Labor shortages have emerged as a pressing issue across CEE, prompting diverse responses from governments, businesses, and the public as they navigate the challenges of workforce gaps and economic sustainability.
CEE’s Labor Market Strains
“Employment has always been closely linked to a country’s socio-political and economic conditions and is therefore strongly affected by any changes in these areas,” Drakopoulos Partner Georgia Konstantinidou begins, explaining that “nowhere is this more evident than in Greece, where after a decade of deep economic recession and record high unemployment rates, the gradual return to growth has led to an almost unexpected labor shortage in several sectors.”
“Demographic challenges, the brain drain of the crisis years, and economic shifts have all contributed to this shortage, which threatens the country’s ability to sustain economic growth and meet the demands of industry,” Konstantinidou continues. “The working-age population is shrinking, resulting in fewer people available for employment in key sectors, as the Greek population is aging rapidly, while a large number of skilled and qualified workers are emigrating to other countries – especially to the EU and the UK.”
Similarly, Lalicic & Boskoski Partner Martin Boshkoski remarks that in North Macedonia, labor shortages have become a “critical issue,” worsened by “ongoing emigration of the country’s youth, who seek better opportunities abroad, leaving businesses unable to meet their staffing needs.”
ACI Partners Head of Labor Doina Doga reports that Moldova is also experiencing “an alarming rate of labor shortages affecting various sectors of the economy,” adding that beyond the shrinking workforce, “the decline in the working-age population, and the issue of undeclared work” are contributing factors.
The challenges are further underscored by supporting data. “According to data from the end of 2023, approximately two-thirds of Czech employers are facing staff shortages,” PRK Partners Partner and Head of Labor Jaroslav Skubal says. In Moldova, Doga highlights that “in 2021, 16% of employers reported shortages of employees,” and this figure “rose to 18% in 2022, and further escalated to 30% in 2023.” As a result, Doga notes that “approximately 10,500 job vacancies remained unfilled in 2023. The majority of these unfilled positions were located in Chisinau.”
Key Sectors Feeling the Pinch
Among the affected sectors in CEE, there are several common trends, with construction, trade, IT, hospitality, and agriculture leading the list. “The largest shortage of employees is recorded in the trade and services sector, followed by the construction, transport, IT, and energy sectors,” Skubal emphasizes when discussing the Czech Republic. “In a nutshell, we believe that nearly all employers who have open positions are facing problems in finding suitable candidates to be hired.”
As for Moldova, Doga highlights that “the sectors most impacted by labor shortages include wholesale and retail trade with a 19% shortage, maintenance and repair of motor vehicles and motorcycles with a 19% shortage, public administration and defense with a 15% shortage, manufacturing with a 14% shortage, and health and social work with a 7% shortage.”
Turning to Poland, Wolf Theiss Poland Head of Employment Agnieszka Nowak-Blaszczak notes that, among others, “the tech industry is struggling with a shortage of programmers, developers, and IT specialists.” Additionally, Poland “lacks sufficient doctors, nurses, and caregivers, especially in rural areas,” with seasonal labor shortages being “particularly acute.”
“A shortage of labor is a significant issue affecting most sectors in Slovenia,” Ketler & Partners Head of Employment Sasa Orazem adds, pointing to sectors such as construction, hospitality, healthcare, social care, IT, education, transport, and warehousing as “experiencing labor shortages for several years.”
As for Hungary, the healthcare sector is particularly impacted, with “a significant shortage of nurses,” according to Nagy & Trocsanyi Managing Partner Balazs Karsai. Moreover, there is a “decreasing availability to work in some industries in Hungary, such as for example in hospitality and agriculture.”
In Lithuania, Widen Associate Partner and Head of Migration Law Svetlana Naumcik reports that there is a shortage of skilled professionals, including “insulators, welders, wide profile builders, electricians, pipeline installers, brick masons, and other professionals.”
Konstantinidou also highlights the challenges of seasonal work, explaining that “positions such as hotel staff, restaurant workers, cleaners and seasonal workers in tourist resorts are particularly difficult to fill. The seasonal nature of the work and the poor working conditions offered make it difficult to attract and retain workers.” Agriculture faces similar difficulties: “The steady flow of young people to the big cities has deprived agriculture of seasonal workers,” especially “in labor-intensive sectors such as olive harvesting, fruit picking, and vegetable growing.” Additionally, she says that “as one of Greece’s largest industries, shipping is also facing labor shortages, particularly for shipboard positions such as engineers and officers, where younger generations are reportedly less interested or motivated to pursue maritime careers than in the past.”
