Rising pressure on employers spells a win for workers

Volvo and Zoomers will influence Slovakia's labour market, experts say.

By: sme.sk

Jul 04 2024
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Rising pressure on employers s

The year 2023 on the Slovak labour market was characterised by growth in demand for workers and then record low unemployment. This also boosted wage growth and made finding employees even more difficult. Employers have faced, and are still facing, a shortage of skilled labour, compounded by the transformation of the labour market as a result of the introduction of new technologies. The ageing population and digitalisation are changing the nature of work and bringing new challenges and opportunities. Prospects for 2024 remain more or less the same.

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“We do not expect labour market pressures to ease in 2024. On the contrary, continued early retirement, a shortage of skilled labour and the increasing onslaught of demographic change will continue to put pressure on employers, which will ultimately support further wage growth,” Marián Kočiš, macroeconomic analyst with Slovenská sporiteľňa bank, told The Slovak Spectator, adding that unemployment would thus remain at similar levels in 2024 as in 2023, with a further slight decline possible in the years ahead. “Of course, economic developments around the world may still reshuffle the cards, but we remain optimistic and expect a continued global recovery.”

Nevertheless, without greater access to foreign workers, companies in Slovakia have limited opportunities to find new employees, which may also limit Slovakia’s economic growth. On the positive side, the bureaucratic burden in this area has been eased, noted Kočiš.

Jobless rate nears record levels

The labour market remained tight in 2023, with the unemployment rate falling to 5.8 percent, according to the Statistics Office. In 2023, employment increased by 0.2 percent year-on-year and the total number of people in employment in Slovakia grew by 6,000 on aggregate, a good result given the long-term problems of skilled labour shortages and the increased rate of early retirement in the past year, noted Kočiš.

The Labour Ministry has confirmed that this trend is continuing in 2024, citing data from the Institute for Social Policy. Based on those numbers, the unemployment rate, measured as the ratio of the number of working-age jobseekers to the working-age population, fell by 0.41 percentage points, or 9.6 percent, to 3.88 percent between March 2023 and March 2024, which is close to the all-time low. The registered unemployment rate also fell by 9.6 percent to 5.07 percent, close to the 2019 historical low.