Jobs are available, all we need are workers

GKI Economic Research forecasts economic growth of around 2-2.5% in 2024, after a decline of around half a percent last year. In line with the improving performance of the economy, the research institute expects a significant expansion in employment in 2024, with an unemployment rate of 3.8%, compared with 4.1% this year.

IT is still a hit

Despite the improving outlook, there is still a lot of uncertainty about the path of the economy next year, but in the first quarter of 2024, 31% of domestic employers plan to expand their current workforce, while 21% predict a reduction, according to Manpower Hungary's labour market forecast. In a quarterly survey conducted by the recruitment agency, a representative sample of 525 employers in Hungary were asked about their hiring intentions for the first quarter of 2024. There are significant differences between regions compared to the national average. The largest increases are expected in the Southern Great Plain and Northern Great Plain area, but employers in Central Hungary, Budapest and Northern Hungary also expect above the national average. However, the outlook is gloomier in the Transdanubian regions, where more employers expect to lay off workers than to hire in the South Transdanubian region, while in the rest of the West no significant increase or decrease is expected.

There is also considerable variation by sector, with the largest increases expected in IT and finance and real estate, but above-average job growth also expected in communications services, logistics and automotive, and materials and manufacturing. The lowest growth is expected in health and life sciences, consumer goods and services, and energy and utilities. When grouping responses by company size, small and medium-sized companies were significantly more optimistic than those with more than 1,000 employees.

Almost half of the companies are willing to join the wage race

In the survey, 73% of domestic firms reported to varying degrees that they are unable to fill open positions due to a lack of qualified candidates. Although only 21 per cent have significant difficulties in doing so. Shortages are most acute in IT, manufacturing and engineering. Companies are trying to reduce the shortage of skilled workers mainly by making working conditions more flexible and by offering higher salaries and entry bonuses. Wage competition is used by 42% of firms to this end, time flexibility (part-time work, flexible working hours) by 33% of respondents, and flexible working arrangements (teleworking, home office, hybrid working) by 29% of firms. 29 percent of responding employers reported offering a sign-on bonus to new entrants.

The survey did not reveal this, but we would add that more and more companies are filling the shortfall in their factories with Asian guest workers. In an interview with HR Portal in December, Rowena Paragas, vice-president of the Philippine Association of Recruitment Agencies, said that 8-10,000 Filipino guest workers are working in Hungary.  According to the general secretary of the ITUC, "if we don't want to fall behind, we will need significantly more digitally literate workers. This is why we find it particularly worrying that one of the most prominent bootcamps has just announced that it will cease its operations.Make no mistake, it was not a lack of student interest, and the problem was not that there was no need for the IT professionals that Green Fox had trained for the labour market, but rather that in the domestic environment, digital skills cannot be left to market-based businesses alone," added Krisztina Tajthy.

Without the right workforce, many efficiency projects cannot get off the ground in companies. "For example, a manufacturing company may know how much more efficient it can be by automating certain work processes if it cannot find the right people to manage the transition, and must continue to produce less economically until it can meet this challenge," says the Secretary General, illustrating the situation in the sector. She pointed out that there are many more optimisation opportunities for the company if it has an in-house data analyst to process the vast amount of data that the machines on the production line are generating. "Not to mention that the domestic subsidiaries of multinational companies could also carry out development projects on a larger scale and of a larger magnitude at home if they could hire the necessary amount and skills," added Krisztina Tajthy.

They keep the workforce

The turnover rate at Videoton Holding has decreased in the last 1-2 months of the year, which the company's CEO says may indicate something about the short-term situation on the labour market. Péter Lakatos, CEO of the company, told HR Portal that it is a known fact that demographics itself is reducing the workforce by 1% per year. For the large electronics company, efficiency improvements, digitalisation and automation can also be a solution to the labour shortage, all of which lead to and serve the goal of producing more with less human resources, he added.  Péter Lakatos, who is also co-chairman of the National Association of Employers and Industrialists, said that the country's GDP growth over the past 10 years has been based on a highly extensive base, which has led to an increase in employment. Since we are close to full employment, he said, the need to employ foreign labour is a result of economic policy priorities. At the same time, efficiency at the national level must increase, thanks to digitalisation, automation, the quality of education and health care, and of course many other factors.  According to Lakatos, especially Hungarian SMEs that are not integrated into the international bloodstream will face new challenges, while generational change is an increasingly typical problem, as the generation that changed the system is typically 60-75 years old - outlined another difficulty of MGYOSZ co-president.

The article in Hungarian can be read here.