5 talent trends to expect in 2023: Central & Eastern Europe 

We look ahead to the talent trends that businesses in Romania, Poland, the Czech Republic, and Hungary can expect in 2023. 


            1. Inflation to increase salaries but caution to slow job turnover

To ease employees´ concerns about inflation, which is currently hitting 15%-20% across all four countries, organisations will continue to raise salaries.

Employers in Romania and the Czech Republic have already taken measures, or are planning indexation, early in the new year. However, current inflation forecasts and increasing operational costs suggest that most raises will be under the current interest rate. All things considered, even though workers might not be completely satisfied with the extra compensation received, they will also be cautious about leaving their jobs for fear of financial instability in such a volatile economic cycle.


            2. Attraction vs retention to determine where skills shortages will appear next


CEE is no longer the best-kept secret for skilled talent networks at a fraction of the Northern European costs.

Local authorities are experienced in investor relations and offer grants and incentives for large IT hubs, Shared Service Centres and manufacturing plants etc. in established business districts and in less mainstream locations as well. Many multinationals are already well-established in the region and many more are set to follow. The competition will lead to skills shortages across the board, concentrated in IT, R&D, Life Sciences, and Engineering roles.

Locally-based SMEs will struggle to retain English-speaking professionals with the soft skills and ambition to progress through the ranks of major international players. Without the budget to compete on salary in a time of economic uncertainty, these organisations will need to tailor their employer value proposition to the top local talent.


             3. Response to global issues to help form employer value proposition that speaks to the latest generation of talent


The future of the region is affected by the current human resources. When conflict impacts people’s physical and mental health, their ability to work, and the overall economic stability, corporate social responsibility will be a vital tool in speaking to the priorities of the latest generation.

The local knowledge in CEE-based SMEs means they are uniquely positioned to make a meaningful difference in the community and attract and keep young people with broad horizons. Developing robust DE&I campaigns, along with giving employees time and recognition for charity initiatives and wellbeing awareness, will be key to engaging them.


          4. New legislation are coming into force across


Romania’s amendments will increase taxes for micro-enterprises, which will lead to contractors increasing their rates to cover the cost. In the Czech Republic, plans to regulate remote work would make it a right, rather than a benefit, and employers will have to contribute to utilities.Poland is increasing its minimum salary twice next year, first in January and then in July.

The cumulative effect of more costs and better incentives for permanent employees might reduce number of talent available to do short-term and lower-paid work in freelance mode. But it is unlikely to affect the general growing trend of high-qualified contracting (both supply and demand), particularly in IT. Recruitment plans and approaches will need to adjust accordingly. Organisations will need to search beyond borders in all meanings - to find the talent they need and define holistic people development strategies to avoid the skills gap.


           5. Organisations to search for talent proactively or look to nurture new skills in existing talent

With the uncertain economic outlook making people think twice about jumping ship, companies searching for professionals with experience and existing skills will need to actively engage talent in the coming year.

Where key skills and experience are in short supply, companies will look to self-manufacture these through upskilling programs. This could create further attraction issues down the line, as larger organisations can offer more comprehensive offering in terms of L&D, growth opportunities & benefits packages to retain the talent and keep profiting from their investment.

 Alex Shteingardt, Regional Managing Director Poland & CEE


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