Czechia warns of critical labor shortage as it casts eye to foreign workers

The Czech Republic is facing a critical shortage of workers that will impede its development and growth in the coming years and decades, according to Minister of Labor Marian Jurečka. He says the state must make fundamental changes – such as attracting more foreign talent – to address the issue. A new state-funded portal created specifically for foreigners who want to find employment in Czechia sets out to remedy this.

At the second edition of the Czechia at a Crossroads conference about the labor market, the minister said that employers have long been voicing their concerns about the lack of manpower. The country is expected to face a significant deficit of workers in the next decade as hundreds of thousands of individuals from the 1970s generation retire.

In response to this issue, Jurečka says that the government is taking measures to increase productivity and encourage people to work until an older age. He stated: "Human resources will be the biggest bottleneck in the development of Czech companies, the Czech economy, and Czech society in the medium and long term." 

The Ministry of Labor wants to mobilize those who can enter the workforce. This includes parents of young children, caregivers, and the disabled, who are supported through reduced working hours and other measures. Changes in benefits are also being made to motivate people to work.

Additionally, the pension reform, which includes an increase in the retirement age and waiving pension contributions for working pensioners, aims to encourage people to stay in the labor market for a more extended period of time. This could result in an average of CZK 2,000 extra monthly earnings for working pensioners.

Attracting foreigners is one of the main ways the state wants to address the labor shortage. The government’s recent decision to allow people from 10 countries access to the country’s labor market without a work permit is evidence of this. 

Other bilateral agreements with European and Asian countries – such as Bosnia and Herzegovina, Moldova, Georgia, North Macedonia, Taiwan, Indonesia, and India – made earlier this year hopes to tempt people further to work in Czechia. 

The Minstry of Indsutry’s CzechInvest organization that supports businesses nationwide has also recently launched a new portal – entitled Work in Czechia – that shows “foreign workers a comprehensive overview of life and employment in our country,” CzechInvest head Jan Michal says.

The site also provides an overview of job opportunities, advises users on how to get through the visa process, and also offers information on cultural activities.

According to Jiří Horecký, president of the Confederation of Employers’ and Entrepreneurs’ Unions, there are four solutions to the lack of workers from the strong generation. These include retaining older workers in the labor market regardless of retirement age, which is already happening in some Nordic countries. 

Horecký also highlights the need for a change in mindset, not just in terms of increasing earnings, but also in introducing part-time jobs. Other suggested solutions include migration from abroad and encouraging an increase in the birth rate.

Innovation is also seen as a critical factor in addressing this issue. Martin Jahn, vice president of the Union of Industry and Transport, stated: “We consider innovation to be one of the main pillars of how the Czech Republic can move forward in prosperity.” He believes the government and companies should invest more in research and adjust conditions to support innovation.