portugal ict sector
TRANSCRIPT
PEMINT
PORTUGAL – ICT SECTOR
Draft version
João Peixoto
Catarina Sabino
Susana Murteira
SOCIUS, Lisbon
March 2003
1
Table of contents
Chapter 1 - Characterisation of the ICT sector in Portugal
1. Introduction
2. The ICT sector in figures
3. Causal factors of the ICT sector development
3.1 Economic modernisation and growth
3.2 Political regulation
3.3 Consumer behaviour
4. Other issues
4.1 Associations
4.2 International situation
Chapter 2 – Stocks and flows of foreign labour
1. Research methodology
2. Labour market trends in the ICT sector
2.1. Employment and migration in the ICT sector
2.2. Supply and demand of ICT skills
2.3. Hypothesis: the social nature of ICT skills
3. Foreign labour in the firms surveyed
Chapter 3 - Recruitment and assignment decision-making
1. Organisational structures
1.1. Types of firms
1.2. Human resources
2. Internal labour market operations
2.1. Reasons for internal labour market movements
2.2. Internal vacancy and career development systems
3. External recruitment and subcontracting
4. External recruitment
4.1. Reasons for international movements
4.2. Forms of external recruitment
Chapter 4 - Mobility constraints and PEMINT variables
1. Mobility constraints
1.1. Labour costs
1.2. Legal framework for migration
1.3. Fiscal and social security systems
1.4. Social and cultural constraints
2. Mobility package
Conclusion
Bibliography
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Chapter 1 - Characterisation of the ICT Sector in Portugal
1. Introduction
Information and communication technologies (ICT) have acquired high importance in the late 20th
century, with its growing insertion in all aspects of everyday life of people and organisations. It has
been in this period that the idea of information society (IS) has been developed.
The aim of this chapter is the characterisation of the ICT sector in Portugal. With this purpose, we
proceed, firstly, to an analysis of the main figures of the ICT sector in the framework of the Portuguese
economy: total number of firms, employment, business volume, total remuneration and per capita
remuneration, and total sales for export. Secondly, the main causal factors of the sector development
are examined, particularly the economic modernisation and growth in the 1990s, political regulation
and consumer behaviour.
Statistical data in this field is very scarce. This chapter is based on data produced by the National
Statistical Institute (INE), the more recent ones referring to 1999; and in data presented by the
National Communications Authority (ANACOM), the more recent ones referring to 2001. Data
produced by the National Association of Information Technology and Electronic Firms (ANETIE) was
also used.
Besides statistical data, this chapter was based in diverse documents and in interviews with
institutional and knowledgeable actors. During 2002, 6 interviews have been made with academic
specialists in the ICT sector, government officials, professional experts and one association
(ANETIE).
Taking into account that the ICT concept may vary from country to country, the OECD definition for
the sector was adopted in this report. Following OECD, the ICT sector is a “combination of services
and manufacturing industries that capture, transmit and fix in an electronic way data and information”
(OECD, 2002). The sector’s main branches are manufacturing industry, telecommunication services
and other ICT services.
2. The ICT sector in figures
The following set of tables present the main data on the ICT sector in the framework of the Portuguese
economy.
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As it can be observed in Table 1.1, about the number of ICT firms compared to the total number of
firms in Portugal between 1996 and 1999, the number of ICT firms was at its highest in 1999 (last year
with available data), with 7600 firms. Despite the strong growth verified between 1998 and 1999, the
sector displays an average annual growth rate (AAGR) of only 0.6%, what suggests that the main
boom dates from the end of the decade. In fact, a decline occurred between 1996 and 1997, with a
slight reversal in 1998 and a strong surge in 1999. Meanwhile, the relative proportion of ICT firms in
the context of Portuguese firms stabilised around 1.3% in the period.
Table 1.1 – Number of ICT firms and total number of firms
1996 1997 1998 1999 AAGR
Nº % Nº % Nº % Nº % %
Total
number of
firms
565 417
545 924
540 222
584 644
1.12
ICT
number of
firms
7 468
1.32
7 053
1.29
7 126
1.32
7 601
1.30
0.59
Source: INE, in www.umic.pcm.gov.pt/site
Table 1.2 presents a more detailed analysis, since it breaks up the ICT sector into its mains branches
(or sub-sectors) – Manufacturing industry, Telecommunication services and Other ICT services.
During the four years under analysis, Other ICT services, including computer-related services, is
dominant, absorbing the large majority of ICT firms in the period (almost 91% in 1999). With a lesser
number of firms it appears Manufacturing industry and, lastly, Telecommunication services. Except in
the Telecommunication services, where AAGR almost attains 10%, the annual growth of ICT firms in
1996-1999 has not been salient.
Table 1.2 – Number of ICT firms by branch
1996 1997 1998 1999 AAGR
Manufacturing
industry
558 508 456 555 -0.18%
Telecommunication
services
113
115
146
149
9.66%
Other ICT services
6 797
6 430
6 524
6 897
0.49%
Total ICT 7 468 7 053 7 126 7 601 0.59%
Source: INE, in www.umic.pcm.gov.pt/site
The dynamics of the sector can be illustrated by the analysis of the business volume generated by ICT
firms and shown in Table 1.3. Between 1996 and 1999 the volume of sales has been growing, attaining
around 3 240 billions of Escudos (circa 16 162 millions Euros) in the end of the period. Concerning
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AAGR, it must be stressed that it corresponds to almost 12% in the ICT sector, a number far superior
to the one that has been observed for the total business volume of national firms (5%).
Table 1.3 – Business volume of ICT firms and total business volume (millions of Escudos) 1996 1997 1998 1999 AAGR
ME % ME % ME % ME % %
Total
business
volume
44 306 014
47 004 633
53 197 815
51 533 966
5.17
ICT
business
volume
2 322 770
5.27
2 614 281
5.56
3 193 020
6.00
3 240 193
6.28
11.73
Source: INE, in www.umic.pcm.gov.pt/site.
Table 1.4 contains data on employment on the ICT sector. This sector has been attracting an increasing
number of workers, only with a slight decrease in 1999. The total number has varied between 93 128
and 100 021 workers between 1996 and 1999. This corresponds to an AAGR of 2.4%, superior to the
one observed for the total number of firms in Portugal (0.8%).
Table 1.4 – Employment in ICT firms and total employment in firms 1996 1997 1998 1999 AAGR
Nº % Nº % Nº % Nº % %
Total
employme
nt
3 017 398
3 055 881
3 096 180
3 092 349
0.82
ICT
employme
nt
93 128
3.09
94 893
3.11
100 417
3.24
100 021
3.23
2.41
Source: INE, in www.umic.pcm.gov.pt/site
Table 1.5 shows data on employment on the ICT sector, split by the three ICT main branches. It is not
surprising that the Other ICT services, which revealed in Table 1.2 its predominance among number of
firms, has the highest figure on employment, with around 51 thousand workers in 1999. It is followed
by the Manufacturing industry (circa 28 thousand workers in 1999) and Telecommunications services
(circa 21 thousand workers in 1999). It is noteworthy that Other ICT services is the only branch that
has an AAGR superior to the one of the whole sector.
Table 1.5 – Employment in ICT firms by branch 1996 1997 1998 1999 AAGR
Manufacturing
industry
26 002 26 568 28 061 27 767 2.21%
Telecommunication
services
21 060
20 527
21 817
21 225
0.26%
Other ICT services
46 066
47 798
50 539
51 029
3.47%
Total ICT 93 128 94 893 100 417 100 021 2.41%
Source: INE, in www.umic.pcm.gov.pt/site
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Table 1.6 presents an overall growth in remuneration, both total remuneration and remuneration in the
ICT sector, during the period under observation. However, the AAGR of remuneration in the ICT
sector between 1996 and 1999 (9%) is superior to the one observed in the whole economy (7%).
Table 1.6 - Remuneration in ICT firms and total remuneration (millions of Escudos) 1996 1997 1998 1999 AAGR
ME % ME % ME % ME % %
Total
remuneration
3 979 188
4 307 996
4 664 236
4 891 333
7.12
ICT
remuneration
240 168
6.04
260 949
6.06
294 488
6.31
312 074
6.38
9.12
Source: INE, in www.umic.pcm.gov.pt/site.
Still considering remuneration, Table 1.7 reveals the evolution of per capita remuneration in the ICT
sector compared to total per capita remuneration. As can be observed in the table, ICT per capita
remuneration exceed considerably total per capita remuneration during the period. ICT per capita
remuneration represent almost the double of total per capita remuneration (circa 97% higher in 1999).
Table 1.7 – Per capita remuneration in ICT firms and total per capita remuneration (millions of
Escudos) 1996 1997 1998 1999 AAGR
ME % ME % ME % ME % %
Total per
capita
remuneration
1 319
1 410
1 506
1 582
6.25
ICT per capita
remuneration
2 579
+95.5
2 750
+95.0
2 933
+94.8
3 120
+97.2
6.55
Source: INE, in www.umic.pcm.gov.pt/site.
The last table in this section, Table 1.8, refers to sales for export in the ICT sector compared to total
sales for export. In the case of the ICT sector, a growth on sales for export has been observed between
1996 and 1999, reversing the global trend for decrease between 1998 and 1999. Besides, the AAGR of
ICT sales for export is more than the double of the one for the total economy.
Table 1.8 – Sales for export in ICT firms and total sales for export (millions of Escudos) 1996 1997 1998 1999 AAGR
ME % ME % ME % ME % %
Total sales
for export
3 967 956
4 312 405
5 091 239
4 445 364
3.86
ICT sales
for export
338 252
8.52
362 778
8.41
412 625
8.10
414 787
9.33
7.04
Source: INE, in www.umic.pcm.gov.pt/site.
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Although exact figures for geographical distribution are not available, the concentration of ICT firms
in the regions of Lisbon, mainly, and Oporto, is indisputable. For instance, considering data produced
in ANETIE, in a study based on 413 firms of the ICT sector, 297 are concentrated in Lisbon and 90 in
Oporto.
3. Causal factors of the ICT sector development
Although the first ICT firms have appeared in Portugal still during the 1980s, it was on the 1990s that
the largest growth of the sector has occurred. The economic modernisation and growth verified during
this period, including the increase in the use of ICT by overall firms, constitutes a first explanation for
the phenomenon. Particularly, the acceleration of the sector growth that has occurred in the late 1990s
was due to the needs caused by the millennium bug and by the proximate circulation of the Euro. A
second explanation is based on the political regulation set by the government since 1995, which
assumed the information society as a priority. A third explanation is the consumers’ behaviour, since
products in this area progressively attracted consumption.
Meanwhile, in recent years the expansion gave place to a recession. According to one of our
interviewees, “the ICT sector is undergoing a critical phase of economic slow down”, which implies
the fact that firms are following cost containment policies. This new reality turns less probable the
hiring of labour, either national or foreign, as well as the internationalisation of activities. Presently,
the national labour market seems sufficient to respond to the sector’s needs.
Next, the main factors that have explained the growth trend of the ICT sector in Portugal will be
examined.
3.1. Economic modernisation and growth
First, the economic modernisation and growth occurred in Portugal since the middle 1980s explains
the development and increased autonomy of the ICT sector. The adhesion to the (then) European
Economic Community, in 1986, was responsible for a sustained trend for economic growth, including
the substantial increase in foreign direct investment and the modernisation of firms. The main ICT
multinational foreign firms became active (entering the country or reinforcing their position),
including representatives from hardware, software and consulting.
A trend for the largest firms, in other sectors, to acquire ICT tasks in the market (abandoning its
internal production in the organisation) has also occurred. Connections between large firms of several
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business areas and autonomous firms from the ICT sector, Portuguese or foreign-owned, became
common.
In the early 1990s a significant growth of software firms offering standard solutions, instead of
specifically tailored software designs, must also be mentioned. The cases of SAP and Oracle
demonstrate this assertion, since they developed standard products for management in different areas,
which have been widely accepted by large firms. This fact has also lead to the growth of sub-
contracting, since other ICT firms specialised in solutions for integration of standard products in large
firms. (Other consulting firms, not centred in ICT, also gained positions in this area, since they also
developed services of this type.)
It was in this favourable environment that the large ICT firms, mainly multinationals, developed and
that a set of diverse small and medium firms (SMF) in the same sector gained momentum. To add to
this trend, the millennium bug and the proximate circulation of the Euro created needs for adaptation
of internal systems. These concerned the universe of firms operating in the market, not only the ICT
related firms.
Meanwhile, the introduction of ICT products in the vast array of small and medium firms, largely
predominant in Portugal, was slightly delayed compared to large firms. The standard products used by
major players did not attract them. Therefore it is understandable that the demand for products of large
ICT multinational firms has been slowing down, giving place to an increased demand for national
firms’ products oriented for the SMF segment. An example is one of the national firms interviewed in
the current survey (a software house 100% national), which produces software for SMF and seems to
be in counter-cycle. It is undergoing expansion in a recessive context, since its market (national SMF)
is far from saturated.
In any case, the use of ICT products in Portuguese firms seems to be generalised. For example,
considering the Internet use, a recent study by PriceWaterhouse Coopers showed that in the year 2000
around 70% of the largest Portuguese organisations already possessed an Internet site. Besides, 26%
were thinking on adopting it that year and only 4% intended to do it later (next three years).
