The Czech Republic: Stable opportunities during challenging times

The labour market has once again experienced several twists, turns, and challenges in the past year. The rapid recovery of the global economy after the pandemic was sharply slowed by the energy crisis and the war in Ukraine. All this is reflected in the strategic decisions of organisations and influences the planning of financial and human resources. Cost and operational efficiency were major theme, however, the number of open jobs in the country and demand for skilled professionals remains high.

Hiring trends
Organisations are reviewing their recruitment strategies and looking to expand their recruitment methods to increase efficiency and be more effective particularly in the industries hardest hit by the skills shortage such as IT, manufacturing, and research & development centres. These include headhunting employees from competitors or recruiting from abroad. Another way the skills shortage can be addressed is to reevaluate role requirements and target more junior candidates and graduates. Any skills gaps are filled through training programs.

Motivation and benefits
Organisations usually continued the trends set during the pandemic or tried to optimise the offer of benefits to remain competitive with their industry standards. From the employees’ perspective, the most important benefits are those related to work-life balance and flexibility. Although the benefits package is one of the five main criteria aside from salary that candidates consider when accepting a job, they are looking for a role with a sense of purpose that aligns with their beliefs and circumstances. As a result, the nature of the work performed, and flexibility is becoming increasingly important.

Wage trends
The increased stress levels that people now face contributed to the “quiet quitting” phenomenon, where employees are showing less engagement and lower productivity levels. This obviously creates a mismatch between increasing salary demands and organisations looking to find ways to protect their profitability.
This is a very financially sensitive situation for both employers and employees. Employers are increasing their efforts to become competitive with their salaries so that the levels reflect the market but are not excessive. Employee salary requirements should therefore correspond to knowledge and experience, but also consider the current market availability.

Salary growth in 2022 was faster than originally expected in the circumstances, reaching an average of 10% in skilled roles. Due to high inflation, some organisations decided to increase salaries in two phases during the year. Employers are looking at salary increases this year, most often in the range of 5-10%, but up to one-fifth of them plan the increases on a case-by-case basis, rather than across the whole organisation.

2023 outlook
The demand for skilled employees and specialists will remain high across all industries. As we have mentioned before the lack of professionals is a major obstacle to achieving their business goals, so recruitment activity for key roles will intensify. To succeed it will be important to focus on effective and quality onboarding for new employees. With many people working remotely the challenge is having the right processes in place for this to be managed efficiently and maintaining organisational culture.

Organisations that can offer stability and job security, interesting projects or products to work on, quality training and development programs, flexibility – and of course a competitive salary – will successfully attract the best talent.