Labour market and human resources in Małopolska

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1 1 Labour market and human resources in Małopolska We are very pleased to present to you this report on the labour market and human resources in Małopolska and the city of Kraków. This study has been undertaken in cooperation between the Małopolska Regional Development Agency, the Kraków Technology Park and the consulting agency Advisory Group TEST Human Resources. It has been made possible thanks to the contributions of several dozen investors operating in Małopolska. The report consists of two parts: 1. Statistical data concerning the demography and labour market of Małopolska and the city of Kraków. 2. Processed data obtained from direct interviews with investors, concerning market evaluation and problems concerning human resources that arise. We are confident that the report will become an important and useful source of information when taking business decisions. We are grateful to all participants for their time and valuable information. An introduction to the Administrative Divisions of Poland Since 1999 the administrative division of Poland has been based on three levels of subdivision. The territory of Poland is divided into voivodeships (provinces) of which Małopolska is one. These are further divided into poviats (counties or districts), which in turn are divided into gminas (communes or municipalities). These terms are commonly left in their Polish-equivalent form so as to avoid confusion (e.g. a poviat should not be considered the equivalent of a county in the United Kingdom). In this document, the terms Małopolska and Małopolska Voivodeship refer to the same administrative entity. Neither should be confused with the historic region of Małopolska. Prepared by: In the cooperation with: and Labour Martket and Human Resources raport.indd :19:11

2 Labour Martket and Human Resources raport.indd :19:13

3 3 Contents Statistical data... 5 Information on the population of Kraków and Małopolska... 6 Information on employed people... 8 Information on unemployed people... 1 Higher-education system in Kraków Teaching foreign languages Results of surveys among enterprises Evaluation of qualifications held by employees available on the labour market in Małopolska in relation to employers requirements Reasons for staff turnover... 2 Identification of factors determining location and development of investments Identification of barriers to hiring new employees Methods used to find new candidates Flexible employment methods Forms of hiring employees Cooperation of enterprises with personnel consulting agencies... 3 Dynamics of the remuneration market for Małopolska Labour Martket and Human Resources raport.indd :19:13

4 Labour Martket and Human Resources raport.indd :19:13

5 5 Statistical data Labour Martket and Human Resources raport.indd :19:13

6 Information on the population of Kraków and Małopolska Data published by the Polish Central Statistical Office [GUS] for 27 shows that the population of Małopolska is 3,279,36 of which 51.5 % is female. 2) Population of Kraków by age 85 and above 9, ,956 1) Population of Małopolska by age ,488 3,444 3, and above 35, , ,471 1,548 12, ,629 Age brackets ,431 58,917 49,377 44, , ,66 Age brackets ,57 233,78 227,92 21, ,268 67,532 71,214 65, , , ,478 2, 4, 6, ,828 Source: Regional Data Bank [RDB], GUS, as of 27, annual data Population , , ,669 3) Age structure of the populations of Małopolska and Poland 5, 1, 15, 2, 25, Source: Regional Data Bank [RDB], GUS, as of 27, annual data Population 1% % 17.8% 17.3% 16.8% 17.2% 16.7% 16.2% 15.8% As the chart above demonstrates, at voivodeship level, the age brackets with the highest populations are the 2-24 and brackets. A similar structure reflecting a significant minority of young people between the ages of 2 and 34, can be seen in the population of Kraków, as presented in the following chart (2). Both charts demonstrate that the only statistically significant difference relates to the population aged 35-49, which in Kraków accounts for a smaller proportion of the population than it does in the entire Małopolska. The age structures of the populations of Małopolska and of Poland for the period are presented in the following chart (3). 75% 11. 5% % 66.8% 67.2% 67.5% 67.6% 68.% 68.3% 68.5% 25% % 15.3% 15.5% 15.7% 15.2% 15.3% 15.4% 15.7% Małopolska Poland post-working working pre-working change in population number 22=1 Source: own analysis of Voivodeship Labour Office, according to Economic Activity Survey, GUS Małopolska is characterised by constant population growth. According to Kraków Statistical Office, the main reason for the growth is a positive natural increase and a positive constant migration balance. Małopolska was one of four voivodeships with population growth (the others were Mazowieckie, Pomorskie and Wielkopolskie). Labour Martket and Human Resources raport.indd :19:13

