Eastern Europe: Labour migration on the rise

“I could not have imaged three years ago that I would be sitting in Warsaw drinking Polish beer,” says Shourya Singh, a risk management consultant from Varanasi in northeast India, who works at Ernst & Young (EY), a professional services company, in the Polish capital. Shourya told DW that he was headhunted by an international staffing agency via LinkedIn and worked on a contract for Dutch bank ING before joining EY. Shourya’s story is not uncommon. Abraham Ingo, a 20-something from Namibia who works as a credit risk model developer for a large bank in Warsaw, says the move to Poland has opened up a whole new world.

“My experience working here has been really amazing. The company I work for has a great work culture, a diverse employee base and great management. This experience in Poland has helped me grow and will enable me to contribute much more to Namibia in the long run,” he told DW.

Change in Poland and other Central and Eastern European countries (CEE) has been remarkable. Most EU member states in the former Communist-ruled region have moved at breakneck speed from developing to developed market status in the 19 years since their EU accession.

This of course brings serious investment, but also some of the afflictions of western economies: aging populations, Labour shortages, fast-rising wages and the need for Labour immigration. The shortage is most acute in economic sectors such as industry, medicine, transportation and information technology (IT).

The shortage is the result of demographic changes, mainly an aging population and emigration, coupled with unprecedented economic growth. Most countries in the region have experienced shrinking populations over the past 15 years. Data from the EURopean Employment Services (EURES) — a network that aims to facilitate the free movement of Labour in the EU — shows that almost all CEE countries experienced a decline in population between 2010 and 2021.

Migration and low fertility rates are expected to mean the working-age population (aged 20-64) in CEE countries will shrink by about 30 per cent by 2050.

Over the last decade, the dependency ratio — the ratio of the number of people of nonworking age to the number of people of working age — has grown. According to Poland’s social security office ZUS, in order to stop growth of this ratio, the number of foreigners of working age will have to increase annually by 200,000 to 400,000 people in Poland alone.

“The context of the green and digital transitions must also be considered,” Nadia Kurtieva, an expert at Poland’s Lewiatan Confederation, a business organisation, told DW. “These twin transitions are reshaping the labour market by creating new job opportunities and influencing the types of skills and expertise that organisations require,” Kurtieva said, adding that however there was “a notable shortage of workers with the necessary skills” to meet these demands.

Some CEE countries also face extensive shortages in their domestic markets due to emigration of certain occupations already in short supply. According to the World Bank, Slovenia had the highest net-migration figure in the CEE countries winning 4,568 people in 2021.

Net migration is an annual ratio taking both immigration and emigration into account. Romania had the lowest with a loss of 12,724 nationals. The situation has changed following Russia’s invasion of Ukraine, which has had significant consequences for labour supply in the region. Currently, Poland hosts the highest number of refugees from Ukraine, estimated at one million.

In 2021, the Romanian government approved an increase in the number of visas that could be granted to foreign workers for 2022 to 100,000. Foreigners represent only 1.1 per cent of employees in Romania.

Romania’s government said this year it is again ready to accept 100,000 non-EU workers in 2023. After Bulgaria, Romania opened its doors for Bangladeshi skilled workers, with jobs in the farm, construction and service sectors.

There are over 4.7 million people workers in Hungary and, according to the Hungarian Central Statistical Office (KSH), 85,000 foreigners are working in the country.

But the domestic labour market will soon need 500,000 additional workers, according to the Minister of Economic Development, Marton Nagy. Hungary has expanded its list of non-EU countries from which it is legal to recruit labour, although tightened the terms on which they can stay. Now, the government said that at least 3,000 active job orders await Filipino skilled workers in Hungary.

And it’s a similar situation in Poland. Tomasz Danel, Vice-Consul of the Polish embassy in Manila, told the Phillippines-based online news portal The Freeman that Poland needs construction workers, welders, pipe fitters, drivers and other blue collar workers. “Poland is becoming more and more popular among Filipinos as a destination for work and the number is growing every year,” Danel said.

A study conducted by the Polish Economic Institute and BGK, a Polish development bank, showed that every fourth company in Poland employs foreigners who are not EU citizens. One example is a so-called container town, a container housing project for foreign workers — mainly from Asia — at a large petrochemical facility being built by state energy firm Orlen near Plock in central Poland.

Up to 6,000 foreign workers from Turkey, India, Pakistan, Korea, Spain and the Philippines will live there while working on the project. Planned recreational facilities include a cricket pitch.

In the Czech Republic, almost one million foreigners worked there as of the end of December 2022, according to official government data — 15 per cent of the adult workforce. Just under half were from EU countries.

Jan Rafaj, vice president of the Czech Union of Industry, said that companies in Czechia lose 30,000 to 50,000 workers a year due to retirement. “The domestic Labour market cannot cope without foreigners,” he told DW.

In most CEE countries, integration remains an issue. That doesn’t bother Shourya, though. “I don’t see many professional downsides, except for the language,” he told DW with a smile. “And Google Translate helps, of course.”