In our continued partnership with the American Chamber of Commerce (AmCham), we are proud to reveal Buckhill’s featured article inclusion in the AmCham 2023 Yearbook. Our article 'Why Digital Transformation is No Longer Optional', addresses the challenges of talent sourcing in the Croatian market, and uncovers the crucial role of digitalization in fostering growth and maintaining competitiveness in the global job environment.


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Why Digital Transformation is No Longer Optional

Croatia is grappling with a critical problem: the mass departure of young, skilled professionals. Since 2011, it is estimated that 400,000 people have left, many seeking better job prospects and higher salaries abroad. This exodus has had profound effects on Croatian society and its business sector, significantly shrinking the pool of talented workers for remaining businesses. As a result, many now face a severe shortage of skilled local labor, leading to exponentially higher salaries and therefore, challenging working conditions, driving many out of business. This situation has particularly impacted certain sectors which have traditionally depended on the local labor market. Due to an employment shortage in hospitality, a café waiter working six-hour shifts will generally earn more than a junior doctor at a public hospital, excluding gratuity. In coastal tourist areas, cleaners’ wages have skyrocketed from €13 to €25 per hour within a year. While some businesses have managed to adapt by increasing prices, this strategy is not universally feasible, especially for those with contractually fixed rate increases. Consequently, Croatia is starting to gain a reputation as a costly tourist destination, and for other sectors, one where securing sufficient workforce is difficult. The limited labor pool across all sectors presents substantial obstacles for business owners seeking growth, hindering their competitiveness both locally and internationally. While recruiting foreign workers has become increasingly popular as a solution, this approach comes with its own set of advantages and drawbacks. Moreover, not all jobs require physical presence at the workplace, suggesting the potential for remote work possibilities.

EMBRACING REMOTE WORK: ONE STRATEGIC SOLUTION

Embracing remote work can enable businesses, regardless of their size, to access a broader talent pool that reaches beyond national borders. It opens up opportunities for growth and access to top-tier professionals who might be unaffordable in the local market. As highlighted by the New York Times, remote work is key for some start-ups outside major tech hubs, allowing them to recruit talent globally without relocation requirements. The advantages of this strategy extend beyond a mere diversified skill set and a balanced salary range. Thanks to technological advancements and improved communication tools, even small businesses can efficiently work with remote teams, positioning themselves competitively at an international level. Remote work also fosters flexibility and autonomy, which can enhance employee satisfaction and productivity. Additionally, having fewer on-site employees allows companies to optimize their budgets by reducing expenses related to office space and infrastructure. However, transitioning to a remote work model presents its own set of challenges and requires significant changes in business operations.

ADAPTING TO REMOTE WORK MANAGEMENT: A NEW APPROACH

In the shift from traditional office-based management to virtual team leadership, Croatian businesses must embrace a comprehensive change in management strategies. While digital task management tools are crucial, success in remote work requires implementation of a broader organizational strategy, to both attract and retain remote employees. Managers who wish to be successful with remote employees need to evolve their leadership techniques and focus on building strong, clear communication to maintain a unified remote team, especially when spanning multiple time zones simultaneously. Businesses that can afford to invest may find a practical first step is to engage an experienced remote-first delivery consultant. Such experts help streamline the transition by reducing uncertainty and providing targeted advice. They play a key role in training managers in remote team management, sharing best practices, facilitating knowledge transfer, and introducing new digital tools. This guidance is vital for building trust and accountability in remote teams, teaching managers to shift their focus from monitoring activities to prioritizing outcomes. To solidify these changes, Croatian companies should develop remote working policies that outline clear expectations, guidelines, and procedures. However, these plans remain theoretical until actual hiring practices are implemented and reviewed. It is advisable to start with a pilot program, hiring a few remote employees in lower-risk roles to test and refine management techniques and workflows and discover which existing roles can be adjusted for remote-working. This approach allows the company to fine-tune its processes, monitor progress, and adjust as needed, gaining firsthand experience with new management software, communication platforms, and collaborative tools. One such remote recruitment platform is Upwork. com, but there are various other options as well.

TRANSFORMING CHALLENGES INTO STRATEGIC ADVANTAGES

In the current global landscape, where digital transformation is essential for maintaining competitiveness, the exodus of Croatia’s skilled young professionals creates a pivotal moment for businesses. This situation compels companies to reconsider their conventional management styles and adopt new methods of working and recruiting. By recognizing the impact of the diminishing local labor market, Croatian companies can harness the advantages of remote work to address their growth needs while integrating digital transformation into their strategies. This approach is not just about navigating current challenges; it’s about future-proofing businesses and retaining top talent. It positions these businesses as forward-thinking leaders in their respective fields, ready to capitalize on global opportunities.

Read AmCham's 2023 Yearbook here; covering several diverse topics that face the current business world, as well as informative information regarding their role in the Croatian commercial market: https://www.amcham.hr/godisnjak-d206