7 7 Despite a general decrease in the numbers of children and young people, we can still say that Małopolska s demographic is younger than the national average. The share of people of pre-working age (up to 15 years) in Małopolska amounted to 16.8%, whereas in Poland overall it was 15.8%. This larger share of people of pre-working age is reflected in a lower share of those of post-working age (67.5% in Małopolska and 68.5% in Poland). A steady growth in the number and share of the population of post-working age has taken place (from 493,675 in Małopolska in 23 constituting 15.2% to 513,57 in 26 constituting 15.7%). 4) Structure of the education of the population of Małopolska The following chart, which displays data relating to the level of education of citizens of Kraków, is worthy of examination. 5) Population of Kraków, age 13 and over, by level of education higher 134,944 Education post-secondary 27,987 secondary general 13,517 secondary vocational 138,617 basic vocational primary 19,97 117,45 2, 4, 6, 8, 1, 12, 14, Source: Regional Data Bank [RDB], GUS, as of 27, annual data Number of people 1% 8% 6% 4% 2% 11.2%??.?%??.?% 14.1% 13.8% 22.8% 22.8%??.?% 22.8% 23.5% 9.3% 9.8% 1.7% 1.9% 1.1% 29.% 28.1% 27.8% 27.3% 25.8% 27.6% 26.9% 26.8% 24.9% 26.7% higher post-secondary and secondary vocational secondary general basic vocational junior high school, primary and lower The education structure of the region s largest and, in fact, only agglomeration is significantly different from the overall voivodeship structure. A closer inspection reveals that 2% of the population has completed higher-education. A similar proportion is accounted for by those that have completed secondary vocational education, although the number is slightly higher Poland Source: own analysis of Voivodeship Labour Office, according to Economic Activity Survey, GUS Among the population of Małopolska, those people with primary and junior high education represent the majority. Together with people with basic and vocational edu ca tion, they constitute more than half of the population of the region. Małopolska s population is better educated than the rest of country s citizens, a fact demonstrated by the last two columns of the chart (4). A significant increase in the level of education occurred in Małopolska between 23 and 24, as well as between 25 and 26. This can be attributed to among other factors the increased accessibility to highereducation for a large number of high-school graduates, thanks to a standardisation of recruitment procedures as part of educational reform. Labour Martket and Human Resources raport.indd :19:14

8 Information on employed people The structure of employees by activity sector remains little changed since last year. Most people, i.e. 36.% of the general population, work in entities within the market services sector. This sector is divided into the following segments: Trade and repairs, Hotels and restaurants, Transport, warehouse management and communication, Financial agency services, Real estate and corporate management, Services, municipal, social, individual and other activities. The number of people working within this sector increased by 3,4, i.e..9%, to 364,3. This was a consequence of an increase in the number of people employed in all of the respective segments, with the exception of Trade and repairs, where a slight decrease was reported. The industrial sector is divided into the following segments: Mining, Processing industry and Electricity, gas, and water production and supply (grouped as Industry), as well as Construction. Just over one-quarter (26.8%) of the overall figure, i.e. 271,2 people worked in the industrial sector. In comparison with last year, a small increase in the number of people employed within this sector was registered. 6) Employment by activity sector non-market services sectorpost-secondary market-services sector industrial sector agricultural sector Source: Regional Data Bank [RDB], GUS, as of 27, annual data Average gross remuneration in Małopolska s enterprise sector during the period January-June 28 was PLN 3,3 - a 9.1% increase over the previous year. Salary increases in Małopolska were relatively low in comparison with the Zachodniopomorskie or Śląskie Voivodeships, where they found to be in excess of 13%. The following chart presents data analysed by the Central Statistical Office Number of people employeed, in thousands 7) Salary level by voivodship, January June 28, in relation to January June 27 3,8 3, The non-market services sector (which includes three segments from the Polish Classification of Activities: Public administration and national defence; obligatory social and health insurance, Education and Health care and social assistance ) employed 19.% (192,1) of all working people. Employment increased across all segments of this sector. 3,4 3,2 3, 2,8 2,6 2,4 2,2 2, zachodniopomorskie wielkopolskie warmińsko- -mazurskie śwętokrzyskie śląskie pomorskie POLSKA podlaskie podkarpackie opolskie mazowieckie małopolskie łódzkie lubuskie lubelskie kujawsko- -pomorskie dolnośląskie The agricultural sector, including Agriculture, hunting and forestry and Fishing, was responsible for the employment of 184,1 people. This represents a slight increase over the figure recorded last year. Within the agricultural sector in Małopolska, approximately 97% of people work in individual or private-enterprise agriculture. January June 28 increase January June 28 / January June 27 (in %) Source: Advisory Group TEST Human Resources Analysis on GUS data Labour Martket and Human Resources raport.indd :19:14

