Wage growth slows in Czechia, but these sectors still command high salaries

While inflation has many employees seeking raises, the tough economy is causing employers to be more careful with their spending. As a result, the increase in wages and salaries in the Czech Republic has slowed down. There are some positions that still command high pay.

A survey by the salary portal Platy.cz shows employee remuneration rates in the Czech Republic, as well as how the situation differs in individual job fields and different regions. The total average salary including bonuses and rewards for the first half of this year is CZK 49,166.

In terms of regions, the average salary is highest in Prague at CZK 58,300, followed by Central Bohemia at CZK 47,200, and South Moravia at CZK 46,000. At the other end of the ranking are the regions of Karlovy Vary at CZK 36,500, Olomouc at CZK 38,600, and Zlín at CZK 39,200.

“We saw the largest year-on-year increase in the total average wage of 10.3 percent in the last year in the third quarter of 2021, but then it almost stopped. In the first quarter of 2022, the total average wage was only 0.8 percent higher than in the last quarter of 2021,” Michal Novák of Platy.cz said.

The wage increases were less than inflation. Compared with the fourth quarter of 2021, consumer prices rose 6.3 percent in the first quarter of 2022, according to the Czech Statistical Office (CSÚ).

“This indicates that wage growth has picked up slightly at the moment, but given the economic situation, large jumps cannot be expected. Companies will rather only give raises where they urgently need to recruit or retain workers,” he added.

Top management salaries aside, employees earn the most in IT, where the average total salary including bonuses is CZK 63,240. The average is also above CZK 50,000 in the banking sector, at CZK 50,400. Salaries in quality management, at CZK 46,000, economics and accounting, at CZK 44,300, and human resources, at CZK 44,100, are at a similar level.

From the perspective of individual labor market segments, the most significant impact on annual wage growth in the first half of 2022 was the increase in the minimum wage to CZK 16,200.

The largest shifts were recorded in the category of ancillary work, up by 23 percent, woodworking, up by 16 percent, and services, up by 11 percent. In all these sectors, the average total wage is low, ranging from CZK 26,000 for ancillary work to CZK 33,400 for woodworking.

Among industries where wage levels are higher, quality control employees have improved the most, with average total wages up 11 percent to CZK 46,000. There are also industries where the overall average wage increased only slightly. These include agriculture and food processing, the chemical industry, and customer support.

Platy.cz’s Novák said this year’s wage growth is difficult to predict. “Most companies need to stabilize their human resources, so they can be expected to increase wages to keep them at a competitive level relative to others in the region,” Novák said.

The gap between wages in the public and private sectors has been closing. While the difference between the average total wage and salary increased between 2018 and 2020, from CZK 3,270 to CZK 4,300, it was only CZK 2,930 in 2021 and CZK 2,520 so far this year.

It is necessary to take into account that, in addition to the across-the-board increase in the salaries of civil servants, the extraordinary rewards of health care workers for their deployment during the coronavirus pandemic also played a role.