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Opinion
September 29, 2017 www.intellinews.com I Page 22
Outlook showed. As of the end of 2015, 20% of the foreigners in Czechia were Ukrainian nationals, with many more arriving from Russia and Slova- kia. The Czech government is now under pressure to open the way to allow more Ukrainians to work in the country, something that unions have vowed to oppose.
“If the talent shortage intensifies, it will force companies to be more creative and innovative in finding and keeping talent,” argues Janas. She has already seen companies increasing their ef- forts to recruit across national borders, with a particular focus on countries such as Ukraine.
All this could lead to a moderating of the labour market squeeze, at least temporarily. Yet in the longer term, as the CEE economies converge with those of their EU peers to the west, rising labour costs are inevitable. Keeping CEE as a low-cost destination will not only be difficult, it will also lead to the region’s development and convergence with Western Europe being held back.
“The countries in CEE are starting to realise that convergence is not possible if they stay low-cost destinations forever,” says Árokszállási. “There has to be an increase in wage levels, and what makes this possible is better healthcare, better education — not just university education but technical training as well, and more spending on R&D. In the Czech Republic and Slovenia, for
example, R&D spending has already increased to very close to the OECD average, and the number of people with tertiary education in several of
the CEE countries is rising faster than the OECD average.”
There are already strong signs the CEE econo- mies are moving up the value chain in terms of the type of investment they attract, which is a positive sign for future convergence.
“Labour shortages do not seem to have impaired investment so far,” says Podkaminer. However, he adds that, “They may be restricting some labour-intensive types of investment in future — this supporting the use of more labour-saving technologies.”
Janas also believes that as long as the labour market squeeze continues, as well as being more creative in their recruiting, employers will also have to put more effort into boosting the skills of their workforce and investing into automation and process optimisation.
These are all positive signs for the future, indicat- ing that while CEE employers may be feeling the squeeze at the moment, the tighter labour market is likely to bring longer-term benefits in terms of pushing investors and governments alike to make the investments needed to turn the region into a higher value destination.