When Przemysław Gacek based his recruitment enterprise, he would watch enormous traces type exterior Warsaw’s foremost workplace for jobless advantages. Twenty years on, unemployment has fallen from 20 per cent to simply 3 per cent and Polish staff are queueing up at his workplace to demand a pay rise.
“We see extra Poles going to see their bosses, asking for a wage improve and in the event that they don’t get it, they begin trying round,” stated Gacek, chief government of Grupa Pracuj, which runs the largest Polish on-line platform for labeled job advertisements.
Poland is among the many most excessive examples of a post-pandemic rise in staff’ bargaining energy. Within the US, employees have quit in record numbers to take up higher affords elsewhere. Within the UK, employers are granting value of residing bonuses. Within the eurozone, slower-burning negotiations with unions are prone to result in a delayed pick-up in pay.
For financial policymakers, nevertheless, this labour market power complicates efforts to manage inflation, which has soared on the again of a surge in international meals and vitality costs. They fear that value pressures — now at their highest degree in a long time — will turn out to be entrenched if staff demand pay rises to match rising residing prices, prompting employers to lift costs to replicate rising wage payments.
In Warsaw, fears of such a wage-price spiral have already turn out to be a actuality. With corporations in all sectors struggling to rent, common wages rose 13.5 per cent within the 12 months to Might, virtually matching the galloping inflation fee of 15.6 per cent within the 12 months to June — its highest degree in 1 / 4 of a century. The central financial institution has been elevating charges quickly in response, and on Thursday lifted its benchmark reference fee by 50 foundation factors to six.5 per cent — up from virtually zero within the autumn. The central financial institution expects inflation to stay in double digits into 2023.
Rafal Benecki, economist at ING, flagged “the danger of persistent and self-reinforcing value development, which can be troublesome to cease.”
Liam Peach, an economist at consultancy Capital Economics, believes international locations in central and jap Europe are acutely uncovered to the danger of a wage-price spiral. Even earlier than the pandemic, robust financial development and a long-running decline within the working-age inhabitants had pushed unemployment to ultra-low ranges. Hungary and the Czech Republic face related pressures, Peach stated, however Poland’s labour market was now “in a league of its personal”.
With shopper spending remaining robust, corporations have leeway to saddle their clients with larger prices.
Softylabs, a Polish software program firm, not too long ago raised salaries by 20 per cent — twice the speed of earlier years — and is passing on greater than half the price of its ballooning wage invoice to shoppers. “I see wage expectations shifting up actually, actually quick,” stated Rafal Kijonka, Softylabs chief government. “If we don’t settle for a better wage demand, sadly a software program developer will simply go away for an additional firm.”
The dual shocks of Russia’s invasion of Ukraine and financial tightening look set to wipe out financial development within the coming quarters. The central financial institution on Thursday predicted the economic system would quickly fall right into a recession.
But economists anticipate the labour market to stay buoyant.
“Indicators are usually not cooling, even with vitality costs hitting manufacturing and rates of interest hitting the housing market,” stated Agnieszka Zielińska, director of the Polish HR Discussion board. Financial uncertainty was additionally making corporations much less prepared to invest in automation, she added.
Morgan Stanley additionally predicts “minimal impression on the labour market and unemployment,” ought to Poland’s economic system tip right into a technical recession.
Competitors for employees has been fiercest in expertise, the place demand soared in the course of the pandemic. Whereas Brexit initially helped corporations by pushing Poles to leave Britain, the pandemic has enabled IT staff not solely to remain house, but additionally to work instantly for corporations in international locations like Germany and Sweden, which pay greater than their jap European neighbours.
Salaries for some IT roles have jumped greater than 40 per cent, in keeping with Manuel Segador Arrebola, who heads the Polish operations of the recruitment company GI Group. Employees shortages might imply that, generally to fill a single job, “we’d be approaching 800 individuals.”
In blue collar sectors, employers are usually not solely elevating wages, he added, but additionally providing time beyond regulation and switching from non permanent to everlasting contracts. Some are additionally asking staff to remain past retirement age.
Since Russia’s full-scale assault in February compelled a mass exodus of Ukrainians, Polish employers have sought to rent Ukrainian refugees. Andrzej Kubisiak, deputy director of the Polish Financial Institute, estimates of 1.1mn registered refugees, round 600,000 are of working age and 200,000 have discovered jobs.
Recruitment companies are working with corporations to assist Ukrainian girls — matching job affords with housing and on-site childcare, in addition to coaching some girls to function forklift vans. However many choose to work informally in cleansing, childcare or hospitality, within the hope that they will quickly return house, in keeping with Kubisiak.
In the meantime, employers in manufacturing, transport and development accustomed to hiring Ukrainian males say it’s troublesome to supply the identical jobs to girls, due to well being and security guidelines and the bodily calls for of their manufacturing traces. “Traditionally, the Poles went west and bought individuals from the east,” stated Gacek. “However there may be now no provide (of males) from Ukraine, and neither from Belarus and Russia.”
