Czech Republic plans to increase refugee workforce | Business | Economic and financial news from a German perspective | DW


Not being a direct neighbour, the Czech Republic has seen fewer refugees arrive than some nearby countries, but while those entering the EU via Hungary or Romania often head west, arrivals in Czechia stick around.

Prague hopes they could help alleviate chronic labor shortages. But for now, the impact is limited.

Czechia spent the pre-COVID years recruiting from places like Ukraine to help supplement a workforce that is struggling to keep pace with labor demand. Almost as soon as the pandemic receded, this hunt resumed.

Driven by low wages and poor demographics, Czech unemployment is the lowest in the EU for years. In April, it was just 3.3%, according to the labor office, which noted that 360,000 jobs were open to 250,000 unemployed people.

At the start of 2022, around 200,000 Ukrainians were living and working in the country, making the landing much smoother for refugees.

In the hope that the 350,000 refugee arrivals could help ease labor market imbalance and ease pressure on wage growth, the government has also sought to make life easier with unhindered access to the labor market and to social benefits.

But analysts warn that the numbers are only a drop in the ocean compared to labor market needs.

“Currently they could contribute maybe 2% of the labor force at most,” said Daniel Munich of the Center for Economic Research (CERGE). “These are not figures that can significantly change the situation of the Czech economy,” he told DW.

Daniel Munich says Ukrainian refugees can’t do much to fill gaps in Czech Republic’s labor market

Women and children first

According to the labor office, by mid-May around 50,000 Ukrainian refugees had found jobs.

However, recruiting was in negative territory even before it started. According to Tomas Prouza of the Czech Chamber of Commerce, 10% of Ukrainian men who worked in Czechia left to fight the Russians.

“These men had been here for years. They were acclimatized, well qualified and had become valuable senior executives,” he lamented. “Now we have to try to replace them with novices who need to learn the language and be trained.”

And even then, the number of potential novices is small. Ukrainian conscription laws mean that the majority of refugees are women and children.

This tends to exclude them from many jobs, analysts say, such as those in many Czech industrial plants requiring hard physical labor.

But other sectors of the economy such as services, social services and health care might be luckier. Although precise data is scarce, hotels and restaurants – which have had great difficulty finding staff due to the effects of the pandemic – would feel the benefits.

Although there is little Czech data available, some regional surveys support these assumptions. In Poland, for example, 53% of accommodation and catering companies report an influx of workers from Ukraine.

Prague's first one-room school for Ukrainian children

Czechia creates a one-class network where Ukrainian children will be educated by Ukrainian teachers

Skilled workers wanted

But while cooks and maids are welcome, companies are also desperately looking for candidates for higher-skilled positions.

Banking group Moneta, for example, is running a campaign targeting Ukrainian recruits for its IT and digital unit. The bank, however, declined to discuss the matter when approached by DW, suggesting that its recruitment strategy may have encountered obstacles.

It is likely that many refugees do not see the point of going through the longer processes needed to obtain higher-skilled employment, which likely includes validating Ukrainian qualifications and acquiring advanced language skills.

Olga arrived in Prague in March to join her eldest daughter after fleeing her home in eastern Ukraine with her youngest. However, without a good Czech, the 56-year-old architect says he has difficulty finding a job in his field.

Refugees “are looking for more short-term jobs, because they think they will return home soon,” said Viktor Najmon, director general of the Czech Labor Office. “So even if they have specialized skills, they are interested in manual trades. As for the children, they favor shift work opportunities.”

Prouza, however, says the perspective of some is beginning to change as the war continues, and he predicts that sectors seeking skilled workers will see more success in the months to come.

Tomas Prouza from the Czech Chamber of Commerce

Tomas Prouza says many highly skilled Ukrainian workers in Czechia had to leave to become soldiers

Fatigue

But even if the refugees are starting to think about putting down roots, they will need more support. Language training is essential, analysts say, while mothers need better childcare options than the current community volunteer system they rely on most if they are to follow a professional path.

The capacity of the education system is key, says Munich, referring to data that shows that while the number of refugees in many Czech regions matches the demand for labour, school capacity is sorely lacking.

And that’s the key, he says, as the chaotic first phase of the crisis, when refugees arrived and ad hoc solutions were hastily put in place, ends and the second phase begins.

“Now we have to start the integration,” he argued. “Refugees will need standard housing and education. I’m not sure the government is ready. It’s going to get very difficult.”

There is also a risk that while refugees can help ease the pressure on the labor market, there is no guarantee that they will be thanked for it.

As generous as the welcome extended to those fleeing the horrors of the Russian invasion has been so far, there are fears that fatigue is setting in as the economy slows and inflation rages.

The Czech public’s potentially negative view of refugees was on full display during the 2015 migrant crisis, and polls already suggest that few would be happy for Ukrainian refugees to stay long-term.

Therefore, if the government does not step up its integration efforts, the risk is much larger than missing out on potential additions to the workforce, Munich says.

“Without work or school, the social and economic condition of refugees will worsen,” he warned. “Crime will increase and Czechs may become reluctant to tolerate or fund this.”

Prouza, on the other hand, claims he’s not too worried. Resentment against refugees that has been spotted is confined to supporters of extremist parties, he argues. A bigger threat, however, could come from plans already being drawn up to start the process of rebuilding Ukraine.

According to surveys by the Czech Chamber of Commerce, many of those “precious skilled and acclimated” Ukrainians who have lived and worked in Czechia for longer say that if a new Marshall Plan for Ukraine is implemented after the war, they’ll be going home to participate.

But, adds Munich, it will then be up to the Czech Republic to give its blessing to the departure of the many qualified people that Ukraine will desperately need. “We must not be selfish,” he insisted.

Edited by: Hardy Graupner

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