Graduates are making the queues at local employment offices significantly longer. The level of unemployment grew to 8.4% in July thanks partly to them, and the number of unemployed is fast reaching the half-million mark.
Young graduates are a new addition to the ranks of those most threatened by joblessness.
They have university diplomas, or at least secondary school certificates, but no experience, so companies reject them. More than 21,000 recent graduates are unemployed — a quarter more than last year.
Graduates are experiencing their worst year in a long time. Initial salaries dropped CZK 10,000 year-on-year, and the number of jobs available to first-timers has fallen 75%, according to recruitment agencies. “When companies hire a new employee nowadays, they prefer someone with relevant experience,” says Ondřej Mysliveček, an analyst at LMC. He adds that at least 25% of companies restricted hiring graduates. “We expected companies to demand a higher number of seasonal workers instead of employees, but even those numbers fell by roughly 50%,” Mysliveček says.
According to Aleš Křížek from the Robert Half agency, companies prefer to seek out and train graduates themselves. Gone are the times when education automatically opened the door. “Today we are mainly looking for senior positions, since that’s what the market requires,” says Mirko Kalous, head of IT company Ness.
The local economy is nearing its nadir. Some fields may have already touched bottom, but experts predict the labour market will be hurting for some time. More than 100,000 people lost their jobs since the beginning of year. But all analysts, including those from the Czech National Bank, agree that unemployment will soon exceed 10%.
“We will likely reach the peak at the beginning of next year, when the unemployment rate might surpass 10%,” says Raiffeisenbank analyst Helena Horská.
“Let’s not forget that these numbers only include people laid off before April and that more people followed,” says Josef Středula, head of the largest trade union organisation KOVO.
Following those working in industry and graduates, all those working in services can expect bad news. Analysts expect the crisis to move into that field right after industry. Layoffs might start in autumn at the latest.
“Even though the situation is no longer as dramatic as it was at the beginning of the year, the number of unemployed keeps rising. We are getting reports from the industry field claiming some of the companies really operate on 30% of their capacities but laid off only few people,” says Boris Dlouhý from the Confederation of Industry, adding that less than half of all industry companies will undergo a reduction.
His words are being confirmed by reality. More than 20 companies were closed down last month. In Stříbro, 600 employees of Alcoa Fujikura were laid off, 200 new unemployed came out of Intos and 170 will leave Kopp, which is moving production abroad.
Construction sites are not reviving either. Local industry leader Skanska is changing its structure due to cuts. The company is transforming daughter companies into divisions of one company. Skanska CEO Dan Ťok wants to lay off hundreds of employees. Association of Building Entrepreneurs estimates 15% of employees will lose their jobs.
The Labour Ministry is fighting the growing unemployment by supporting education. “Almost 2,000 companies showed interest in our education and training programmes,” says Minister for Labour Petr Šimerka. His ministry has more than CZK 3 billion to support such programmes.
Managers can relax mainly since companies that restructured early are slowly opening their gates. Middle management fell victim to the first wave of layoffs at the beginning of the year. “The market for managers has revived, and sometimes they are even offered the same salaries as before the crisis,” says Petr Žídek from Top Recruitment.
According to Jobs.cz, the most sought after professions on the market are experienced sales managers, who can secure lifeline commissions.
Among the exceptions, computer retailer Mironet is expanding and offering CZK 2,000 to employees who bring in new recruits.