Summary
Telework in Hungary – an Overview

Over the past few years, telework has become of interest to Hungary's government leaders, business decision makers, employee's and entrepreneurs. Relatively extensive media coverage, and slowly growing practice have helped the better understanding of telework in Hungary and the word “tavmunka”, which is the accurate translation of the term telework, is now widely known in Hungary. However, despite this coverage, for many people its uses and benefits are still not fully understood.

Thanks to recent research, there is now information available about the extent, trends, good and bad practices as well as driving and hindering factors of telework take-up in Hungary.

Researchers have found that there are only a few companies who employ teleworkers, and among them the relative number of these workers is low. The share of corporate teleworkers does not yet reach 1% of the workforce. Also, according to a recent survey among mid and large size organizations slightly more than one third of companies based in Hungary reject the idea of telework. A bit more than one third of the companies would gladly employ teleworkers, and can imagine realizing this in a five years’ time.

When looking at the fields of work, Hungarian corporations have determined four areas that could create opportunities to employ teleworkers. These work areas are accounting, market research, translating and data recording.

In 2001 two big corporations, Matáv and MOL, respectively the country's biggest local telecom company and largest oil company have launched corporate telework projects among their employees.

SMEs, according to recently prepared case studies, show and increasing interest towards mobile and flexible working methods. So does the freelance world, where one can see a growing number of individuals and small companies incorporating ework into their daily working procedures.

In looking to the future of teleworking in Hungary, several factors will influence the rate of growth including telecom liberalization, the growth in the number of home PCs connected to the Internet, the decreasing cost of Internet connection, the growth of bandwidth, the need to increase productivity and cost-effectiveness, as well as the need for a more balanced lifestyle amongst employees.

Awareness of Telework in Hungary

According to a survey among mid and large size companies telework has been found unanimously advantageous by most company managers. The macro-economic advantages of telework are mostly manifested in decreasing the crowdedness of public roads due to drop of the number of traveling employees, and through that improving the state of the environment. The managers questioned in general can also see more advantages from the employees’ point of view, true enough that not to that great extent. On micro-level, i.e. the level of the business of the companies, the utmost advantage of telework is identified in savings achievable in cost management: through decreasing office, rental and various other costs.

When given more specific questions whether the particular firms are planning to employ teleworkers in the near future, less advantageous data was collected. The companies contacted can be divided into three main categories in view of their attitude to telework, and when they can imagine employing teleworkers. Slightly more than one third (37%) of the firms have appeared to be definitely against the idea: they can foresee no teleworkers employed or only in the distant future. Contrary to them, also a bit more than one third of the companies (39%) have been absolutely open: they would gladly employ teleworkers, and can imagine realizing that in a five years’ term. The remaining one fourth of the companies (24%), have taken an intermediate position: they are neither that much open, nor that much against it; they can conceive that they employ teleworkers in 5-10 years.

In view of the fact that employing telework raises plenty of various technical, financial, legal and other issues, a significant number of companies have no intention to employ teleworkers at all. Above all, the main factor influencing companies against telework is data protection difficulties related to the employment of telework.

Also holding companies back is that managers are not entirely certain that telework is more effective or that it generates a higher level of performance than traditional in-house forms of work.

The number of teleworkers in Hungary

Due to the low uptake of telework in Hungary precise figures to the number of teleworkers are not available. However, even without precise data it can be stated that the employment of telework can be observed solely within a fairly limited range in Hungary.

According to ECOSTAT Research about 25,000 people in Hungary do some work on a home computer. This is out of a total labor force of 3,5 million. Most of this work is done in occupations such as accounting, translation, typing/editing, research, planning and design. Many of these people would be classed as “voluntary “ teleworkers, but they have probably accepted this form of work because they prefer an alternative to rigid forms of work.

