The biggest downward pressure on the Czech Republic’s score came from falling industrial wage pressures. Growth in lower-skill industries has outpaced that in high-skill ones.
Fast wage growth in lower-skill occupations, including service and sales workers, compared to high-skill ones has caused a narrowing in occupational wage gaps.
An increase in labour market participation across all people of working age reduced the pool of spare labour that could enter the skilled labour market.
Managing Director, Hays Czech Republic
During the past three years, the Czech economy has experienced positive developments and ongoing growth. This growth is mainly driven by strong export and a continuous increase in household spend. The number of open vacancies continues to rise, reaching all-time maximum levels. A continuous hunger for skilled professionals is creating a shortage in the market which is putting great pressure on organisations to innovate and automate processes. We have seen a switch recently from low added-value operations moving further East, with more complex processes being established in the Czech Republic. While traditional industry remains the key driver, the service sector is expanding with double digit growth. There is no easy fi x for the labour market on the horizon; therefore companies should invest heavily in further automation in a short timescale.
Ladislav Kučera, Managing Director, Hays Czech Republic
The Czech Republic economy expanded by 4.5% in 2017.
This rapid rate of growth stimulated the demand for labour, with the International Labour Organization’s measure of the unemployment rate declining to 2.9%. This is well down from its post-financial crisis peak of 7.3% in 2010. At the same time, the number of open job vacancies has risen to its highest in more than two decades, at over 250,000 compared to less than 150,000 a year before.
The increased demand for labour has impacted earnings growth. Economy-wide wages are estimated to have increased by an average of 3.7% in 2017. Lower-skilled workers seem to have received larger increases than higher-skilled counterparts.