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| Eastern European countries have built barriers to prevent the influx of migrants. However, these same countries are now realizing that their economies depend on foreign labor. (Source: AP) |
"Three years ago I could never have imagined that one day I would be in Warsaw sitting and drinking Polish beer," shared Shourya Singh, a risk management employee from Varanasi in northeastern India. He currently works for Ernst & Young (EY), a professional auditing firm in the Polish capital.
Shourya revealed that he was recruited by an international recruitment company through LinkedIn and worked under contract at the Dutch bank ING before joining EY.
Shouya's story is not uncommon.
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| Shourya Singh says he has made more Indian friends in Poland than in his own country. (Source: Privat) |
Abraham Ingo, around 20 years old and from Namibia, currently works as a credit risk management model development specialist for a major bank in Warsaw. Abraham shared that coming to Poland has opened up a whole new world for him.
Abraham said: "My experiences working here have been truly wonderful. My company has a great work culture, a diverse workforce, and effective management. Life in Poland has helped me grow and provided a foundation for me to contribute to my home country of Namibia in the long term."
Central and Eastern Europe are undergoing transformation.
Poland, along with other Central and Eastern European (CEE) countries, has undergone dramatic changes. In the 19 years since joining the EU, many countries have developed at a breakneck pace, transitioning from developing markets to developed markets.
This, of course, brings serious investment to the European economy, but at the same time creates a number of challenges such as an aging population, labor shortages, rapidly rising wages, and an increased demand for immigrant labor.
Among these, industry, healthcare , transportation, and information technology are the economic sectors experiencing the most severe labor shortages.
Demographic issues reveal a lot.
The labor shortage in Europe is a consequence of demographic changes, primarily from an aging population and migration, coupled with unprecedented economic growth.
Most countries in the region have experienced population decline over the past 15 years. According to data from the European Employment Service (EURES) – a network aimed at facilitating the free movement of labor within the EU – CEE countries also experienced this phenomenon from 2010 to 2021.
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| Western businesses in Eastern Europe are increasingly having difficulty finding skilled workers. |
Migration and low birth rates are projected to cause the working-age population (20-64 years old) in CEE countries to shrink by approximately 30% by 2050.
The dependency ratio – the ratio of non-working-age people to working-age people – has also increased over the past decade. According to Poland's social security office ZUS, for the dependency ratio to decrease, the number of working-age foreigners would have to increase annually by 200,000 to 400,000, in Poland alone.
The green economic transformation is reshaping the labor market.
In addition to demographic factors, "the context of economies undergoing green and digital transformation should also be taken into consideration," according to Nadia Kurtieva, an expert at the Lewiatan Federation of Poland.
Mr. Kurtieva added: "These two parallel trends are reshaping the labor market by creating many new career opportunities, thereby affecting the skills and expertise that organizations require, but there will be a significant shortage of skilled workers to meet the demand."
Some CEE countries also face severe shortages in their domestic markets due to migration of certain professions that were already in short supply.
According to the World Bank, Slovenia has the highest net migration rate among CEE countries, reaching 4,568 in 2021. Net migration is an annual rate that includes both immigration and emigration. Romania has the lowest rate at 12,724.
The situation changed after the Russia-Ukraine conflict, which had significant consequences for the labor supply in the region. Currently, Poland has the highest number of refugees from Ukraine, estimated at around 1 million.
Wave of foreign workers
In 2021, the Romanian government approved a policy to increase the number of visas that can be issued to foreign workers for 2022 to 100,000. Foreigners account for only 1.1% of the workforce in the country.
The Romanian government said this year it is ready to accept 100,000 non-EU workers. Following Bulgaria, Romania has opened its doors to skilled workers from Bangladesh, with jobs in agriculture, construction, and services.
According to the Hungarian Central Statistics Office (KSH), more than 4.7 million people are employed in Hungary, and of those, 85,000 are foreigners.
However, according to Economic Development Minister Marton Nagy, the domestic labor market will soon need an additional 500,000 workers. Hungary has expanded the list of non-EU countries eligible to recruit workers, although it will tighten the terms under which they can stay and settle. The government says there are currently at least 3,000 job openings available for skilled Filipino workers in Hungary.
The same is true in Poland. Speaking to The Freeman of the Philippines, Tomasz Danel, a consular officer at the Polish Embassy in Manila, said that Poland is currently experiencing a shortage of construction workers, welders, drivers, and many other low-skilled workers. “Poland is becoming increasingly popular with Filipinos as a work destination, and that number is growing annually,” Danel said.
According to research conducted by the Polish Institute of Economic Research and BGK (a Polish development bank), four out of ten companies in Poland employ foreigners who are not EU citizens.
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| Migrant workers in Eastern Europe and the question of who needs whom more. |
A practical example reflecting this phenomenon is the emergence of "container towns," a project providing housing for foreign workers, mainly from Asia, at a large petrochemical facility being built by the energy company Orlen near the central Polish province of Plock. Approximately 6,000 foreign workers from Turkey, India, Pakistan, and South Korea are expected to live and work there. Recreational activities are also included in the project, such as the construction of a cricket pitch.
According to official Czech government data, as of December 2022, an estimated nearly 1 million foreign workers were employed in the Czech Republic, representing 15% of the adult workforce. Less than half of them came from other European countries.
Jan Rafaj, Vice President of the Czech Industrial Association, stated that Czech companies lose between 30,000 and 50,000 workers each year due to retirement. "The domestic labor market will not be able to solve this problem without foreign workers," said Jan Rafaj.
Integration remains a challenge in most Central and Eastern European countries. However, that doesn't bother Shouya. "I don't find many difficulties in my job, except for the language. But of course, Google Translate helps."
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