The Transfer Season Never Ends: When a Manager Craves Freedom, They First Become a ‘Freelancer’

Expectations are changing, both for workers who desire a long list of benefits when being hired and for employers regarding future employees. Trends do not spare managers either, who, aside from their professional knowledge, are increasingly required to possess new qualifications and skills, especially soft skills that imply social intelligence. The pandemic has further turned some trends upside down, with significant waves of layoffs occurring in certain sectors globally, prompting managers who have invested their entire lives in themselves and their knowledge to try their hand at independent business.

This has been confirmed by leading HR experts in the market, and the enormous growth of consultants and their revenues in the Croatian market supports this. Although, of course, they are not the only ones, the majority of managers venturing into entrepreneurship are turning to consulting others. According to data from the Croatian Association of Business Consultants, in the last five years, the number of companies engaged in consulting has increased by 21 percent, their revenues by 334 million euros or 48 percent, and net profit by 143 million euros or 357 percent. This is one of the fastest-growing sectors in our market.

Eager to Advise

Manager transfers in Croatia, especially in the private sector, continue to occur largely thanks to personal acquaintances and contacts with company owners and management. However, it seems that when it comes to engaging various executive functions, headhunting agencies are playing an increasingly significant role, conducting the entire process of verification, assessment, and testing for companies, often based on real business cases. Management ultimately receives ‘served’ potentially two candidates who best meet their needs.

– We often encounter situations where a manager in a high position, after spending many years in corporations, desires entrepreneurship, most often in the consulting sector. They crave freedom, autonomy in making certain decisions, and over the years learn which business moves are good or bad, applying that knowledge in their own business – emphasizes Ena Mehulić, head of search and selection, career and organizational development at Adecco.

Raises Only for the Experienced

Valentina Haddad, head of the recruitment and selection department at Selectio, states that the trend of layoffs was greater when transitioning from 2021 to 2022 than at the beginning of 2023. Many layoffs in the last quarter of last year and the first quarter of this year involved non-technical staff, with decisions made based on performance assessments.

– Due to the shortage of experienced tech talent, companies have been increasing salaries for IT professionals, and this year we expect a rise in raises, but only for very experienced and sought-after profiles of IT professionals. Despite the announced reduced hiring and layoffs in megacorporations such as Amazon, Google, Microsoft, Meta, and Twitter, and some optimizations at the regional and cluster levels, there are currently no signs of a drastic reduction in the number of employees in Croatia. However, global trends suggest otherwise – notes Haddad.

In her opinion, the use of technology and automation had the greatest impact on employment in 2022. Additionally, there is ongoing concern about a potential economic slowdown, and layoffs are expected in tech companies.

– Big Tech began over-hiring during the pandemic to support remote work and the rise of e-commerce, and now they are facing declining revenues. It is not only the tech giants that are laying off; smaller tech companies are also facing challenges on a global scale. Although global IT spending is expected to grow moderately in 2023 in the software development and IT services segment, and decline in hardware sales, an increase in hiring technical professionals is not expected, except in areas requiring very expert knowledge and skills – predicts Haddad.

Blue Collar There, White Collar Here

Aleksandar Zemunić, director of Selectio, states that, unlike the USA, where blue-collar employees (mostly manual workers) were most affected by large layoffs, in Croatia it was the managerial staff.

– One of the main reasons is that in Croatia, very few employees can afford to resign without another option or job in sight. Additionally, during the pandemic, the demand for managerial staff slowed down, only to return to pre-COVID dynamics during 2022 – emphasizes Zemunić.

Darija Jakovljević, executive director of Dekra Employment, states that business decisions from foreign companies are spilling over into the Croatian market, and thus subsidiaries in Croatia must also thin out their managerial and other staff according to the decisions made at headquarters, which is noticeable in the market.

– Some companies have already thinned their teams, and some will do so in the near future. It is not about large numbers; these people quickly found new jobs, so such information often goes under the radar in the market – notes Jakovljević.

Selectio has also noticed an increased number of managers transitioning to entrepreneurship, which coincides with the statistics on the use of self-employment incentives.

– The challenges of the pandemic were a catalyst for change. Some managers did not adapt to the new challenges, while others did not find common ground with owners or supervisory boards, and the challenges of working from home did not help either. For some organizations, this was an additional incentive to emphasize the development of their own management and human resource management to retain managers and other employees – concludes Zemunić.

Jakovljević agrees, adding that many individuals of all professional levels and profiles are increasingly deciding to work as freelance experts in their own companies.

– We have noticed a pronounced trend of independent work in all service industries, especially in IT (developers). Among managers, these are most often those who are in a transitional period between jobs, those who cannot work in competing companies due to contract clauses, or those affected by one of the mentioned ‘waves’ (resignations, quiet resignations, or large layoffs) who actually want to return to the same or similar positions in a company as soon as possible – lists Jakovljević.

Stepping Out of the Comfort Zone

At Manpower, they say that the pandemic period has prompted people to step out of their comfort zones, making them more willing to switch not only to another company but also to another industry.

– We are noticing a focus among managers on developing their personal brand, for example, through LinkedIn, promoting ideas, and providing insights on major global events. Additionally, many managers are working part-time (writing articles, giving lectures) or taking on advisory roles in other companies alongside their full-time jobs. Interest in positions that require setting up procedures, processes, and work from scratch is much higher, especially among managers who have been in those positions for a long time and have extensive experience – states Kristijan Matijašević from Manpower.

A common reason for seeking a new job and changing jobs is, he adds, the work environment and atmosphere in the company, as well as the (in)ability to maintain a balance between private and business life.

– A large number of overtime hours (whether paid or unpaid), poor interpersonal relationships, and management that does not lead people satisfactorily are the most common reasons for departure that we observe among candidates. Additionally, a larger wave of resignations is noticeable in companies undergoing or about to undergo announced reorganizations. In such situations, people are more concerned about their positions, but even when their position is secure, they are uncertain about the direction those changes will take, leading them to decide to resign. The same situation applies to waves of layoffs, but according to our findings, this is a somewhat rarer situation; mostly, people leave voluntarily – concludes Matijašević.

The Ball is in the Candidate’s Court

The number of foreigners in jobs in sectors such as hospitality and construction is growing daily; however, headhunting experts have differing opinions regarding a larger influx of foreign labor in managerial functions. On one hand, companies are seeking local experts who know the environment, legislative processes, and have business contacts. On the other hand, there is a larger number of lower management (for example, team leaders) foreigners in the IT industry coming from all parts of the world, as this sector has the largest gap in the required knowledge of candidates, given the needs of employers.

Haddad, however, notes a trend of increased hiring of foreigners compared to previous years in executive functions, as a result of the arrival of foreign investors and international funds, the development of greenfield projects, acquisitions, and mergers of domestic companies with global firms.

Today, as Mehulić says,’the ball is in the candidate’s court.’ A good and quality candidate is the one who today sets the conditions and has more negotiating power than ever. And if they fail to get what they asked for in negotiations, they are clearly heading into independent entrepreneurial waters. It would be interesting to see how many of them ultimately succeed in that. But that is another story.