3.2. Political regulation
ICT has been adopted as a priority in the political agenda with the creation of the Ministry for Science
and Technology in October 1995. In this framework some initiatives were developed, such as the
“National Initiative for the Information Society” (aiming to determine the current situation, needs and
future opportunities for the Portuguese scientific and technological development); the “Mission for the
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Information Society” (aiming to promote and monitor the development of the IS) in 1996; and the
“Green Book for the Information Society” (comprising a concrete set of proposals for action), which
became a landmark in the process of creation of the IS in Portugal, in 1997. The publication of the
Green Book, a result of an extensive work and a wide public debate in the Portuguese society, was a
foremost step. For the first time, a strategic document adopted by the State was under permanent
public scrutiny on the Internet. This document identified a vast set of policy measures that afterwards
were set in motion, both in the civil society and in state departments.
After the Green Book, the “Network Science, Technology and Society” was created, which links to the
Internet the schools of the second and third cycles of Basic Education, Secondary Education and
Municipal Public Libraries. The engagement of the public authorities in promoting the “digital
literacy” lead to the results shown in Table 1.9, about the percentage of schools with Internet access in
2000 and 2001. There it can be seen that Portugal, along with Sweden, obtains the best position, with
100% of schools connected to the Internet either in 2000 or 2001.
Table 1.9 – Percentage of schools with Internet access in the UE, 2000-2001
Countries 2000 2001
Belgium 90 96
Denmark 98 99
Germany 90 98
Greece 22 58
Spain 91 95
France 63 97
Ireland 96 99
Italy 87 98
Luxembourg 86 100
Netherlands 91 100
Austria 53 95
Portugal 100 100
Finland 99 99
Sweden 100 100
United Kingdom 93 98
Source: Eurobarometer, in www.umic.pcm.gov.pt/site
Still in the framework of the political initiatives, the “Digital Cities Program” was adopted and a
regime of fiscal deductions for the acquisition of computers and software for domestic use was
approved; the “National Initiative for Electronic Commerce” was launched; legislation about Digital
Signature and Electronic Invoice was agreed; the “National Initiative for Disabled Citizens in the
Information Society” was settled; and the “Internet Initiative” was launched. Initiatives in the area of
modernisation of public administration and public services, support to the development of a digital
economy and response to juridical issues arising from the IS - can also be cited. Finally, the
competence for producing statistical indicators about the IS have been centralised (on the Ministry for
Science and Technology, in co-operation with INE).
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In what concerns information technologies, the official policy also generated a set of institutional
developments, including the Inter-ministry Commission for the Information Society and the recent
Inter-ministry Commission for Innovation and Knowledge. This latter was created in 1992; it is
headed by the Assistant Minister for the Prime Minister and integrates representatives from all
ministries, as well as the Head of the Mission Unity for Innovation and Knowledge.
In the specific case of telecommunications, some political and institutional landmarks for the sector
have to be enumerated. These include the beginning of the mobile service sector in 1989, with the full
functioning of two operators in 1992; the permission for a third operator, starting in 1997 and entering
in effect in 1998; the liberalisation of the fixed phone service, starting in 1999 and entering in effect in
2000; and the concession of four licenses for mobile communications in the UMTS system, starting in
2000 and planned to enter in effect in 2002 (however, this system has not yet started to operate). The
increase of competition in the sector has resulted, among other aspects, in a decrease of
telecommunication prices and an effective dynamics of the labour market.
On the institutional field, the role of the regulatory authority for telecommunications has been
attributed to the Portuguese Communications Institute, currently National Communications Authority
(Autoridade Nacional de Comunicações - ANACOM).
Finally, it must be referred that the policies for the development of the ICT sector have never included
in Portugal a migration component, i.e., the access in privileged conditions of skilled foreigners in this
area – as occurs in the German (Green Card) and British case. However, in the late 1990s there was
some signals of this type of policy. These were manifest in the actions proposed in the framework of
the “Internet Initiative”, launched in 2000 by the Ministry for Science and Technology with the aim of
developing the Internet in Portugal. The need to study the conditions to attract highly skilled
professionals in the ICT sector was then targeted (Ministério da Ciência e da Tecnologia, 2000: 22).
3.3. Consumer behaviour
A third factor that contributed to the boom of the ICT sector in Portugal is the attraction for its
products on the part of the population. One of the most remarkable aspects is the adhesion to mobile
phone services, since around three quarts of the Portuguese population uses currently a mobile phone
(see Table 1.10). If, between 1995 and 1997, the percentage of mobile phones used by the total
population was inferior to the EU average (less than 20% in 1997), from 1998 onwards it was always
superior (more than 60% after 2000). With an average annual growth rate (AAGR) of almost 90%
during the 1990s, the number of mobile phones’ users corresponds currently to 74% of the population.
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Table 1.10 – Total number of users (subscribers) of mobile telephone services between 1991 and
2001 (thousands and percentage of total population) Total (thousands) % of total population
1991 12.6 0.1
1992 37.3 0.4
1993 101.2 1.0
1994 173.5 1.8
1995 340.8 3.5
1996 663.7 6.7
1997 1 507.0 15.3
1998 3 074.6 31.2
1999 4 671.5 47.4
2000 6 665.0 67.6
2001 7 607.9 73.5
AAGR 89.1% ---
Source: ANACOM, in www.umic.pcm.gov.pt/site
Another example is the Internet access, a central axis of the IS in what concerns the acquisition of
information. Currently in Portugal circa 1 in each 3 individuals is an Internet user (30%), and 74% of
these Internet users are frequent users (see Table 1.11).
Table 1.11 – Total number of individuals with Internet access (subscribers) between 1997 and
2001 (thousands and percentage of total population) Total (thousands) % of total population
1997 88.7 0.9
1998 172.7 1.7
1999 645.2 6.5
2000 2 110.8 21.0
2001 3 056.0 30.0
AAGR 142.0% ---
Source: ANACOM, in www.umic.pcm.gov.pt/site
4. Other issues
4.1. Associations
In this section the creation and functioning of associations of firms or other organisations in the ICT
sector in Portugal will be focussed. According to some of our interviewees, the grouping of firms into
associations “is very low”, a trend that has become worse in the last few years, given the economic
downturn.
Despite this, some associations must be cited. It is mainly the case of ANETIE (National Association
of Information Technology and Electronic Firms - Associação Nacional das Empresas das
Tecnologias de Informação e Electrónica), generally accepted as the privileged interlocutor for the
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information technology and electronic sectors. It was created in 1994, then as NETIE (Núcleo
Empresarial para as Tecnologias de Informação e Electrónica). It mainly represents national
technology based firms in the information technology and electronic sectors; it counts with more than
120 associated firms that develop their activities in the electronic, software, information and
communication industries. The association has as its main objective to defend the interests of firms in
those areas and to promote its sustained growth.
Other associations can also be cited, such as the APDC (Portuguese Association for Communications
Development - Associação Portuguesa para o Desenvolvimento das Comunicações), claiming
nowadays to represent the communications sector and counting with circa 200 associated firms; APSI
(Portuguese Association of Information Systems - Associação Portuguesa de Sistemas de
Informação), a scientific-technical association that groups several agents in the information systems’
domain, mainly linked to higher education institutions; APRITEL (Associação dos Operadores de
Telecomunicações), which aims to contribute to the development of the telecommunications sector in
Portugal; and APDSI (Associação para a Promoção e Desenvolvimento da Sociedade da Informação),
which aims to develop the information society in Portugal.
4.2. International situation
It is possible to say that Portugal, in what concerns the characteristics of the ICT sector, displays a
relatively good situation compared to other more developed countries in the European Union. ICT use
by firms and individuals is widespread. The activity of the main international corporate players in the
economy is solid. As Mamede (2001) suggests, referring to the ICT service sector, the capacity that
national owned firms has shown to compete with the larger multinationals is a sign that its
performance is not very different from the one that can be found in more advanced economies.
Besides, Portugal has been the nest for some high tech innovations that have been exported to other
countries. It is the case of Multibanco network, one of the more sophisticated banking networks in the
world; Via Verde, the first and only closed system of automatic highway tolls in the world; the Pre-
Paid Mobile Phones, that quickly became the payment system with an highest growth rate in the
world; and Interactive Digital Television, since Portugal will be one of the first five countries in the
world using the system (on Portuguese internationally successful ICT companies, see also Various
authors, n.d. 2002).
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Chapter 2 - Stocks and flows of foreign labour
International mobility of workers and, particularly, highly skilled agents is a phenomenon of growing
relevance in a world in process of globalisation. Either this mobility is of long or medium-term
duration, the fact is that the conditions for movement from country to country are installed, being
increasingly possible that professional activities are exerted in a different country.
This chapter aims to give an overview of the movements of foreign workers in Portugal, as well as
brief indications on the outflows of Portuguese workers to foreign countries, concerning the ICT
sector. In other words, an analysis of the national labour market trends in the sector will be made,
taking as main focus the existing and potential international mobility of workers.
First, a characterisation of overall flows and of foreign workers in the ICT sector in Portugal should be
made. However, as it will be seen, no aggregate statistics exist on the international flows or stocks of
the ICT sector in this country. In absence of those figures, we will proceed to an analysis of the supply
and demand of ICT skills and, afterwards, to some considerations on the social nature of ICT skills.
Finally, the main information derived from the survey that was undertaken will be exposed, in what
respects to the characteristics of the sample and the foreign workers in the firms.
1. Research methodology
From the methodological point of view, the present survey was based in three separate steps. First, an
analysis of the literature was made, concerning official or other documents and general bibliography
on the theme. These references proved to be very scarce in information about the international
mobility of workers on the sector and, particularly, the process of recruitment decision analysed in
PEMINT. Second, a set of exploratory interviews was made, on the beginning of the research and
some months after the beginning of the fieldwork. Third, semi-directive interviews were carried out in
several firms operating in the sector.
Concerning the exploratory contacts, six interviews were made since January until December 2002,
with institutional and knowledgeable actors. These interviews concerned government officials,
professional experts, academic specialists in the ICT sector and one association (ANETIE). The aim of
these interviews was twofold. First, it was intended to evaluate the main trends of the ICT sector in
Portugal and the relevance of international mobility in the sector. Second, the aim was to collect
information that allowed a good selection of the sample of firms to be interviewed. These interviews
13
gave very positive insights on the theme, although no rigorous map on mobility processes was
obtained.
Afterwards, semi-directive interviews were made to the firms selected to integrate the sample. The
main details of the fieldwork are presented in Table 2.1. There, it can be seen that a dynamic process
of sample constitution ought to be made, due to the high percentage of refusals or excessive delaying
on the part of firms. Since May 2002, 32 firms were contacted, which were considered to include the
main conditions to integrate the sample. From these firms, 14 interviews were successfully conducted
(i.e., a rate of success of 43.8%). Some of the overall firms were selected right on the beginning of the
fieldwork, whilst other appear on the process since they were suggested as interesting cases by other
interviewees (either exploratory contacts or firms).
The 14 firms that were interviewed may be said to respect the general criteria set for the national
sampling in PEMINT. Its positioning under the criteria set for the ICT sector is indicated in Table 2.2.
Most of the “cells” were covered. An effort to substitute refusals or excessive delaying by similar
firms was done during the period. The aim was to obtain a balanced distribution of firms in the various
“sub-sectors” targeted in PEMINT. The “cells” that finished “empty” or poorly filled represent
segments that are not very significant in the Portuguese ICT sector. The four multinational firms
indicated to be commonly surveyed in all PEMINT countries were successfully interviewed (IBM,
Oracle, Vodafone and Siemens). Large subcontractors and smaller subcontracted companies were
gathered.
Table 2.1 – ICT firms contacted and interviewed
Firm Initial contact Refusal Delaying Interview
Altitude Software January 2003 X
Cap Gemini Ernst & Young May 2002 X
Compaq May 2002 X
Critical Software November 2002 X
CSC January 2003 February 2003
Enabler January 2003 February 2003
Ericsson May 2002 X
I2S’s January 2003 X
IBM May 2002 July 2002
Infineon Technologies January 2003 X
Microsoft November 2002 X
Motorola November 2002 X
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Noesis September 2002 November 2002
Novabase November 2002 X
Novis May 2002 X
ONI May 2002 June 2002
Optimus May 2002 X
Oracle May 2002 June 2002
ParaRede May 2002 X
Primavera Software November 2002 December 2002
PT Comunicações May 2002 July 2002
PT Sistemas Informação September 2002 X
Q-Free November 2002 X
Rumos November 2002 X
SAP May 2002 July 2002
Siemens May 2002 November 2002
Solbi January 2003 X
S-Tecno November 2002 November 2002
Tempo Real September 2002 December 2002
TMN May 2002 September 2002
Vodafone May 2002 July 2002
Xerox May 2002 X
Table 2.2 – Firms surveyed, by PEMINT criteria
Hardware Software Telecommunications
National Primavera Software
S-Tecno
Enabler
Noesis
Tempo Real
PT Comunicações
TMN
ONI
EU Siemens SAP Vodafone
Non-EU IBM Oracle
CSC
2. Labour market trends in the ICT sector
2.1. Employment and migration in the ICT sector
As stated in chapter 1, about the “Characterisation of the ICT sector in Portugal”, the ICT sector has
been absorbing a growing fraction of the Portuguese labour market. With around 100 000 workers, it
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gathers circa 3% of the Portuguese labour force, revealing an annual average growth rate significantly
over the national average (2.4% against 0.8%, between 1996 and 1999). Considering its main sub-
sectors, most of the employment is concentrated in Other ICT Services (51% of the sectors’ total), in
front of Manufacturing industry (27.8%) and Telecommunication Services (21.2%).
