If anything keeps the Czech economy afloat, it is neighboring Germany

Source: REGIONIn the Czech Republic, unemployment has been low for a long time. In January, according to the Office, employment was at the level of four percent, and specifically in the Pilsen region it was even only 3.2 percent. All over the country, companies are facing a shortage of qualified employees. What is the situation in the Pilsen region?
Member companies have been reporting a long-term shortage of employees across all fields and most professions. Some say that when there is an increase in demand for their services, the biggest concern is not where they will get new technology or in which direction they will develop the company, but who will work for them.

Do you think the labor market has any hidden reserves?
If we talk about the Czech Republic as a whole, there are basically two possibilities. Either we will import workers from abroad, or we will have to adjust the labor code better. This means that it enables companies to effectively employ people who cannot work full-time, i.e. people on parental leave. The state should give employers the opportunity to offer a freer form of work in the form of work activity agreements or work execution agreements.

However, with the amendment to the Labor Code starting this year, employing people on an agreement has become more complicated for most employers. While previously the company did not have to waste a lot of time administratively with the agreement manager, today there is practically no difference between whether I have an agreement manager or an employee. The administration is almost the same. The company would rather find one employee than employ, for example, two parents taking care of children for the same working hours. We protect the employee’s position, but the entire work environment suffers.

Is the Pilsen region something specific in this regard?
From a geographical point of view, the Czech Republic has always been a wedge in the side of Germany, and our region is located at the head of this wedge. We are one of the largest regions, but at the same time have the lowest population density. It happens that people move to cities such as Pilsen, Domažlice, Klatovy or Tachov for work, which causes depopulation of border areas.

We are also a logistics center. Our region is crossed by most of the connecting lines from Central and Eastern Europe towards Germany. It is therefore logical that a number of German companies have subsidiaries here, which they place in such a way that it makes sense from their point of view. That is, mainly along the D5 highway, or in Tachovsk or Domažlick.

The Pilsen region borders Bavaria. To what extent is the presence of a large, rich neighbor an advantage for Czech companies, and how does it complicate their lives?
The closer you are as an entrepreneur to the border, the more you struggle with the fact that for the same job position in Germany the salary will be basically double. However, for such a job you have to commute, the language barrier also plays a role, so many people will tell you that they do not want to learn the language or simply do not want to go abroad.

But we must also perceive that we are an export economy and that our exports to Germany are higher than what Russia and Turkey export there in total. Our economy is in the wake of the German one. If anything keeps the economy and our businesses afloat, it is the Germans.

We talk together about the lack of skilled labor. Czech companies have long looked up to the German model of dual education, where vocational training is combined with work experience in companies. However, we have not been able to implement a similar system for the time being. Is there any hope for change?
Within the framework of the Regional Development Agency (its founders include the Pilsen Region, the City of Pilsen, the Chamber of Commerce and the Labor Office – editor’s note) the Employment Pact was created, which will help us in the Pilsen Region to direct the capacities of schools in the future so that the supply of graduates corresponds to the demand from company parties.

This is also our answer to the German dual education system. We could learn from the Germans, take their good experience and transfer it to us, but what works in Germany may not yet work here.

Why do you think?
Large companies are able to offer internships to students, but the smaller the company, the greater the problem for it to join the dual education system. I am afraid that if pressure were exerted on the part of schools to implement dual education, there would not be enough businesses that would be able to get involved in it and secure the necessary capacities, so that dual education would be available to everyone and at an adequate level.

This is precisely why we created the aforementioned Employment Pact. We ask companies whether they would be interested in cooperating with schools and in which fields. In the case that students in specific fields need practice, it is necessary to find companies that will allow them that practice. If the school educates CNC machinists, but the company offers internships for mechatronics, then the offer does not meet the demand. In the pact, we find out what qualifications companies need, and then we try to talk to schools and tell them what fields of study will be needed and what graduates will find employment on the market.

You praise the work of the Regional Development Agency. What are similar activities financed from? Does the agency also use European funds?
The recipients of the outputs of the Regional Development Agency are the city of Plzeň, the Plzeň region, and they are also used by the principals of specific schools, but at the same time, they are not in a position to order similar surveys or concepts commercially. A considerable number of people are working on it, their activities need to be financed in some way, and European funds can be used for these purposes.

Does the Pilsen Chamber of Commerce participate in projects to support employment or increase qualifications itself?
Last year, for example, we successfully completed one larger educational project that enabled us to provide support to hundreds of companies. Companies had the opportunity to take advantage of the offer of education in the field of labor law or language skills. However, we also offered a retraining welding course and we also continuously provide training in Word, Excel and other soft skills. The Chamber also provides educational courses for foreigners, now mainly for Ukrainians. These are conducted in the Czech language and their goal is to enable foreigners to better integrate and fully operate in Czech companies.

The chamber continuously uses grant titles. It is actually one of the sources by which we earn for our activity and which at the same time enable us to provide meaningful services to members.

Jan Vitásek, EURACTIV.cz