How the relationship between workers and employers has changed in the V4 countries
In recent years, the labour markets in the former Eastern European bloc countries and the V4 countries have undergone significant changes, which have also changed the relationship between workers and employers. One of the key issues in these countries is the dramatic increase in labour shortages, which have been influenced by demographic factors, emigration and EU-wide wage differentials, among other factors. An empirical study has investigated the characteristics of HR systems in the V4 countries. The authors of the article are József Poór, Professor Emeritus, President of HSZOSZ, MATE, Zsolt Sándor Kőmüves, Associate Professor, MATE and Gábor Szabó Szengróti, Associate Professor, Széchenyi István University.
Two or three decades ago, lifelong employment in the same company or organisation was widespread in the V4 countries (Czech Republic, Poland, Hungary, Slovakia). This is now a thing of the past. Today, one of the key issues in these countries is the dramatic increase in labour shortages, which have been influenced by various factors. These include emigration after the change of regime, adverse demographic trends, the economic crisis and wage differentials within the EU. Today, three additional crisis factors are linked to the causes mentioned above: the Covid-19 pandemic and its consequences, Russia's war in Ukraine which has been going on for more than two years, and the recent regional Arab-Israeli war conflict.
In this context, the five universities (University of Silesia, Czech Republic; Hungarian University of Agricultural and Life Sciences and Széchenyi István University, Hungary; University of Szczecin, Poland and Matej Bel University in Banská Bystrica, Slovakia) undertook to collect information on HR activities in V4 organisations and compare it with information from each of the V4 countries. The online questionnaire survey was conducted between 1 May 2023 and 30 November 2023 and received a total of 2,094 analysable responses from different organisations (companies and institutions) in the four countries.
Table 1: Main characteristics of the countries surveyed
Features | Czech Republic (CZ) | Hungary (HU) | Poland (PL) | Slovakia (SK) |
Population (million persons) | 10.9 | 9,8 | 19,2 | 5,45 |
GDP (%) | 0.18% | -0,90% | 0,23% | 1,10% |
Unemployment (%) | 3.70% | 5.10% | 3.61% | 2,22% |
Minimum wage (euro/month) | 651 | 547 | 641 | 646 |
Wage cost (euro/hour) | 15,5 | 10,4 | 11,5 | 14,2 |
From Eurostat (2023, 2024)
Note: The monthly minimum wage in the European Union countries was between €477 and €2571 in January 2024 (Konya, 2024)
Respondents
About 13.92% of respondents were nationally owned public organizations or companies, and 86.08% were private companies. Of all respondents, 80.44% were in the category with fewer than 250 employees. The distribution of respondents by sector varies considerably between countries. Business services account for the largest share of responses in the four countries surveyed, with an average of 27.60%. In terms of the distribution of respondents by sector, the manufacturing sector came second with an average of 19.85%, while retail sector firms came third with 14.42%. Among the organisations surveyed, the proportion of enterprises with a turnover of more than 15 years was by far the highest (53.94%)
Role and importance of HR
Our analysis showed that the three most important HR processes for the four countries were (1) employment management and termination (2) personnel control and (3) talent management. The present survey data also show that the COVID-19 epidemic had a significant impact on the management of HR functions and tasks in the countries surveyed and revealed a number of important HR management trends. In line with teleworking, the importance of HR digitalisation also increased during COVID-19.
Several global, regional and local studies (e.g. Cranet, 2023) show that on average, more than 60 percent of organizations worldwide have some kind of HR strategy. This figure is much lower for SMEs. In this survey, as we wrote earlier, 2,092 respondents from 4,092 countries indicated that 48.85 percent of them have some kind of HR strategy.
Job categories
Our survey shows that the average currency of job descriptions in responding organisations is relatively low (23.16%). Respondents in all four countries ranked duties and responsibilities first, results and responsibilities second, and competencies third
.Recruitment selection
In the four countries surveyed, online job advertising was ranked first, while letters of recommendation came second and referrals from friends and acquaintances came third. The results of a country-by-country survey show that in the Czech Republic, however, the same amount of reliance is placed on letters of recommendation and almost as much on posting by friends. In Slovakia, human contacts also play a key role in recruitment, but firms in Hungary make much less use of the latter option.