As also was saw in chapter 1, the level and increase in remuneration, i.e., individual income, in the
sector exceed plainly the national average. Although no rigorous data exists on the issue, it is known
that the sector concentrates a higher than the average proportion of highly educated individuals,
particularly holders of credentials issued from the tertiary (university level) educational sector.
Unfortunately, no aggregate statistics exist on the stocks of foreign workers in the sector or
international flows (inflows or outflows) of these professionals in Portugal. The usual aggregate
statistics on foreign population and international migration flows are lacking in information on
economic sectors or detailed occupations. When economic sectors are considered, they usually respect
to “traditional” sectors – not the emerging ICT one. When occupational data are considered, they only
gather broad categories of workers.
Some specific sources, only available recently, could provide some indications on the level of
international mobility in this sector. It is the case of the 2001 Census, issued by the INE, and the most
recent set of Quadros de Pessoal, a compilation of information on firms’ human resources issued by
the Ministry of Labour. Both of them provide data on economic sectors and nationality of workers.
However, the adequate analysis of these sources, which required non previously published material,
was not possible in time of this study 1.
Due to the absence of adequate data, only sketchy trends on international mobility could be derived
from our survey. These were based on qualitative information detected on the documentary analysis,
the exploratory interviews and the firm’s survey. The main trends will be described in the next
sections.
2.2. Supply and demand of ICT skills
If we observe the supply of educational degrees in this area, it can be noted that an increase of tertiary
education (university level) degrees related to ICT have been always rising, particularly since the mid-
1990s (for a list of tertiary education degrees directly related to ICT, see www.umic.pcm.gov.pt/site).
1 Some additional specific sources could be explored, such as computer-related engineers, by nationality,
registered in the Order of Engineers. However, this entity did not answer to the data request we made in early
2002.
16
Between 1996 and 1999, for example, the total number of tertiary education degrees increased by 3%
per year, whilst ICT tertiary education degrees increased by around 6% per year (see Table 2.3).
Besides, in the year 2000 ICT degrees represented around 10% of the total supply of tertiary education
degrees, the same proportion of vacant places for enrolment in ICT and total tertiary education
degrees. However, the number of vacant places for enrolment in ICT degrees decreased, namely
between 1999 and 2000: they went from 8530 in 1996 to 8270 in 2000, after settling in a peak of 9855
in 1999 (see Table 2.4).
Table 2.3 – Number of tertiary education ICT and total degrees
1996 1997 1998 1999 2000 AAGR
Total number of degrees
1 307 1 398 1 433 1 466 1 475 3.1%
ICT number of degrees
117 118 137 140 147 5.9%
Source: Direcção Geral do Ensino Superior, Departamento de Avaliação, Prospectiva e Planeamento do
Ministério da Educação; and Observatório das Ciências e das Tecnologias - in Unidade de Missão Inovação e
Conhecimento: www.umic.pcm.gov.pt/site
Table 2.4 – Number of vacant places for enrolment in tertiary education ICT and total degrees
1996 1997 1998 1999 2000 TMCA
Total number of vacant
places
79 460 84 651 88 179 90 423 82 313 0.9%
ICT number of vacant
places
8 530 9 090 9 830 9 855 8 270 -0.8%
Source: Direcção Geral do Ensino Superior, Departamento de Avaliação, Prospectiva e Planeamento do
Ministério da Educação; and Observatório das Ciências e das Tecnologias - in Unidade de Missão Inovação e
Conhecimento: www.umic.pcm.gov.pt/site
A trend that must be noted is that, contrary to what occurs in general tertiary education, where 61% of
students are women, ICT degrees are dominated by a large majority of men (83%). Concerning
graduations, i.e., individuals that detain an ICT diploma, the proportion is slightly less unbalanced:
74% men and 26% women. In the year 2000, a total number of 2647 individuals graduated from these
degrees.
Trends in the supply and demand of ICT skills correspond to the evolution of the sector itself. As
referred in chapter 1, factors such as the increased use of ICT products and services by Portuguese
firms, the millennium bug, the circulation of the Euro and the liberalisation of the telecommunications
market explained the strong growth of ICT activities in the 1990s, as well as a proliferation of firms in
this area. The expansion of the labour market was gradually accompanied by an increase of students,
thus occurring a progressive adjustment of demand and supply of ICT skills.
17
However, during most of the 1990s and, particularly, in the late decade (the period of the most
notorious boom), the Portuguese labour market seemed largely unprepared for the sector’s growth and
supply did not perfectly correspond to demand. It was often cited in our survey that young graduates in
ICT degrees were actively sought by firms and had immediate recruitment by them, settling their own
work conditions. In specific cases, ICT firms recruited temporary work from foreign countries or faced
a systematic recruitment from abroad – a situation that was rarely set on. These trends will be
described in detail in the next sections and chapter 3.
After the year 2000, the “optimism” that characterised the economic situation of the ICT sector gave
place to a new phase: the world economic recession, besides the end of the short-term motives for
growth (millennium bug and Euro), led to a sectoral downturn. In Portugal, the slowing down of the
sector implied that the national labour market seemed to become self-sufficient, i.e., supply tended to
match existing labour needs. Currently, it is generally admitted a need of cost containment, implying
non-recruitment and even dismissals. In some of the contacts done in this survey, it was suggested that
the main problem of the firms, nowadays, is more one of “reducing or assigning tasks” to existing
personnel, and not one of recruitment. This situation is not also favourable to an increased
internationalisation of ICT firms, and hence international recruitment.
The existence of a skill shortage or, alternatively, a self-sufficiency of skills in the ICT Portuguese
labour market could not be entirely determined in this survey. The rapid growth of the sector in the
last decade, together with two successive short-term cycles of opposite meaning (boom in the late
1990s and current recession), disallows a satisfactory interpretation.
Some evidence collected indicates that the Portuguese labour market revealed itself to be relatively
self-sufficient in ICT skills during the 1990s - despite some overwork of existing employees. The main
exception respected to specific skills that only could be found in foreign countries, as occurred with
IBM skills disseminated in Brazil (Portuguese universities did not privilege training in this type of
technologies). This fact did not necessarily led to international recruitment, since sub-contracting and
temporary commitments were also used. The fact that the short-term motives for growth have ceased,
the decreasing need for adaptation of IBM technologies, the increased diffusion of new software
technologies (Microsoft or Oracle) and an accrued training in the latter – all suggest an increase in
self-sufficiency.
Few diagnoses seem to exist on the labour needs for the sector in next years. Amongst this type of
studies, an enquiry did by ANETIE, in late 2001, to affiliated Portuguese ICT firms on short-term
needs of human resources provides some indications. The results, concerning 55 ICT firms of Lisbon
18
and Oporto regions, showed that in the short-term around 300 medium-skilled technicians (middle-
level cadres) and 640 highly skilled ones (high-level cadres) would be needed. The most requested
functions would be the following: programming of computerised systems; management and
orientation of Information Society projects (only high-level cadres); Internet programming; and local
systems and networks administration.
An alternative viewpoint was defended, in another of our exploratory interviews, by an academic
specialist in ICT. According to him, the main skill shortage in the Portuguese ICT sector corresponds
to medium-level training degrees. In other words, a lack of resources does not occur for engineers and
technical engineers, but only to intermediate degrees (medium-level cadres). Using the metaphor of a
pyramid, he stated that the Portuguese labour market was abundant in “top” workers (tertiary
education trainees, who “conceptualise and identify the problems”, such as systems engineers) and
“medium-level” workers (who “execute the tasks”, such as programmers).
2.3. Hypothesis: the social nature of ICT skills
In what concerns international mobility of labour, it can be assumed that ICT is a sector apparently
prone to international professionals’ circulation. The international dimension of business and products,
as well as a widely used lingua franca (the English), would foster mobility. However, there seems to
be no evidence, in Portugal, of systematic international mobility in the sector, neither concerning
foreigners in Portugal, nor Portuguese professionals abroad. Besides, whenever this circulation occurs,
it is linked more with temporary (short and medium-term) than with permanent (long-term) moves.
Discarding, for the moment, further evidence gathered in the firms’ survey - both detailed data on
mobility and the one pertaining to recruitment decisions -, two hypotheses may be placed to explain
the apparent low mobility pattern. First, the peripheral status of the country, relatively isolated from
the main hubs and flows in the sector. Second, a specific social nature of ICT skills, which would
constitute a friction to mobility. This latter hypothesis was often cited in exploratory interviews and, in
a lesser degree - and less systematic manner -, in the firms’ survey.
In some of our interviews, it was referred that the pattern of low international mobility is largely due to
the specificity of the ICT work. This seems to encompass, in several cases, decisions taken in the
framework of complex organisations and the need of communicating with clients. In the computer
field, for example, what is often requested is not the production of software, or “systems
development”, where technical skills seem really to be transnational. The main professional mission to
be accomplished is the adaptation of pre-existing software packages (developed by foreign or national
firms) to specific organisations or, instead, the sale of those packages to those organisations. As stated
19
in one of our interviews, “labour market demands engineers and managers of information systems in
organisations, and not computer engineers producing software”.
Knowledge of local environment and ability on local language are necessary to those tasks, thus
constituting a friction to international mobility. As stated in the interviews, this is a consequence of the
“cultural paradigm” prevailing in the area: the existence of “national organisations, national cultures
and national languages” restrains the level of international flows in the ICT sector.
This argument can be refined using the idea of different layers in the sector. In one of our interviews it
was admitted that the best way to segment the ICT sector is considering the following layers: the
infrastructures (“machine house”, computers and systems), large applications (specific packages or
middleware) and top consulting services (systems architecture) (this segmentation would be preferable
to the one carried in PEMINT between hardware, software and telecommunications). International
mobility should potentially occur mainly in the first segment, the basis of the system (for example, the
programming industry). The intermediate and higher levels would suffer from diverse social
constraints.
In other terms, the ICT sector may be generally characterised as “highly cultural”, consequently
needing many “local workforce”. As it was also stated in the survey, “information systems are not
solely a technical issue”. International flows of highly skilled professionals often do only correspond
to strictly temporary stays related to the transfer of know-how.
This hypothesis can provisionally explain why the large majority of workers of the foreign ICT firms
settled in Portugal are Portuguese – since those firms do not deal with production but with sales and
adaptation of standard software packages in the country. It can also be understood why some of the
international mobility that occurred in Portugal, namely the entry of Brazilians, has occurred in the
least elevated segment of programming – including the case of specific IBM technologies.
Taking this hypothesis forward, it can be admitted that a large part of the obstacles to international
mobility in the ICT sector, in the framework of the European Union, are related to cultural differences.
The weight of other variables, such as fiscal and social security issues (the PEMINT variables), may
considered to be lower.
3. Foreign labour in the firms surveyed
Table 2.5 synthesises some of the characteristics of the ICT firms interviewed in our survey.
Amounting to a total of 14, these firms are distributed by the sub-sectors defined in PEMINT: 2 from
20
hardware, 8 from software and 4 from telecommunications. Among them, 8 are of national property
(more than half the capital) and 6 represent large foreign multinationals. Firm size is widely variable,
existing both large conglomerates and very small firms. The whole chain of subcontracting is present,
because both frequent subcontractors and small subcontracted firms were surveyed.
Concerning number of employees, a large array of cases is verified: large, medium and small-sized
firms. Number of employees varies between a maximum of 10 thousand workers (PT IC 6, a large and
long-existing national firm in the area of telecommunications), and a minimum of 16 workers (PT IC
10, a small national firm in the area of software consulting). Even multinational firms display a very
different presence in Portugal, varying between a maximum of 1800 (PT IC 12) and a minimum of 90
(PT IC 13).
The number of foreign workers is not high in most of the firms surveyed. However, we must
distinguish the cases of permanent workers (or long-term stays) and the ones of temporary workers (or
short and medium-term stays). This distinction was often relevant, although rigorous numbers on both
situations were often lacking in the survey.
Concerning permanent workers, the proportion of foreigners is minimal. In two thirds of the firms the
absolute number was inferior to 3. The more expressive figure was found in a large
telecommunications group (PT IC 3), where only 22 in 1200 (i.e., 1.8 per cent) were foreigners. In
relative terms they seemed to be always negligible.
Concerning temporary workers (stays until 3 years), the proportion is frequently higher. In 5 of the
firms, the absolute number of foreigners can now be counted in two digits, varying between 15 and 50.
In relative terms, the figures can be surprising. In some of the cases, such as firms PT IC 2, PT IC 10
and PT IC 13, the proportion is very high: considering the whole set of permanent and temporary
workers, the number of foreigners varies between 24 per cent and 58 per cent. However, the status of
these workers in the firm may vary substantially: in some cases they are corporate assignees coming
from other branches of the same multinational firm; whilst in others they are independent professionals
coming under temporary contracts to fulfil specific tasks.
