Managerial markets in transition in Central and Eastern Europe: a field of study and implications

In this paper, we report findings from the first comprehensive study of managerial labour markets in Central and Eastern Europe, drawing on field data from 157 firms in six countries. Results indicated widespread and deep changes occurring in the region’s managerial markets. Despite differences among countries in reform and economic performance, we found these particular changes to be surprisingly common across the countries studied. They included rapid rises in salary and benefit levels, narrowing of some skill gaps, shifts to more sophisticated methods of recruitment and an overall move towards Western management practices. The study also revealed severe shortages of qualified managers in all the countries studied. The resulting tightness in the managerial labour markets was reducing only modestly, despite other improvements. Foreign and joint-venture firms were relying disproportionately on expatriate managers, and may not have been sufficiently developing locals. We argue that, partly because of this, the distortions in pay, promotions and performance resulting from these tight markets are likely to persist for some time.