'Vacancies at an all-time high': Czech Republic's labor shortage gives candidates negotiating power

New data suggests the labor crisis afflicting the Czech economy is set to worsen in the coming months, with the pandemic's freezing of the labor market triggering a subsequent slow recovery.

The data comes from a new survey compiled by the ManpowerGroup Czech Republic, which maps employer hiring intentions for the fourth quarter of 2021 in its latest “ManpowerGroup Labor Market Index.”

Out of a representative sample of 750 employers who took part in the survey, 16 percent said they were likely to increase their number of workers over the coming months, 77 percent do not expect any change, and 6 percent expect to reduce their workforce. According to the Manpower Group’s methodology, this gives the Czech labor market a net score of +10 percent for Q4.

“The current number of vacancies is an all-time record,” said Jaroslava Rezlerová, CEO of ManpowerGroup Czech Republic. “However, the pandemic has frozen the labor market and it is recovering only very slowly. People do not want to change jobs voluntarily and in doing so invite insecurity. This is particularly evident for those working unskilled jobs, such as in manufacturing and logistics.”

The demand for workers is set to be particularly acute in Prague, where a labor market net score of +17 percent was recorded. This is linked to the particularly high recruitment plans reported by large companies with over 250 employees, whose net score for taking on new employees was +21 percent.

As demand rapidly outstrips supply in the labor market, 62 percent of Czech employers report a long-term lack of suitable candidates for open vacancies. This is the highest percentage of employers reporting such a problem since the ManpowerGroup started measuring this critical element of the economy. But the Czech Republic is not alone in this. The global average of companies unable to find the necessary talent is at an all-time high of 69 percent, with the worst shortages of suitable labor seen in India (89 percent), Romania and Singapore (84 percent), Bulgaria (81 percent) and France (79 percent).

With employers struggling to find the right workers, it is believed the pandemic-induced shift in the employment market puts more power in the hands of prospective employees in negotiations.

“The struggle for talent is intensifying and employers are starting to respond more to what employees want – more flexibility, higher wages and skills development. Supporting people in retraining and improving their qualifications remains of the biggest challenges of our time,” said Jaroslava Rezlerová.

The Czech Republic’s labor crisis is set to worsen over the coming months as companies seek out growth in the wake of the Covid pandemic. In this, the Czech Republic joins other countries around the world where employees are in short supply and high demand. While many are reluctant to change jobs due to the global insecurity of the past eighteen months, the present strong bargaining position of job hunters means doing so may bring unique potential for reward.