Caution – a New Labour Market Keyword

Prague, 22nd September 2020 - The results of an extensive survey that charts the current financial remuneration of hundreds of jobs in 9 industries and 13 regions of the Czech Republic were published by Grafton Recruitment, a recruitment agency. It clearly indicates that after a long period of growth, salaries have levelled off. In addition, the amount of financial remuneration as well as possible benefits is no longer dictated by employees. Instead, it is the employers who decide on them once again. Candidates have been adapting to the current situation flexibly and have put job stability, job security and safety at the top of their priorities, even at the cost of lower incomes.

“Since 2019, we have been observing a gradual slowdown in the growth of the Czech economy, which has been exacerbated by the coronavirus pandemic this year. Although companies could have taken advantage of a number of government support measures, the Czech economy can be expected to fall by 10–15% and unemployment can be expected to rise to 6–10%," says Martin Malo, Director of Grafton Recruitment and GI Group. According to him, there is already a clear trend where, on one hand, the number of newly opened positions with employers is significantly decreasing, and on the other hand, the number of vacancies is multiplying. This means for employers that, once again, they can fully focus on selecting better candidates who meet all the prerequisites to get a job, and they can also focus on labour productivity, which has generally stagnated in recent years. Another effect of the current development of the labour market is a significant reduction in employee turnover, precisely due to the low number of job openings. 

Caution in Recruitment as a Major Phenomenon in 2020
However, not only employees but also employers currently feel considerable insecurity. It results both from the epidemiological development and from the unclear and changing contents of contracts, and it is the reason for the considerable caution exercised by companies in the field of recruitment. Therefore, the trend for 2020 is and will be a flexible form of employment of candidates, especially, but not exclusively, in production.
"It can be expected that, for the rest of the year, there will not be much interest in recruiting candidates without qualifications, but we will continue to face a shortage of qualified candidates who used to often come from abroad but had to leave the Czech Republic in many cases due to the pandemic. Cross-border recruitment will therefore be needed even now at the time of rising unemployment,” says Martin Malo.

IT and Telecommunications: The Salary Bubble Has Burst
Information technology and telecommunications have long been among the industries with the greatest shortage of qualified experts. To a large extent, this is also related to digitisation projects which are taking place across all sectors of the Czech economy and have become even more important during the coronavirus pandemic. Nevertheless, a decrease of about one-fifth in the number of vacancies as well as stagnation of salaries can be seen.

Probably the greatest demand for applicants is in the field of e-commerce and data analysis. The increase is also noticeable in administrator positions within the infrastructure, and cloud specialists are also in great demand. An interesting phenomenon in the field of information technology is the elimination of differences in years of experience. Many technologies are new and therefore two years of experience is considered and also regarded as senior. The preferences of applicants for IT positions remained unchanged. It is still true that it is not so important how much they earn, but on what project, with what technologies and in what environment they will work. Due to the uncertainty prevailing in the entire market, a growing number of contractors are applying for employment.

Manufacturing: A Lack of Skilled Workers despite the Decline
The manufacturing sector was hit hard by the pandemic. The decline was recorded mainly in the automotive area and in companies that are linked to the automotive industry. Recruitment of these producers was completely stopped and financial and non-financial benefits were cancelled too. In contrast, manufacturing companies in the pharmaceutical or food industries experienced a growth even during the peak of the pandemic and needed to hire new workers. However, salaries did not rise with such employers either. Currently, there are enough vacant unskilled workers also thanks to the redundancies in other segments, especially in hospitality. However, there is still a hunger for skilled positions, such as electricians, welders, warehouse forklift operators and the like.

Banking and Financial Services: Combining Agendas and Positions
The field of finance is one of the least affected by the pandemic. After stopping recruitment during the lockdown, the sector recorded the fastest return to the pre-pandemic levels. Accounting and financial specialists are the most sought after, and an increase is also expected in positions related to receivables, risk management and data analytics in relation to the customer market and consumer behaviour. A new trend is emerging in the field, where positions do not specialise so much anymore and the requirements of companies intertwine across responsibilities (e.g. accounting and financial controller). In most cases, however, such aggregation of positions and responsibilities under one person is not accepted positively.

Banking, on the other hand, is experiencing a continuous decline in recruitment. At the same time, the attractiveness of the entire industry is also declining. Due to the wider use of automation, there is a noticeable reduction in the number of "front office" positions; on the contrary, an increase can be seen in analytical roles.