9 Labour Martket and Human Resources raport.indd :19:17 9

10 Information on unemployed people At the end of October 28 there were 89,7 people registered as unemployed in the poviat labour offices of Małopolska. 9) Unemployment levels in Małopolska, by poviat, at the end of December 28 dąbrowski limanowski In comparison with the previous year, the unemployment rate in Małopolska decreased in all poviats (except for Nowotarski, where it remained unchanged) and in those cities with poviat rights. The highest rate of unemployment was recorded in the Dąbrowski Poviat (16.6%), and the lowest in Kraków (2.8%). nowosądecki gorlicki olkuski brzeski tarnowski chrzanowski oświęcimski The level of unemployment in Małopolska is one of the lowest in the country. The following two charts (8, 9) present the level of unemployment accurate as of December 28. nowotarski City of Nowy Sącz wadowicki myślenicki proszowicki ) Unemployment levels in the voivodeships at the end of December 28 tatrzański City of Tarnów suski wielicki wielkopolskie śląskie mazowieckie małopolskie pomorskie łódzkie POLSKA podlaskie opolskie miechowski 6.7 krakowski 6.7 bocheński 5.9 City of Kraków 2.8 Małopolska Source: Advisory Group TEST Human Resources Analysis on GUS data dolnośląskie 1.2 lubelskie 11.3 lubuskie 12.4 podkarpackie 13.1 kujawsko-pomorskie 13.4 zachodniopomorskie 13.4 świętokrzyskie 13.9 warmińsko-mazurskie Source: Advisory Group TEST Human Resources Analysis on GUS data 16.8 unemployment registers was the commencement of work, which was the case for 5,9 people (36.% of those removed), including unsubsidised work 4,8 (29.6%). Nearly 5, registered unemployed did not confirm their readiness to start work (3.7% of those taken off the register), while 1, (6.1%) voluntarily gave up their unemployed status as unemployed. As of October 28 in Małopolska 15,1 people were registered as unemployed, i.e. 4.6% more than the year before. In October 28 16,2 people were removed from the unemployment registers of poviat labour offices. The number of people removed decreased both on a year-on-year basis and also in relation to the previous month by 7.6% and.3%, respectively. The main reason for removal from the The number of unemployed in any particular situation on the labour market includes: the long-term unemployed (remaining without a job for an accumulative period of twelve months during the last two years) at 45,1 (5.3% of the total number of those registered) by the end of the reporting month; young people (up to the age of 25), constituting 23,1 (25.8%); those lacking professional qualifications, of which there were 22,5 (25.1% of the overall figure); and the elderly (above the Labour Martket and Human Resources raport.indd :19:17

11 11 age of 5), with a total of 15,6 (17.4%). The analysed group of unemployed people also included 5,4 single parents, responsible for at least one child up to the age of 18, as well as 4,7 disabled people. Within the group of those listed as unemployed in any particular situation on the labour market, the lowest decrease compared to a respective month of 27 was recorded in the categories of the long-term unemployed (33.%) and those lacking professional qualifications (23.%). 1) Registered unemployed by age Registered unemployed by age 55 and more and less 7,281 5, 1, 15, 2, 25, 3, Source: Regional Data Bank [RDB], GUS, as of 27, annual data 22,657 25,94 25,761 3,963 Number of people According to GUS, at the end of 27 young people (age 25-34) accounted for the largest share of those registered as unemployed. The majority of Małopolska s unemployed have either just basic vocational education (31%), or secondary vocation and post-secondary education (25.7%). Detailed data relating to the level of education of the unemployed in the region is shown in the following chart. 11) Registered unemployed by level of education junior high school and less basic vocational secondary general post-secondary and secondary vocational higher 9,5 11,744 27,82 28,937 35,114 5, 1, 15, 2, 25, 3, 35, Source: Regional Data Bank [RDB], GUS, as of 27, annual data Number of people Labour Martket and Human Resources raport.indd :19:2

