14:35 29 September 2022

Job market resists economic turmoil

Despite recent economic troubles and the cost of living crisis, Poland’s job market is still booming. Whether the current trend continues remains to be seen, however, as financial pressures are impacting new hires.

Job market resists economic turmoil

 The Polish job market has so far been remarkably resistant to the economic slowdown. The country’s unemployment rate is the second lowest in the European Union, and wages are growing at a double-digit pace. In the first half of the year, 97% of companies searched for new employees, a report by recruitment consultancy Hays has revealed.

 “After a short pandemic slowdown, the Polish labor market has flourished, making talent acquisition and retention more difficult than ever before,” Alex Shteingardt, Regional Director CEE, Managing Director Poland at Hays told the Warsaw Business Journal. Employees are becoming more demanding, and companies often struggle to catch up with their expectations. Inflation-related pay rises were also common in the first half of the year. A Hays survey shows that as many as 83% of organizations increased their financial offerings.  

The recent months, however, have marked the first signs of cooling in the labor market as companies face growing cost pressure amid rising inflation and skyrocketing energy prices. “The Polish labor market is not on the brink of a crisis, but rather returning to some form of stability. Employers will be less likely to increase employment levels, but will recruit in order to find replacements for workers who decide to leave,” Shteingardt said.

The marketplace platform OLX reported that the number of job offers in July declined by 9.3% compared to the previous month. In August, the downward trend continued, and there were 4.4% fewer offers compared to July. Paweł Świderski, Head of Jobs at OLX, says that the competition among candidates is growing. “The correction, although still quite insignificant, may already indicate changes in employers’ moods,” he noted. Competition has particularly intensified in the gastronomy and customer service sectors – roles which candidates often see as an additional source of income. 

Rising inflation, and, as a result, a growing cost of living, higher interest rates, and geopolitical uncertainty may cause a temporary slowdown in recruitment processes, Łukasz Borowicz of OLX told the Warsaw Business Journal. In addition, the number of applications for jobs abroad has been growing steadily, indicating that more Poles consider emigration as a way to increase their income. In September alone, interest in vacancies in foreign countries jumped by 65% annually. 

In the domestic labor market, the competition among candidates is now fiercer. Professional services network Grant Thornton reported that out of 40 monitored occupations in Poland, the number of job offers decreased by 26. The greatest declines were for manual labor jobs, such as waiters and bartenders, cooks, construction workers, hairdressers, and drivers. Grant Thornton analysts note that declines are partially due to high base effects from the last year when firms were actively hiring service staff after the pandemic freeze. 

At the same time, the number of offers for accountants and financial analysts jumped by 50% compared to a year ago. IT specialists and HR professionals traditionally remained in demand: the number of job advertisements for these roles increased by 39% and 29% respectively. 

Overall, the slowdown in the labor market is rather mild so far. Even though the number of vacancies has been recently dropping, this applies mainly to blue-collar and low-skilled jobs. Specialist and skilled workers are still difficult to acquire and retain, Shteingardt said.

Competition for qualified employees

Professionals continue to expect their employers to adjust their pay levels to the current economic situation. “A raise of 5-10% for many is simply not satisfactory as it does not increase their real purchasing power,” Shteingardt of Hays said. In August, inflation in Poland accelerated to 16.1%, the highest level in 26 years. 

The number of companies willing to make counter-offers to keep employees who consider leaving is growing. However, only 35% of firms consider this method effective, according to Hays. Apart from monetary motivation, employees nowadays expect flexibility, such as hybrid or remote work. For more than two-thirds of employees, dissatisfaction with their work model is a sufficient argument to change the job.

Qualified professionals do not hesitate to leave their workplace for a more attractive offer. In the second half of the year, as many as 82% of companies expect difficulties in finding specialists, which is an increase of 8 percentage points compared to the beginning of the year. Almost half of Hays survey respondents plan to search for a new job during the next twelve months. At the same time, almost one-third have changed their job in 2022. 

Dissatisfaction with salary level together with the ever-growing costs of living convince many employees to look for new job opportunities. Shteingardt expects high turnover rates to remain an issue for many companies and organizations. At the same time, companies are aware that in uncertain times, qualified employees are more valuable than ever, and will make an effort to retain experienced and skillful specialists. 

“It can be expected that in the upcoming months we will observe neither an employer nor a candidate market, but rather a situation where a candidate’s position relies on skills possessed. Workers who have the right skillset and professional experience will still have career opportunities to choose from,” Shteingardt said.

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