Notwithstanding the different channels in action (which will be observed in the next chapters),
temporary mobility seems one of the main trends registered in this survey. International mobility in the
ICT sector occurs essentially through temporary flows, in the framework of specific projects, training
activities, etc. These flows can lead to stays varying between 1 week and 3 years. Permanent
movements, as well as long-term stays, appear to be rare and are often caused by personal motives
(constitution of family in Portugal).
21
Some indications can also be derived from the type of firms surveyed. Concerning national firms, in a
panorama where the presence of foreign workers is not very relevant, the most interesting cases are the
ones of small firms devoted to software consulting. In our survey, 2 of these firms (PT IC 2 and PT IC
10) employ a large number of foreign workers in a non-permanent basis (many “external
consultants”), mostly coming from Brazil. The reasons for this inflow are linguistic (ability in
Portuguese) and technical - knowledge of specific technologies (IBM), which is scarce in the
Portuguese market.
Concerning multinational firms, it is possible to talk of a pattern of “national labour force”. In most of
the cases, these firms are concerned with the commercialisation of products developed elsewhere, what
turns the contact with clients a prominent feature of their local activity. By this reason, Portuguese
language is considered to be an important asset, what contributes to explain the option for a national
labour force. However, this trend depends also on the scale of operations. In fact, the main exception
to the rule of low mobility is PT IC 13, which has a significant presence of (temporary) foreigners in
Portugal. But its small dimension in Portugal justifies that option: it was stated in the interview that the
firm wants to invest in local competence, gaining autonomy towards other branches, what will be
reflected in less mobility and lower costs.
Other characteristics of firms, namely the sub-sector of activity, seem not to be relevant to explain
different patterns of mobility.
22
Table 2.5 – National sample
Code
Core activities
National or
Multinational
Total number
of employees
Presence of foreigners
Activities
subcontracted
Other specificities
PT IC
1
Hardware and software production and
consulting.
The Portuguese branch is only devoted
to the commercialisation of the firm’s
products, other services and
consulting.
Multinational Around 300
thousand
worldwide.
Around 800 in
Portugal.
1 Spaniard (formerly
from the Spanish
branch) as financial
director (permanent).
6 Spaniards (from the
Spanish branch) as
managers and
technicians (temporary
stays - 2/3 years).
The firm often
promotes
subcontracting, when
there are skills
shortages in certain
areas or overload of
work.
The areas
subcontracted are,
mainly, installation of
ICT programs and tools
in clients.
One of the four
common ICT firms in
PEMINT.
PT IC
2
Software consulting.
National Around 165 in
Portugal
(including
permanent and
temporary
contracts).
Around 30 in
Brazil.
40 Brazilians as project
managers, analyst-
programmers and
programmers. Most of
these Brazilians stay
temporarily in Portugal
(around 3 years).
5 French.
It is often a
subcontracted firm
(mainly from large ICT
firms), especially in the
area of IBM
technologies.
PT IC
3
Telecommunications (holding).
The group includes 4 separate business
units: fixed communications, mobile
communications, information systems
and call centres.
National Around 1800 on
the whole
group, from
which around
600 in Spain.
Around 22 foreigners
in the area of fixed and
mobile
communications.
Including 5 French, 4
Brazilians, 6 coming
from PALOP, and
others (permanent
workers).
1 Swedish as
administrator. Around
20 Norwegians in top
At the level of skilled
activities, the firm
promotes
subcontracting on a
temporary basis. This
usually occurs in the
area of roll out and,
sometimes, in 3rd
generation mobile
communications
engineering.
At the level of low
23
managerial functions,
middle management
and technical functions
(temporary stays –
around 2 years).
Around 20 Spaniards in
the area of mobile
communications, as
technical cadres
(temporary stays –
around 2 years).
skilled activities, the
firm promotes
subcontracting on a
permanent basis. It is
the case of call centres.
PT IC
4
Software production and consulting.
The Portuguese branch is only devoted
to the commercialisation of the firm’s
products, other services and
consulting.
Multinational
Around 200 in
Portugal.
1 permanent foreign
worker, from
Venezuela (computer
engineer, second line
of management.
Concerning temporary
stays, there is an
average of 15 workers
per year coming from
other branches (UK,
Italy, Spain, Brazil,
USA and India). These
are highly skilled
cadres in consulting
and technical support
(temporary stays – 1/3
months).
The firm often
promotes
subcontracting, in
activities that require
know-how on the
firm’s technology.
One of the four
common ICT firms in
PEMINT
PT IC
5
Software production (software house). National 83 in Portugal. 1 permanent foreign
worker – German
(software engineer,
project manager.
Concerning temporary
stays, there are some
flows of technicians
coming from partners
The firm does not
promote subcontracting
and does not act as
subcontracted.
24
in PALOP, countries;
these flows occur in the
framework of training
(2 weeks).
PT IC
6
Telecommunications.
The firm is part of a holding devoted to
communications (which also includes
firm PT IC 11). It is concentrated in
fixed communications, data
communications, videoconference and
other products.
National Around 10
thousand in
Portugal
Foreigners not
significant among
permanent workers.
At the skilled level, the
firm awaited currently
for 1 Brazilian (pricing
and CRM), 1 British
and 1 Polish.
The firm does not
usually promote
subcontracting.
PT IC
7
Software production and consulting.
The Portuguese branch is devoted to
the commercialisation of the firm’s
products, other services and
consulting.
Multinational Around 140 in
Portugal.
1 Brazilian (formerly
from the Brazilian
branch) as technical
consultant in computer-
related engineering
(permanent).
Brazilians, (Belgium),
British and Germans in
temporary stays (2
weeks to 6 months),
often for purposes of
training.
The firm promotes
subcontracting on areas
such as marketing
(gifts and
advertisement), HR
(labour medicine,
insurance and wage
processing), collection
of news about the firm
and software
(consulting in certain
projects, when no
internal consultants are
available).
PT IC
8
Hardware and software production and
telecommunications.
The Portuguese branch is devoted to
production, commercialisation of the
firm’s products and research and
development.
Multinational
Around 1668 in
Portugal
The proportion of
foreign workers is very
low.
There are 3 situations:
(a) foreigners that work
in the firm for a long
time;
(b) workers from other
branches that come to
fulfil specific technical
needs (this situation is
practically non-existing
The firm promotes
subcontracting
whenever there is
shortage of human
resources (for example,
when work was done
for preparing the
installation of UMTS
system).
Subcontracting is also
done for labour
recruitment.
One of the four
common ICT firms in
PEMINT
25
currently);
(c) foreigners working
for subcontracted
firms.
Several short-term
movements to fulfil
technical tasks or for
matters of training.
PT IC
9
Software production and consulting.
National Around 60 in
Portugal.
Around 20 in
Brazil.
No foreign workers in
the firm.
It is often a
subcontracted firm
(mainly from large ICT
firms), particularly for
the purpose of specific
projects in
telecommunications.
PT IC
10
Software consulting.
National Around 16-17
permanent
workers in
Portugal (plus
22-23 non-
permanent
workers
currently).
Around 5 in
Brazil.
No foreigners among
permanent workers.
Around 20 Brazilians
as non-permanent
workers - external
consultants (temporary
stays – 6 months to 3
years).
It is often a
subcontracted firm
(mainly from large ICT
firms), especially in the
area of IBM
technologies.
It becomes sometimes
an intermediate part of
a chain of
subcontracting, since it
also subcontracts
Brazilian firms,
including its Brazilian
branch, and Brazilian
independent
professionals.
PT IC
11
Telecommunications.
The firm is part of a holding devoted to
communications (which also includes
firm PT IC 6). It is concentrated in
mobile communications.
National Around 1200 in
Portugal
Foreigners not
significant among
permanent workers.
International temporary
movements for the
purpose of training,
The firm promotes
subcontracting for
training purposes. In
what concerns
technical software
issues and
telecommunications
26
mainly in areas such as
marketing, network and
distribution
(movements
concerning the partners
in Morocco, Brazil,
Botswana and Angola).
engineering, training is
contracted to suppliers.
During the boom,
subcontracting was
often used due to skills
shortages. These
concerned computer
specialists and
telecommunication
engineers (for example,
the maintenance of the
network was
subcontracted to
suppliers).
PT IC
12
Telecommunications.
The firm is concentrated in mobile
communications. It also displays some
fixed services.
Multinational
Around 1800 in
Portugal
There always has been
1 foreign cadre in
Portugal at the top
managerial level
(technological or
financial areas), as
policy of the holder of
the majority of capital
(this policy can finish
in the short-term).
There always has also
been one or other
foreign worker in
Portugal, in the
framework of
temporary projects and
stays (these workers
fulfil specific technical
needs).
The firm promotes
subcontracting for
support activities,
consulting and problem
solving related to
specific projects.
In a lesser scale,
subcontracting
concerns also
engineering projects.
Subcontracting of
national firms is used
for call centres.
One of the four
common ICT firms in
PEMINT
PT IC
13
Software production and consulting.
The Portuguese branch is only devoted
to the commercialisation of the firm’s
products, other services and
Multinational Around 66
thousand
worldwide.
3 permanent foreign
workers, all of them
consultants: 1 Brazilian
(women), 1 USA (from
The firm does not
promote subcontracting
for its core activities. It
only subcontracts for
27
consulting. Around 90
permanent
workers in
Portugal (plus
50 non-
permanent
workers
currently).
the USA branch) and 1
British (from the UK
branch).
Currently, 50 non-
permanent foreign
workers, all of them
consultants. Mainly
coming from the USA
and UK, but also from
Australia, Venezuela
and Japan.
wage processing, for
the few cases of
external training or
external recruitment,
and for house search
for foreign workers.
PT IC
14
Software production and consulting.
National Around 220 in
Portugal.
Around 20 in
Brazil.
Around 15 in
the UK.
1 Spaniard (recruited
during the boom) and 1
Brazilian (transferred
from the Brazilian
branch) (permanent).
Several temporary
flows (months), in the
framework of training
(Brazil and the UK)
and monitoring of
products’
implementation
(Brazil).
The firm promotes
subcontracting when:
(a) it is about to
abandon a technology /
product and wants to
concentrate resources
in new ones;
(b) a technology is too
specialised and does
not belong to its core
activities;
(c) wants to develop
external tasks to its
core business (for
example, design of a
career system or wage
processing).
It is also a
subcontracted firm
(mainly from large ICT
firms).
28
Chapter 3 - Recruitment and assignment decision-making
1. Organisational structures
1.1. Types of firms
The 14 firms that were interviewed constitute a very diversified sample of the ICT firms operating in
Portugal. The fact that both multinational and national firms, and both large and small firms, on the
diverse ICT fields are under investigation creates a vast potential for comparability; however, it also
sets difficult challenges for the analysis.
In what concerns the 6 multinational firms in the sample, diverse types of firms were interviewed.
Regarding sub-sector (see Table 2.2, chapter 2), 2 are from hardware (main activity), 3 from software
and 1 from telecommunications. Regarding size, there are 3 large-scale firms, counting more than 500
employees; 2 medium-sized firms, with between 100 and 500 employees; and 1 small-sized firm, with
less than 100 employees (in this latter case, permanent employees). A large part of these differences
have to do with the different development phases on the firms in Portugal. Some of the largest are
established in the country since decades, long before the 90s (2 firms), whilst others, namely the
smallest, are established only from the 90s (4 firms). The different development phases partially
explain the different dimensions (in number of workers and business volume) of these firms.
The development phase may also have implications in workers’ international mobility, through what
we may call an “auto-sufficiency strategy”. Apparently, the more these firms are established and
settled in Portugal, the more they get resources on the national labour market, be it at the external and
the internal (organisational) level; this fact implies in an accrued auto-sufficiency of the firms
regarding the firm’s headquarters or other subsidiaries. Alternatively, the more these firms are recent
in Portugal, the more they must rely on their international internal labour market (ILM) to respond to
specific business needs.
Besides these factors, it shall also be stressed that most of these multinationals (5 from the 6 firms) do
not constitute more than commercial subsidiaries, i.e., units devoted to commercialise and run in
Portugal the firms’ products developed abroad. This last factor has deep consequences regarding
recruitment, since the direct contact with clients become a fundamental aspect of the firms’ activities.
This implies that the Portuguese language, and even business and social culture, become key aspects
of the employee performance. This trait explains that in most of our cases it is possible to speak of a
29
“nationalisation” of multinational firms, in the perspective of human resources, a situation that
constrains potential international mobility.
In what concerns the 8 national firms in the sample, the variety may also be observed. Regarding sub-
sector (see Table 2.2, chapter 2), none is from hardware, 5 are from software and 3 are from
telecommunications. Regarding size, 3 are large-scale firms, with more than 500 employees; 2 are
medium-sized firms, with between 100 and 500 employees; and 3 are small-sized firms, with less than
100 employees. Regarding date of foundation, most are recent operations: 5 firms started their
activities in the 90s, whilst 2 began earlier (including one firm devoted to fixed communications).