12 Higher-education system in Kraków Kraków is one of the biggest academic centres in Poland. It is appropriately called The City of Students. Today the number of students in the city continues to rise: in 25 it was over 192, and two years later, had risen to more than 23,. As shown in the chart (13), the economic and technical faculties are the most popular among the students of Kraków schools, thus providing employers from the service and industrial sectors easy access to young people the most highly educated pool of human resources in Poland. Large numbers of young people also choose to study at Kraków s universities. 12) Increase in the number of students in Małopolska 21,115 23, , ,958 33, ,59 Sixteen of Kraków s higher-education institutions are licensed to conduct master s degree studies (second-level studies), while the other eight provide just bachelor degree programmes (first-level studies). Seventeen higher-education institutions offer post-graduate studies. Technical universities offer firstlevel studies (engineer and bachelor degree, regular master s degree studies) and second-level studies. 24/25 25/26 26/27 Source: Advisory Group TEST Human Resources Analysis on GUS data students graduates According to 27 data, 24 higher-education institutions and 14 schools with a different status were in operation in Kraków. The city is also renowned for research and development. 1.8% of Poland s students attend the city s 24 highereducation institutions, with this share increasing every year. Research and scientific activities are responsible for the employment of 12,4 which equates to 12.7% of all of the people employed in these activities in the country. It is worth noting that the education market in Kraków is highly flexible, which is particularly visible in the case of students from computer science faculties. In Poland in there was a strong demand for computer science graduates, resulting in an extraordinary increase in the number of computer science students in 24, compared with other faculties. 14) Percentage of students of computer science, economic and technical faculties as a proportion of the total number of students 45% 4% 13) Breakdown of students in the 26/27 academic year, by school type 35% 3% universities (21.7%) shools of arts (1.%) technical schools (22.3%) schools of theology (2.4%) Source: Advisory Group TEST Human Resources Analysis on GUS data vocational schools (1.3%) teacher training colleges (8.5%) physical education (2.3%) schools of agriculture (6.3%) schools of economics (25.2%) 25% 2% 15% 1% 5% % economic sciences technical sciences modern technologies Source: Advisory Group TEST Human Resources Analysis on GUS data The next chart (15) presents the number of students of Kraków s public higher-education institutions. The chart shows that the majority of students are full-time students. The Jagiellonian University and AGH University of Science and Technology are the most popular institutions by some distance. Labour Martket and Human Resources raport.indd :19:21

13 13 15) Students of Kraków public higher-education institutions in 27 Ludwik Solski State Drama School in Kraków Academy of Music The following chart displays the percentage of students accounted for by the leading voivodeships. 17) Percentage of students of Małopolska as a proportion of the total number of students in Poland Jan Matejko Academy of Fine Art in Krakow University School of Physical Education University of Agriculture in Krakow Tadeusz Kościuszko Cracow University of Technology 4% 3% 2% 5.11% 8.42% 3.4% 4.11% 1.81% 5.16% 5.3% 8.79% 8.95% 2.98% 2.85% 4.4% 3.94% 1.71% 1.54% pomorskie wielkopolskie świętokrzyskie podkarpackie śląskie Pedagogical University of Cracow 1% 9.98% 1.3% 1.53% małopolskie University of Economics AGH University of Science and Technology Source: Advisory Group TEST Human Resources Analysis on GUS data Jagiellonian University 1, 2, 3, 4, Source: Advisory Group TEST Human Resources Analysis on the Report on the City Condition 27 extramural full-time total In the private higher-education sector, Andrzej Frycz Modrzewski Krakow University College is the most popular. At present, 17, young people study there in eight faculties, including Law and Administration, and International Relations. 16) Students of Kraków private institutions of higher education in 27 Tischner European University Bogdan Jański Academy Vocational College of Małopolska University of Economics and Computer Science Pontifical Academy of Theology in Kraków Jesuit University of Philosophy and Education Ignatianum School of Banking and Management Andrzej Frycz Modrzewski Krakow University College 5, 1, 15, Source: Advisory Group TEST Human Resources Analysis on the Report on the City Condition 27 Labour Martket and Human Resources raport.indd :19:22

