Find out more about the labour market

Excellent human resources, a central location and a stable political and economic environment are the main reasons that foreign investors frequently choose the Czech Republic as the country in which to implement their investments. However, the labour market in the Czech Republic is facing a growing shortage of candidates and an increasing pressure on salaries growth due to high inflation. 

Whether this concerns R&D centres, ICT companies, business services centres and manufacturing enterprises, the Czech Republic has an indisputable advantages thanks to its central location, advanced infrastructure, high quality of university education, excellent quality of life and high level of safety. The good news for investors considering locating their business activities in Central Europe is the fact that the Czech Republic and other countries here demonstrate long-term political and legislative stability, which is why this part of the world is slowly becoming a synonym for nearshoring.

Human resources

Human resources are the key aspect of every successful business project. Labour costs are not the only issue to be addressed; access to workers and, in the case of investments based on intellectual activities, the educational level, language skills and so-called soft skills of potential employees are also important. It is apparent that Czechs possess these skills and traits in abundance, as they are very adaptable and compatible with a number of cultures.

Labour market

However, the hunger for candidates on the Czech market persists, both for blue-collar and skilled positions. Unfortunately, even the negligible increase in unemployment has not helped the labour market and that companies are still struggling with a shortage of employees. The intricate and lengthy cross-border recruitment from outside the EU and the totally inadequate economic migration rules are also contributing factors. Despite loudly articulated needs, the government is not moving this issue forward fast enough, increasing the risk of Czech companies losing competitiveness.

Future developments will continue to be influenced by the ongoing economic crisis and some components of the austerity package, particularly the cancellation of tax advantage for employee benefits in terms of employee costs. This is why a significant majority of employers will have to reduce the amount of benefits provided, which will be accompanied by some difficulties - from greater pressure to increase salaries to employee dissatisfaction and even higher employee fluctuation. At the same time, the cancellation of this advantage will make it more expensive to work in the Czech Republic.

For the next period, we expect the unemployment rate to fluctuate at the level of 3,5%. There will still be a lack of qualified workforce on the market, which will result in significantly limited and thus almost no or only very low economic growth. Despite that, after eight consecutive quarters of declining real wages, there are now better times ahead. We expect wages to grow by 8-12% next year.

However, there is no need to be only negative, the Czech Republic is a strong industrial country within Central Europe. It will keep its position even in this difficult time.

The most desired benefits

White collar


Blue collar

5 and more weeks of vacation

Flexible working hours Bonuses

Annual inflation-adjusted salary increase

Bonuses 5 or more weeks of vacation
Bonuses 5 and more weeks of vacation 13th/14th salary
Health leave / Sick days Annual inflation-adjusted salary increase Meal vouchers or allowance
13th/14th salary Home-office Christmas bonuses (other than performance based)

Source: Grafton Recruitment, 2023 


Martin Malo
Managing Director
Grafton Recruitment & Gi Group