Czech job sectors struggle to fill roles despite rising wages and benefits

Employers across industries are raising wages and benefits, but many sectors are having difficulty filling jobs, according to a survey by the recruitment agency Grafton Recruitment.

"The labor market in the Czech Republic is facing uncertainties this year, caused by both the unresolved pandemic crisis and the conflict triggered by Russia against Ukraine. While the labor market has learned to live with the pandemic in many areas, the state of war has not allowed it to develop as originally anticipated," Martin Malo, director of Grafton Recruitment and Gi Group, said.

Unemployment can be expected to oscillate between 2.7 percent and 3.3 percent in the subsequent period, but that is only if the darkest scenario of an energy crisis does not occur, according to Grafton.

Manufacturing and construction firms have been most affected. In addition to having to deal with rising prices for components and materials, they are more short of skilled labor than ever before. There has been long-term reliance on workers from Ukraine, but currently, due to the general mobilization, recruitment from that country is virtually impossible and other sources of job applicants are insufficient.

"The Czech government can solve this problem by redirecting the approved quotas in the Skilled Worker Program from Ukraine to other countries. However, the government is surprisingly passive in this area and is waiting for developments in Ukraine and probably the results of the local elections," Malo said.

He added that Czechia is losing any competitive advantage against neighboring countries by waiting. Poland, for example, has already changed the rules of economic migration.

Despite the current economic problems, some industries are growing and increasing employees’ benefits and wages. In addition to the traditional bonuses, there is also an annual salary adjustment in line with current inflation, especially for jobs in the information technology or business services sectors.

A sign-on bonus and a reward for referring a new employee are also becoming common. In manufacturing, CZK 25,000 is the most common in both cases, but double that amount is not uncommon.

According to estimates, there is a shortage of around 20,000 to 30,000 IT workers in the Czech Republic. Companies are outbidding each other and trying to attract candidates with higher benefits and wages, and the possibility to work from anywhere.

Demand for manufacturing labor continues to outstrip the pool of available candidates. Companies are most interested in welders, machinists for automated equipment, electrical engineers, designers and production technologists. In an effort to retain existing employees, many companies increased wages, most often in the range of single percentages. Wages increased the most in Prague and the Central Bohemia region.

Despite new construction projects being held back by rising energy and building material prices, among other factors, demand for construction workers continues to grow. The labor market is particularly short of skilled trades as well as bricklayers and joiners. Companies are also looking for construction managers, designers, budgeters, and building managers. Wages in the construction industry have risen across the board.

The sales and marketing industry continued to see increased demand, particularly for e-commerce and performance marketing staff. Most in demand now are business analysts and, in general, employees who can work with data, read trends, and track customer experience.

There is also increased demand in the area of content creation for the web and social networks. Content specialists and copywriters are more in demand than ever. Companies expanding their marketing teams include investment or development companies, banks, and insurance companies.

In terms of business, the biggest expansion is in e-commerce and services. Companies need employees for acquisition and business development. For sales representatives, the emphasis is mainly on technical knowledge. Their starting salaries have risen, even for juniors across regions.

In the area of administration, the most sought-after position is office manager. As this position often requires a strong emphasis on English language skills, which is often a problem for many candidates, it is quite difficult to fill. In administration, workers often have to fill several roles within a single position, which is the reason for the high turnover.

Organizations in the banking and financial services sector are not only looking for replacements for former employees but are also opening new jobs, especially in the investment sector. Due to the shortage of candidates, companies are also open to new graduates. The trend of job bundling, where employees hold two roles at the same time for the same pay, also continues.

Enterprise services is an industry where the pandemic crisis has accelerated the development and implementation of new technologies and new working approaches. As a result, employment in the sector has grown by a full 13 percent year-on-year. In addition, the Czech Association of Business Service Leaders predicts that the total number of employees in the sector will grow by a further 50,000 by 2025, reaching a total of 200,000 people.

Grafton’s survey was conducted during the third quarter of 2022 in 13 regions of the Czech Republic. The data presented is based mainly on the starting salaries of candidates for whom the recruiter has arranged employment, as well as on companies' inquiries about finding employees.