Hungarian workers and employers alike expect tough years ahead

Pessimistic employees

A disheartening proportion of workers have turned pessimistic about macroeconomic changes and labour market opportunities in the next 2-5 years, with 59% pessimistic or completely pessimistic, compared to only 30% of workers a year ago, according to Hays Hungary's survey.

The Salary Guide 2025 also shows a surprising jump in the level of pessimism:

• the proportion of workers who are completely pessimistic has jumped from last year's 3% to 15%.
• Optimism or complete optimism is just 11%, down from 34% last year.

The situation is not much better for employers. They were asked a year ago how they see the opportunities for their companies and the labour market in the light of economic change in 1-2 years' time. Although one in three respondents were optimistic or completely optimistic, there were still more pessimists and complete pessimists overall (41%).

Employers are more optimistic than employees (20%), but the majority, 55%, are pessimistic or completely pessimistic about the future in 2-5 years' time.

The three most common strategic objectives, according to the surveyed directors and managers, are to increase turnover, competitiveness and market share. The main obstacles to achieving the strategic objectives are rising operating costs and budget (45%), while difficulties with staffing (shortage of skilled workers in the market and retention challenges) are also seen as common problems.

Retention amid unrealistic wage expectations

Retention remains the most important HR-focused plan for companies this year. They will also continue to refine their organisational structure and, in addition to recruiting and training employees, they will also look to further improve process efficiency (the latter mainly through the integration of automation and artificial intelligence.)

Last year, one fifth of the employers surveyed saw no change in the number of staff, but the majority did see a slight increase in the number of employees, although at a more modest rate than last year. 29% reported a decrease in staff numbers (down from 23% last year), and the proportion of employers who achieved an increase of more than 10% fell from last year's 20% to 15%.

Employers say that unrealistic salary demands from candidates, the shortage of qualified candidates available and fierce competition for professionals are the main features of the labour market today.

This has remained almost unchanged for some time, and although the general shortage of skilled workers has given way to competition for skilled workers this year (and thus been pushed out of the top 3), overall there has been no significant shift in employers' perceptions.

Nor is there any change in the consequent fact that professional/specialist, senior and managerial positions remain the most difficult to fill. The main reasons why it is difficult to find good candidates are also in line with the above: salary levels, fierce competition with other employers and fewer available candidates are the main reasons why companies have the greatest difficulty in recruiting.

However, it is also worth looking at the fourth most common problem, the quality of qualifications/training. Over the past year, only 9% of responding employers had not experienced a situation where candidates' skills/competences did not meet expectations. 49% experienced a moderate lack of candidate skills/abilities, 26% a minor lack and 16% an extreme lack.

This result confirms the long-standing trend that the availability of a skilled labour force is scarce in the market.

Employers plan to continue recruiting mainly for full-time positions in 2025. Those who choose to hire temporary workers or freelancers and contractors mainly explain their choice by staff costs and the need for specific projects and skills.

Lower wage increases planned

The general shift towards a pessimistic view of the macroeconomic outlook for workers is also reflected in their expectations for their salaries in 2025. While a year ago 37% expected their pay to increase by more than 10%, by 2025 just over 20% think this will be the case. Many have moved into the more modest pay rise bands of less than 5% or do not expect a rise in 2025. Again, the largest proportion (31%) of workers are guessing for the 6-10% band, and employers' responses suggest this is likely to be the reality.

In the business plans for 2025, it is also in the upper bands that the most significant declines are seen.

• Only 12% plan to increase wages by more than 10% (compared to 34% for the projected increases in 2024).
• Most employers are still thinking of 6-10% (42%).
• The much more modest 2.5-5% band has grown significantly, with 33% planning for this band by 2025, up from 13% previously.

Flexible work arrangements are important

Two thirds of the workers surveyed receive some kind of non-monetary benefit from their employer. The top 10 most common standard benefits, although no longer the winner, according to employers' responses, flexible working, as it was a year ago, is still in a stable position with both parties - but cafeteria payments are a big winner. Of these benefits, as in last year's survey, flexible working is the most important for employees, but it shares the gold medal with cafeteria catching up.

In the labour market, benefits are of course a crucial factor in recruitment. There has been a slight shift in the list of employers' perks and employee preferences that employers consider attractive to candidates compared to a year ago, but the emphasis has not changed significantly. Employers say that the most attractive factors for their company, apart from salary, are the benefits package, a good working atmosphere and the possibility of a home office.

For the research, Hays Hungary used data from hundreds of recruitment projects provided by their existing multinational and SME partners in 2024. More than 3,000 employers and employees were interviewed.

Cover photo (for illustration purposes only): Getty Images