Business services sector set to hire more skilled foreigners in Czechia

The business services sector, which employs a tenth of all foreigners in the Czech Republic, saw a slowdown in hiring during the first year of the pandemic as travel restrictions and fears over safety caused many foreign workers in the Czech Republic to consider a return to their home countries.

Several new findings suggest the situation has stabilized and even predict a post-pandemic hiring boom with Czech-based companies intensively hiring workers from abroad.

Among those findings, a new survey from the Association of Business Service Leaders (ABSL) found that despite ongoing Covid measures, the number of foreign workers in the Czech business, customer service, and IT sectors has increased by more than 6,000 people in 2021.

According to its predictions, the number of skilled foreign workers in the IT, finance, logistics, and data analytics industries is anticipated to grow by another 10,000 in 2022.

“In the first year of the pandemic, many employers faced the problem of higher fluctuation of foreign workers, who returned to their home countries due to fears over the situation and safety,” said Jonathan Appleton, Director of ABSL. "Although about a third of business services centers now experience higher fluctuation of foreign employees and 36 percent of employers register fewer applicants from abroad than before the pandemic, the situation has stabilized."

Further data from relocation agencies as well as insights from companies that rely on foreign employees for customer service positions in the Czech Republic suggests a similar pattern.

"In 2021, compared to 2020, we recorded an increase in the demand for real estate leases to foreign nationals by 37 percent. Their number stabilized at almost the level of 2019,“ said Andrea Tkačuková, CEO Foreigners.cz.

SAP Services reports that the number and share of foreign employees are increasing every year. A smaller slowdown in their recruitment was evident between 2019 and 2020, but in 2021 the number of foreign workers increased by 24%. In total, they already make up 60% of all employees and they consist of 80 nationalities.

The boom in foreign employment may be linked to the current trend toward more flexible working; seventeen percent of employers in the business services sector now allow foreigners to work from home from different countries, while another 36 percent are said to be considering adopting such a model.

While the value of foreign workers in diversifying the Czech economy and driving growth has been highlighted throughout the pandemic, lengthy bureaucratic processes are still a major problem for companies looking to employ workers from abroad.

“Everything is still greatly complicated by bureaucratic burdens and contradictory information at various embassies and the Ministry of the Interior,” said Tkačuková. She adds that the amendment to the Act on the Residence of Foreigners in the Czech Republic from 2021 has discouraged many candidates by complicating the process for relocating family members.

Changes to amendment include an administrative fee of CZK 200 for residence applications from EU citizens, as well as new rules regarding health insurance for foreigners in the Czech Republic that stipulate “extended family” members of EU citizens must submit a document confirming their total monthly income as well as proof of comprehensive health insurance.

Though experts from abroad now make up 44 percent of the workforce in the business services sector, foreign labor remains of vital importance in more “blue-collar” sectors, such as manufacturing and construction.

In response, and amid a chronic labor shortage in the second half of 2021, some politicians called for visa requirements to be relaxed, facilitating an influx of foreign workers to restore balance to the jobs market.

Simplifying very complex immigration processes would no doubt ensure the continued arrival of international investors and talents, said ABSL's Appleton.

"We believe that the new government will help in this regard to support the development of our sector, which is changing the Czech Republic into a country of innovation and highly skilled work."