This year is a turning point in the labor market in many ways. It has brought the most significant decline in real incomes in the history of the independent Czech Republic. Because of the almost 10-percent drop, many people have to go to one more job.
At the same time, however, it has the impetus to the development of part-time work, paternity leave, and other benefits companies offer in addition to salaries.
There is also a widening gap in employment chances between people who lack specialization and those who can choose. IT specialists and technicians of all kinds remain the most in-demand workers, but there is also a year-long wait for craftsmen, for example.
In general, however, from the employees’ perspective, the “recruitment party” is ending this year.
“This year has seen the beginning of a turnaround in the labor market, where we are moving from a hunger for employees of all kinds to a situation where an estimated one in five companies will reduce their workforce,” summarized Jan Klusoň, HR manager and head of the Welcome to the Jungle platform.
How many companies will downsize?
The Confederation of Industry and Transport found among its members that one in ten companies in its sphere of activity will reduce the number of employees. The Chamber of Commerce estimates that one in five companies will make redundancies by the year’s turn.
According to HR experts, this may benefit the overall labor market. However, downsizing puts employees under pressure and will force them, for example, to commute more or retrain.
However, if, for example, ten seamstresses lose their jobs, they will hardly make up for the vacant positions of CNC machine operators or IT administration at a company in the next district.
Therefore, there is expected to be more unemployed, but many jobs will remain unfilled anyway. According to the consultancy RSM, some project teams in companies can lose up to 15% of their staff without negatively impacting the company’s performance.
These are mainly corporate soft-skill professions, primarily managerial positions such as communications managers, so-called “happiness and corporate games” managers, etc.
From work to work
Even though people in many industries see more money on their paychecks, they are still buying, on average, ten percent less than a year ago.
Transport and storage, administration, and activities of all kinds that statistically cannot be classified as either manufacturing or trade have been the most successful in at least partially offsetting the rise in prices.
In nominal terms, wages rose by nine to ten percent in this mix of occupations. Even so, real wages have fallen the most since the 1990s due to price increases in these sectors.
Companies are trying to put the brakes on rising prices for employees, but according to consultancy RSM, they often don’t know where to get higher wages.
Therefore, even wage increases are insufficient to keep up with high inflation. An exception is pharmaceutical companies, for example, which have seen their sales grow steadily, unlike trade.
More and more people cannot get by on one salary, especially at the lowest levels.
Therefore, about a quarter of employees must have a supplement to their primary income, and another 21 percent plan to find one to make ends meet, according to LMC data. The response of job seekers to job ads, which was weak last year, has rebounded.
Part-time jobs will be more attractive
“But this year has also brought good news, such as the extension of paternity leave, the preferential treatment of part-time jobs, and the drafting of an amendment to the law regulating home offices,” Klusoň summarises.
Newlywed fathers saw their leave double from one week to two.
Returning to work after parental leave can be facilitated by part-time work. In the Netherlands, for example, around 37 percent of the workforce uses part-time jobs, while in the Czech Republic, only about 10 percent.
Working from home with extra pay?
New legislation is set to improve this, making it a more attractive option starting in January. It will give employers a five percent discount on premiums for parents of children under 10, students, people under 21, and workers over 55.
“This will help new parents, seniors, or students,” Klusoň said.
This year, discussions also began at the legislative level about a lump sum that employees should receive by law for working from home as an allowance for electricity and heating.
Opponents of the homeworking allowance argue that the employee, on the other hand, has more freedom and saves time and transportation costs.
According to a survey conducted by the Randstad recruitment agency among 140 major companies from various sectors in the Czech Republic, 14 percent of companies contribute to expenses related to working from home, and only 2.5 percent of respondents plan to introduce the allowance.
Working from home is widely regarded as a benefit, but many company bosses point out that it reduces productivity if people work more at home than at work. Communication is flatter and less creative.