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The end of the labor market boom. This may be the last minute for an interest rate hike [WYKRES DNIA]

The end of the labor market boom.  This may be the last minute for an interest rate hike [WYKRES DNIA]

The slowdown of the economy due to high interest rates, inflation or the effects of the war in Ukraine – this is the economic scenario for the coming quarters, which economists in Poland have predicted. And also those from public institutions, such as the head of the Polish Development Fund, Bauwe Boris, who warned in May that “in two or three quarters, we may enter a technical recession” (i.e. a drop in GDP quarter by quarter).

How deep will the slowdown be and what will be its consequences for the labor market? Of course, there is a lot of uncertainty here related not only to external factors, but also m.in. NBP or government policy. A significant increase in unemployment is a far-fetched scenario. pa Ministry of Finance In the assumptions of the draft state budget for 2023, it even included it in End In 2022 and 2023, the registered unemployment rate will reach 5.1%, the same rate as today.

However, the job market will surely calm down. We should expect that companies will reduce their appetite to search for and fight for employees. What does this mean exactly? For example, no raises, no bonuses or bonuses, and more difficulty finding a new, better job. If inflation does not begin to fall, it will also mean a fall in the real wages (that is, wages adjusted for inflation) for larger and larger groups of workers.

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The job offer boom is coming to an end

In recent days, at least two studies have appeared indicating that the employee market in Poland (if it can be talked about at all) may be ending for some time.

First, according to data collected by the Elementapp.ai recruitment system for Grant Thornton Polska, the number of online job offers in May 2022 fell for the first time in 14 months. As experts from Grant Thornton Polska have noted, although there are usually more job ads in May, this time compared to April Their number decreased by 5 percent. Of the 39 occupations monitored in the report, 34 recorded a decrease in the number of job advertisements in the past two months.

Data on the number of job advertisements is important because there are many employees in Poland a wage They are growing not because they got a raise with their employer, but because they changed their job to a better paying one. Therefore, lower demand for new employees may limit the pace of wage growth.

The first symptoms of labor market “cooling off” also appear in Randstad’s latest study, Employer Plans. Nearly half of the companies surveyed expect a recession – the largest number since the 2020 coronavirus that marked the pandemic. Only 8 percent. Depends on growth.

This pessimism affects the companies’ hiring plans. As noted by experts from Randstad, currently only 25 percent. Companies plan to hire employees. Two years ago, before the epidemic, the percentage was almost 40%, and in the fall of 2021 – it was just over 30%. Fortunately, only 4 per cent. Companies are planning to lay off workers. This is as much as it was in the best periods before the pandemic. The most difficult job may be to find a new job (or keep the current one) in the financial and insurance industry, as well as real estate and business services, as the commercial industry does not want to increase employment significantly.

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When it comes to raising wages, 28 percent plan on it. Almost half of what it was at the end of 2021. Some consolation is the fact that the Randstad survey shows that if the company plans to increase, it is not meager (in the order of 2-4%), but more specific (about 7 percent and more).

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Poles want to change jobs en masse

The Grant Thornton and Randstad reports don’t sound the alarm bells too much, but they nonetheless show the first symptoms of what economists are talking about – an economic slowdown that would limit the “employee market” (that is, companies’ willingness to hire new employees and raise wages).

This data is important because, according to another recent study – consulting firm Deloitte – every Polish employee surveyed plans to change jobs within the next six months. Among the most important factors leading to a change of employer, of course, are low wages (apart from the lack of development opportunities and “ineffective processes in the organization”).

If you are among the enthusiastic half, among others, who wants to change their job because they want higher earnings, it seems better not to put off these plans.

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