There seems to be also some association between national firms’ size and international mobility of
their employees. In what concerns national larger firms (some of them multinational themselves), the
international mobility is mainly verified in the framework of subsidiaries, partnerships or shareholder
positions in foreign countries, in a similar logic to what occurs in the movements on ILM of
multinationals. In what concerns smaller firms, international mobility is often “external” to the firm.
Some of these firms are more committed to production (including production of software) (3 firms),
and they opt for ambitious strategies on recruitment in the national external labour market (ELM) –
leading to a systematic increase in firms’ size. In this sense, their strategies of mobility may become
similar to the larger firms. Other smaller firms are more committed to consulting (2 firms), being
more dependent on specific projects with a limited duration; they often opt for subcontracting other
firms and individuals (external consultants), avoiding the risks of excessive labour in negative cycles.
This external link frequently leads to external mobility. (More details will be given in the next
sections.)
It must be added that an important organisational development may be now developing in ICT firms,
with specific impacts in international labour mobility. This fact was related in one of our interviews
with a telecommunication firm (PT IC 11), involving changes in organisational structures and
associated mobility. The argument is that telecommunication companies are frequently based,
nowadays, in outsourcing, particularly in what concerns technical areas. These firms tend to
concentrate on its function of service providers, becoming permanently encircled by various firms in
technical areas. For example, in the case under analysis, “the firm qualifies mainly as a service
provider, which controls and guarantees quality but does not possess the technical tools”; as such,
almost all its workforce is recruited and managed in the country. The “technical tools” are available
from the firms’ suppliers (for example, equipment – mobile phones) and consulting firms (for
example, software and computer-related issues), which display frequent international circulation of
workers (many of them foreigners staying temporarily in Portugal). Therefore, regarding international
mobility, firms acting as service providers may display a markedly national labour force, whilst
30
subcontracted firms engage in the more abundant international flows of skilled labour. In the
telecommunications field and, generally, in the ICT sector, suppliers and consultants may become the
main responsible agents for attributing cosmopolitanism to the sector, engaging in international
movements to solve specific problems.
1.2. Human resources
Concerns about Human Resources (HR) issues and policies exist in the majority of the firms observed.
However, it is much clearer in large firms, either nationals or multinationals. This concern is expressed
through the existence of Human Resources Departments, specific policies of recruitment, training and
career development. Some of this large firms – many of them recent – seem to have perceived the
importance of the HR dimension only recently, with gradual autonomisation and consolidation of this
organisational dimension, either at the headquarters or the national level. Meaningfully, some of our
interviews were made with recently appointed heads of a new HR Department or organisational area.
In smaller firms, mainly nationals, the concern with HR is not so visible. Many do not present an HR
autonomous area and these questions – including recruitment – are in charge of one the top directors.
Their smaller scale and, sometimes, a higher turnover of personnel may explain this larger disregard
for HR (it was referred, for example, in one small firm: “why invest in training, if our employees leave
afterwards for larger firms?”)
Regarding multinational firms, another relevant issue is the degree of autonomy towards headquarters.
This autonomy is very large in the majority of cases. Decisions on recruitment, training and career
development seem to be taken at the national level, only following very general guidelines from
abroad. One firm was a partial exception. PT IC 7 declared to have “few autonomy” towards
headquarters concerning HR policies. However, this may correspond to the fact that the HR dimension
was priorly neglected at the world and national level, being concrete guidelines only now emerging
from abroad. The central co-ordinating role of multinationals may reside on the world or regional
headquarters (for example, in the case of a Southern Europe or Iberian division).
2. Internal labour market operations
2.1. Reasons for internal labour market movements
As expressed in chapter 2, one of the main trends detected in our survey is the predominance of
temporary over permanent international labour movements in the ICT sector. By temporary
movements are meant diverse kind of flows, which can last from one week to three years. Most of
these temporary flows occur in the framework of ILM of multinational firms – both foreign firms in
31
Portugal or Portuguese firms with activities abroad. The motives for the flows are various: training,
problem-solving and control.
Regarding foreign multinational firms, several temporary movements occur in the framework of their
ILM, mainly for motives of training and problem solving. The latter is usually related to projects: as it
was stated in one interview, “international mobility in our firm occurs based in projects and not in
countries; the expertise reported necessary to projects’ development is sought wherever it exists”.
Although traditionally the outflows of Portuguese personnel are due to reasons of training - on job or
formal training -, and the inflow of foreign personnel is due to problem solving, this trend is beginning
to change. Several situations exist were the entry of foreigners is caused by training, namely to give
training in Portugal; in this case, we are faced with de-localisation of training from the headquarters or
other subsidiaries, a cheaper option when large numbers of local trainees are involved. In other
situations, there is increasing resource to the temporary assignment of Portuguese skilled personnel to
solve problems abroad.
Most of the foreigners that come temporarily to Portugal are highly skilled. This does not mean that
they frequently assume top management functions (see chapter 2, Table 2.5, for details). They are
placed in high hierarchical ranks, mostly in the technical area, but which exclude the main decision-
making on the firms. Top management functions, including direct project management, are generally
attributed to Portuguese personnel. For example, PT IC 13, a software multinational firm, displays
almost as many temporary foreigners as permanent national personnel in their daily activities.
However, permanent national professionals manage all projects, as deliberate policy. As stated in the
interview, “in practice all foreigners report to Portuguese personnel”. The functions performed by
foreigners are varied, but mostly act as technical consultants.
Some exceptions to that hierarchical position exist, but do not conceal the rule. For example, in PT IC
12, a multinational telecommunications firm, there has been, since the firm foundation in Portugal, a
foreign cadre at the top management level (technological or financial area), as an explicit policy of the
firm (one of the 4 PEMINT firms). However, it was argued that even this situation will probably
disappear in the short-term, becoming all directors Portuguese nationals.
This trend on the hierarchical position of foreigners is in line what was said before about the main
character of the ICT multinational activities in Portugal. As they are devoted to implement products
developed elsewhere, they privilege the direct contact with clients. This requires social and linguistic
skills naturally possessed by nationals. This situation may also confirm the hypothesis advanced in the
previous chapter about the “social” nature of many ICT activities.
32
Concerning Portuguese personnel leaving temporarily in the framework of foreign firms, different
situations exist. The absolute number of flows is low (in comparison with total personnel at home), but
the variety of destinations and occupations is large. Taking only professional flows (excluding
attendance of formal training), in PT IC 1 there are Portuguese in subsidiaries in USA, France, Spain
and Ireland; in PT IC 4 the Portuguese follow for subsidiaries in Spain, UK and Portuguese-speaking
African countries (PALOP); in the case of PT IC 7, there are Portuguese in Spain, Colombia and
Brazil; in PT IC 12 some sporadic cases of Portuguese in UK, Italy and Switzerland were referred; in
PT IC 13 the Portuguese are found in subsidiaries in Belgium, USA, Switzerland and UK. The
hierarchical positions of these personnel seem to be, at most, intermediary in the host firms; and the
functions performed are varied (including software development and consulting, marketing, financial
services, etc.).
Comparing inflows of foreigners and outflows of Portuguese in foreign multinational firms, at least
two of our cases (PT IC 1 and PT IC 4) reported that they are “more importers than exporters”. This
situation, meaning that more cadres from other subsidiaries in Portugal than Portuguese cadres abroad
are to be found, may be generalised to all foreign firms under observation.
Regarding national firms (namely those with international activities), temporary movements in the
framework of international ILM are frequently related to their subsidiaries or partnerships established
with foreign firms abroad. Motives for flows are varied, including problem solving, control and
training. The rationale for moving nationals and foreigners seem now often symmetric to what was
found in foreign multinational firms. The expertise developed at home is the main reason why many
Portuguese leave for reasons of problem solving and control; whilst foreigners enter for training. The
newness or small dimension of many of these firms, compared to their foreign counterparts, may
explain some differences.
Some cases may illustrate these movements. Firm PT IC 14 has some Portuguese staff assigned for
periods of around two years in its subsidiaries in the UK and Brazil and a partner in Germany; several
short-term outflows of Portuguese personnel to these countries; and inflows for training, mainly from
Brazilian personnel. Firms PT IC 3 and PT IC 11 have shareholder positions in telecommunication
firms in foreign countries, such as Spain and Norway, in the first case, and Brazil, Angola, Botswana
and Morocco, in the second case; these links originate movements in both senses, in the framework of
professional training or formal training courses (movements to Portugal) and problem-solving
(movements to other countries). Firm PT IC 5 has partners in the Portuguese speaking African
countries (PALOP) whose mission is to commercialise software products developed in Portugal; this
partnership implies the inflow of African professionals to receive training in Portugal and the outflow
of Portuguese employees to do problem-solving, both flows lasting for few weeks in average.
33
Regarding the hierarchical position of Portuguese personnel leaving temporarily, it seems to be often
high. In firms PT IC 3 and PT IC 6 there are Portuguese, in different hierarchical levels, in subsidiaries
or firms with shareholder positions in foreign countries. This is also the case of PT IC 11, which
referred as destinations Brazil, Morocco, Botswana and Angola; the hierarchical positions occupied
are of the first and second row. In PT IC 5 Portuguese professionals move frequently to partners in
PALOP to solve technical problems. In PT IC 9, the policy is to send Portuguese personnel to manage
projects abroad while a permanent branch is not created. Whenever this occurs, the local branch tend
to be filled with local personnel; however, the policy for branches abroad always implies that a
Portuguese will fill the top management role. In PT IC 14, assignments in the UK, Brazil and Germany
are in high managerial levels – although not at the top one.
Inflows of foreigners in the internal framework of national firms are less frequent, and occur most
often for reasons of training. Several short-term movements of this kind were detected in firms with
subsidiaries, shareholder positions or partners abroad such as PT IC 3, PT IC 5 and PT IC 14. Some
movements are more complex, mainly when foreign operations become mature. For example, PT IC
14 has a software development centre in Brazil (delocalised software production). This branch has led
to a new type of movement from Brazilians to Portugal, compared to the traditional pattern of these
flows (to which we will refer later in this chapter). After a first phase of intensive training in Portugal,
some Brazilians are now coming to monitor the implementation of products developed by them in the
Portuguese market. Recently, one Brazilian was even assigned to the Portuguese headquarters to act as
a liaison between Portugal and the German operations.
The specific case of training as a cause for movements in the ILM of most of the firms observed must
be noted in detail. In almost all of the firms (except in one, the smallest of the sample – PT IC 10)
there is an important investment in training as a way of skills’ development. Whenever the firm has
international branches, it uses the advantages of scale to train personnel, either on-the-job or through
formal procedures. Many of the multinational firms, namely the largest ones, have “universities” with
its name, which take care of the training for world members. Even in one of the national firms (PT IC
5), a similar approach was detected: the firm has an “academy” that offer training in the firm’s
products, both to personnel and clients.
Besides training in foreign countries, there is emphasis in internal local training, done by the majority
of the firms. Part of this training is done outside any formal framework, since firms stimulate its
personnel to maintain a constant search for skills (in new firm’s products or others). New technologies
are increasingly used in training, mainly in large multinational firms. For instance, PT IC 13 referred
the importance of their worldwide intranet for the self-training of personnel; and PT IC 4 referred the
34
increasing role of e-learning as a training system operating at the firm world level. When there is
resource to external training – a situation common in consulting firms – it implies often subcontracting
or, alternatively, acquisition of training from large ICT players. However, this latter solution is not
always considered as appropriate; PT IC 9 referred to this type of training as too standardised or, using
its terms, as “slideware”.
Permanent movements in the framework of ILM are rare, and mostly occur by personal reasons. In
foreign multinational firms, some permanent inflows of personnel were detected, some dating from
early phases of the company in Portugal and other recent ones. A similar pattern (although always
recent) exists for the outflow of Portuguese in the framework of national firms. The cases observed
were from cadres that asked for permanence or assignment to a specific branch in the sequence of
marriage (actual or prospective). This occurred either in foreign multinational firms in Portugal or
national firms abroad. For example, many of the few foreigners found to have immigrated to Portugal
through the ILM of their firms revealed that type of motive. In PT IC 9 the assignment of a Portuguese
cadre to manage the branch in Brazil turned into a permanent flow, since he constituted family in this
country. This kind of flows, that may be generally called as heart-related movements, seem to
constitute one of the main causes of permanent attraction for foreign ICT talents to Portugal.
Finally, it must be noted that whilst the inflows of foreigners to Portugal were found in multiple
contexts - the ILM of their firms, subcontracting and external recruitment (this latter less often) -,
movements of Portuguese to foreign countries seem to occur mainly in ILM. This was found in the
framework of multinationals, either foreign or national firms.
2.2. Internal vacancy and career development systems
In practically all the firms observed, the procedure used whenever some specific skill shortage is
detected is similar. First, a search in the ILM of the local firm is done. The possibility of training
resources is pondered. Next, another search occurs at the ILM at the international level. An assessment
of the advantages and disadvantages of any of these types of ILM circulation is done, against the
alternative possibilities of subcontracting and external recruitment. No regular pattern on these issues
emerged from our survey. Everything depends on time urgency, local and international availability of
resources, type and continuity of work. Hence, all of those possibilities may occur as outcome of a
given context.
