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What is the current situation of the Czech labor market?
The labor market – not only in Central Europe, but all over the world – is experiencing a certain slowdown. There are fewer job vacancies than before. The selection of new employees and the screening of employers from applicants are more cautious. Companies and individuals prefer to bet on certainty and the prospect of long-term cooperation. After many years, when there were indeed a lot of job opportunities, we are in a situation where there are slightly fewer jobs than unemployed people, and the decline in jobs is also noticeable in some professional fields.
How do we compare to other countries?
Some European regions that had invested more in previous years are now facing higher levels of layoffs. Fortunately, this has not affected the Czech Republic as much. Nevertheless, the forecast is quite optimistic and the economy is expected to stabilize and grow moderately in the coming months and years. This is true both in the Czech Republic and in Central Europe. This may also mean an increase in the number of new job openings.
The Czech Republic has a chronically low unemployment rate. On the one hand, this means that most people have a job, but on the other hand, this creates problems for companies that do not have the opportunity to select the right candidates, thus slowing down economic development.
True, companies’ options are limited. More and more companies are facing a shortage of qualified specialists. By the end of 2023, 33% of companies felt strong competition from other employers during the recruitment process, and this year this figure has even increased by 10%.
Investment flows into the Czech Republic are also lower than in previous years due to a lack of candidates. Not only are we no longer considered a cheap region, the lower labor supply also plays a major role in this. If we want to become an attractive destination for investors again, we must be able to provide them with enough high-quality employees.
And how to do it?
One possibility is immigration policy – supporting an influx of qualified workers from abroad who will live and work here long-term. We have become an interesting destination for university students, many of whom decide to continue working here. I think this is a step in the right direction.
The second solution is to support mothers in finding employment after maternity and parental leave. Our country has one of the longest parental leave periods in the world and, according to Eurostat, one of the lowest employment rates for young women in the EU. Mothers often want to work but do not have the right conditions – neither flexible working hours nor general opportunities to combine a career with a family. Kindergarten and nursery places are in short supply, private care often requires a lot of money, and at the same time this group hides great potential.
You focus mainly on so-called white-collar jobs, i.e. office jobs. But you can get an overview of the entire market. What candidates are most in demand right now?
Management, technology, production, engineering and sales are the five most popular professional fields this year. Administrative positions are among the most frequently filled positions, primarily because they are needed in all industries, unlike other narrowly specialized careers.
Technical positions are not only a fixture of the Czech market, whether software developers or data specialists or IT security experts. This also applies to demand from manufacturing, automotive and engineering companies, which have a strong presence on the Czech market. They are looking for electrical engineers, quality engineers and specialists for various positions in development centers. We also see high demand from pharmaceutical and medical companies.
What do you think the ideal candidate who can find a job right away looks like?
The ideal candidate may be a college student with moderate experience in a specific field, preferably with a specific product or service, and with good communication and presentation skills. At the same time, he is flexible and adaptable to changes, technically proficient and has the necessary language equipment, and preferably available immediately.
In fact, the reality is very different from the ideal, and better than waiting for such a “unicorn”, companies should clarify which candidate skills are essential, what can be learned over time, and what the company can do without.
It is often said that the right candidate must have so-called “soft skills.” Which ones in particular will open doors for him in your company?
Soft skills stand out because the right combination of them shows the candidate’s potential in a company. Good communication skills are in high demand. They are needed in professions that didn’t exist a few years ago – for example in the IT industry. Paradoxically, this mainly stems from remote work: although people meet less often in the office, teams communicate more effectively and can better present your results.
Another important skill is the willingness to educate oneself and to continually strive so that one can acquire the skills necessary for the job in a relatively short period of time. That said, the most important are digital competence, the ability to learn to use new systems, and a cautious attitude towards cyber risks.
Critical thinking skills are highly valued by employers. Many careers require processing large amounts of data, so it is necessary to be able to navigate that data and form logical conclusions and priorities. The ability to be self-motivated is also important. This allows employees to be productive and come up with ideas and solutions even when things are not going well. For more senior positions, it is the ability to effectively lead and motivate work teams.
If you find an ideal employee, he or she will naturally want to be compensated appropriately. How is he or she doing now after joining the company?
At the beginning of the year, 83% of employers wanted to increase wages, but currently, according to our current survey, only 10% of businesses have done so. Currently, wage increases are usually between 5% and 10%. In the second half of the year, wages may stagnate or only increase slightly. But on the other hand, with the current inflation rate of 2.2%, a wage increase of 5% means a real wage increase.
The instability and crisis of the past few years have forced employers to be very cautious, and it may take some time before they can start growing strongly again. If the positive economic forecast continues into next year, employers may take full action to increase employee salaries more frequently to ensure market competitiveness and secure key talent.
Where are wages growing fastest?
Healthcare, energy, banking and financial services, pharmaceutical or trading companies are the most generous to their employees. We see only slight growth or even stagnation in IT and consulting companies. But according to our data, employees are not very satisfied with the amount of their salary. This satisfaction has dropped by 15 points compared to last year, and currently “only” 60% of eligible workers appreciate their evaluation.
Despite a sharp drop in inflation, the cost of living has risen faster than wages in recent years, and this is not only happening in the big cities. Many jobs now also have a broader agenda as companies eliminate other positions, and salary compensation in these cases is not always sufficient.
You mentioned your survey, which also showed that one in five employees changed jobs this year. How do you see AI being used in recruiting? From companies and staffing companies, or from candidates? Can you recognize a letter like this that was written by AI?
Artificial intelligence has rapidly entered our work and private worlds and continues to grow. It has become an integral part of many professions, including recruitment. I personally believe that if we can use AI well, it can be a very useful assistant. At Hays, we have made significant investments in artificial intelligence around the world. The result is a customized, privacy-preserving system that helps us find new business opportunities and important contacts, obtain information, optimize internal communications, and more.
Yes, even applicants are using it more frequently when preparing their resumes and cover letters. The difference is sometimes hard to tell, but if the results provided by AI are not subsequently checked and revised by the applicant based on their actual situation, a personal interview will quickly reveal the difference.
AI is also bringing changes to the selection process, for example in practical tests. Now, a large number of practical tasks can be handled with the help of AI, so companies are abandoning AI and either testing candidates during the interview process or looking for alternatives to verify the skills of candidates.
Even HR is not immune to cybercriminals. I read a warning on your website about fraudulent messages labeled Hays trying to extract money from candidates. How exactly do the fraudsters do it and who are they targeting?
Internet fraud has long gone beyond the scope of financial and similar institutions. Fraudsters can target companies in almost any industry. In the case of recruitment or other consulting companies, fraudsters often impersonate company representatives and try to obtain personal or other sensitive information of candidates under the pretext of false job opportunities. Data obtained in this way can be misused for other illegal activities or, for example, illegally sold to another party. We have also seen attempts to extort money from applicants, such as registration fees, administration fees, or to send job opportunity information.
It is important for job seekers to know that reliable staffing companies will not charge any fees to job seekers. Although we at Hays University in the Czech Republic have not experienced such attacks, we still want to warn applicants against similar attacks just in case. It is well known how quickly they can spread.
Katerina Khovolkova
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