Low wages, high living costs driving skilled foreign workers out of Czechia

Czechia is struggling to retain foreign workers, particularly skilled ones, with a quarter leaving within two years of arrival, Interior Minister Vít Rakušan said at a Central European Aspen Institute conference in Prague this week.

Low wages and a relatively high cost of living contribute to this issue, which impacts Czechia’s competitiveness, said Rakušan, a member of the Mayors and Independents (STAN) party.

As of June, the Czech Labor Office recorded around 827,600 foreign workers in the country, which has a population of 10.9 million. Half a million of these workers are Ukrainians and Slovaks. Although the number of foreign workers has doubled since 2017, Czechia still has one of the lowest unemployment rates in the European Union, and employers continue to report workforce shortages.

"Low wages and the high cost of living currently limit Czech competitiveness in the European and global race for skilled workers and reduce our ability to retain them," Rakušan said. "Unfortunately, a quarter of foreign workers leave within two years. We must address this at both the state and business levels to prevent it from continuing."

He noted that most foreign workers in Czechia hold less skilled positions, with specialists comprising less than 10 percent of the foreign workforce.

Rakušan highlighted five government programs to attract foreign labor with specific quotas for different groups from selected countries. The hiring and employment process is expected to be streamlined through digitalization, allowing foreigners to apply for residence and complete related paperwork online by 2026.

Labor migration will become increasingly important for Czechia, Rakušan added, as a workforce shortage is anticipated when the large generation born in the 1970s retires in the 2030s. The country’s incoming, smaller generations will be insufficient to replace them.

Most foreign workers in Czechia are from Ukraine (286,256) and Slovakia (216,700). Nearly half (408,100) of foreign workers come from EU countries. At the end of June, the Interior Ministry recorded more than one million foreigners with residence permits in Czechia, 360,600 of whom had permanent residence.

Rakušan stressed the importance of ensuring Czechia’s capacity to accommodate more foreigners, including housing, healthcare, education for children of foreign nationals, and administrative resources.

He said employers should take on more responsibility by guaranteeing fair conditions for foreign workers and helping with their integration. The state should also prioritize areas in labor migration that will drive knowledge-based economic growth.