The concrete way of searching in local ILM is variable. Both general advertisements and direct
contacts with persons who fit the job or are interested on it are used. This last way of searching in local
ILM – personal contacts - seems to be the most expanded. The possibility of training internal resources
35
is admitted if there are prospects of continuity of work, and interest in pursuing it, but excluded if there
is no time available for it.
The international ILM channel is highly relevant in the case of multinationals. Search may be done by
different means. The use of Intranets seems the most relevant (PT IC 1, PT IC 8 and PT IC 13 share
information about the subsidiaries’ needs through their Intranets). Additionally, personal contacts are
used (often immediately after a prior search in the Intranet). This search usually appeals to the firm’s
centres of competence, and not to all subsidiaries abroad. An assessment is done on the costs of
bringing in personnel, compared to their potential benefits. As it is widely known, costs of
international assignments are high, particularly for the host firm (see next chapter). Whenever resource
to international ILM is promoted, this fact may be understood as a powerful mechanism for
international labour mobility, although in a temporary way.
Regarding career development, well-defined career plans exist in most of the multinationals, usually
conceived at the world level. In some of the cases, they refer the international dimension. However,
this latter seldom exists in practice. At the local level, grades and paths exists for pursuing careers,
which take into account individual capabilities, job descriptions and organisational needs. At the
international level, little evidence of this type was detected; in another words, international career
paths seem sporadic. Additionally, in many of the firms observed international mobility is not
compulsory for career advancement, although it is considered a relevant asset. Some firms declared as
world policy an investment in international mobility (this was the case of PT IC 1 and PT IC 13);
however, this policy is seldom transformed into practice. One interesting case was the one of PT IC
12, which has a specific program, common to the firm at the world level, of career development for
high potential’ young cadres. In the framework of this program, some young personnel from different
countries is selected to pursue a MBA in London, being assigned temporarily afterwards to a foreign
branch to acquire professional experience (one Portuguese cadre is currently following this scheme).
The situation in national firms is heterogeneous. In larger firms the panorama is similar to the foreign
multinational ones. The same does not occur in smaller firms, where career plans are seldom defined.
This mainly occurs in the consulting activity, which is more prone to instability and personnel turn
over. The strategy of these firms appeared twofold. In some cases, they tend to ignore the career
dimension. As was stated to us, “in the consulting activity it is not easy to offer career prospects. What
we do is to give conditions for the individuals to plan their own careers, either in our firm or in
clients”. The fact that clients usually prefer young consultants favours this option. In another cases,
firms turn more often to external uses of labour (with no career plans).
36
One of the firms surveyed (PT IC 10) constitutes a good example of this latter case, and also of the
importance of small firms and their flexible strategies in the framework of the ICT sector. Centring its
activity in large systems based in IBM technologies, this is a family firm characterised by the flexible
management of its labour force. It has a majority of “external consultants”, reporting to a minority of
permanent workers, which never manage to get a stable contract with the firm. The volume of this
external labour force is unstable, depending on the business of the firm. This strategy seems essential
to survive in a volatile market. During a crisis, as today, the firm should be suffering had it invested in
permanent contracts.
3. External recruitment and subcontracting
The sample of firms is very informative about the subcontracting chain in its different levels. Both
large subcontractors and small subcontracted firms were interviewed, and they described the main
processes followed in this area. Interestingly, the subcontracting chain does not finish with the smaller
firms, since these often subcontract individual professionals (or individuals acting as firms) to act as
external consultants.
One of the outcomes of the survey is that there is not a clear trend on subcontracting, either in favour
or against this procedure. There are firms that usually use subcontracting and others that do not use it
at all. For example, PT IC 7, a multinational software firm, draws on subcontracting in several
business areas: software, marketing, human resources, etc., arguing that it often decreases costs.
Alternatively, PT IC 5, a national software firm (a software house) does not make use of
subcontracting, but instead “it does everything”. Distinct patterns of subcontracting were seldom
detected, whatever criteria of firm classification were used: “producers” or “service providers”, “large”
or “small” firms, “foreign” or “national” ones.
Regarding the nature of subcontracted areas, there seems to be a trend to subcontract tasks that do not
remain to the core activities of the firm. On the survey, references to subcontracting were common in
areas such as wage processing, training, recruitment processes, call centres, etc. However, there were
also cases where subcontracting was related to the key activities of the firm. This link occurred most
often in a temporary basis and as a way of overcoming a short-term skill shortage - although some
“permanent” links of this kind also existed.
In synthesis, taking into account the behaviour of many of the firms surveyed, we may talk about
short-term subcontracting for highly skilled activities central to the business; and long-term
subcontracting for less skilled activities lateral to the core activities of the firm. For example, some of
the large firms surveyed make use of subcontracting to fill short-term specific needs, usually very
37
technical ones, through specialised service providers in a temporary way. In complement, they use
subcontracting as a permanent resource in less skilled activities such as call centres.
This fact, which corresponds to a majority of situations, may be related with the investment of ICT
firms in expertise. In all the firms surveyed there exist a very high percentage of individuals detaining
a tertiary education level (university education). The investment in training is also high. In another
words, the main investment is on skilled and experienced labour, leaving to a secondary plan less
skilled activities that can easily be subcontracted. However, some situations exist where high level
subcontracting also occurs.
Taking into account subcontracting in core business areas, different situations were detected during the
survey. The rationale for subcontracting exists in different situations. First (the most common
situation), when human resources are not available both in the ILM and the external one. Professionals
in the firm may be not immediately available for a job or may not exist in the firm, being impracticable
the resource to ILM. The alternative of external recruitment may be excluded since human resources
are rare, or too expensive to recruit, in the external labour market. Second, when a perspective of cost
containment is dominant, and subcontracting is a cheaper option than training internal resources or
recruiting new ones. Third, in case of urgency of product development or service providing (this was
the case of the development of UMTS technology in two of the telecommunication firms surveyed).
Fourth, when the firm tends to abandon certain technologies considered outdated, concentrating its
efforts in the development of new ones; in this case, it subcontracts to maintain support to clients of
the former technology. Fifth, when the firms’ strategy is not to develop an own product (and hence a
particular expertise), but to provide services; here, subcontracting is used as a flexible tool, useful to
adapt to variable business cycles. Causes for subcontracting have varied in time and vary with firms.
During the survey, cases of systematic subcontracting were mostly observed in the some situations,
only partially leading to international mobility of labour. The first was a short-term context, caused by
the sector’s boom in the country and a correspondent skill shortage. Many of the firms surveyed
confirmed that during the boom of the ICT sector in Portugal, in the late 1990s, subcontracting
registered a considerable growth. The main reason for this was that a skills shortage was detected in
the national labour market, reflected either in absolute shortage or excessive costs to recruit (and
maintain) the existing staff. Subcontracting was a strategy to fulfil specific labour needs – in the same
sense as circulation in the ILM, from foreign branches, served the same role. Processes of
subcontracting led to labour movements either in a national (frequently local) and international
dimension, since both national and foreign firms were involved. With the sector’s economic downturn,
a decrease in subcontracting was verified.
38
During the boom, a particular international link on subcontracting was developed. A labour flow with
Brazil was then started, which nowadays maintains a significant expression. It was mainly the activity
of firms such as PT IC 2 and PT IC 10 that led to this flow. These firms act as consulting ones (ICT
business services), often acting as subcontracted of large players, such as PT IC 1, a multinational
hardware and software firm. Since the beginning of the 1990s, those firms started to recruit personnel
from Brazil, often in a subcontracting basis. The business areas they intended to develop were based in
a specific technology, namely large systems based in IBM software, which was badly known in
Portugal (see chapter 2). Since Brazil presented abundance of these specific IBM skills, these firms
(and similar ones) became largely responsible for the inflow of Brazilian professionals to the country.
The volume of flows attained in this period was large. In PT IC 2 there were years where the ratio
between Brazilians and nationals was 140 to 10; in PT IC 10 the absolute number of Brazilians
reached a peak of 60 (against 33/34 permanent nationals) in 1999.
The relevant point in this flow is that most of these Brazilians were either temporarily recruited (see
next section) or subcontracted. Mainly in the case of PT IC 10, they often acted as subcontracted
professionals or even subcontracted (individual) firms, being presented as “external consultants” of the
firm. Since these national firms were themselves subcontracted, it follows that a large international
chain of subcontracting united (and still unites) these two continents.
Recently, both PT IC 2 and PT IC 10 have opened small branches in Brazil, namely in Rio de Janeiro.
These branches serve mainly the purpose of recruiting personnel to Portugal. In some cases, the formal
procedure of subcontracting the Brazilian branch seems also to occur, in order to facilitate the
bureaucratic process of migration. Even if the reasons for the sector’s boom (including the millennium
bug and the Euro) have faded and the specific IBM technologies are becoming relatively less
important, this link is still active in the firms observed.
A situation parallel to subcontracting, although a very specific one, was detected, without involving
international mobility (for this reason, details were not asked in the interviews). It occurs with the
large software producers observed in the survey (for example, PT IC 4 and PT IC 7). Due to the
extensive use of their products, they are incapable of implementing and monitoring the use of their
products in every firm. They do not face as a strategy to recruit personnel to face this growth (probably
because the main firm’s strategy is product development, not so much consulting). As a result, they
opt for the system of “partnerships” to carry this work. These “partners”, usually local small firms,
acting as ICT consultants and specialised in those products, function as permanent collaborators of the
large firm. This form of subcontracting almost turns to a situation of “quasi-firms” (known from
organisational studies as a form of business groups).
39
4. External recruitment
4.1. Reasons for international movements
The main reason for external recruitment is the shortage of specific skills, or the need of additional
skills, in the firm. This decision is pondered against the alternative possibilities of ILM movements,
additional training and subcontracting. The precise outcome of a given decision depends on the firm
and the business context. The main evidence detected in this field was related to the economic cycle.
During the boom of the ICT sector, most of the firms observed grew rapidly, in the sequence of
increased recruitment. In the last few years this trend vanished. Currently, few are the recruitment
being made. As it was once expressed in an interview, “now we must think carefully before
recruiting”.
Regarding the international dimension of external recruitment, our survey concluded that currently
there is no active search for foreign workers in most of the firms observed. This conclusion is certainly
biased by the economic context. During the boom some initiatives of international recruitment existed
or, at least, have been considered. In fact, during the period of strongest growth of the ICT sector in
Portugal, since the late 1990s until recently (roughly 2002), a skills shortage occurred in the national
labour market, which led some firms to face the hypothesis of recruitment in the international labour
market. Whilst some firms succeeded in this approach, others were inhibited to do so due to various
sorts of difficulties.
The main cases were international external recruitment was made were in some small national firms
whose strategy have been the recruitment of workers or external consultants in Brazil. Firms PT IC 2,
PT IC 9 and PT IC 10 recruited in Brazil mainly in the late 1990s (in the case of PT IC 10 since the
early 1990s), reacting to skills shortages at home. Many of the Brazilians were recruited in a
temporary or subcontracted model (see last section), a reason why most of them returned subsequently
to Brazil. In the case of PT IC 2 and PT IC 10, recruitment had to do with the knowledge of IBM
technologies on the part of Brazilians, compared to insufficiency in Portugal. As stated above, this
technological niche is currently fading, since these technologies are relatively less used and new
software languages are increasingly known by national graduates (Microsoft and SAP, for example).
Other national firms faced the possibility of international external recruitment but they did not
proceed. Firms PT IC 3 and PT IC 11, both large national telecommunication companies, declared to
have faced the hypothesis of recruitment in foreign countries some years ago, around 2000, due to
skills shortages in the national labour market. However, this hypothesis was not led to practice. Firm
PT IC 3 tried recruitment in Eastern European countries and in India, in technological areas such as
40
billing and CRM (areas in which countries like Poland, Belarus and India are very competitive). This
search was not achieved due to the various difficulties inherent to a recruitment process: delays in the
concessions of tourist visas and high costs of travel to Portugal to do job interviews. Firm PT IC 11
considered the hypothesis of recruiting software specialists and telecommunication engineers in Brazil,
Morocco and Poland, usually with a short-term perspective aiming to solve temporary labour needs.
However, after weighing up costs and benefits, it concluded by the unfeasibility of the strategy. The
main rationale was either that the wages would be superior to the national average or the cost with
travel would be excessive. Specifically, in the case of Poland the language barrier would be erected; in
the case of Morocco there was no abundant offer of software specialists and telecommunication
engineers; in the case of Brazil the costs with wages would be unbearable, since this type of
professionals in Brazil have far superior wages than their counterparts in Portugal (what results from
the Brazilian legal framework, where the lack of social guarantees in work is compensated with higher
wages).
During the survey, whenever the possibility of international external recruitment was faced, the
interviewees expressed a systematic preference by national labour force. For example, PT IC 12, a
multinational telecommunication firm, declared that “whenever a need for recruitment exists, we
always prefer national labour force”. And if some years ago, with the boom in the ICT sector, the
national labour market could not correspond to the demand by firms, currently this shortage of national
expertise seldom occurs.
