the category of New Business conferred by Ernst & Young and the “Manager of the Year” title granted by Businessman Magazine.”

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Press Officer

Andrzej Kubisiak


Andrzej Kubisiak

tel. +[48] 512 176 030
andrzej.kubisiak@workservice.pl

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