Our findings show that the labor market in many of the EU-CEE8 countries is extremely tight. CEE is the region with the second lowest unemployment rate in the world. A dramatic further decline in working-age population does not offer much relief in the future. Net emigration continues to plague the economies, especially in Romania, Bulgaria and Poland. A huge (although shrinking) wage differential between CEE and Western Europe is still one driver of emigration. A declining labor pool, a mismatch between offered and demanded qualifications as well as intense competition between firms for job candidates are main causes of these shortages. The most-sought after occupations can be found on both ends of the skills and wage spectrum, namely among manual workers in logistics/production at the low wage end and engineers and IT specialists at the high-wage end. The most affected countries are the Czech Republic, Romania, Poland and Slovenia.

In the interviews, nearly all executives confirmed the strong impact of the shortages on their operations. The companies respond to the challenges by upskilling, for instance by promoting digital skills, and reskilling employees for a broader task set to increase flexibility in operations. To retain them employers offer more options in work arrangements, higher wages and more benefits. Employer branding on social networks, more cooperation with schools and colleges, boni for recruitments as well as approaching less represented groups in the labor market such as women and people aged 50+ are used in recruiting. Future initiatives should focus on better aligning the education with the demands of the businesses and removing regulatory barriers hindering cross-border work and mobility. Furthermore, the interviewees make a plea for an upgrading and promotion of the vocational education and practice-oriented trainings.

Download the report