14 Teaching foreign languages Teaching foreign languages is currently one of the most important elements of the education system. As per information accurate in 27, in primary, junior high, secondary and post-secondary schools, the following languages were taught: English, French, German, Russian and, to a lesser extent, other languages such as Latin, Spanish and Italian. Foreign language most commonly taught in all types of schools in Małopolska is English. German is the second popular language with Russian, French, Italian and Spanish all some way behind. 18) Knowledge of languages among graduates of higher education institutions most widely known languages English German Russian French Italian Spanish % 1% 2% 3% 4% 5% 6% Source: database of Advisory Group TEST Human Resources, 27 19) Knowledge of languages among graduates of higher-education institutions most rarely known languages The predominance of English is also evident among candidates for work who possess a diploma. These data are displayed in the following charts. Ukrainian Czech Slovak Swedish Hungarian Greek Norwegian Dutch Portuguese %.5%.1%.15%.2%.25%.3% Source: database of Advisory Group TEST Human Resources, 27 Study of foreign languages in schools for children and youth and post-secondary schools Language Total number of learners Junior high schools Basic vocational General secondary schools % of all students Specialized secondary schools Technical schools Post-secondary schools English 399, French 19, German 147, Russian 13, Italian 2, Latin 4, Spanish 1, Other Source: Advisory Group TEST Human Resources Analysis on GUS data Labour Martket and Human Resources raport.indd :19:22

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17 17 Results of surveys among enterprises Labour Martket and Human Resources raport.indd :19:23

18 Evaluation of qualifications held by employees available on the labour market in Małopolska in relation to employers requirements Companies participating in the survey were asked to evaluate and describe the level of qualifications of potential employees available on the labour market in Małopolska in relation to their requirements. The respondents were asked to evaluate the competencies of the candidates available on the labour market. They were also asked to comment in detail on individual competencies as well as on individual professional groups and positions within the structure. General evaluation of the current state of qualifications held by candidates available on the labour market in Małopolska 2) Evaluation of employees qualifications example programming or specific manufacturing skills. It is worth noting that none of the companies evaluated employee qualifications as being very low, which may be evidence of a general positive evaluation by investors for this particular aspect of the labour market in Ma ło pol ska. A relatively large number of companies participating in the survey found it difficult to apply one evaluation to all employees. This was reflected in quite a large degree of differentiation by profile or position level, or seasonal difficulties. Particularly sought-after competencies 4% 21) Sought-after competencies 35% 3% 25% 2% 15% 1% 5% very high high average low no data available The majority of companies participating in the survey evaluated their employees qualifications as being good or very good more than 4% of respondents assigned a positive evaluation from the proposed scale of 1 to 5, where 5 means a very high level. Particularly high assessments were found in: computer science, engineers and customer service specialists. Financial and accountancy specialists were also judged to have very high qualifications. Nearly one-third of companies declared that they assessed the level of their employees as being sufficient in relation to their current requirements. This group included consultant-sales assistants. A scarcity in the competencies of those people available on the labour market was highlighted by 18% of respondents. This evaluation was specific to selected, strictly technical skills, for 8% 7% 6% 5% 4% 3% 2% 1% practical skills Within the particularly sought-after competencies, surveyed companies most frequently (82% of respondents) pointed to some scarcity in selected aspects of practical skills among the candidates available on the Małopolska labour market. With regard to candidates/graduates, there are often difficulties with translating theoretical knowledge gained during studies into skills and practices that can be applied to real-life working conditions. Survey respondents also mentioned a lack of knowledge of selected software or systems (for example Oracle, PS SQL, SAP, AutoCad), or a knowledge of some sectors (for example the automotive sector). Such difficulties are often caused by a lack of experience in a specific job position (for example as a programmer, tester, mechatronics engineer, business analyst, manufacture worker, printer, coater, mechanic). foreign language soft competencies lack of problems no data available Labour Martket and Human Resources raport.indd :19:23

