Labour Market in CEE-17

In the following chapter Randstad together with it's partner companies Ancor and Staffpoint, have provided a country-by-country overview of various labour market conditions and trends across the CEE-17 region. The description is supported by data illustrating the salary levels within the production and logistics sectors for both blue and white collar workers.

Seasonally adjusted unemployment rates reported by Eurostat in July 2020 across CEE were the lowest in the Czech Republic at 2%, followed by Poland at 3.2%. Rates of below 5% were also reported in Bulgaria, Romania and Slovenia. At the same time, salaries have increased, in some years, reaching double digit growth. Candidates have started to become aware of their value on the scarce labor market and have become more selective in terms of their future employers. With numerous possibilities available, even though the salary remains to be the main selection criteria, other factors have started to play an important role. These include the company’s reputation on the market, good working conditions and atmosphere, career progression opportunities and work-life balance.

Skilled, blue-collar candidates remain the biggest challenge in terms of recruitment for the production and logistics industries. After the fall of the vocational school system in most of the countries, the availability of skilled employees is slowly growing thanks to the efforts of employers, who train their personnel, on a regular basis to ensure production continuity. There is also a relentless need for engineering and R&D roles.

The COVID-19 pandemic has had and continues to have an impact on labour markets. Production stoppages have forced companies to reorganize their workforces. Although a reduction of part of the personnel might seem like the quickest solution to cut costs, most of the companies were hesitant to do so, having in mind the effort and funds invested in building up their teams. Instead, reductions in salaries and hours worked, asking employees to use up their outstanding holidays and freezing bonus systems were introduced. Many companies stopped using contingent workforce and utilizing the advantage of flexibility in such contracts. As a result, and rather surprisingly for many, the pool of available candidates didn’t increase as much as one would expect and unemployment rates went up but remained relatively steady. Candidates coming from different industries also hit hard by the pandemic, like the HoReCa sector, were not interested in taking jobs in production or logistics. There were also other industries that had growing needs for personnel during that time, like pharmaceutics, medical equipment and e-commerce.

Currently, as the situation is slowly improving, we are again observing limited availability of the most desired positions on the market. However, companies are rather rebuilding their workforce than increasing headcount, still having in mind the possibility of a second wave of COVID-19. As a result, we predict that the temporary workforce will become an even more popular solution on the market. The pandemic also made further changes to the way employees look at their future employers. In the near future, we expect that job security and a company’s financial stability will close the gap to the salary and benefits in the job selection criteria.

Key contacts

Contact
Paweł Kopeć
Head of Enterprise Solutions Center | Randstad Polska
Raluca Dumitrescu
Business Development Manager | Randstad Romania

Czech Republic

Payments in Czech Republic

PRODUCTION | Monthly gross salary in EUR
BLUE COLLARMINOPTMAX
unskilled production operator7559001,130
skilled production operator8309801,200
team leader/foreman1,1501,5001,900
WHITE COLLARMINOPTMAX
plant manager4,6005,8008,800
production manager2,7004,2005,800
production/process engineer1,5001,9003,000
LOGISTIC | Monthly gross salary in EUR
BLUE COLLARMINOPTMAX
warehouse worker8309801,200
forklift operator9001,0501,300
team leader/foreman1,1501,5001,900
WHITE COLLARMINOPTMAX
logistics specialist1,1501,7002,200
warehouse manager2,3003,4004,600
distribution center manager3,4004,7005,800

The economy of the Czech Republic is a developed export-oriented social market economy based on services, manufacturing, and innovation, that maintains a high-income welfare state and the European social model. The industry sector accounts for 37.5% of the economy. The principal industries are high tech engineering, electronics and machine-building, steel production, transportation equipment (automotive, rail and aerospace industry), chemicals, advanced materials and pharmaceuticals.

The initial spread of COVID-19 was contained effectively and the government lifted containment measures gradually. Nevertheless, the lockdown and disrupted supply chains have had a deep adverse economic impact especially on the country's top sectors, such as automotive that declined by 10%. While non-automotive production sectors were only partially harmed, logistics on the other hand was not severely affected despite recording a small slow down. Production was affected differently, based on the type of production. In general - skilled candidates with a technical or technology background are in high demand and not many of them are currently available on the market.

More basic roles, (especially in logistics) were and are still being occupied by people who had previously worked in other fields of business. According to the OECD, the unemployment rate is expected to rise from 3.7% (June 2020) to 5.0% (September 2020; single hit scenario) or 12% (double hit scenario).

While salaries were mainly frozen in the production/automotive sector and in tourism related services, they have still grown by 3.7% and in logistics by 4.5% overall. In a more detailed view, wages of blue-collar workers in the production sector increased by 7.0% and by 9.0% in the logistics sector. White collars workers in the production sector saw an increase of up to 5.0% and 4.7% in logistics. Production sites are spread fairly evenly across the Czech Republic as well as numerous logistics hubs (particularly in the western parts of the country closer to Germany, in and around the capital city of Prague and in the north-east and south-eastern part of the country).

The most sought after blue-collar positions in production are basic manual workers (unskilled/skilled operators on production lines), skilled blue-collars: forklift drivers, CNC operators, electricians, mechanics and shift leaders. Blue collar workers in logistics that are typically hired are: warehouse operators (pickers), forklift drivers and shift leaders. White collar positions typically sought after in production and logistics are: logistics specialists, planners, maintenance technicians, process engineers, technologists and production engineers.

With regard to employee availability, the highest levels can be found in the Moravian-Silesian region – with the highest unemployment, hit severely by COVID-19 as there are many mining sites that had to be or will soon be closed down. At the same time, thanks to the technical university in Ostrava, there is an availability of white collar roles and the possibility of cross border workers from Poland and Slovakia. The Ústí region (North-West of the country) has the second highest unemployment rate, and is highly dependent on the automotive segment that was impacted by COVID-19 and has a high number of unskilled labour.

The lowest unemployment and therefore the lowest availability of workers is traditionally in: Prague and Central Bohemia, where there are also numerous logistics, production and automotive plants. These locations also maintain the highest salary levels in the industrial and logistics sector in the country. The South Moravian region, where the second biggest city in the country (Brno) is located, also attracts many production plants&companies, followed by low unemployment and the second highest salary levels in the Czech Republic.