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

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

Other countries

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The ongoing global pandemic caused by COVID-19 has made significant changes to the state of labour markets across the various countries in the CEE region. Necessary restrictions that were implemented, forced many industries to make big adjustments in the number of employees, hours worked and, in many cases, led to the reduction of salaries. This has had a direct impact on the increase of the unemployment rate between Q1 and Q2 2020 in the CEE region.

Bulgaria is one of the largest countries (ca. 7 million) from the group not mentioned in the specific country commentaries and has continued to see its unemployment rate decrease over the years. In 2020, the highest level was recorded in April at 4.8% while in June it decreased by 0.3 pp to 4.4%. The only, yet still very low, increase in the number of workers was registered in the manufacturing, information technologies and retail sectors. The low increase in employment is mainly connected to the skilled worker shortages and employment itself reaching peak numbers. The average monthly salary in Bulgaria is slightly above EUR 650.

In Slovakia, with a population of ca. 5.5 million, the unemployment rate in April was at 6.4% and had increased to 6.6% in June. The Prešov Region was reporting the highest number of unemployed people, while the Capital city region of Bratislava recorded the lowest. Before the pandemic, Slovakia experienced workforce expansion in the industrial production, agriculture and information and communication sectors. During the initial months of COVID-19, employment increased only in the information and communication sector. In June 2020, compared to June 2019, it increased by 5.2%, while in the industrial sector there was a decrease of 6.3%. In June 2020, the average monthly wage decreased year-on-year in most sectors. In the first half of 2020, wages decreased on average in transportation and storage by 0.7% (to EUR 999) and in industry by 0.3% (to EUR 1,146). The average monthly wage in all sectors reached a level of EUR 1,086.

In Croatia, labour shortages are resulting from long-lasting demographic trends linked to an ageing population and significant emigration to other EU Member States. Croatia’s population totals ca. 4 million inhabitants and in January 2020, the unemployment rate was recorded at 6.3%. However, in May the unemployment rate reached a high of 8.9% while in June it decreased slightly 0.1 pp to 8.8%. Average gross monthly wages for the first half of 2020 reached a level of EUR 1,220, a nominal increase of 2.1% compared to the same period of 2019.

Serbia has a population of ca. 7 million and as of Q1 2020, the unemployment rate reached 9.7%, a drop of 2.4 pp compared to the same period of 2019. The average salary for the first 6 months of 2020 stood at EUR 696.

Albania has a population of ca. 3 million and as of Q1 2020, the unemployment rate reached 11.9%, which shows a slight increase of 0.3 pp compared to Q4 2019. In Montenegro, with its population of ca. 620,000, the unemployment rate in April was quite high 17.4% and had increased by 0.8pp to 18.2% in July. Slovenia’s population of ca. 2 million saw its unemployment rate increase between April and June by 0.1 pp and stands at 4.8%. The monthly minimum wages for these countries vary between EUR 213 in Albania and EUR 940 in Slovenia, to ca. EUR 300 for both Montenegro and Serbia.

In general, we can see that the labour market is slowly recovering, however the situation will remain uncertain for the next few months, particularly as a second wave of the pandemic is predicted. As a result, the logistics and production sectors must be prepared for new realities and take the necessary safety measures so as not to put its employees at risk.