The Statistical Office of the Slovak Republic recently reported a slight decrease in wages from June to July 2015. After reaching an all-time high in the fourth quarter of 2014, the average manufacturing wage is now slowly trending downward. Employers have reported extremely optimistic hiring plans for the final quarter of 2015. Analysts expect the strongest labor market in Slovakia in recent years due to increased hiring forecasts and potential foreign investments.
Major automotive manufacturers are now favoring Slovakia for new manufacturing plant expansions as alternatives to locations such as the United States and Mexico. One automotive manufacturer, in particular, observed that a closer supply chain, better logistics infrastructure and increased presence in a region which they have identified to have growth potential made the region an attractive potential development opportunity. European vehicle manufacturers also benefit from exploring countries such as Slovakia in an effort to expand their international manufacturing presence as these locations also offer protection against currency fluctuations and achieve a more efficient and globally competitive business strategy.
While the ManpowerGroup Employment Outlook Survey (MEOS) for the final quarter of this year boasts a healthy Net Employment Outlook of +25% (up 15%, year-over-year) in the manufacturing sector, the ability to source this much-needed talent has become more challenging throughout the country. “Actually, on the labor market we can see a real euphoria and exceptional recovery that can bring to mind the situation before financial crisis in 2006-2008. The labor market has changed a lot in the last few months in favor of job seekers. Demand significantly exceeds supply, in the big cities and industrial areas companies report critical lack of workers,” said Jaroslava Rezlerová, Managing Director of Manpower Slovakia.
Rezlerová went on to explain, “The main driving force of this recovery is the automotive sector, as they provide positions in their own factory or positions of their subcontractors. However, the talent supply—those with the right talent to get the job done—is in short supply. The tight talent supply is forcing employers to try and use new HR strategies. They modify reward systems and benefits, organize manufacturing in different way, and frequently have used part-times and flexible forms of employment and have pursued recruitment in distant regions, even abroad. On the other hand in some regions there is still high unemployment. To overcome this imbalance will be the big challenge for state, companies and individuals.”
Of the Slovakian employers surveyed for ManpowerGroup’s 2015 Talent Shortage Survey, 28% reported difficulties filling jobs in the region. This being the highest reported shortage of talent in the country since they joined the survey in 2012, however, still below both the global and EMEA regional averages of 38% and 32% respectively. The most commonly listed difficult-to-fill position being skilled trade workers and drivers, followed by sales representatives, IT personal and engineers rounding out the top five. Despite the perceived talent shortage recent studies, conducted around data from the second quarter of 2015, confirm that solid gains in the labor market have contributed to a GDP, which is expanding at the fastest rate since the last quarter of 2010. With investing at a fourteen-quarter high, indicators suggest that growth in the final half of 2015 will remain strong.