Executive Search in Czech Republic– 2015 Outlook
Czech Economy outpaces Eurozone
Economists are forecasting a good year for the Czech economy in 2015 with a predicted growth of 2.5% as the economic recovery gains momentum. Supportive financial conditions, government spending, rising confidence and stronger incomes are expected to strengthen domestic demand, giving fresh impetus to the economy and to executive search in Czech Republic.
The positive economic trends established in 2014 are expected to continue in the form of stable economic growth, a low inflation rate and falling unemployment.
Higher wages, bigger pensions and more money spent on social welfare is expected to boost consumer spending and government investments in large infrastructure projects are expected to revitalize the construction industry. Economic growth should result in the rate of unemployment declining further from 7.7% to 7.2% with a faster growth in wages.
The outlook for foreign trade is less optimistic, due to the economic slow-down of the Eurozone, the impact of the EU-Russia sanctions and the likely fall of the Russian economy into recession. An important factor in the 2015 outlook, according to ING economist Jakub Seidl, is how radically the European central bank may react to the threat of deflation in the Eurozone.
The Czech central bank has already made it clear that the forex interventions launched in November of 2013 in order to prevent deflation will remain in place throughout next year. Some analysts predict the interventions could stretch to the end of 2016.
We believe clients and potential clients in the field of executive recruiting can expect the following conditions:
- Increase in foreign investments especially from Germany but also from China
- Increase number of domestic companies willing to establish their business in abroad especially in China
- Increase of successful start-ups in Czech Republic
- Big losses for some companies resulting from the EU-Russia sanctions
- Growing interest in gaining business access to Eastern European countries via Czech Republic, particularly by means of offices in Prague
- Growth of intellectual / high techs hubs
- Excellent infrastructure and low crime rate
The change in the structure of foreign direct investment shows the new trend in the Czech Republic. The number of opportunities in the fields of research, development and business support services is rapidly increasing.
New investors as well as those companies that formerly only came with a production programme are now transferring their higher-value-added development activities (technology centres or business support services centres) to the Czech Republic.
Conditions for investment in the Czech Republic are very favourable and include:
- Safe investment environment
- Skilled and well-educated workforce
- Favorable labor costs and price stability
- Central location in Europe
- Dense and high-quality infrastructure
- Transparent system of investment incentives
- Strong focus on R&D
- Stable social and political system
- EU membership
- Mentality, culture and attitudes similar to those of western countries
- High quality of life
With regard specifically to the search and recruitment industry, we are finding:
- Huge competition in recruitment is influencing fees and fee structure negatively
- More people are now willing to start their job outside of the Czech Republic
- There is a war for well skilled / educated people
- There are increasing regulations in recruitment requiring state licenses to conduct business in recruitment and related consultancy
- There are plenty of General Managers but high skilled / educated service people are hard to find.
For More Information
- Current economic data related to Czech economy can be found here: http://www.indexmundi.com/czech_republic/economy_profile.html
- For a list of leading businesses or investors in the Czech Republic please contact Ales Jiric