Thursday 16 September 2010

Thoughts on Emigration from Greece

The New York Times ran an article on September 14th entitled Young Greeks Seek Options Elsewhere, which comprised a series of vignette-style interviews with young Greek professionals seeking to leave Greece for better jobs, or academic degrees, abroad.


While I agree with its broad conclusions—that the political scandal, the austerity measures and the nature of the Greek private sector all contribute to increasing emigration from Greece—I would like to add some perspective which balances the negative sentiment of the article.


There is no doubt that for urban, educated professionals, working in either the public or private sectors in Greece can be difficult. But we should look at the structural problems which affect skilled, professional employment in general, rather than the economic crisis or “cronyism” alone:


1.      In Greece, payroll taxes for social security (IKA) amount to 44.06% for employee and employer combined. Annual wages are paid on the basis of 14 monthly salaries. These two facts combine to force many potential employers—such as myself—think very carefully before deciding to employ in Greece. The risks and costs in offering formal, highly-paid employment are often too high to justify a hiring decision.


2.      Exceptionally poor value is derived from high social insurance costs. Although the employer and employee pay a combined 44.06% of net salary to IKA, we know that a private health policy is necessary due to the poor quality of the public system, while a private pension will also be necessary, since IKA itself cannot provide an actuarial assessment of likely retirement benefits. This leads to a situation where the employer and employee have to double-pay for already-expensive public services.


3.      These risks are compounded by the fact that most of the employees available in the labour market in Greece may have one or two degrees, but these are highly academic and often of little real value in the workplace. I do not speak solely of Greek academic degrees, but of the vast diploma mill which churns out qualifications in the United Kingdom or the United States. In my experience, gained from hiring and deploying consultants and staff on behalf of clients in over 6 countries, hiring an MBA graduate from most universities or business schools usually means four things:


·         A very theoretical approach to complex business problems;

·         A shocking lack of applied skills or problem-solving ability;

·         The need for at least 6-8 months re/training before the employee is ready to perform;

·         A vastly inflated self-assessment of personal value, leading to unreasonable wage demands.


This third point, in conjunction with the first two, means that we are paying a high price for often unproductive MBAs who very often refuse to get their hands dirty or put in the hours needed to become productive. Yet not everyone can sit behind a desk “managing”.


4.      The large majority of Greek companies are micro-enterprises, usually classified as self-employed professionals. Most companies employ less than 10 people. Even larger, internationally-oriented companies, such as Titan Cement or Boutari, are often family-owned and operated. This means that cronyism is in fact a symptom of the particular ties that bind a family-owned enterprise.  In this environment, it is not unusual to see the entire B- and C-level management positions filled by family members, who by nature cannot be fired or replaced. This accounts for an unusual stagnancy among management boards, which may also be a factor in the small prospects of advancement for Alexandra Mallosi or others mentioned in the article.


5.      A large number of Greek companies are heavily seasonal in nature. The tourism industry, for instance, accounts for at least 17% of Greek GDP in official terms. Yet it is heavily seasonal in nature, usually operating for at most 4-6 months per year at capacities in which the company actually breaks even. This makes it economically impossible for the largest sector of the Greek economy to develop and retain professional managers. A further particular factor in tourism, of course, is the small-scale, family-run hotel model which has been adopted by successive governments in Greece. This, more than anything else, has ruined the professional development of the tourism sector.


6.      We should also be aware that in the current labour market, there is a tremendous mis-match between demand for academic versus vocational qualifications. Greece attracted over 1 million immigrants since 1990, usually from the Balkans and former Soviet Union. These individuals are today employed in a large spectrum of vocational trades: plumbers, carpenters, masons, farm hands, etc. The fact is that many Greek students associate vocational trades as a less-prestigious form of development compared with academic degrees. As a result, it is quite rare today to find Greeks working on construction crews or repairing the plumbing or gathering olives. It is much more difficult to find a qualified plumber in Greece than to find a “qualified” marketing executive.


The result of these facts is the incoherent system we experience today:


·         We have a “surplus” in academic degrees being produced by Greece (annual enrolment in academic tertiary-level institutions is over 600,000 per year), versus the “deficit” in vocational qualifications and degrees being produced (less than 250,000 enrolled).


·         We have a country which desperately needs to promote employment, particularly among the theoretically highly-skilled management professions, but propagates a tax framework in which legal employment is prohibitive.


·         We have a country in which the business environment in the best of times (e.g. delays in payment, bureaucratic obstacles, family-run businesses) does not provide an attractive option for professional employment.


In this situation, there are typically three options available to those educated professionals who do not have the advantage of a family business to receive them: 


a.       Accept work in an often demeaning professional environment, and gradually watch your skill set and ambition wither;


b.      Set up your own company (which was my decision) and put in the long hours and sleepless nights needed to succeed;


c.       Emigrate.


Emigration is hardly the bugbear made out in this article. I’ve had the privilege of working in the US, France and Germany during my career. I learned positive and negative things in each country in this time, but have been able to synthesize the good elements and, I hope, become a better person and a better consultant. And I returned to Greece, bringing my particular skills and competencies with me.


I am therefore in favour of emigration, and I don’t see this as a zero-sum game. In my opinion, every young Greek should go abroad for at least 5-10 years. They should learn how international business culture and active citizenship works, and try to match employment with educational background. Along the way, that person will do more than just earn an income: s/he will change and hopefully develop in a positive way, using different role models and inspirations than what one would find in Greece today.


Implicit in my opinion is the hope that, like me, the emigrant eventually returns to Greece, putting his or her skills to good use in this country. Should this be the case, I strongly recommend that the returnee comes back an entrepreneur. This is the only way of controlling one’s own destiny (insofar as any entrepreneur actually does), but it is also usually the only way to increase the competitiveness of the domestic market.


Greece needs new people, new ideas and new professions to move forward, and I can attest that there is plenty of room in the market for growth of this kind. 


  1. Well thought-of and expressed views, which I agree with in their entirety. I am a young Greek professional with a 5yr work experience abroad, who just left Greece (left, or emigrated..?) to grab a professional (and personal) development opportunity. The reason I mention this is to hint at the fact of how skewed/biased a hiring process can be in Greece, i.e. hiring managers are prepared to recruit a less capable/efficient employee solely on the basis of "recommendation", than a better yet "outsider" candidate, hence contradicting the very business objective of the hiring process and what follows it.. That may be another topic to discuss, perhaps from an accountability, corporate governance or business ethics point of view..!?
    My best regards and thanks again for sharing your thoughts!

  2. Thank you for your comment and for sharing your experience. The hiring process is indeed contradictory: I've often wondered what good personal references and CVs are, without a real competency test during the recruitment process. Or, for that matter, if the reference is so important, why that person is leaving the former employer in the first place. If it's any consolation, I see the same bias in recruitment processes in a number of different countries.

    I also want to wish you good luck and success in your new position. Καλή τύχη!