Human resources

under construction

The dynamic growth of the Czech economy, which has been especially strong in the last two years, with yearon- year growth of the gross domestic product at approximately 6 %, has lead to an increase in employment and decrease in unemployment.

The growth in employment, which rose by 1.2 % in 2005, continued with the same intensity in 2006. The share of employed persons in the total number of inhabitants aged over 15 amounted to 54.9 %. In the sense of the European Employment Strategy, the total rate of employment equalled 65.1 %, the rate of employment of women 56.7 %, and the employment rate of those between 55 and 64 years of age equalled 45.4 %1). The rate of employment in the primary sector continues to fall, whilst employment in the secondary and tertiary sectors is on the rise. 3.8 % of all employed persons1) are employed in the primary sector, 40.0 % are employed in the secondary sector and 56.2 % work in the tertiary sector. The chief factor of industrial growth was the increase in production in new production facilities, especially those of foreign investors (manufacture of transport vehicles and the electrotechnical industry sector). 

REGISTERED UNEMPLOYMENT

The average rate of registered unemployment fell only slightly in 2005, the year-on-year drop in 2006 was greater – the rate fell by 0.9 percentage points to 8.1 %. The average number of job seekers in 2006 amounted to 474.8 thousand persons, 39.5 thousand less than in 2005. At the end of 2006, a total 448.5 thousand persons were registered with employment offices, which represented a decrease of the unemployment rate to 7.7 %. There are two population waves of persons of productive age at present - the strong post-war generation and the populous young generation of those born in the 1970’s. At the same time, the state pension age continues to increase gradually. The available labour force thus presents a total 5.4 million persons. Another 2.16 million persons of productive age remain economically inactive. The rate of economic activity calculated as the share of economically active persons to the number of persons of economically active age, i.e. 15 to 64 years of age, equals 70.4%. The increase in the number of economically active persons, i.e. those who work or desire to work, is one of the reasons why the decrease in unemployment is not great despite strong economic growth.
A negative trait of unemployment in the Czech Republic is its long-term character. The share of unemployed persons who remain jobless for a period of more than 6 months is equal to almost 56.8 % at present. The share of those without work for a duration of more than 1 year is equal to 41.2 % of all registered unemployed. A large portion of these unemployed are persons who are in some way disadvantaged on the labour market, for instance due to their physical health, age, lower education, or persons caring for small children. The share of physically handicapped persons in the overall number of unemployed is equal to 15.9 %. The unemployment of persons over the age of 50 is attributable to the loss of their job at a time when they do not yet fulfil the criteria for the state old-age pension, and, at the same time, the majority of employers are no longer interested in hiring them. The share of this age category in the number of job seekers (27.1 %) is growing, in part also due to gradual increases in the state retirement age. Almost one third (31.4 %) of registered unemployed are persons with incomplete education or with merely primary education. A typical trait of unemployment in the Czech Republic is regional disparity. The highest rate of unemployment affects North Moravia (12.6 %) and the North-West of Bohemia (12.5 %). Prague and the neighbouring districts display a rate of unemployment lower than 3 %. 

ACTIVE EMPLOYMENT POLICY

Dynamic economic growth and various forms of support for the creation of new jobs, including the active employment policy, have been reflected in a greater availability of jobs. The number of available positions reported by employers and offered by employment offices has increased in comparison to previous years. At the close of 2006, unemployment offices registered over 93 thousand such jobs. The imbalance between high supply and low demand on the labour market has somewhat diminished, although the structural character of unemployment persists. One of the reasons for this is insufficient labour mobility, both in terms of profession and locality. 

DEMAND FOR TRADESMEN

Employment offices are registering a demand in particular for builders, toolmakers, metalworkers, welders, tool setters, machining tool operators, electromechanics, plumbers, locksmiths, assemblers of both mechanical and electronic equipment, seamstresses, cooks, waiters, and waitresses. Of professions that require a higher degree of education, those in demand include in particular programmers, designers, and computer systems analysts, designers and design engineers of mechanical and electrotechnical equipment, and construction engineers. 30 % of those seeking jobs at employment offices are helpers and unskilled workers (assemblers and labourers, helpers in transport, warehouses, construction sites, or those working as gatekeepers and guardsmen). 15.7 % are employed in services and retail (shop assistants, cooks, waitresses, and waiters). Roughly the same number is represented by handicraftsmen, qualified manufacturers and fabricators (construction workers, builders, locksmiths, car mechanics, sewers, seamstresses, and tailors). 

HIRING OF FOREIGNERS

 The gap between labour supply and demand has lead employers to hire foreigners (for the conditions governing employment of foreigners in the Czech Republic, see http://portal.mpsv.cz/sz/zahr_zam). At the close of 2006 there were 185 thousand foreigners employed in the Czech Republic: 116.8 thousand citizens from EU and EEA member states (most from Slovakia – 91.4 thousand and from Poland – 17.1 thousand), 61.5 thousand foreigners from third countries employed on the basis of work permits (most from the Ukraine – 46.2 thousand) and 6.8 thousand citizens of third countries who are not required to obtain work permits. The majority of them were hired to work in the manufacturing industry and the building industry. Another 65.7 thousand foreigners conducted business activities on the basis of trade licenses, the issuing of which is in the competence of the Ministry of Industry and Trade. 

STATE EMPLOYMENT POLICY

The underlying principle for the focus of the state employment policy is the revised EU "Strategy for Growth and Jobs" declared by the Czech Government in its National Reform Programme for the 2005-2008 period. The chief objective of the employment policy is to achieve the most favourable possible development of employment and to increase motivation and activation for the seeking, finding, and maintaining of employment. Programmes implemented by employment offices as part of the active employment policy focus on retraining programmes, financial support of positions for those seeking employment of a permanent character (public utility jobs), the employment of problematic, often unqualified unemployed persons for community service. Employment Act No. 435/2006 Coll., has increased the number of active employment policy instruments effective as of 1 October 2004 to include a bridging allowance, a contribution towards training of new workers and a contribution towards transportation of employees. An important element of the state employment policy is support provided to employers in the form of investment incentives applicable in the case of investments in districts where the average rate of unemployment is equal to or higher than the overall average rate of unemployment (see http://portal.mpsv.cz/sz/politikazamest/podpora_zam est). This form of support is aimed at creating new jobs, at the training and retraining of employees. 

PROGRAMMES CO-FINANCED FROM THE EUROPEAN SOCIAL FUND

Programmes co-financed from the European Social Fund (www.esfcr.cz) form an integral part of the employment policy. In addition to measures aimed at strengthening the active employment policy, equal opportunities, the integration of specific groups facing the risk of social exclusion, increasing the competitiveness of employers and employees, these projects also focus on the modernisation of employment services. One such project is the Labour Market Institute (Institut trhu práce - ITP), the objective of which is to adapt the management system and the personnel capacities of public employment services to the needs of the labour market, to try out new methods of cooperation with employers and to improve the coordination of all parties. The basis of the project is the setting up of an ITP centre and network of local ITP offices. These will function as an executive instrument for the creation and implementation of an employment policy focused on employers and will thus supplement the work of employment offices. In terms of organisational structure, ITP offices will be incorporated within the framework of offices of the Czech Chamber of Commerce, one of the partners working in conjunction with the Ministry of Labour and Social Affairs on the implementation of this project. 


Eva Procházková
Ministry of Labour and Social Affairs
www.mpsv.cz


Further information on employment in the Czech Republic is available at http://portal.mpsv.cz/sz.

Taken from Doing Business