Wages in the Czech construction industry are rising, but not enough for half of companies

Although wages of employees in the construction industry are increasing, directors of construction companies are divided on the issue of employee remuneration. Roughly half of the surveyed directors (47 percent) are inclined to the opinion that wages are adequate to the current opportunities, while a slightly larger part (53 percent) think that the level of wages in the construction industry is not sufficient. This is according to a study by the analytical company CEEC Research on the current development of wages and employment in the construction sector, in which 130 of the largest Czech construction companies participated.

"The problem of the construction sector is the lack of interest in technical education and the fact that less than half of the graduates go into the field after graduating from the construction faculty. One of the reasons is that they find better salary conditions in other fields," said Michal Vacek, executive director of CEEC Research.

Data from the Czech Statistical Office for the second quarter show that the average monthly wage in the construction industry was CZK 36,963, up 6.8 percent year-on-year. However, the directors of construction companies expect further wage growth next year by an average of eight percent.

Wages in the construction industry vary according to the demands of the job, but also according to regional conditions. Rising inflation also has a significant impact on wage and salary decisions for construction workers, according to the study. The Ministry of Finance expects average inflation of 10.8 per cent this year. According to two-fifths of the surveyed construction company directors, the influence of inflation on wage development is very significant, and according to half of the respondents, the influence of inflation is noticeable but not decisive. Only seven per cent of respondents think that the impact of inflation is minimal. Employers are also adjusting their wage policies to avoid a repeat of the exodus of workers from the construction industry as happened 15 years ago during the global economic crisis. Most often, however, the study says, corporate profit is the main factor in deciding wage levels.

There has been a long-term shortage of qualified workers in the construction industry, which companies are addressing by recruiting foreign workers. According to the analysis, 76 per cent of construction companies use foreign labour. For 92 per cent of them, the main reason is the lack of available labour on the local market. The construction sector employed 406,000 workers last year, 71,000 of whom were foreigners and more than half of whom are non-EU employees.

According to Jaroslav Stádník, director of the Employment Department of the Ministry of Labour and Social Affairs, 2,500 inspections were carried out in construction companies and more than 500 illegal workers were detected. The fines thus amount to CZK 40 million.

"To maintain competitiveness, the solution for the future is to recruit more foreign workers from countries that are culturally close to us. But if the authorities issue a work permit to someone, they should ask the employer whether he is satisfied with the work of such employees, and only then extend the permits," said Štěpán Křeček, an economist at BH Securitas and adviser to Prime Minister Petr Fiala (ODS).

Source: CEEC Research and CTK