Salaries are growing and employers are investing into reinforcing the loyalty of their people

Prague, 5 April 2017

The Grafton Recruitment Agency has published the results of an extensive salary survey. This material provides a clear comparison of financial compensation in 8 key segments in 14 regions in the Czech Republic. The survey provides a clear-cut conclusion. The very low unemployment rate is forcing employers to not only re-evaluate their offer of non-financial benefits, but also to increase salaries, which is evident in practically all segment.

According to the findings of the Czech Statistical Office, salaries grew nominally by 4.3% in 2016 (compared to 3.4% in 2015 and 2.4% in 2014). The speed with which new jobs are being created and the growing imbalance between demand for employees and the supply of candidate capacities, can cause even greater growth this year, by up to around 5%.

“The unemployment rate in the Czech Republic is one of the lowest in Europe and is on the level of so-called natural unemployment. There are a minimum number of available job applicants, while the number of offered positions is growing rapidly, and this growth will continue in 2017. As a result, employers must consider the methods they can use to motivate their employees and reinforce their loyalty, in addition to increasing salaries and benefits,” says Martin Ježek, Business Director at Grafton Recruitment, and he adds, “Many employers, particularly in the IT, business services and manufacturing sectors are starting to invest into a modern working environment offering a number of relaxation zones, and opportunities for sports or social activities, as well as areas for work. Benefits, which are intended to simplify achievement of a work/life balance are also becoming more frequent.” A pleasant work environment and ambiance also has increasing significance during recruitment of employees, it particularly plays a role for the young generation of candidates and the importance of this aspect will continue to grow in the future in relation to the job applicant’s decision whether to accept a job offer or not.

The job market is also registering other distinct trends:

• Employers are placing increasingly greater emphasis on the language skills of candidates. This is based on the fact that Czech companies are providing their services or focusing their business activities abroad more and more intensively.
• With regard to the lack of qualified candidates, companies are also recruiting employees with less experience. More opportunities are also appearing for fresh graduates, which companies then train for the required qualifications themselves.
• There is a growing interest in recruitment of employees from abroad. This doesn’t just concern companies in the business services sector or IT, but increasingly frequently also companies in manufacturing and even in the healthcare sector.
• The recruitment process is being accelerated. Companies have realised that if they want to acquire a candidate, they have to be flexible in their decisions.

Industrial production and IT are currently registering the greatest shortage of employees, and the number of vacant positions is also growing in the field of human resources and in business services. The greatest regional differences in salaries can also be found in IT and in the financial segment. There are also great differences in compensation of employees without foreign language skills and those who do have these skills, across all the monitored market segments.

IT and telecommunications: new technologies, great regional differences
The stable growth of the Czech economy and new IT trends result in rising demands for human resources; however, employee qualification requirements are also growing from the aspect of technologies and also with regard to language skills. Demand for IT specialists capable of adapting to new technologies is also growing, there is an increasing shortage of developers, from development of industrial applications, advanced automobile control systems and mobile and web applications, to development in the field of artificial intelligence and machine learning. This is also related to rising demand for IT analysts and IT testers. Companies specializing in information mining, data analysis and interconnection of data, are registering similar increased requirements for specialists in so-called Big Data and demand is also growing for experts in increasing the security of both personal and company data, securing information systems and similar.
Great regional salary differences are typical for this sector. For example, while a system architect in Prague may make up to CZK 100,000, he will earn CZK 90,000 in Brno, CZK 80,000 in Pilsen or Ústí nad Labem and just CZK 60,000 in Olomouc. Similar differences can be found in practically all positions.

Industry: strong growth of salaries
The trend from previous years is being confirmed in the field of industrial production. This trend is a growing demand for a labour force with technical and language skills. Companies have sufficient contracts, they invest, launch new production lines, establish new plants on greenfield land and open new R&D centres. In some sectors and regions, the situation on the employment market is becoming very complicated and employers are dealing with this situation by increasing salaries, making the recruitment process more flexible and recruiting employees from abroad. Specialists in the field of mechanical engineering, electrical engineering and electronics are in greatest demand. The most desirable professions include design engineers, technologists and production engineers, demand for specialists in technical purchasing, quality and lean management is also growing and there is also a great shortage of CNC operators, tool makers, quality control workers and warehouse workers with a fork-lift truck licence. Salaries do not differ regionally as much as in IT, but are still quite marked in relation to some positions. For example, a production manager in Central Bohemian region will make about CZK 120,000, CZK 110,000 in Pilsen or Ostrava, CZK 100,000 in Brno or Ústí nad Labem, and just CZK 80,000 in Olomouc. A CNC operator will earn a salary of CZK 40,000 in Central Bohemian region, CZK 35,000 in Brno and Jihlava and CZK 30,000 in Olomouc. Workers in this position will earn the least in Ostrava (CZK 25,000) and in Zlín (CZK 23,000).

