Surprisingly, Czech employees remain among the most cost-effective in the European Union despite the country’s growing economy. According to recent data, the Czech Republic ranks as the eleventh cheapest country regarding employer costs for their workforce.
Last year, the hourly labour costs in the Czech Republic amounted to 18 euros, equivalent to 432.10 CZK at the time. While these costs have increased this year, the rise has been modest compared to most neighbouring countries. The Czech Republic still lags behind the European average.
Luxembourg has the highest hourly labour costs, at 53.9 euros (about 1,294 CZK), while Bulgaria trails at the bottom with 9.3 euros (223.30 CZK). The EU average is 31.80 euros, or 763.40 CZK.
Petr Dufek, chief economist at Banka Creditas, notes that the Czech Republic’s position has barely changed over the past decade. “Twelve years ago, we had the tenth lowest labour costs in the EU; last year, we were eleventh,” he commented.
The strengthening of the Czech koruna has contributed to the gradual increase in these costs when measured in euros. However, Czech labour costs still only reach 44% of German levels, even after 34 years since the Velvet Revolution. This significant disparity persists despite the Czech Republic’s economic progress.
Experts suggest that the Czech Republic must focus on creating new, high-skilled job opportunities to see a more rapid increase in labour costs. This shift would not only boost wages but also enhance the country’s overall economic competitiveness on the global stage.