Employer survey: Bleak outlook for jobs in the Czech Republic for 2021

Widespread layoffs are anticipated in gastronomy, while the e-commerce and logistics sectors will lack qualified candidates

Raymond Johnston

Written by Raymond Johnston
Published on 29.12.2020 10:00 (updated on 28.12.2020)

Job seekers in the Czech Republic in the first quarter of 2021 may face challenges, as more employers say they'll decrease their workforce rather than hire new employees.

Some 8 percent of Czech employers expect an increase in the workforce in Q1 2021, while 9 percent predict a decrease and 77 percent of employers do not anticipate any changes, according to the ManpowerGroup Labor Market Index survey.

The country’s net labor market index for the first quarter of 2021 shows a value of -1 percent, but after seasonal adjustment the value is +1 percent. The index shows the planned job growth compared to the planned losses.

“There are several opposing tendencies in the labor market. We see massive departures of people from gastronomy; a completely frozen labor market in production, recruitment in e-commerce and logistics; a lack of people with a technical profile and a very limited ability of the market to move large numbers of people in other sectors,” Jaroslava Rezlerová, CEO of ManpowerGroup for the Czech Republic and Slovakia, said in a press release.

Employers in three of the four size categories expect a reduction in the workforce next quarter. Weak recruitment plans, with either reductions or negligible growth, are reported by micro, small and medium-sized organizations. Only employers in large organizations report any significant plans for growth.

Employers in four of the seven tracked industries predict an increase in the workforce in the coming quarter. The strongest recruitment plans are reported by the other services sector (government, health, education and culture; transport, storage, and communication) with a net labor market index of 8 percent reporting they expect growth.

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Job opportunities are expected with a net index of 3 percent in manufacturing industry firms, as well as construction (2 percent index), and finance, insurance, real estate and other business services (1 percent index).

In contrast, accommodation and catering reports a pessimistic outlook with a net labor market index of -28 percent. Negative outlooks are also in other production (production and distribution of electricity, gas and water; agriculture, hunting, forestry and fishing; mining and quarrying) with a -6 percent index, and wholesale and retail trade with -2 percent index.

“People who had been working in accommodation and catering are looking for new work most often in services, logistics and administration. They respond heavily to openings for receptionist positions, administrative support, business positions or customer service,” Rezlerová said.

“In addition, many manufacturing companies need new employees, but the number of candidates has dropped compared to before the pandemic. Although the government's pandemic program prevented layoffs, it also stopped the natural turnover of employees who do not want to face insecurity at this time,” she added.

Employers in Bohemia expect favorable recruitment activities in the next quarter with a net labor market index of + 4 percent. However, employers in Prague expect a subdued labor market with an index of -2 percent. Moravia reports a weakening of recruitment activities with an index of -8 percent.

Compared to the previous quarter, Prague reports an improvement in the recruitment environment by 1 percentage point. The index weakened in Bohemia by 1 percentage point and in Moravia it weakened by 8 percentage points.

Impact of the COVID-19 pandemic on recruitment activities

Survey respondents were asked: “When do you expect your recruitment activities to return to pre-COVID-19 levels?” Some 23 percent of companies said that this will happen within 12 months, of which 5 percent said it would be within three months. On the other hand, 64 percent of companies said recruitment would never return to its original rate.

This expectation worsened by 10 percent compared to the previous quarter, when 54 percent of companies thought the situation had permanently changed.

The ManpowerGroup Labor Market Index survey is conducted quarterly to monitor employers’ intentions to reduce or increase the number of employees during the following quarter.

For the ManpowerGroup Labor Market Index for the first quarter of 2021, employers from a representative sample of 509 employees in the Czech Republic were contacted and asked the same question: “How do you expect the total number of employees in your company to change in the first quarter of 2021 compared to the current quarter?”

The survey has taken place in the Czech Republic since 2008. It began in in the United States and Canada in 1962, and in 1966 the United Kingdom also joined. Currently it is conducted in 43 countries and territories.