Procurement and Logistics: Growing Demands and Punishment for Unfair Practices
In the area of procurement, salary stagnation continues and the pandemic has also brought about a reduction in financial benefits, especially 13th/14th salaries and quarterly bonuses. Procurement positions are often cancelled without replacement, so there are now many available candidates on the market. At the same time, the demands of employers are changing; as for the procurement staff, the emphasis is also placed on strategic thinking and the ability to present one’s self professionally. Companies also pay increased attention to possible unfair practices of their people in purchasing positions and severely punish it. The situation is different in the area of warehouses and logistics, where a significant increase in vacancies is evident. Even there, however, the demands on job seekers are growing. Companies want smart and bright employees who can cope with unusual situations. 

Sales and Marketing: Lower Income in Sales, Focus on E-commerce in Marketing
As with most other office professions, the benefits of sales and marketing positions have been reduced. Most often it was a reduction in contributions to leisure activities. Due to the fact that most salaries in sales positions are tied to performance, which was minimal during the state of emergency and lockdown, there was also a reduction in income of these employees.

Currently, there are a large number of candidates actively seeking jobs on the market, and they are willing to make large concessions in their demands. However, few of them correspond to the ideas of companies, which increasingly demand specialisation in the field of sales. In the area of direct sales, there is a clear shift towards building relationships with clients and analytical work with data so that communication is as effective as possible.

In marketing, a decrease in positions specialised in offline marketing and trade marketing can be seen, while a boom has occurred in positions related to e-commerce and social media.

Human Resources and Law: Finding a Job without Experience Complicated
Thanks to the pandemic, the administration and human resources recorded a large decrease in vacancies and at the same time an enormous increase in applicants. In general, companies do not list any new positions and only replace vacancies. The coronavirus crisis has also brought about a relatively significant reduction in financial benefits and an increase in demands on applicants. Companies are looking for multifunctional and experienced employees, so it is now a significant problem to find a job without experience. The pandemic has also affected the field of law. Law firms have suspended the recruitment of new colleagues, and about a third of law firms have temporarily reduced remuneration. This is usually by around 10%.

Construction and Real Estate: Growth Is Expected
The construction was affected by the pandemic only minimally. Recruitment of new employees resumed almost the fastest of all fields after the end of the lockdown and state of emergency. The pandemic complicated the recruitment of workers from abroad in particular, so companies had to focus on foreign workers who have already been relocated but lost their jobs due to the coronavirus crisis.

The number of vacancies is roughly the same as last year at this time, but an increase is expected due to the stimulus to the economy by the government and the EU.  Over the next two years, this industry should experience very good times. Currently, construction managers, costing managers and estimators are the most sought-after; the interest in designers and electrical designers is also growing. The good news is that the pandemic has not affected the salary level and the benefits in this field in any way.

Healthcare and Pharmacy: Increasing the Attractiveness of the Industry, though Remuneration is without Changes
The pharmaceutical and healthcare industries experienced a boom during the pandemic. The attractiveness of these industries has also increased, which has been reflected in greater interest from job seekers. Most companies were looking for candidates for positions related to the production of pharmaceuticals and drugs, and customer service in pharmacies and medical supply stores was often in demand.

Stronger recruitment during the pandemic can be seen as fluctuation rather than a long-term trend. In particular, companies needed to cover absences of employees who were in quarantine or had to stay at home with their children.

Remuneration in pharmacy and health care remained unchanged; however, in pharmacy a distinction is made between the salaries of those employees who already have experience in the field and those who have transferred to it from elsewhere.

Shared Business Services: Growth despite the Pandemic
While a number of sectors are experiencing stagnation or even decline in the context of the coronavirus pandemic, the business services sector has been able to ensure smooth operation even in times of emergency and growth at the time of general cooling of the economy and labour market because most of the employees were transferred to work from home. According to a survey by the ABSL industry association, new opportunities have even opened up for more than half of the Czech centres in connection with the pandemic. Some centres took over processes from their sister organisations in Asia, where the infrastructure did not allow all people to be transferred to work from home, and there was a temporary slowdown of the operation. Others expanded their regional presence or began to provide new services such as IT support for employees working from home, consolidation of data, digitisation projects or the introduction of robotic automation. This is one of the reasons why the field is one of the few sectors that have not suspended their recruitment activities. Despite the growth, however, salaries have stagnated there as well. A slight growth can be recorded only in the area of IT Services across all regions of the Czech Republic. Salaries in the area of finance are growing slightly only in Prague, for positions in HR in Ostrava and in Supply Chain Management in Brno.



About the Grafton Recruitment Salary Survey
The survey was conducted during the 3rd quarter of 2020 in 13 regions of the Czech Republic. The presented data are mainly based on the starting salaries of candidates we have placed, as well as on the demands of companies to find employees. In 2019, Grafton Recruitment, a recruitment agency, helped 1,903 people find full-time employment (HPP). In addition, the agency recruited 8,001 workers through agency work.