Business services: languages, languages, languages. The more languages, the more money.
The business services sector is registering dynamic growth, as most existing centres are expanding and recruiting new employees and new operations are being opened. For candidates, this means that there are more interesting job offers on the market, which motivate them to change jobs. And candidates do not have to be too active when seeking a new job. Qualified people with experience are frequently contacted directly by the HR Department of a company or personnel agency, by means of social media for example. It is consequently more difficult for employers to retain their employees in the long-term. Benefits (financial and non-financial), the working environment and office equipment, have recently become the key instruments, in addition to salaries, in the fight for employees. All employees of business services centres must have foreign language skills. The greatest shortage is in German speaking candidates, which is why companies frequently offer higher bonuses to candidates speaking this language. Nordic languages and Dutch are also languages in great demand, particularly in the field of IT. Enquiries are most frequently made for candidates for helpdesk positions and for specialists in network technologies, system support, virtualisation and application support for IT centres. Specialists in customer care, HR managers and administrators, recruitment, modification and benefit managers, or accountants, financial analysts, purchasing clerks and logistics clerks will also find employment in this segment. Most positions are also suitable for fresh university graduates.

Human resources: the boom on the job market has resulted in a shortage of recruitment officers
Due to the shortage of active candidates on the job market, there is a rising need to seek out and contact passive candidates, i.e. those who are not currently seeking work. This activity is typical for so-called talent seekers and recruiters. The requirements placed on these workers are increasing from the aspect of experience and knowledge of the tools used to seek talents. This is also related to the significant rise in salaries in these positions. Demand is also growing for personnel officers and HR administrators, which is also related to development of business services centres, which frequently specialise in services in the field of personnel management.

Administration and law: assistants are significantly better off
There is a lot of interest in assistants and receptionists in the field of administration. Assistants are currently in short supply and so their salaries have risen markedly year-on-year. There are only a few available candidates on the job market and it is frequently necessary to work with such candidates quickly and effectively during selection proceedings.

On the contrary, demand for solicitors remains constant in the field of legal services. However, graduates of legal faculties are increasingly demanding higher compensation. We encounter expectations of gross starting salaries of up to CZK 30,000 per month by trainee solicitors, and during interviews these candidates frequently inquire chiefly about how much work overtime their job would entail. They usually train at multiple legal offices. On the contrary, more experienced solicitors and in-house solicitors are more stable employees. They are mainly willing to change jobs for the opportunity to work on more attractive projects or for the opportunity to specialise in a specific field of law.

Sales and marketing: a higher fixed salary component for sales agents, English necessary for marketers
A new trend is appearing in the sales and marketing sector, the requirement for a university education is being increasingly overshadowed by the requirement for appropriate experience. Emphasis is placed on sales skills, language skills, pleasant behaviour and customer service. Another trend in the field of sales is the increase in fixed salaries for higher positions (Key Account Manager types), whereas bonuses are smaller and paid out on a quarterly or annual basis. Candidates in the field of marketing are required to have in-depth knowledge of the sector, frequently overlapping into IT, excellent communication skills and creativity. Fluent English is essential for most positions in marketing. There are regional salary differences, but they are not significant. For example, a highly sought after marketing specialist will earn about CZK 50,000 in Prague and in Brno, CZK 45,000 in České Budějovice, Pilsen or Liberec, CZK 40,000 in Ostrava and CZK 37,000 in Zlín.

Banking and the financial sphere: candidates want home office
The salaries of financial managers are growing the most – the number of positions with salaries exceeding CZK 80,000 per month is increasing. Salaries are also growing for graduate positions, where the starting salary currently ranges between CZK 30,000 and 35,000 per month. Professional accountants with English language skills and candidates for the position of head accountant or accounting department manager are most in demand. Candidates in this segment frequently require the option of at least partial home office.

Construction and real estate: optimism is growing
There is moderate optimism in the construction industry at the beginning of 2017. Civil engineering is expecting an increase in public tenders compared to last year in the traffic infrastructure sector, while residential development is supported by the low mortgage rate and growing household incomes. The influx of investments into industrial, logistics and office real estate is also continuing and many Czech companies are also expanding onto foreign markets, mainly in the field of transport construction. We currently register increased demand for candidates for the positions of planner and calculator. The key requirement, in addition to experience, continues to be a good English skill level. The proof that the construction industry is undergoing a revival is the rapidly growing demand for specialists in permission processes, which are the forerunner to newly commenced construction projects. On the contrary, we can see a fall in the demand for sales agents. Interest in graduate profiles is also falling, because companies currently prefer candidates with experience.

Pharmacy and healthcare: there is a shortage of nurses and pharmaceutical representatives.
The situation in the healthcare sector has not changed much since last year. The shortage of medical nurses and physicians of all specialities is on-going. Not only private facilities, but state hospitals are also being forced to increase salaries in order to retain qualified employees. We are also seeing interest in medical staff from East Europe (for example Bulgaria or Ukraine) more and more frequently in the healthcare sector. However, the language barrier in particular is a significant obstacle in this area. The salaries of nurses continue to range below the level of CNC operators for example – depending on the region, nurses can earn from CZK 16,000 to 35,000 per month. A shortage of available candidates is also apparent in the field of pharmaceutical companies, where sales agents and also candidates for pharmaceutical registration departments are in short supply.

About the Grafton Recruitment Salary Guide
The Grafton Recruitment Salary Guide was executed in the Czech Republic during the 1st quarter of 2017 at all 14 branches of the Company. The presented data is based mainly on the starting salaries of candidates for whom Grafton arranged employment and also on the enquiries of companies seeking employees. Grafton Recruitment helped a total of 2,378 people find full-time employment in 2016. Their number grew year-on-year by nearly 11%. The agency also arranged work for 9,679 people in the form of agency employment.