Rising to the Challenge
Several measures have been implemented across countries to address labor shortages, with improving working conditions being a top priority for both businesses and legislative bodies. “From the perspective of employers, the most common tool to attract (new) employees is offering very competitive wages and other forms of variable financial compensation as well as various benefits such as work-from-home or flexible working hours,” Skubal explains.
Doga highlights the importance of family-friendly policies in Moldova: “The Moldovan Government has implemented programs to support employees with family obligations. Notably, individuals with children under the age of three are now eligible for new childcare services aimed at encouraging greater workforce participation. The majority of these reforms focus on providing support to specific categories of employees, including individuals with young children, pregnant and breastfeeding women, women who have recently given birth, and individuals with particular family responsibilities. Flexible working arrangements have been introduced to accommodate these groups.”
In addition, reskilling programs have been emphasized in several countries. “Multiple government programs are available for Hungarian companies to train and integrate job seekers and to supplement their remuneration,” Karsai says. In Greece, Konstantinidou points to “training programs to attract new workers, as well as vocational training programs to reskill or upskill existing workers. In addition, to attract younger workers into the labor market, there has been an expansion of paid apprenticeship and internship programs to provide young people with opportunities to enter industries such as construction, tourism, and IT.”
Efforts to reverse the brain drain are also underway in both Greece and Moldova. According to Doga, “the National Program for Stimulating the Return to Moldova and Facilitating the Reintegration of Citizens for 2023-2027” was adopted in 2023. Konstantinidou adds that, in Greece, there are incentives for skilled professionals who emigrated during the financial crisis to return, “particularly in high-demand fields such as healthcare, engineering and IT. Incentives include tax breaks, competitive salaries, and improved work-life balance opportunities.”
Another strategy for addressing labor shortages is digitalization, as outlined by Skubal: “Employers are also trying to overcome the shortage of employees by, for example, greater involvement of AI at work and the digitalization and robotization of the workplace, if possible.”
Opening Doors: Immigration Policies as a Strategy
One natural solution among these countries to address the labor shortage appears to be immigration. In Hungary, “a new immigration act was adopted,” Karsai notes. “This act introduced multiple types of possibilities for obtaining a residence permit in Hungary. Some of these possibilities are linked to the real estate industry (purchase of real estate, or purchase of an investment fund share issued by a real estate fund, etc.) and, accordingly, in the past few months, we already observed increased interest from real estate market players.”
Similarly, Greece has been “easing visa requirements for foreign workers, especially from non-EU countries such as Pakistan and Egypt, and concluding bilateral agreements between Greece and these countries to bring in seasonal workers, especially in sectors such as agriculture, construction, and tourism, where there are alarming labor shortages,” according to Konstantinidou. “A significant part of these procedures is also being digitized, making the process easier.” Additionally, Konstantinidou draws attention to the law enforced in earlier 2024, in which “key changes include a reduction in the number of residence permit types from 50 to 19, simplifying the process for both applicants and authorities.”
As for the Czech Republic, “the government has expanded the list of countries whose citizens are not required to have a residency permit, such as an employee card, intra-corporate transferee card, or blue card,” Skubal notes. “Even though they still need a work permit, this change has considerably simplified the process of recruiting foreigners from non-EU countries. These include citizens of Australia, Japan, Canada, South Korea, New Zealand, the UK and the US.”
Naumcik points out that “the list of in-demand professions in Lithuania is approved by the Director of the Employment Service of Lithuania each year, based on monitoring of the labor market carried out by the employment service, and assessment of, and forecast of changes in, the labor market situation.” For 2024, quotas allow the employment of “up to 40,250 foreigners whose profession is included in the list of in-demand professions in Lithuania: 25,100 workers in the department of service, 5,050 industry workers, 9,800 construction workers, and 300 agriculture workers,” she says.
The impact of foreign workers in Poland has been significant. According to Nowak-Blaszczak, they “added approximately 2.3% to Poland’s GDP growth during the 2015-2023 period, averaging an annual increase of 0.24 percentage points.” She adds that “in the last three years, the number of foreigners with work permits in Poland nearly doubled, reaching over 1.5 million in the fourth quarter of 2023.” According to Nowak-Blaszczak nationals from Ukraine, Belarus, and Georgia were among the most represented. Additionally, she states that “Poland actively recruits foreign workers, particularly from countries such as the Philippines, Nepal, Bangladesh, and India.”