A direct outcome of this “resistance” to international labour market is a major national component of
labour force and, sometimes, even a regional one. National ICT professionals predominate, as already
seen, in almost all the firms observed. In some firms in the North of the country – namely PT IC 5 and
PT IC 14 – a regional picture occurs. Both recruit mostly in universities in the North of the country,
particularly in the ones nearer to its headquarters. The low professional mobility between the major
business locations in Portugal – particularly Lisbon and Oporto – explains this geographical rigidity.
Although the national labour market corresponds currently to demand, its self-sufficiency cannot be
asserted, since a wide array of technologies may or will not be handled in Portugal. In this respect, few
firms declared to face skill shortages in their daily activities. This was mainly the case of PT IC 3, a
national telecommunication firm, and PT IC 7, a multinational software firm, who admitted shortages
in specific technical areas (for example, in the case of PT IC 3, the area of billing) . Other firms
admitted the possibility of facing shortages in the future, and searching the correspondent expertise
wherever they exist. For example, firm PT IC 2, a national software consulting firm, is trying to turn to
military business areas, which are not well developed in Portugal; if it will not find the skills in need, it
admits the possibility of recruiting in France (the country where a partnership is already established).
41
4.2. Forms of external recruitment
Regarding recruitment processes, one trend must be stressed: the increasing relevance of Internet.
Almost all firms surveyed declared to have placed advertisements in recruitment specialised sites
(mainly foreign entities with a national site – for example, Stepstone), besides referring the use of their
own sites on the Internet as recruitment channels. In this latter case, both the roles of voluntary
applications and job advertisements have been stated. Other recruitment channels, of a more traditional
type, were referred. This was the case of advertisements in newspapers (more specifically in Expresso,
a widely used weekly newspaper for job search of cadres) and direct contact with universities, for
recruiting in recent young graduates. Some firms mentioned “personal references” as an important
channel. Firms PT IC 9 and PT IC 13, both a national and multinational software firms, admitted that
most of the recruitment follows the way of personal networks.
Specialised recruitment firms did not appear as a regular pattern. There were some cases of this type,
but under variable circumstances. For example, PT IC 13, a multinational software firm, makes use of
recruitment firms only when there is urgency in recruitment, since these firms possess their own data
bases of potential applicants. Firm PT IC 8, a large ICT player, makes use of these firms only for pre-
selection of candidates (final decisions are taken in the firm). Firms PT IC 1, 3, 6 and 14, from
different nationalities and sectors, draw on headhunting firms to recruit top managers. Regarding
lower skilled levels, firm PT IC 3, a national telecommunications firm, uses temporary labour firms to
recruit personnel for call centres.
Firm PT IC 5 declared a different approach in function of the recruitment level. For top management
or highly skilled technical functions, such as a software engineer, it aims to recruit from the whole
national labour market, placing advertisements in a national newspaper and in its own site in the
Internet. However, for low skilled functions, such as a clerical employee, it recruits in its own region,
placing advertisements in a regional newspaper.
The specific case of recruitment of young graduates was referred more than once. Some firms are keen
on this type of recruitment, establishing direct contact with universities with ICT degrees. This contact
is mainly done by direct search in the universities (the case of firms PT IC 6 and 14 and, in an earlier
phase, PT IC 5 and 9); and by specific programs of professional training for graduates (the case of PT
IC 7). In this latter case, it was stated that the rationale beneath the programs was to have “ten persons
with the cost of one”. However, other firms refer to this recruitment as a risky investment, since young
graduates must be trained, incurring in high costs for the firm, and its continuity in the firm is not
guaranteed. This problem was admitted by firms PT IC 2 and 10, national consulting firms which work
42
frequently with IBM technologies (requiring specific additional training for Portuguese graduates), but
also by PT IC 13, a multinational software firm.
Regarding recruitment at the international level, no much evidence was gathered since this process is
rarely put in practice. However, in some cases it was relevant. Firms PT IC 3 and 4, a national
telecommunication and a multinational software firms, admitted to have received applications from
foreign countries through its web site and a recruitment specialised site. Firms PT IC 7 and 11, also a
multinational software and a national telecommunication firms, declared receiving periodically
voluntary applications from foreign countries, but not specifically through the web.
Recruitment in Brazil was described with more detail, since most of the external inflows have this
origin. Both firms PT IC 2 and 10, which have recruited often in this country (see last sections),
possess offices in Rio de Janeiro whose main function is precisely the selection and recruitment of
Brazilian professionals. In the case of PT IC 2, before the office was opened selection and recruitment
of Brazilians were made through partners in the ICT area, acting in the regions of São Paulo, Rio de
Janeiro and Nordeste (Fortaleza and Salvador). The national firm adequately rewarded this co-
operation. The case of PT IC 10 is a similar one, since it subcontracted Brazilian firms for selection
and recruitment of Brazilian professionals. Due to the bureaucratic problems of legalisation that
always occurred, the firm opened the office in Rio de Janeiro, whose function, besides selection and
recruitment, is to deal with all legal aspects involved in the movements of Brazilians (through contact
with the Portuguese embassy and consulates in Brazil).
43
Chapter 4 - Mobility constraints and PEMINT variables
1. Mobility constraints
1.1. Labour costs
One of the main obstacles to mobility within the European Union (EU) is the disparity of pay between
Portugal and other EU countries. This limits not only the flow of foreigners to Portugal but also the
emigration of Portuguese citizens. Generally, one might say that higher wages paid in other EU
countries represent an obstacle to the entrance of aliens in Portugal, because they must be paid in
Portuguese firms’ terms; on the other hand, the lower wages paid by Portuguese firms do not
encourage the migration of Portuguese workers to countries with higher living standards.
These obstacles must be differentiated according to the type of movement. Regarding temporary
movements in the ILM of multinational firms (foreign or Portuguese), it is added to the labour costs of
the home country a specific mobility package (see next section), since the employee remains
contractually linked to the home country. International assignments and expatriations always involve
high costs. Regarding permanent movements, the differential in labour costs appears in a stricter way.
Considering temporary ILM movements, trends depend on the companies being foreign multinationals
or national. Concerning multinational companies, foreigners in Portugal are paid according to the
conditions of their branch of origin and the Portuguese abroad are paid according to the conditions in
the Portuguese branch. Consequently, foreign workers in Portugal represent a huge charge to the
Portuguese branch; and Portuguese workers are not kin to leave because they will work with
colleagues of other branches who receive higher wages.
For example, regarding foreign workers in Portugal, firm PT IC 12, a multinational
telecommunications company, says that the expatriates keep the link with the country of origin, that
leading to higher costs to the host employer and making the Portuguese firm prefer national workers.
Also, firm PT IC 3, a national telecommunications firm with shares in companies of Spain and
Norway, refers that costs related to temporary assignments of Spanish and Norwegians in Portugal are
very high: further to the housing costs, they are paid according to conditions in their countries (this
would mean high costs for the holding company in case of long-term expatriation).
According to firm PT IC 13, a multinational software firm, one of the main obstacles to mobility is the
fact that foreign workers correspond to high costs, not only due to travel and families, but also because
44
they are recruited in the terms of its original branches. In the firm’s case, the Portuguese branch must
pay a special fee for each of these assignments, in order to support those costs and the “mobility
package”. Still according to this firm, it is more advantageous to develop internal competencies in the
Portuguese branch, than to remain dependent from resources in other branches.
Still in firm PT IC 13, pay gap has been a barrier to permanent integration of foreign workers in
Portugal and of Portuguese workers coming from other branches, due to difficulties in the negotiation
of work conditions (compromises were made not to “distort the situation of the firm in Portugal”).
Regarding Portuguese workers abroad, firm PT IC 7, a multinational software company, points out the
lack of motivation to leave, particularly when assignments are towards branches where the Portuguese
have to work with people earning higher pay. This firm gives the example of two Portuguese that
where supposed to go to India in 2001 but did not go because they would work with people of other
branches that were better paid.
Still in the case of Portuguese abroad, firm PT IC 9 says that “the assignment of people is very
expensive”, as these flows result in high costs (related to high incentives and other benefits).
Considering permanent movements in the international external labour market, obstacles to mobility
remain. As for the inflow of foreigners to Portugal, according to firm PT IC 11, obstacles to movement
in EU derive from pay gap, as in Portugal pay level is lower, thus being a little attractive country. Firm
PT IC 5 (which does not recruit from abroad), considering the case of recruiting in other EU countries,
says it does not know "whether we have in Portugal sufficiently competitive salaries". For example, it
is interesting to see the case of firm PT IC 2 on disparities of pay between Portugal and France: it is
easy to move Portuguese to France, but not vice versa; and this because labour costs are higher in
France than in Portugal.
According to firm PT IC 6, the levelling of pay across the EU would be a facilitator of mobility in EU.
1.2. Legal framework for migration
Bureaucracy related to work permits is another obstacle to international mobility cited in the survey;
on this point, the situation is comparatively better within EU. Firm PT IC 4, a multinational software
company, says that work permits, stay permits and residence authorizations “are cumbersome and
demotivating”. However, this situation applies mainly to non-EU workers, since it is them that need
most of those permits. According to firm PT IC 13, another multinational software company, “it is a
relief to know that the consultant coming to Portugal is English and not American”. In this context,
45
this firm argues that “the EU is mainly advantageous in terms of procedures”. This is confirmed by
firm PT IC 5, a national software company, by saying that the recruitment of a German worker was no
problematic at all (no bureaucracy); the “overload of work” comes only when recruiting from non-EU
countries. One may say, as mentioned by firm PT IC 2, that EU regulations facilitate mobility; but that
is not the case in mobility to or from non-EU countries.
Firms PT IC 2 and 10, employing Brazilian professionals, also refer to bureaucracy arising from
legalisation of foreign workers in Portugal. According to firm PT IC 10, legislation is ambiguous and
the double taxation convention can be source of confusion (some of these workers are considered as
resident in Brazil and not in Portugal). Another problem is the amount of documents needed for
legalisation (e.g.: a residence visa requires a contract of employment, which the firm refuses to hand
over, and a certificate from the Parish Board). To deal with this hurdle the firm opts for work visas (up
to 2 years), easier to obtain due to the existence of a branch office in Brazil: legalisation of the
Brazilian workers is made on the basis of a contract between the Brazil office and the head office,
which means work visas instead of residence authorizations in Portugal. To meet these problems, this
firm says there should be an "experience" period: Brazilian workers would work for some months, but
they should be legalized only if the stay was longer.
Firm PT IC 5 still mentions another example of bureaucracy related to work contracts with foreigners:
the problem occurs since the contract must be handed over to the IDICT (in Portuguese and in the
language of the person to be employed, which puts difficulties in the case of people from Poland or
Slovenia, but not from Brazil…) 30 days in advance, to be afterwards approved, thus delaying the
contracting. Still, according to this firm, workers from non-EU countries "easier" for firms are those
coming from Brazil and PALOP (African speaking Portuguese countries), as there is less bureaucracy
and work environments are similar in those countries and Portugal.
As for Portuguese workers abroad, bureaucracy is mentioned by firm PT IC 3 only. It mentions the
example of the delay in issuing the "green card" to Portuguese professionals in Spain.
Regarding the qualifications compatibility (including diploma recognition), most of the firms state that
this is not an obstacle to mobility. In accordance with firm PT IC 3, it currently exists a great
compatibility between the know-how of the Portuguese professionals and of those from other EU
countries. It is referred by some of the firms that the Portuguese universities have courses as good as
those from other countries. This may be related to the fact that many qualifications in the ICT sector
do not require diplomas or authorizations from a professional board, as it is, for example, the case for
doctors (the main exception being the one of engineers).
46
1.3. Fiscal and social security systems
Fiscal systems and social security regimes in different EU countries, which lie at the heart of what has
been called PEMINT variables, did not turn up as relevant obstacles to international mobility. Almost
all firms declared that this is a minor question. For example, firm PT IC 14, a national software firm,
considered it a “small administrative problem”, that does not hinder mobility. In this firm, the
assignment of Portuguese professionals to the UK branch did create some bureaucratic problems,
concerning the payment of social security in Portugal; however, it was not due to these motives that
the assignments were concealed.
Some firms described some problems related to differences in fiscal and social security regimes. It was
the case of PT IC 13, a multinational software firm, that admitted a higher cost with foreign workers
since it was necessary to subcontract a firm to deal with those issues. Also PT IC 3, a national
telecommunication firm, referred problems with the understanding of the Spanish fiscal system on the
part of assigned Portuguese professionals (since it is difficult to get information about the system,
workers ignore if their income will be damaged or not), besides problems with job insurance of
Norwegians assignees in Portugal (despite Norway is not a EU member, difficulties in getting
contracts with Portuguese insurance firms, due to administrative and formal reasons, were described).
However, this type of problems does not seem to constitute real obstacles to mobility on the EU. Still
following the comments of PT IC 3, this may occur since this mobility mainly involve young
personnel, that face international assignments as enriching job experiences, besides being temporary
ones. This firm bases this argument on its own experience with young Portuguese expatriates in Spain
(mostly in the age group 25-35). Despite higher fiscal constraints and higher contributions to social
security, mobility of these workers is not affected.
One interesting, although isolated case still emerged in the survey. Different fiscal systems and social
security regimes in the EU, more than an obstacle, can even reveal themselves as an asset for mobility.