The number of corporate (employed) teleworkers in Hungary does not reach 1% of all employees. There are only a few companies who employ teleworkers and among them the relative numbers are small. When comparing reality to plans, a much higher number of teleworkers can be identified. Those questioned in a survey by Psyma Hungary were asked to estimate the percentage of jobs they could imagine in the form of telework. The data collected revealed that (in theory) one out of ten employees could perform his/her work as a teleworker in the future.

Fields of teleworking

When looking at in what specific fields telework itself can be employed, Hungarian mid a large company managers have defined four fields of work which could create an opportunity for a relatively high number teleworkers. They are as follows:

• accounting
• market research
• translations
• data recording

Conditions of teleworking in Hungary

According to the data given by the National Statistical Office (KSH) one third of Hungarian employees works on a computer. Given the fact that a computerized workstation is a basic condition of establishing telework relations, there is a large target group for teleworking in Hungary.

However, there are still a number of factors that prevent the rapid growth of teleworking. One of them is that many people in Hungary tend to live in flats which are too small to accommodate telework. Few people have a separate room or space to designate as a work area. The number of home PCs and the relatively high costs of telecommunications are another barrier.

Management Attitudes

One of the main barriers to the take-up of telework is conservative management attitudes. Managers fear that they would not be able to control and motivate teleworkers from a distance. Lack of information and of practice on managing from a distance are both preventing managers and HR professionals from experimenting with telework practices.  The executives of medium size companies are especially skeptical.

Those questioned believe that one of the important factors in preventing the spread of telework is the lack of jobs that can be allocated to it. Another thing that holds companies back is that they are not certain whether telework is more effective in generating higher levels of performance than the traditional, in-house forms of work. In spite of the fact that various estimates have been published in the international literature with regard to the point to what extent telework create favorable conditions for more effective performance of work, relatively few managers think that the employment of telework would to a great extent contribute to making the performance of work more effective, producing higher outputs. It seems that in order to dissolve such fears the interrelation between telework and effective work performance should be demonstrated more convincingly.

Corporate Case Studies

Matáv

The leading Hungarian telecom company MATÁV launched a corporate telework project in the beginning of 2001. According to the decision of the management board a total of 250 employees will be allowed to perform part of their work from home. So far 80 employees out of 14,380  have signed the telework agreement and were equipped with a home office. According to this agreement all teleworkers remain the employees of Matáv with equal conditions. The only difference is the specification of work place and working hours. Teleworkers are allowed to work at home 50-80% of time (up to 4 days a week) and the rest in the company's office. All costs to create home offices (PC or laptop, office furniture, ISDN2 connection) are covered by the company.

Participation in the telework project so far is only available mainly by Budapest residents. Areas of work where the option of telework is provided include IT, product management, sales, customer support, project management, training and technical support. To inform future teleworkers about the issues of telework Matáv organized a training for those interested, prepared a printed information booklet called „Telework Guide” and provides additional information via the company’s intranet network. First teleworkers reported that the productivity of the work performed at home is better than in the office.

MOL

At MOL -  the biggest Hungarian oil company -  73 employees telework today out of 18 016 employees. The manager of MOL expressed in an interview that based on positive experience gained from the project the number of employees allowed to work from a distance will definitely grow.

Forms of Telework/Telecommuting

Most companies in Hungary tend not to accept the idea that corporate teleworkers are to work permanently, each day of the week, at home. The relative majority would prefer the solution that teleworkers work 3-4 days at home and go to their place of work for the rest of the week.

Most companies however, prefer staff to be self-employed because it reduces labor costs. The popularity of the entrepreneurship form is certainly not independent of the fact that the current practice in Hungary prefers entering entrepreneurial agreements in order to diminish wage costs. Most companies in the event they would employ telework, would establish a relation with the teleworker as an independent entrepreneur. Thus there is a sharp difference in accepting a work relationship with an entrepreneur versus an employee. Only a few companies would put teleworkers on the payroll, the majority of them would prefer to work with teleworkers as independent entrepreneurs.

