Analysis: the Czech Republic has higher costs per employee in Central and South-Eastern Europe

17 June 2024

Czech companies’ costs per employee are among the highest in Central and Southeastern Europe. Austria has had higher costs in the long term, but they are gradually catching up with the Czech Republic, Slovenia and Slovakia. This is according to an analysis by the consultancy TPA. The analysis points out that assessing the cost of employees plays a role for companies when deciding where to locate.

The analysis examined the costs of companies’ employees, from top managers to workers, in 12 Central and South-Eastern European countries. It found that, over the long term, countries that are not members of the European Union have lower personnel costs. They increase according to the length of time a country has been in the EU, with the exception of Croatia, which joined in 2013, but staff costs there are on a par with Hungary, which joined in 2004.

“In the Czech Republic, managers, executives and administrative staff have the second-highest financial compensation in Central and Southeastern Europe,” said TPA partner Jan Soška.

Austria has the highest employee costs among the countries surveyed. “High inflation rates and competition for professionals are driving up costs in CEE. Although these costs are rising faster than in Austria, the levelling out process in the countries of South Eastern Europe will continue for a long time to come,” said Thomas Haneder, one of the authors of the analysis.

According to the analysis, personnel costs play a significant role in the location decisions of international companies. The issue has been highlighted by the current trend of supply chains moving to nearby and friendly countries. At the same time, the analysis notes that other criteria such as education levels, qualifications and labour regulations also play a role in the location decision.

Source: TPA and CTK

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