Czechia is experiencing a surge in skilled foreign workforce

Research by the Czech Statistical Office (ČSÚ) has found that wages in Czechia are growing faster than in many other West European countries, leading to higher amounts of qualified foreigners coming to Czechia for work. 

According to official data, almost 1 million foreigners worked in the Czech Republic as of end-December 2022, comprising some 15 percent of the adult workforce.

In 2010, this figure was at just 306,000 and in 2017 it reached 472,000. Just under half of all foreign workers in Czechia are from EU countries. The influx of Ukrainian refugees since last year pushed EU workers out of being the majority.

Slovaks, Poles, Romanians, Bulgarians, and Vietnamese were the next most-common nationalities, owing to the fact that average salaries in Czechia are higher.

Although labor costs in Czechia remain below the EU average (at less than CZK 500 per hour), the country has made strong improvements in delivering higher wages. Between 2012 and 2022, labor costs in Czechia rose by 60 percent. “In 2022, Czechia overtook Portugal in terms of labor costs. … In Czechia they rose 5 percent year on year,” ČSÚ chairman Marek Rojíček said.

Despite rampant inflation and an unstable economic situation causing real wages to slump recently, Czechia has generally made strong wage-growth progress. Ten years ago, the gross average monthly salary in Czechia was CZK 25,000 – today it is around CZK 40,000.

As in many countries, wage disparity exists between the capital and other cities. The ČSÚ writes that “Prague is unique in terms of the number of foreign workers, especially qualified ones,” which leads to substantially higher wages in the capital. 

The average gross monthly salary in Prague is about CZK 5š,000 – almost 25 percent higher than the national average wage. This likely explains why over 30 percent of all foreigners in Czechia are employed in the capital.

Latest available data also shows that both EU and non-EU citizens work most often in the manufacturing industry. For both sets of citizens, the second-most frequent line of work is the administrative sector, and the third-most common industry to work in is wholesale and retail trade. 

Of all EU citizens, around 23 percent work in “highly skilled” fields, compared with 14 percent of non-EU citizens.

The Association of Business Service Leaders in the Czech Republic also writes that around half of all employees in Czechia’s business services sector as foreigners.

The establishment of international firms' offices and warehouses in Czechia – Amazon and software firm SAP being examples – has boosted foreigners' chances of finding work here in both manual and administrative roles.

Entrepreneurs and unions are putting pressure on the government to make the Czech Republic more open to labor from abroad, Echo24.cz writes, due to higher expertise.

"About 80 percent of companies in the fields of production, automotive, and logistics employed workers from abroad last year. Two-fifths focused exclusively on EU citizens, and the rest were looking for candidates from third countries. Interest in the recruitment of foreigners has not abated this year either, but it is still complicated by the current rules of economic migration," said consulting company Grafton Recruitment.

Jan Rafaj, the vice president of the Czech Union of Industry, says that every year companies in the Czech Republic lose 30,000 to 50,000 workers due to retirement. According to him, the “domestic labor market cannot cope without foreigners.”

Broadly rising salaries and a perceived lower cost of living – paired with many multinational firms opening branches – in Czechia have spurred a jump in the number of skilled foreigners coming to work. Despite recent economic turbulence, this is a trend likely to continue.