Czech Republic & Slovakia: Temporary Staffing Market Grew by 9,0%

The temporary staffing market in the Czech Republic & Slovakia grew by 9.0% amid market uncertainty last year. Interconnection Consulting predicts a further increase of 4.0% in 2024.

In 2023, supply chain disruptions eased, and declining energy prices alleviated pricing pressures, benefiting post-COVID recovery. Despite the positive effects of realized projects, signs of insufficient investment in both countries hindered demand.

All in all, temporary worker numbers decreased by 1.2% in Slovakia and 3.5% in the Czech Republic in 2023. Nominal wage growth and price pressures compensated for the decline, resulting in a total turnover of nearly €920 million in both countries.

The effect of the conflict in Ukraine on the temporary employment market diminished, and companies had to focus on the problem of high turnover of Ukrainian temporary workers, problems with low skill levels, and limited language skills of temporary workers.

The expected decline in the automotive industry will have a significant impact on the temporary staffing market

The automotive sector, which dominated turnovers with a market share of 48.9% in 2023, is expected to decline in the coming years, registering a negative CAGR of 5.2%. In contrast, the ‘industries and materials’ segment emerges as a driving force, poised to increase its market share from 17.4% in 2023 to a robust 23% by 2027. The transport and logistics segment is predicted to show similar growth trajectories and achieve a CAGR of 8.3%.

The market comes to a standstill

The trajectory of the market hinges on a multitude of factors, including domestic consumption, export trends, legislation changes, and the integration of automation in production processes. These elements are poised to exert a significant influence on overall demand dynamics and workforce requirements.

In the upcoming year, the market anticipates a commendable 3.8% growth in value terms. Notably, Volvo’s strategic investment in Eastern Slovakia stands out as a pivotal contributor to this anticipated expansion.

The temporary staffing market is expected to see moderate value growth averaging 1.0% annually until 2027, with a continued decline in temporary workers.

On the other hand, long-term labor market tension leads to a trend toward permanent staffing, with a CAGR of 3.1% projected until 2027.

The largest companies in the Czech and Slovak personnel services market are, in the alphabetic order: Adecco, Gi Group, Index Noslus, Manpower, Manuvia,  Maxin‘s,   Randstad, and Trenkwalder.

Link to the report

07/05/2024

Copyright: Interconnection, Publication free of charge for coverage regarding the study and InterConnection Consulting.