Freelancing

Freelancing in traditional creative professions such as translators, journalists, artists, researchers, software developers and graphic designers have been in practice for many years. With the spread of the Internet the idea of freelancing became more popular. The number of self-employed teleworkers in internet-related jobs (web design, web programming, content development, online research, etc.) is growing along with the demand for such services. Hundreds of Hungarian individuals and small companies have entered international marketplaces such as Elance, SmarterWork, Guru.com, etc. to experiment transborder teleworking and to find new clients from all over the world.

The first Hungarian freelance marketplace was launched in July 2001 at interwork.hu. This was followed by a vertical marketplace specialized in translations projects, called the Wired Online Translator.  Both services have been developed in Hungary and are aimed at helping to match small and mid-sized outsourced projects with service providers within the country online.

Government Actions

 Many business entities expect that the state and the government will play a role in the promotion of telework in Hungary, for example, through public tenders, tax allowances, etc. which would make employers interested in employing more teleworkers.

 In 1998 a budget of 400 million Forints ($1.5m) was targeted at two groups, the disabled and mothers of young children based at home. As a result of this project only a few new jobs were created and most of them were not sustainable after the grants were over. The relatively small uptake can be explained by conditions specified in the project as well as by the fact that generally entrepreneurs are not seeking to employ people from either target group. In fact, the Government overestimated the role of teleworking in job creation.

Lessons from the failed project have been learnt and new initiatives are elaborated with a new approach. It is now clear that telework cannot be an effective weapon in combating unemployment. It is thought however that it can play a role in rearranging regionally unbalanced economic development, for example in helping in the development of the east of Hungary. In Hungary, where the territorial mobility of people is of a very low intensity; it is thought that telework may help to channel labor into the performance of work that they would be unable to reach in the traditional way because of the distances. In order to reach such goals, the Government subsidizes the spread of telecottages. Over 200 telecottages are operating in Hungarian villages and new ones are to open soon.

 The Commissioners’s Office for ICT in Hungary that has recently been founded with the aim of accelerating the process to develop the information and communication technologies in Hungary prepared the “National Strategy for the Information Society” in 2001. As part of this project Hungarian businesses were invited to tender on projects related to the development of information society. There was a huge response to the invitation to tender. Selection of the winners is now in process, and the implementation of winning projects including many related to e-work and e-learning will start in September this year.

Teleworking / eworking in Hungary has become a widely discussed and promoted concept at the highest levels of administration and the idea is welcome by a relatively large share of employers and the workforce too. The take-up of telework practice is expected to grow over the coming years.
 

Sources of information :

• Telework Trends and Practices in Hungary

Research report by the Information Society and Trend Research Institute (ITTK)
Budapest, 2001
 
• The Chances for Telework in Hungary

Research report by Psyma Hungary and the Foundation for the Women in Hungary (MONA),  2000
 
• Telework – the New Forms of Employment in the Innovative Society

Research report by ECOSTAT, Budapest, 1999
 
• Telecottages and Telework in Hungary

Book published by the Hungarian Telecottages Association in 1999
 
• The Hungarian Telework Information Portal (tavmunkainfo.hu)

 
• Other: telework related articles published in the printed and the electronic media

About the Author
Andrea Wesselenyi is a freelance journalist, a home based teleworker herself since 1996. As a columnist is the author of a series of articles and interviews featuring the new ways of working in the information society and the co-author of the book titled „Telecottages and Telework in Hungary” published by the Hungarian Telecottages Association in 1999. Participated in telework research projects and held presentations about telework at several conferences in Hungary. She is the creator and owner of tavmunkainfo.hu, the Hungarian Telework Information Portal website and several other websites including a personal introduction and reference site at www.wesselenyi.com.

The above report was written back in 2001 and was presented by the author on the e-work 2001 Conference, the 8th European Assembly on New Ways to Work
12-14 September 2001 Helsinki, Finland, in a section dedicated to telework issues in Central and Eastern Europe.

A new report reflecting the changes since 2001 will be added to this page soon.