Being an employer in the Czech Republic

Stability Combined with a Series of Challenges. This is one way to describe the Czech labor market. While it is among the most stable in Europe, despite its resilience to economic fluctuations, employers are facing growing challenges that impact their competitiveness.

The Czech economy is facing digitalisation, demographic changes, and global factors that are influencing the labor market. There is strong demand for skilled workers, while pressure to modernize working conditions is increasing. The Czech Republic has one of the lowest unemployment rates in the EU, which stood at 4.3 % at the beginning of 2025. However, regional disparities remain – the lowest unemployment rate is in Prague (2.9 %), while the highest is in Ústí nad Labem Region (6.4 %).

Companies are struggling to fill positions, especially in specialized fields. The highest demand for labor is in IT, industry, logistics, healthcare, and construction. The employment structure is changing – industrial professions are giving way to technology and IT fields, while the service sector is expanding. 59.7 % of people are employed in services.

Another challenge is population aging, which puts pressure on the pension system and labor market. The number of people of working age is declining, leading companies to rely more on foreign workers. This brings administrative challenges, such as a lengthy visa process, which can take up to 9 months for workers from outside the EU. Companies also often encounter language barriers and the need to adapt their work environments.

Digitalization and automation are leading to the disappearance of some professions while creating new job opportunities. This highlights the need for retraining and lifelong learning, which is crucial for the competitiveness of companies and employees. Additionally, strict legislation and high administrative burdens make doing business in the Czech Republic more complex compared to other European countries. Employers face long notice periods, high social security contributions, and a complicated process of employing foreign workers.

Flexibility and remote work (home office) have become the standard, helping employees maintain a work-life balance. According to a survey from an annually published salary study, flexibility is one of the key benefits. At the same time, companies are under pressure to increase wages – the average salary in 2024 exceeded 1 725,49 EUR, with wages growing by 5–7 % annually, although this growth is slowing due to economic uncertainties.

The future of the labor market will depend on companies’ ability to attract and retain talent, invest in automation and digitalization, and adapt to employees’ evolving expectations. Despite economic uncertainty, businesses will need to find innovative ways to remain competitive, increase efficiency, and create a work environment that supports both productivity and employee satisfaction. The Czech labor market thus remains dynamic and full of challenges, with its future shaped by global trends and corporate responses to changing conditions.

Sources:

Czech Statistical Office. Czech Economy and Labor Market – Statistical Data. [online]. Prague: ČSÚ, 2024. Available at: https://www.czso.cz.

Labor Office of the Czech Republic. Unemployment Increased to 4.3%, the Labor Office Successfully Utilizes Active Employment Policy Tools. [online]. Prague: Labor Office of the Czech Republic, January 2025. Available at: https://www.uradprace.cz/web/cz/-/nezamestnanost-vzrostla-na-4-3-uradu-prace-se-dari-intenzivne-vyuzivat-nastroje-aktivni-politiky-zamestnanosti.

Kienbaum und Partner GmbH, Organizational Unit. Salary Study / Salary Report 2025. 25th edition. [internal source]. Prague: Kienbaum und Partner GmbH, 2025.