Executive Search in Czech Republic– 2017 Outlook
CEOs Show High Rate of Optimism
Czech Republic – a nation of 10.5 million people, is improving its public finances as one of the fastest-growing economies. The lowest unemployment rates in Europe are boosting tax revenue and the drawing of more EU funds than anticipated led Finance Minister Andrej Babis to announce in January a record budget surplus of 61.77 billion crowns (US$2.4 billion) for year 2016. Highlights:
- The Gross Domestic Product (GDP) in Czech Republic was worth 181.81 billion US dollars in 2015
- GDP Growth Rate fell to 0.2% and GDP Annual Growth Rate went down to 1.9%
- Foreign Investment – as a member of the European Union, with an advantageous location in the centre of Europe, a relatively low cost structure, and a well-qualified labour force, the Czech Republic is an attractive destination for foreign investment. Investment was cut sharply in 2016 due to the transition in EU funding programmes, but is projected to rebound in 2017.
- Stable economic growth is projected for 2017 and 2018.
- The Czech unemployment rate fell to 4.9 percent in November 2016 from 5 percent in October and better than market consensus of 5 percent. It was the lowest jobless rate since December 2008.
- Current inflation is 1.5%. Rising cost pressures will push consumer price inflation to the 2% target during 2017.
- The Political situation is very stable. President Miloš Zeman is well supported because of his populistic opinions, mainly to EU immigration policy and pragmatic & business oriented statements towards policy to west, east and China
- Immigration Issues – People are generaly afraid of immigration, watching problems especially in Germany, France, Belgium, Sweden. Czech Republic is not attractive for immigrants, because social security and allowances are generally on a low level. This disadvantage for Czech citizens is advantage for current situation when majority of immigrants are not willing to stay in Czech Republic. Those ones who stays in Czech Republic are thoroughly screened. Maybe this is also the reason why terrorist threats are not as high as in other countries. Terrorism index is 2.18.
- Security – According to the Global Peace Index, an annual study of the world’s most peaceful countries the Czech Republic has moved up four positions to rate as the sixth most peaceful nation in the 2016 Global Peace Index study.
CZECH CEOS OPTIMISTIC
The Czech CEO survey 2016 showed an extraordinary rate of optimism by Czech business leaders as compared to their world CEO colleagues who are far more pessimistic. Czech CEOs are also less worried than their colleagues around the globe about external geopolitical impacts.
The key topic of the CEOs agenda remains the issue of how to get suitable employees to join their companies and how to keep them. It is the latest digital, mobile and cloud technologies that are related to that topic but they also influence the internal corporate culture of companies. On the one hand, corporate cultures would have to adapt to the new generation´s habits of using these technologies. On the other hand, the new generation has a different approach to the work and life in a dynamically changing world.
Following are main findings from this study:
- 82 % of CEOs believe that their revenues will grow
Czech economy ranked among the top European states in 2015 with GDP growth of more than 4 %. Even though the growth was influenced by receiving money from EU funds, companies’ trust in the economy is evident. This is proven by the increasing number of investments, wage increases and very low unemployment rate. Growth expectations of CEOs in 2016 are the highest in the seven-year history of this survey.
- 65 % of companies plan cost-savings
CEOs have ambitious plans. However, they have not forgotten about their experiences with the crisis so they keep their expenses under control. It appears that pressure to reduce expenses will become a permanent tool
- 50 % of companies will increase employees
According to CEOs the key topic in 2015 was the availability of employees with required knowledge, experiences and skills. In 2016, the year-on-year increase in new vacancies will not be that significant but the reservoir of vacant labour force will also decrease. The shortage of labour remains the biggest business menace for 2017.
RECRUITMENT AND EXECUTIVE SEARCH:
There is generally is huge shortage of employees in Czech Republic especially:
- blue collars for plants of mainly foreign companies which are often suppliers to Skoda (VW group);
- IT specialist with up-to-date knowledge;
- Young people with IT knowledge of foreign languages
Companies tend to recruit people via:
- massive advertisements on jobs portals: mainly cz (this is very strong job portal in Czech Republic and Slovakia)
- employer branding
- job fairs in Universities and schools
- internal hunters / recruiters
- Focus on social networks (low experience here but big prospects).
Only a limited number of companies are willing to pay retainers to Executive Search Companies.
Generally, the pattern is to ask several employment agencies to hire a specific candidate for a success fee, after which “the hunt for candidate starts”. These companies are searching for the same candidate and people are very often attacking from various agencies with the same offer. Candidates are tired by this situation and as a result are very cautious when addressed by retained search recruiters.
- From my personal experiences from job portals, when searching for any candidates, there is low quality and huge flood of candidates who are responding to the job offer via job portals.
- Those companies who are searching for new well skilled / educated people with solid experience should understand that successful people are not reading job offers. Companies are beginning to realize the most efficient — and very often the only — way to hire quality new employees is through project based executive search process with very experienced consultants. These people are experts for specific industries who are addressing candidate who are successful in their current jobs.
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