Firm PT IC 9 admitted in this respect that national differences might become beneficial. The example
of a Spanish firm operating in Portugal, as ICT service provider in the banking sector, was given
(although as an exterior case to the firm in question). The Spanish firm employs Portuguese
professionals, who never left Portugal, but that are legally considered as Spanish workers. They work
in Portugal but with a Spanish contract; hence, their fiscal payments and social security deductions are
directed to Spain. The fact that they are paid with the Spanish minimum wage, to which it is added a
considerable amount of tax-exempt financial benefits, turns this a cheaper option than the usual
contracts.
47
Although this type of variables – fiscal and social security regimes – have not turned to be determinant
for mobility, and the differences between EU countries can become advantageous in some situations,
the case for harmonisation was once mentioned. Firm PT IC 7, a multinational software firm, admitted
that a mobility police in the EU would be welcome. This could harmonise taxes and deductions in
different countries, although maintaining some of the countries’ specificity.
Concerning fiscal issues outside of the EU realm, some obstacles were still cited in the interviews.
Firms PT IC 10 and 11, both national ICT firms operating in foreign countries – particularly Brazil -,
referred the problem of double taxation as a relevant obstacle to mobility.
1.4. Social and cultural constraints
One of the main conclusions of this survey is that the major obstacles to international mobility in the
ICT sector are from a social a cultural nature. Factors such as language and social networks of support
were cited as the main barriers to inflows and outflows of foreign and Portuguese professionals.
Almost all firms referred the issue of language as the main obstacle to mobility. This problem is
always derived from the necessity of contacting the clients. As firm PT IC 10, a national software
consultant firm, put it, “it is not possible to force the client to speak English”. On this point, the only
exception to the rule was the one of PT IC 13, a multinational software firm, where language is not
faced as an obstacle to mobility. The firm’s clients do not have problems to deal with foreign
consultants, because all them speak English; instead, clients consider the fact that the firm often brings
American and English specialists to do presentations or co-operate in projects “an asset”. Maybe this
results from the fact that banking and insurance, the activities supported by this firm, are more prone
to the English language. Since all foreign specialists in the firm report, as mentioned above, to
Portuguese personnel, the “local” component does not become irrelevant.
Some cases are illustrative of the linguistic barrier. Firms PT IC 2 and 14, both national software
firms, referred the issue of language as very relevant in the specific cases of their business relations
with France (firm PT IC 2) and Germany (firm PT IC 14). According to the first firm, the case of
France is peculiar since this country does not accept those who are not French speakers, being less
receptive to foreign professionals than countries that adopt English more often. Contacts with
Germany became difficult also due to linguistic barriers. Meaningfully, a partnership, instead of a
branch, was chosen in this country “due to language”; and the professionals assigned from PT IC 14 to
its German branch are German speakers.
48
Domain of the Portuguese language was often considered as an advantage in the recruitment process.
This was the case even in large multinational software firms: both PT IC 4 and 7, an American and a
European firm, admitted that advantage, although the firm’s products are basically available in
English. By this reason, according to firm PT IC 4, if there are no difficulties of recruiting in the
national labour market and if human resources display the same capacities, Portuguese professionals
are always preferred.
Other firms testified the importance of language as a preferential criterion on recruitment. It was the
case of PT IC 9, a national software firm. This prefers the national labour market for recruitment,
being the only exception two Brazilians recruited abroad. Although with the firm’s expansion the
recruitment of other foreign personnel was justifiable, particularly Spaniards, that has not occurred
because the issue of language is very relevant; according to the interviewee, “it is demanded that the
firm’s personnel add to the technical skills the linguistic skills”. Firm PT IC 3, a national
telecommunication firm, recruited (through its ILM) some Spanish professionals; these worked in the
area of “tests”, in which contact with clients is needed, requiring ability in the Portuguese language.
Since Portuguese and Spanish are relatively similar languages, this flaw was amended in an acceptable
way.
Besides linguistic problems, large part of the firms reported cultural problems concerning the inflows
of foreigners to Portugal. For example, firm PT IC 14 admitted cultural adjustment problems between
Portuguese and foreign cadres, namely in what concerns work habits. Firm PT IC 10 reported
problems resulting from the different “way of being” of Brazilians. Firm PT IC 6 referred the
“overload of work” resulting from a foreign presence, since this will lead to a difficult process of
integration in the country. Firm PT IC 5 declared that, if it would face the hypothesis of recruiting
abroad, it will never recruit Indian professionals, due to the cultural shock that could emerge.
All this evidence is in line with the hypothesis advanced above about the “social nature” of many ICT
skills. Indeed, we must refer the different layers of ICT occupations, being the upper one the most
embedded in the national cultural environment. At the most, migrations would occur at the lowest
level, the one of software programmers. However, even production of software does not seem prone to
receive foreigners. In our survey, some firms producing software were found, either national (for
example, PT IC 5) or big multinational ones (for example, PT IC 8), and none counted foreigners in
this area. At the contrary, most of foreign flows were found at the consultant firms’ level, either
multiple nationalities in the framework of ILM, usually reporting to Portuguese local cadres, or
(Portuguese-speaking) Brazilians. (Even the only case of delocalisation of software production found
in the survey - firm PT IC 14 - was done in Brazil.)
49
Regarding the outflow of Portuguese professionals to foreign countries, one of the most cited obstacles
is the force of social networks at home. In another words, according to a large part of the firms,
Portuguese are not keen to leave to foreign countries due to family and friendship links maintained in
Portugal. Family, girlfriends/boyfriends, and friends are the main reasons invoked by cadres to refuse
missions abroad. According to PT IC 12, a multinational telecommunication firm, in Portugal, such as
in other Southern European countries, the stronger links to family inhibit mobility; this evidence was
also reported in other Southern European operations of the firm. This firm also reported other factors
as barriers to mobility of Portuguese professionals, including the combined link to nuclear and
extended family (such as grandparents), higher female activity rates and the housing property regime.
PT IC 6, a national telecommunications firm, expressed another example of resistance of Portuguese
cadres to foreign missions. According to it, “there exist a cultural attitude in Portugal that dislikes
departures to foreign countries”. The need to find more concrete factors for inertia emerges from this
remark; the dimension of the Portuguese diaspora suggests that resistance is from a different nature.
A more pertinent factor was still advanced by PT IC 6. The negative attitude towards leaving may be
related, among other factors, to the concern manifested by cadres with “what will occur when they get
back”, i.e., what will be their future after returning. This concern is typical from organisational
contexts were leaving may mean distancing from local networks of influence and power. The
argument was still more specific, since it referred to the current context of firm’s volatility, due to
rapid technological and organisational changes. Firm PT IC 14 expressed a similar opinion, according
to which permanent (or long-term) mobility is difficult for Portuguese professionals. Their main
objective “is not to loose rights when they return to Portugal”.
Several firms admitted that resistance to mobility is lower among young personnel. These seem to be
more receptive to foreign work experiences, either because they have most of the career in face of
them, or because they have not yet constituted family. The only exception to this point was firm PT IC
9, that declared to have faced severe difficulties to assign young cadres to Brazil and Spain. According
to the interviewee, there seems to exist a “generation effect”, since the older generation (the one of the
firm’s founders) was more prone to international mobility than the current younger generation. For
example, it was admitted that it was easier to assign people to Brazil and Morocco, in the older
generation, than currently to Spain, despite this is closer and belonging to the EU.
However, if there are social and cultural resistances on the part of Portuguese to leave, so resistances
have been met on the part of foreign countries that received them. For example, firm PT IC 9 referred
its experience with the “superiority complex” of Spaniards and Brazilians: in a project in Spain, the
animosity of Spaniards toward Portuguese professionals was only “more or less” overcome three
50
months after the launching; in a project in Brazil, Brazilians resisted to the inflow of Portuguese, only
having accepted them after having (informally) recognised their expertise. Firm PT IC 14 cited other
type of resistance, from a commercial more than a cultural nature, on the part of Spain and France. It
adds that Spaniards do not face willingly the inflow of Portuguese, even when they are integrated in
larger teams under the co-ordination of international consultant firms.
Finally, it may be added that this type of prejudgements also exists in Portugal. According to firm PT
IC 7, a multinational software firm, there is a sort of non-acceptance of mobility, which is expressed in
the phrase “what does he/she want to do outside that he/she cannot do here?” This firm – a large ICT
multinational player - cited the example of a Portuguese cadre that changed to Spain, becoming “badly
looked” by his former colleagues.
2. Mobility package
A “mobility package” for international mobility exists in almost all the firms surveyed, although with
different degrees of formalisation. Generally, this package implies wage increases and financial
support at the level of travel of housing. It may also include tax-exempt payments (ajudas de custo)
and financial support at the level of sustenance. The high costs incurred by these packages are well
known. For example, regarding wage increases, firm PT IC 6 declared that internationally assigned
managers duplicate their wage, whilst other professionals augment it between 30 to 40 per cent.
As stated in chapter 3, assignments in foreign countries may also lead to a more rapid career
progression. Firm PT IC 9 constitutes an example: professionals who leave to foreign countries may
ascend two grades in the same year in the consulting career. These career progressions imply an
increase in wages that may duplicate the original level, besides a set of benefits including car and a
mobile phone’ credit.
In this respect, it must be noted that some firms distinguish between short-term and long-term
assignments. This was expressed by firm PT IC 8, a national telecommunication firm with several
activities abroad. For the short-term movements there is no “mobility package”, whilst for the long-
term ones there exists a set of incentives, including wage increases.
The resistance of personnel to move abroad may be related to the scarcity or non-existence of
attractive mobility packages. For example, firm PT IC 14 declared not to face currently many
difficulties to move its personnel abroad. This was related to the availability of an attractive package –
bit also, as admitted in the interviewee, pressure on the part of the firm for its employees’ mobility.
51
Regarding integration of foreign employees and their families in Portugal, this seems not to constitute
a specific policy on most of the firms surveyed. However, in some cases this policy exists. Firm PT IC
4, a multinational software firm, grants all the necessary support to the integration in Portugal of
foreign workers and their families, by means of its HR department. Also PT IC 3 gives support, at the
level of housing search and helping the spouse’ job search. Smaller firms like PT IC 10, a national
software consultant with a vast experience of Brazilian inflows, declared not to assist the integration of
foreign workers and their families, leaving that support to the informal networks of Brazilians already
established in the country.
52
Conclusion
The ICT sector in Portugal expanded considerably over the 1990’s, especially towards the end of the
decade, due to work associated with the millennium bug and the advent of the Euro. The sector’s
growth was impressive, either at the level of business volume, number of firms and number of
employees. Labour recruitment in this period was high, and the market had some difficulties on
meeting demand. Since recently, the world problems of the sector joined the end of the short-term
motives for growth, and the dynamics of the sector became weaker.
The sample of ICT firms observed in this survey is a broad one, comprising several categories of
firms. 14 ICT firms were interviewed, both multinational and domestic companies, large and small,
subcontractors and subcontracted. The three sub-sectors under observation in PEMINT were included:
hardware (the smaller fraction), software (both software producers and consulting firms) and
telecommunication.
One of the main trends detected in the survey, which reflects a low international mobility, is a largely
predominant national labour force in the ICT firms. This occurs in all types of companies, even
considering the national ownership criteria. Both domestic and foreign multinational firms satisfy that
condition. In the case of multinationals, the national pattern may be explained by the fact that they act,
in almost all cases, as marketing subsidiaries, giving rise to a preference for recruiting Portuguese
nationals. However, this fact does not preclude significant international temporary flows in the
framework of internal labour markets.
A related finding is that there is almost no internal recruitment of foreigners in the external labour
market, except for Brazilians. Particularly during the 1990’s boom, several firms recruited Brazilians,
either as permanent or (mostly) temporary workers, or in the framework of complex subcontracting
chains. Most of these Brazilians were recruited to meet specific labour shortages related to IBM
technology. Still during the boom, some firms also considered the possibility of recruiting abroad;
however, for several reasons, only a small number actually did so. At present, firms report that they
supply matches demand in the national labour market.
In synthesis, the trends on international mobility that emerged from the interviews are mainly
temporary in nature. More specifically, we may say that it is possible to identify three types of
movement:
1. temporary movements within the internal labour market of multinationals and domestic firms with
activities abroad - the most frequent flows;
53
2. the entry of Brazilians, mostly on a temporary basis or in the framework of subcontracting, to meet
specific labour needs;
3. lastly, a few permanent movements resulting from personal reasons - the least frequent flows.
The internal labour market of multinationals and domestic firms with activities abroad is thus the
major driving force behind international mobility. Specific moments of strong sector’s expansion and
specific labour shortages – which seem declining - proved to be the main exception to the rule of low
international recruitment in external labour markets.
These trends may be related with a significant social embeddedness of the ICT sector. The importance
of language and cultural skills constitutes a strong explanation for the national component of ICT
specialists – and may also explain the preference for (Portuguese-speaking) Brazilians.
The finding that the obstacles to mobility are predominantly social and cultural is related with the
former argument. That is to say, factors such as language, work habits, friends and family hamper
mobility. Other obstacles were met, including wage disparities between EU countries and the
bureaucracy involved in obtaining work permits for non-EU citizens. All in all, we concluded that the
PEMINT variables did not constitute obstacles to mobility within the EU.
54
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