We won’t go back to what it was before the pandemic. This is certain. However, 2024 is expected to be a year of return to growth. What will determine the future labor market is suggested by Wojciech Ratajczyk, Vice President of the Polish HR Forum and CEO of Trenkwalder recruitment agency.
MAINTAINED STATUS QUO
The outgoing year in the labor market was, in a nutshell, a maintained status quo. Inflation and the resulting wage pressure, significant new employment suspension in companies, lots of legal changes and further progress in digitalization. The lack of candidates, associated not so much with a competency gap, but with a quantitative shortage (unemployment at a record low of around 5%), meant that employers focused more on retaining existing teams than on hiring new workers. In permanent recruitments, neither employees nor employers were willing to change. The temporary labor market has shrunk and is heading towards employee outsourcing or process outsourcing. A clear boom, however, was seen in short-term employment abroad.
In 2023 we observed record numbers of candidates interested in working abroad, particularly for temporary periods – up to 1 year,” says Wojciech Ratajczyk. This was clearly due to high inflation and rising living costs in Poland. Salaries in Germany are still twice as high as in Poland. A temporary job abroad is for many people a quick way to supplement their home budget or gather funds for a specific goal, such as studying or housing investment.
2023 was marked by a significant change in legislation. Remote work was legally regulated, which didn’t have much impact on the labor market, as it rather sanctioned solutions already existing in companies for several years. The most substantial legal accent was the regulation of probationary periods and fixed-term employment, which in a way could also be considered a test period. An employer can hire an employee for a probationary period of one month and later on for a fixed term of up to 6 months, or for two months probationary period with a period of fixed-term employment from 6 to 12 months.
Given the current labor laws and especially in light of competency gaps and staff shortages, employers need to seriously consider which version of the probationary and fixed-term employment to choose.
2024 – LABOR MARKET FORECASTS
Although the labor market situation is tough from the employer’s perspective and we will not avoid wage pressure and related employee turnover, some signs of revival and optimism are noticeable. This is associated with a new political opening and the government’s announcement of legal solutions that will promote company development, such as cash PIT or ZUS holidays. These are two significant changes, especially for micro-enterprises, which are the most common in Poland. According to surveys conducted by employment agencies, every fourth company surveyed declares an intention to hire. The labor market is also expected to open up to workers from other continents such as Asia, Africa, or South America.
DIGITAL TRANSFORMATION IN COMPANIES
In 2023, there was not so much a technological leap as a market leap – companies realize that digitalization of processes is a necessity. In 2024, companies will be looking for and more commonly implementing modern mobile solutions that speed up their work, as these are market requirements, employees’ requirements.
GENERATIVE AI IN THE LABOR MARKET
In 2024, the application of AI solutions will increase efficiency, speed, and quality of work for millions of people worldwide. Digital competencies of workers and the ability to adapt to technological changes will be of higher importance in the labor market than ever before. Jobs related to AI technology service will become increasingly common.
CHANGES IN THE ORGANIZATIONAL CULTURE
The pandemic has accelerated digital transformation, and this has changed our approach to work. Where and when work is performed will be of much less importance. Regular jobs will be replaced by more flexible hybrid work and project team work consisting of specialists working task-based. Company culture based on building employee engagement, their sense of agency, and co-responsibility for the company will play an increasingly major role.
AUTOMATION OR FOREIGN EMPLOYEES
Statistics show that the Polish society is aging and the number of people leaving the labor market for retirement is already higher than the number of people entering the labor market. Although the demographic changes and the additional outflow of workers from Ukraine due to the war have created a drastic shortage of labor force in the Polish market, the disease of foreign policy or automation is currently and will remain the only solutions in the coming years.
Almost 100,000 workers from Ukraine of nearly 1 million working in Poland left when the war broke out. Women with children arrived, who were difficult to professionally activate, and our sectors were looking for more male workers. In light of this situation, the solution is a greater opening of the Polish labor market to foreigners in 2024.
Due to a lack of workers from the countries of the former USSR, whom can be employed in Poland based on a simplified procedure, Polish entrepreneurs are increasingly looking towards the Far East, Vietnam or the Philippines in search of workers.
