Contracting in Austria: What agencies need to know when placing talent
Michelle Reilly, CEO of 6CATS International
Austria is often overshadowed by some of its flashier and higher-profile neighbours, but make no mistake, it’s an excellent choice for firms placing contractors overseas. The country is blessed with fantastic culture and scenery as well as a myriad of potential employment opportunities. But what is driving demand for overseas expertise and what do recruiters need to be aware of when placing talent in Austria?
The Austrian economy is on the up. Job creation remains high despite challenges in the Eurozone and unemployment recently declined for the first time since 2011. It’s a highly efficient economy and one that could probably be described as punching above its weight in the global arena. While having the 98th largest population in the world, it has the 14th highest GDP. This is partly due to the country’s skilled workforce with a combination of effective workplace training opportunities and firms recruiting from overseas contributing to its success. As a nation that shares a border with eight other neighbouring countries, exports also contribute to a large chunk of the gross domestic product. Public debt is one negative blip on the radar, however the overall strength of the economy means this hasn’t become too much of a pressing concern thus far.
Another reason for Austria’s success is its openness to global trade and recruitment which is essentially institutionalised within the economy. A lively entrepreneurial base also adds to competiveness within its markets and provides a large proportion of GDP. This is representative of the rest of the economy which is largely dominated by small and medium size firms, rather than large corporates. But what sectors are seeking the skills of overseas contractors?
The Austrian services sector is one of the strongest on the globe and contributes to around a third of its overall economy. Vienna has become something of a finance and consulting hub and has been established as a door to business in Asia and Eastern Europe. In addition, Viennese legal firms and financial services houses are also amongst global leaders and do a significant amount of business with new EU member states. Firms here seek the best and the brightest, particularly those with a strong network and knowledge of the wider global markets. You also won’t need me to tell you, but there’s the potential to earn considerably above the market average when operating for one of the leading organisations.
Like many other European nations of a similar size, Austria has a dynamic and rapidly expanding renewables industry. There are approximately 2,470 power plants of varying sizes found within the country which generate roughly 60% of the country’s electricity demand. In addition, Austria is number one in Europe for hydropower, ahead of other countries like Germany and Denmark which also have robust industries in place. And that’s not all, the domestic bioenergy field is rapidly growing and could currently contribute around 58% of all of Austria’s electricity needs. Part of the reason for its success in the green arena is the highly skilled workforce which is blessed with expertise and an understanding of how to get projects off the ground and completed at a rapid pace. However, as a relatively small country with large renewable demand, it also regularly sources specialists from other countries. This can be a hugely attractive opportunity for agencies placing contractors who are looking to not only take on a role in a highly competitive economy, but also to be upskilled by some of the best professionals in the market.
Tourism is also a major contributor to the economy, providing around 10% of overall GDP. Skiing is one major attraction that lures visitors to the country as is the city of Vienna which boasts masses of history and cultural activities. In fact, Austria was the 11th most popular destination for tourists last year, ahead of popular nations like Thailand and Greece. Historically, there has been a dependence on German tourists however in recent years this imbalance has been addressed and greater numbers of visitors from the likes of Russia and the USA have been recorded.
However, it’s not always completely straightforward for agencies placing contractors in Austria and there are some considerations that all firms should take into account. Tax law here distinguishes between unlimited and limited tax liabilities for companies and individual contractors will have to pay relatively high rates if they fall into the higher bracket, which they are likely to do. Like the UK, potential liabilities here extend to agency directors so any non-compliance could result in a potential fine or prison sentence, making the threat that bit more real. The tax system can be challenging to navigate, particularly for those who don’t speak the domestic language. And, as with the vast majority of countries, Austria has also committed to the Common Reporting Standard, meaning non-compliance here can follow contractors back to their country of residence. Essentially, it’s advisable to partner with a specialist and certainly not to take any undue or unnecessary risk with your taxes while placing professionals here.
With ongoing demand for the skills of overseas contractors, agencies can prosper from working in Austria. Not only does it provide numerous opportunities across a range of industries, but it also ranks fourth on the quality-of-life index, meaning the professionals you place should be in for an enjoyable stay. If you’re looking to find opportunities for contractors in the services and renewables industries, to name a few, then Austria could be for you.