Over the past four months, the coronavirus has disrupted the daily lives of citizens in the Czech Republic and the world. And while most industries have felt the pinch under lockdown, some have been more seriously impacted than others.
While things are more or less returning to normal in the Czech Republic this month as restaurants, movie theaters, and hotels are allowed to reopen, the economic impact of the virus — particularly in the area of unemployment will be felt for many months to come.
Where does this leave job seekers in the Czech Republic?
Numerous industries have suffered a blow
The socio-economic impact of the COVID-19 crisis has especially been felt in the hospitality industry. Airlines, hotels, and restaurants have all experienced dramatic drops in their revenues. While some have been able to adapt by offering takeout food or special discount vouchers for future stays, others have had no choice but to lay off employees.
In Prague, tourism and gastronomy are the sectors most affected by the crisis, according to Martin Malo, managing director of Grafton Recruitment, one of the largest recruitment companies in Europe. “Especially in big cities, where the lack of tourists is significant, people had to start looking for jobs in different sectors,” says Malo.
“We’ve seen them move into logistics, e-commerce, and sometimes even into the business services sector, especially customer care, where they can use their communication skills and knowledge of foreign languages.”
According to a report published in Idnes.cz, the coronavirus crisis has significantly affected the Czech labor market as a whole, cutting down the job offers handled by recruitment agencies almost in half.
“During the lockdown, the significant decrease of job offers has been visible,” says Malo. “Depending on the specific sector and region, the year to year decrease has varied from 30 to 70 percent.”
The ESL teaching sector has also suffered considerably during the pandemic, as restrictive measures and social-distancing orders have put many English teachers out of work. While some have been able to adapt by switching their lessons online, others have seen their income drop to a fraction of what it used to be.
In the Czech Republic, the economic shock of coronavirus has also reached the automotive industry and its suppliers. “The situation in this industry is strongly influenced by the development of the European, and especially German, market,” says Malo. “The slowdown of this sector had already started last year, but the crisis brought further problems and we are now seeing the first job reductions.”
These are the businesses that are winning the crisis
While some industries are obviously suffering, the economic outlook for other sectors is much brighter. According to Malo, some sectors such as e-commerce or logistics have not stopped recruiting and have been growing significantly. “IT, business services, and the pharma industry are still growing,” says Malo. “And we expect a growth of job offers in construction too.”
The increased demand for workers in the construction and farm sector is directly related to the border closings, as many companies employ workers from abroad. Anything related to technology and telecommunications will also continue to do well, as IT positions are location independent. In fact, many IT companies have continued to operate as usual during the lockdown, since their workers could work from home.
When will the situation stabilize?
Job market projections for 2020 aside, the truth is that nobody knows how long it will take for the economy to recover. According to a UNIDO (United Nations Industrial Development Organization) report, the index of industrial performance shows a decline in most sectors in the CR.
For example, the beverages industry saw a decline in production of 17.4 % in March 2020 compared to the same month the previous year, while the motor vehicle industry experienced a decline of 25.8%. The losses have been smaller in other sectors such as furniture (11.6%) and textiles (7.7%). It’s still too early to know what the economic disruptions triggered by the coronavirus will look like in the second quarter of 2020.
While experts are hopeful that a return to normalcy is still in sight for this year, the recovery will most definitely be gradual.
With things reopening in May and June, corporations are optimistic that things will start to move in the right direction. Very few experts, however, expect any significant change until late in the summer. “In the end, everything depends on the development of the pandemic situation,” says Malo.
Still, the situation is slowly improving compared to March, and Malo says they are seeing offers starting to come back onto the market. “At the beginning, almost all recruitment activities had stopped,” he says.
“In the last few weeks, we have seen slow growth again, although many companies are still cautious — we estimate that a large number of the currently paused job offers will actually be canceled.”