Czech Republic labor market and foreign worker trends

The Czech Republic continues to face significant labor market challenges, characterized by a shortage of approximately 100,000 workers despite low unemployment rates. While the Czech Statistical Office reports a 5.0 percent unemployment rate, Eurostat recorded it at 3.3 percent in July. There is a growing structural mismatch between job seeker qualifications and employer requirements, with Radovan Hauk of Moore Czech Republic noting that actual demand may be twice as high as the 100,000 positions registered with the labor office.

Foreign workers remain essential to the economy. The country is home to over 1.5 million foreigners, representing nearly 12 percent of the total population. This includes 613,000 Ukrainians, with over 80 percent of Ukrainian adults in the region currently employed, as well as approximately 125,000 Slovaks and over 15,000 Filipinos active in healthcare and logistics. To address shortages in construction, industry, and healthcare, Vice Prime Minister Karel Havlíček has advocated for easier permanent residency for integrated individuals, while the government explores recruitment from India, Indonesia, Mongolia, Moldova, Georgia, and Kazakhstan.

New technological and policy shifts are also emerging. Approximately 17 percent of companies—rising to 22 percent among medium-sized firms—plan to limit junior positions over the next two to three years due to artificial intelligence. Additionally, the Ministry of Labour and Social Affairs proposes reducing initial unemployment benefit support from 80 percent to 65 percent by January 1, 2027, and eliminating certain advantages for workers over 52. Minister Aleš Juchelka stated these measures aim to save public funds and ensure benefits facilitate job transitions rather than incentivizing long-term unemployment registration.