Slovenia is also addressing labor shortages by “entering into bilateral agreements with Bosnia and Herzegovina and the Republic of Serbia,” Orazem says, adding that “these agreements provide a streamlined process for the employment of Bosnian and Serbian workers in Slovenia.” Additionally, “the Slovenian government is seeking to diversify the source countries for foreign workers, extending beyond the Western Balkans region, to ensure a sustainable supply of adequate labor in the future. In anticipation of the forthcoming bilateral agreement, a Slovenian consulate has already been established in the Philippines.”
Still a Conundrum
On one side, there seems to be a disconnect between employer associations and their representatives and the wider public.
In Poland, “employer associations are advocating for more liberal and streamlined immigration policies to address labor shortages,” Nowak-Blaszczak explains, emphasizing that “employers are pushing for simplified and faster immigration procedures to attract more foreign workers. This includes reducing bureaucratic hurdles and processing times for work permits and visas.”
“The Lithuanian Confederation of Employers, the Lithuanian Confederation of Industrialists, and the Lithuanian Transport and Logistics Alliance suggested opposing the amendments to the Migration Law,” Naumcik says, noting “every 10,000 employees contribute a minimum of EUR 60 million per year to the Lithuanian budget in the form of wage-related taxes, and that they are consumers in the Lithuanian market, thus contributing to the country’s economic growth.”
Likewise, Doga highlights that “employers face significant challenges related to labor shortages and the lack of qualified specialists,” and “to address these challenges, employers advocate for policies that address the impact of migration on their businesses in Moldova.”
Not by All Means: The Tensions of Immigration
Even though there is a clear demand for foreign workers, public resistance remains strong. “The debate around immigration in North Macedonia remains polarized,” Boshkoski notes, with “many still arguing that allowing more immigrants would threaten local jobs, particularly for low-skilled workers. This sentiment resonates with some parts of the electorate, making immigration a politically sensitive issue.” This, according to Boshkoski, happens despite the fact that some businesses “might argue that without foreign workers, they will not be able to meet their operational needs, let alone grow.”
Skubal also points to a similar worry in the Czech Republic. “Despite the shortage of workers in almost all sectors, there is a tendency on the part of trade union representatives to argue that massive immigration may lead to falling wages and worsening working conditions for local workers.”
In Lithuania, steps have been taken to regulate the flow of foreign labor more strictly. Naumcik explains that amendments made at the end of June 2024 “aim to more effectively regulate labor immigration flows to the country, by limiting ‘cheap labor’ and encouraging highly-qualified worker immigration.” Among others, “the amendments will tighten the conditions for the employment of foreigners in Lithuania.” For instance, Naumcik says that “employers must make sure that the foreigner has documents confirming their qualifications and that they have at least one year’s relevant work experience in the last three years, or confirm that the foreigner will be paid a monthly salary which is at least equal to the last published average monthly gross salary for the calendar year.” Additionally, according to her, “from January 1, 2025, a strict quota for non-highly qualified foreign nationals arriving on the basis of work will be set.”
Similarly, Orazem shares that tighter rules have been introduced in Slovenia, particularly regarding the extension of temporary residence permits. “With applications submitted from November 1, 2024, onward, a certificate demonstrating proficiency in the Slovenian language at a survival level will be required,” and for those seeking a permanent residence permit, “it is necessary to have passed the A2 level of the Slovenian language exam.”
Immigration has become a central topic of political discussion. “The Czech Republic, like many European states, is grappling with complex debates surrounding immigration and labor policies,” Skubal notes, adding that “these debates often intersect with broader societal and economic concerns, such as populism and anti-immigration sentiment (xenophobia). It cannot be ruled out that immigration will be one of the most contentious issues in the next elections to the lower house of parliament – i.e., the most important political elections in the country, which will take place in October 2025.”
In Poland, despite a pressing labor shortage, there is “also a strong debate about the social integration of these immigrants,” Nowak-Blaszczak adds. “Ensuring that newcomers can integrate smoothly into Polish society, including learning the language and understanding cultural norms, is a major concern.”
This article was originally published in Issue 11.9 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
