70 percent of Czech companies feel pressure to raise wages

Recruitment firm Hays says Czech companies are increasingly looking abroad to fill positions.

Expats.cz Staff

Written by Expats.cz Staff Published on 22.09.2022 11:57:00 (updated on 22.09.2022) Reading time: 3 minutes

Over 70 percent of employers feel considerable pressure from employees or job applicants to raise wages. Firms, however, are not approaching wage increases across the board to match inflation. They prefer individual wage increases and have other tools to combat this situation, according to personnel agency Hays.

"The current labor market is quite unbalanced. There are companies that regularly increase employee wages across the board, usually around 5 percent; and on the other hand, there are companies that increase individually. This is the main trend that is now being promoted in remuneration," Jan Nezkusil, manager for technical recruitment at personnel agency Hays, said.

He said there is also a group of companies that are still waiting and watching to see how the market develops.

The most progressive job sectors in increasing wages are IT and engineering. These include mainly research and development but also extend to manufacturing companies. The most significant changes in terms of wage increases have been in software development positions, data scientists, and SAP systems consultants.

"These are in high demand, are highly valued on the labor market, and are examples of roles where individual salary increases are currently significant," Nezkusil said.

The situation in the Czech Republic is complicated by the lowest unemployment rate in the EU, which is why the pressure on wages from employees and candidates is particularly strong. This is also why companies have been actively looking abroad for employees in the last two or three years, Nezkusil said.

"The first preference is within the European Union because administratively it is easier to employ these people. The trend remains to look more within Central and Eastern Europe, where the financial requirements of employees tend to meet the offer of Czech employers," Nezkusil said.

The motivation is to fill open positions, as local candidates are lacking. "It's not about cheap labor, these job seekers have similar wage expectations as the Czechs," he said.

More companies are open to employees from third countries, he noted. Hiring people from India is particularly popular in the IT field.

He said the benefits have been affected by the last two years, which were influenced by the Covid pandemic. "The biggest change has been in flexibility. In technical and technological fields, the ongoing trend is a hybrid working model in the form of '3+2' or '2+3', meaning three days at work, two days at home, or vice versa," Nezkusil said.

In the case of IT professionals, he said, the trend of "work from anywhere in the Czech Republic" is gaining ground, where the employee works completely remotely and comes to the office occasionally.

"This way, a Prague company can employ a person from Ostrava, who will come to a meeting once or twice a month," Nezkusil said, adding that home office is offered by about 85 percent of companies where it is technically possible.

Some employees, though, are more interested in returning to the office due to rising energy prices. This issue should be dealt with by an upcoming amendment that would require companies to pay the costs of working from home.

Mental health is another reason to limit home office. "Health care has come to the forefront in terms of company benefits, with mental health care being a priority. Companies are therefore focusing extensively on expanding their portfolio of these offerings," Nezkusil concluded.

Well-being does not mean only psychological help, but extends to the atmosphere in the workplace. For instance, some companies that embrace corporate culture are now organizing yoga courses in the office as an employee benefit.

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