The current times are marked by turbulence in the job market. While many companies have plans to hire new employees in the upcoming quarter, there is also a significant number intending to downsize. These findings come from a survey conducted by recruitment group ManpowerGroup for the third quarter of this year, shedding light on the major movements expected.
According to the survey, employers in the Czech Republic are looking to increase their workforce over the next three months. Among the companies surveyed, 35 percent have intentions to hire, while 16 percent plan to lay off employees. Nearly half of the companies have no specific plans, and the remaining portion is uncertain. As a result, the net labor market index, which indicates the difference between the proportion of companies planning to hire versus those planning layoffs, stands at a positive 19 percent for the third quarter of 2023.
This represents a three-percentage-point increase from the previous quarter and an impressive 12-point increase from the first quarter when the index was negative. However, when compared to the same period last year, the index is still down by two percentage points.
After a period of uncertainty at the beginning of the year, confidence has returned to the labor market, leading to a decline in unemployment by seven to ten thousand individuals per month. This positive trend can be attributed to growing optimism among companies. Furthermore, firms are anticipating further increases in hiring during the summer. However, while more than a third of organizations plan to hire, over one-sixth of companies are considering layoffs. This highlights the ongoing challenges that businesses face in adapting to the new reality, as stated by Jaroslava Rezlerová, Managing Director of ManpowerGroup Czech Republic, in response to the index results.
In terms of specific industries, all nine major sectors in the Czech Republic are planning to increase their workforce in the next quarter. Compared to the previous quarter, hiring activity has strengthened in five sectors and weakened in four. However, when compared to the same period last year, hiring has slowed in seven industries.
The Finance, Insurance & Real Estate sector is the most optimistic about future hiring, boasting a net labor market index of 45. The energy sector follows closely behind with an index of 32 percentage points. The communications services sector has experienced a significant increase, with the index rising by 32 percentage points compared to the previous quarter. On the other hand, the weakest sector, with an index of two percent, is the “other” sector, encompassing the public sector, government, education, and nonprofit organizations.
Regarding company size, medium and large enterprises exhibit the highest levels of dynamism. These companies have the strongest intentions for both hiring and downsizing. For instance, 42 percent of medium-sized companies plan to hire, while 18 percent of them intend to downsize. Similarly, a significant portion of large companies with over 250 employees also plan to reduce their workforce, but one-third of these companies still plan to recruit, resulting in a net labor index of 15 percent.
In terms of regional comparison, employers across all three regions expect the labor market to expand in the coming quarter. The Prague region demonstrates the strongest values with an index of 22, marking a three-percentage-point increase from the previous quarter but a one-point decrease year-on-year. The Moravia region reports the highest increases, with a nine-percentage-point increase quarter-on-quarter and a six-percentage-point increase year-on-year. Companies based in the Czech Republic have the least ambitious recruitment plans, resulting in a net job index of 15 percent for the region.
Source: seznamspravy.cz
