Plummet in Czech unemployment leaves businesses struggling to find workers

Czech employers have been struggling with a shortage of available employees for months now. From the Czech Republic’s rapidly growing IT scene, to heavy industry and agriculture, demand for workers is far outstripping supply.

New data from the Labor Office of the Czech Republic suggests their problems are only getting worse. The unemployment rate in the Czech Republic fell again in September, to only 3.4 percent, with 10,500 job seekers removed from the market.

There were 251,689 job seekers in September, almost 20,000 less than last October. Unemployment has been decreasing since the darkest days of the Covid pandemic passed in March this year, having grown to 4.3 percent in the winter due to Covid-related redundancies.

A high level of employment may seem like a sign of health for the Czech economy, but it poses serious problems for businesses looking to ramp up their operations to make up for losses caused by Covid. A low level of job seekers means a low number of applicants for each vacancy. This causes the talent pool for employers to shrink, resulting in the necessity of taking on less well-qualified workers, or otherwise struggling to find anyone at all to fill positions.

It is promising, however, that vacancies also decreased in September. This suggests the significant divergence between demand and supply seen earlier this autumn may be correcting itself. And the number of available workers could rise again as seasonal work comes to an end for the year.

“In the coming months, unemployment is likely to rise due to the decline in seasonal work, especially in agriculture and forestry. Yet the situation on the labor market will primarily depend on the prevailing pandemic situation,” said Viktor Najmon, Director General of the Czech Labor Office.

Unemployment levels in the Czech Republic have long been unusually low, and the country now has the lowest unemployment in the European Union. In a study for EU-wide unemployment in August this year, Eurostat found that the bloc had an average unemployment rate of 6.7 percent, two-and-a-half times that of the Czech Republic on 2.6 percent.

Demand for employees is especially high in the manufacturing and construction industries. Fast-growing parts of the economy, such as the IT sector, are having to turn increasingly to foreign employees to fill the labor gap. For some employers, on the other hand, the arrival of a new wave of graduates on the labor market this autumn may have helped alleviate concerns about a lack of workers.

The region with the high level of unemployment (5.1 percent) was Moravia-Silesia, followed by the Ústí Region (5 percent). The lowest level of unemployment was recorded in the Pardubice Region (2.1 percent). In some localities unemployment was even lower: in Prague-East, it was only 1.4 percent.

The first signs of correction in the Czech labor market are now appearing as vacancies fall in line with unemployment. Yet in many sectors, qualified workers are still gold dust for businesses; meaning exciting prospects could lie ahead for people keen to explore new work opportunities.