19 19 Nearly half of the respondents (47%) highlighted the importance of having knowledge of foreign languages it is very difficult for employers to make a positive decision on a candidate if he/she does not have such knowledge. At present, there is high demand for knowledge of lesscommon languages, such as Norwegian, Dutch, Russian, Portuguese and Hungarian. Nearly one-quarter of respondents (24%) declared a particular demand for so-called soft competencies, with the following skills being mentioned: business orientation, target orientation, team work, management skills and customer orientation. thinking, the ability to associate facts, holistic thinking, etc. The companies surveyed also spoke of their intentions to establish closer cooperation with academies and schools in Małopolska in order to achieve common goals. The main criteria for evaluating work candidates 22) Criteria for evaluating work candidates 6% 5% 4% 3% 2% Among the responses there were several mentions of the apparent 1% low motivation of potential work candidates. This is likely caused by either high expectations in the proposed subject matter of tasks or by strong competition on the labour market. foreign language specific education soft skills experience motivation and competencies in subject matter no data available Opinions on the education system and the quality of education in the region The evaluation of the education system in Małopolska was made by a descriptive presentation of its strengths and weaknesses. The surveyed companies appreciate the level of knowledge held by graduates in Małopolska, however, at the same time, they emphasise the need for greater focus on the practical application of knowledge in a professional environment. There were positive opinions regarding the intentions of the biggest highereducation institutions (AGH University of Science and Technology, Cracow University of Technology, the Jagiellonian University and the University of Economics) to cooperate in the development of modern teaching systems, the organisation of conferences, job fairs and student internships. The companies surveyed were asked to identify the most common criteria for selecting work candidates. The following factors are the most common: knowledge of foreign languages (59%), education (53%) and experience and competences in a given subject matter (53%). Within the area of education, the most common faculties were technical/computer sciences, and the most frequently cited important soft skills were: analytical thinking, communication skills, customer orientation, creativity, problem-solving abilities, openness, or ability to organise work, and to work both as part of a team and individually. More than a quarter of companies consider experience and competencies in subject matter for a given position to be essential. Other competencies mentioned were skills related to project management and working at a call centre. Public institutions were judged to be better than private institutions and universities to be better than technical and vocational schools. Furthermore, companies drew attention to an insufficient level of the development of soft competencies, which, they claim, could also be developed during studies. The respondents also mentioned other skills such as: analytical More than a quarter of those interviewed highlighted motivation as being an important factor when selecting work candidates. Labour Martket and Human Resources raport.indd :19:24

20 Reasons for staff turnover The research sought to ascertain the rate and reasons for staff turnover, which is defined as the act of an employee leaving his/her job voluntarily. Nearly one-third (29%) of the companies surveyed indicated a low level of turnover, and not exceeding 5 per cent. A similar number of those surveyed estimated the figure to be at a medium level, within the range 5 to 1%. Almost one-fifth (18%) of respondents claimed to have a high level of staff turnover i.e. over 1%. 23) Estimated level of staff turnover 3% 25% 2% 15% 1% leaving a position was a decision to travel abroad an answer provided by 29% of those surveyed. However, respondents emphasised that the importance of this as a factor was clearly in decline. We have supplemented the data gathered from direct interviews with investors with information from the Complex Analysis of Staff Turnover, which is based on data collected as part of a Polish survey on remuneration conducted by RaportPlacowy.pl. The average staff turnover in the first half of 28 is presented below: First 6 months of 28 Poland 7.67 % Małopolska 5.55 % 5% 5% 5 1% more than 1% no data available The reasons for leaving a job are closely correlated with turnover rates. Interviewees identified four main reasons for why employees change their job. Over half of the respondents (53%) cited unsatisfactory remuneration as the main reason. The second general reason, indicated by 47% of interviewees, was the general need for a change. The survey responses reveal that, for many, the reality of the job in question differed from the expectations previously held by the employee. Other reasons mentioned were professional burnout syndrome, leading to a desire for a change of profession. A desire to start one s own business activity was also cited. The third main reason for 24) Main reasons for leaving job 6% 5% 4% 3% 2% 1% The data above has been completed by a helpful evaluation of levels of absenteeism. This demonstrates that employers in Małopolska do not experience problems with employees avoiding work. 25) Evaluation of absence levels 7% 6% 5% 4% 3% 2% 1% very low low average high very high The vast majority of interviewees indicated a very low level of absenteeism, with such responses accounting for 65% of all answers. Both low and average absences level were claimed by 6% of respondents. The same results were observed for those claiming high and very high levels of absenteeism. no data available remuneration location of employer need for a change journeys abroad Labour Martket and Human Resources raport.indd :19:24

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