Pandemic, Inflation, War: How The Job Market Has Changed In The Czech Republic
The survey was conducted by the Grafton Recruitment agency, which tracked the current financial valuation of hundreds of job positions in nine sectors and 13 regions. Photo Credit: Freepik.
Czech Republic, 10 Sept. (BD) – Although employers in all sectors are trying to increase the salaries of their employees, the increases will not be able to cover the full extent of inflation. The promising economic performance at the beginning of the year was interrupted by the war in Ukraine, which disrupted supply chains, drove up energy prices and caused even more dramatic labour shortages, often forcing companies to reduce operations. A decline in the standard of living of Czech employees can therefore be expected, resulting in lower spending on goods and services.
“The labour market in the Czech Republic is facing uncertainties this year, caused by both the unresolved pandemic crisis and the war unleashed by Russia against Ukraine. While the labour market has learned to live with the pandemic in many areas, the state of war has not allowed it to develop as originally planned,” said Martin Malo, director of Grafton Recruitment and Gi Group. “If we take into account the rate of inflation, current and expected trends in commodity prices, the energy crisis, disrupted supply chains, the development of the Czech koruna against the euro and the absence of a skilled workforce, and add the incalculable uncertainty of the future, it is clear that many employers, even if they would like to, are unable to give employees wage increases to cover inflation and meet expectations.”
Manufacturing and construction companies are the hardest hit by the situation. In addition to having to cope with rising prices for components and materials, they are more than ever short of skilled labour, despite the large influx of refugees from war-threatened areas. “The Czech government is surprisingly passive in this area and is waiting for developments in Ukraine and probably the results of local elections,” said Malo. “With this approach, we are losing any competitive advantage vis-à-vis neighbouring countries, including Poland, which has understood very well that in order to grow the economy, it is necessary to ensure a sufficient number of qualified candidates and thus change the rules of economic migration.”
Despite the current economic problems, some industries are growing and increasing monetary benefits for their employees in addition to wages. Besides traditional bonuses or gratuities, there is also the benefit of an annual salary adjustment in line with current inflation, especially in the IT and business services sectors. The shortage of personnel also gives Czech employees security that they will not have to worry about their jobs in the future. Unemployment is expected to fluctuate between 2.7% and 3.3% in the following period, but only if the darker scenario of an energy crisis does not occur.
The demand for labour in the manufacturing sector continues to far exceed the available pool of candidates. Companies are most interested in welders, CNC machinists, electrical engineers, designers and production technicians, but are also increasingly looking for quality workers. This shortage is exacerbated by the outflow of experienced Ukrainian workers who have returned to their home country. Production plants are also affected by the persistent shortage of chips and other components, which has paralysed the automotive industry and associated machinery production in particular.
Even though new construction projects are being held back by rising energy and building material prices, rising mortgage rates and inflation, the demand for construction workers continues to grow. The labour market is particularly lacking in skilled blue-collar occupations, particularly bricklayers and carpenters. Labour costs are rising and wages in the construction sector have risen across the board.
The sales and marketing sector continues to see an increase in demand, particularly for e-commerce and performance marketing personnel. Most in demand are business analysts, PPC specialists and, in general, employees who know how to work with data, read trends and monitor customer experience. There is also an increase in demand in the field of content creation for the web and social networks, so content specialists and copywriters are more in demand than ever. In particular, companies outside the high-turnover consumer goods sector are expanding their marketing teams, especially investment or development companies, banks and insurance companies. In terms of business, the biggest expansion is in e-commerce and services.
In purchasing, on the other hand, the demand for personnel remains low even after the pandemic. This is mainly due to increased automation and reorganisation of purchasing teams. Last year, warehouses mainly employed warehouse workers from abroad, in particular from Ukraine. However, due to the war, there was a large outflow of these workers and companies are now looking for alternative solutions and recruiting from other sectors or other countries.
An increasing number of companies are realising that human resources personnel are under increasing pressure, whether they are coping with staff shortages, anti-pandemic measures or the introduction of process digitisation, and are rewarding them accordingly. A large part of the challenge currently facing HR departments is to increase the use of online tools and to improve the employer’s reputation. As a result, many new jobs are being created and the need for HR business partners is growing along with them.
Organisations in the banking and financial services sector continue to actively recruit. Compared to last year, however, they are not only looking to replace former employees, but are also opening up new jobs, especially in the investment sector. The trend of job bundling, in which employees fill two roles at the same time for the same salary, continues. Companies that do not offer the option to work from home often miss out on candidates.
The long-term shortage of skilled labour in the pharmaceutical and healthcare sectors persists. It is difficult to find certified doctors, even for private clinics, which are usually preferred by applicants. Language barriers and bureaucracy hinder the employment of Ukrainian workers. Salaries for nurses already hit CZK 50,000 last year, mainly due to overtime and bonuses. In the pharmaceutical sector, the greatest demand is for registration specialists and managers, pharmacovigilance, drug production and quality personnel.
Business services is a sector where the pandemic crisis has accelerated the development and implementation of new technologies and new work approaches. As a result, employment in the sector grew by as much as 13% year-on-year. Moreover, ABSL expects the total number of employees in the sector to grow by another 50,000 by 2025, reaching a total of 200,000. As a large part of the industry’s workforce is made up of foreigners, the simplification of economic migration regulations will be crucial for the industry.
The survey was conducted in the third quarter of 2022 in 13 regions of the Czech Republic. The data presented is mainly based on the starting salaries of the candidates recruited by Grafton, as well as recruitment requests from companies.