Table 2: Use of selection methods and techniques (%)
Selection methods and techniques | CZ | HU | PL | SK | Overall |
selection based on the applicant's documentation (CV, application form, references) | 83,41 | 68.96 | 69,40 | 86,72 | 77,12 |
interview: structured | 86,06 | 50,39 | 27,00 | 88,80 | 63,06 |
interview: unstructured | 59,38 | 27.58 | 26,60 | 41,15 | 38,68 |
tests: expertise/experience | 30,29 | 48,01 | 5,40 | 30,99 | 28,67 |
tests: skills (thinking, behaviour) | 29,09 | 25,99 | 26,80 | 32,03 | 28,48 |
tests: personality (types) | 15,87 | 34,48 | 14,00 | 11,98 | 19,08 |
social media profiles | 12.26 | 13,53 | 11,80 | 9,64 | 11,81 |
tests: intelligence (IQ, EQ) | 6,25 | 17,50 | 13,20 | 5,47 | 10,61 |
assessment center | 4.69 | 10,87 | 5,20 | 7,55 | 7,08 |
other | 0,36 | 0,26 | 1,20 | 0,00 | 0,46 |
Overall | 100.0 | 100,0 | 100,0 | 100,0 | 100,0 |
Format: Authors' own editing
Training
Our survey results show that course/lecture is the most commonly used training method (48.04%) in the four countries. E-learning, which is gaining momentum in the wake of the covid epidemic, also features prominently in the list of training methods, especially in Hungarian companies, where 57.82% reported using it. The importance of e-learning is likely to remain high in the future due to its enduring benefits such as flexibility, accessibility from anywhere, from any device, and the possibility of collaboration for geographically dispersed employees.
Despite the difficult economic situation, organisations (87.7%) have not cut their training budgets.
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Training budget evolution (%)
TEA/TM
Our research also confirmed our (Cranet) research finding in another area that performance appraisal is most often (70.71%) used for incentive (remuneration) purposes. But it's also a welcome fact that the second most frequently cited purpose was training and development.
Occupational health and safety
Responses from the majority of organisations in the V4 countries participating in our survey show that the organisations surveyed recognise the importance of health and safety regulation. The highest positive response (yes) came from Hungary (75.82%), while the lowest positive response (yes) came from the Czech Republic (57.33%)
.Incentive benefits
The data shows that both in the V4 region and in the single countries, the highest percentage (65.18%) is for various bonuses. There is a significant difference in the use of bonuses between countries: while 75.33% of organisations in Hungary use this form of reward, only 54.45% of organisations in the Czech Republic. Among the differences between the countries, it is important to note that in Hungary nearly 80% of organisations provide their employees with a 13th or 14th month salary, while in Poland it is only 15.8%
.
Other In Hungary, the most common benefits are company mobile phone and car insurance, travel allowance, sick leave, housing allowance, flexible working hours, free drinks, relaxation room, childcare and foreign language courses. Slovakia has the highest rate of pension savings (39.32%).
Compared to the other three countries, Poland leads only in the take-up of life insurance (31.20%) and health insurance (36.40%), with other benefits playing a less important role. The situation is similar in the Czech Republic, which ranks first in the region in terms of the use of the surplus. Among the benefits surveyed, flexible working hours (45.78%) and free drinks (45.78%) rank second and third in the region. The use of wellbeing-related benefits, such as relaxation space (14.62%) and massage at work (6.25%), were rated relatively low in the region.
Employee Support Services (ESS) Staff Information System
Our results show that in the V4 region and in each country a quarter of respondents (26.04%) use ESS. The results suggest that the use of self-service information systems (ESS-SPIS) is not yet widespread in the V4 region. It remains a successful tool for large organisations. More than one third (36.00%) of the surveyed companies in Poland use self-service information systems, while the lowest rate is observed in Slovakia (19.27%).
HR controlling
More than a third of organisations in the V4 region (38.86%) do not use HR controlling solutions at all. However, the majority of organisations with a controlling system (29.3%) use both operational and strategic controlling tools. One fifth of the surveyed organisations (21.09%) only adapt operational tools to their controlling processes. On the other hand, there are some organisations that only apply strategic controls, but only 10.75% of them do so. A comparison of the countries surveyed shows that the highest proportion of domestic organisations (35.10%) apply complex (operational and strategic) controlling processes. When comparing the four countries surveyed, organisations in the Czech Republic apply staff control solutions the least. In summary, controlling-based monitoring of HR processes can be identified as a direction for improvement in the V4 region, as almost 40% of the surveyed organisations do not use HR controlling tools at all.
HR outsourcing
The majority of respondents across all V4 countries, with an average of 65.73%, indicated that they have no experience in outsourcing HR processes. Positive experiences with HR outsourcing were more common than negative experiences in all countries surveyed, with an average of 27.87% of respondents reporting positive experiences and 6.21% reporting negative experiences. This indicates that the majority of those who tried HR outsourcing found it beneficial and useful.