Czech salaries rising by up to one-fifth

Reading Time: 2 minutes

Private sector wages in Czechia are rising by as much as 20%, Czech Radio found when it interviewed employment industry experts this week. High inflation and rocketing energy prices while the government has chosen to freeze salaries for civil servants, means companies are having to hike salaries to keep employees.

Covid slowed down the influx of people from abroad looking for work and Czechia has one of Europe’s lowest unemployment rates, noted Jaroslava Rezlerova, the CEO of ManpowerGroup, the country’s largest recruitment agency. While a significant number of people have prioritised flexible working hours over salary in recent years, wages have come back to the forefront thanks to rising inflation, she explained.

“In some sectors wages are growing above inflation rates, around 15%, or even 20%. This could have a slow-down effect on the economy, because foreign companies could decide that it is not worth it for them to have branches here,” said Rezlerova, Radio Prague International reported.

Czech Chamber of Industry and Trade vice-president Radek Spicar joined Rezlerova in calling for a restructuring of the country’s economy. Spicar identified the key problem as that a Czech employee on average creates value equivalent to EUR 13 in an hour, while in Germany that figure is EUR 42. “It is not that a Czech employee works 45 minutes less than a German: it is about the structure of the economy,” he said. “We are a sub-contracting-oriented economy, rather than one focused on manufacturing the final product,” Spicar added.

“We are significantly controlled by foreign capital. It is good that foreign economies invest in this country, however their dividend profits end up outside of the Czech Republic. If that money stayed here, it could be invested into research, development or better salaries,” the external service of Czech Radio reported Spicar as saying. To make this happen, companies will need state support to boost the size of the labour market and simplify procedures for establishing R&D facilities in Czechia, Spicar added.

CET Editor

Recent Posts

Poland tops employment rankings – OECD report

The EU’s employment rate reached a record high of 70.9% in the fourth quarter of…

4 days ago

Greece plans to repay Eurozone’s bailout loans whole decade in advance

Greece has announced plans to repay its first bailout loans a decade ahead of schedule,…

4 days ago

CEE economies tougher than you may think – ING

Despite their export-driven economies and strong manufacturing bases, Central and Eastern Europe (CEE) countries may…

4 days ago

Slovenia mulls French, US bids for nuclear project

Slovenia is at the centre of a strategic struggle between France and the US, as…

4 days ago

Single market is not single, and it’s costing us all

The EU’s internal market is still falling short of its founding promise. Despite decades of…

1 week ago

Foot-and-mouth sees culls, CEE border closures

An outbreak of foot-and-mouth disease (FMD) has prompted mass animal culls and tightened border controls…

2 weeks ago