35 thousand guest workers will not be enough - what is happening on the Hungarian labour market?
Although the government has set a quota of 35,000 guest workers by 2025, this will not significantly ease tensions in the Hungarian labour market. Employment remains high, but there are severe labour shortages in several sectors (industry, construction, hospitality). The supply-demand balance has been disrupted: while new industrial investments are being launched, it is becoming increasingly difficult to find suitable workers, according to an analysis by GKI Gazdaságkutató Zrt.
The number of employed reached nearly 4.7 million in the first months of March 2025, before falling to 4 million 669 thousand in May 2025, leaving the three-month average for March-May 25 thousand below the same period last year. The employment rate is 75% for the 15-64 age group. At a sectoral level, the services sectorwhich accounts for about two-thirds of the labour marketis pulling employment. Industry is undergoing a structural transformation, with traditional industries in decline but new plants being set up (battery factories, electrification of the automotive industry), which will create new jobs (mainly guest workers) in the future.
The GKI monthly survey shows that firms' willingness to hire in the first months of 2025 is showing signs of uncertainty: In May 2025, 9% of firms were planning to expand their workforce in the next three months, while 12% were planning to reduce their workforce. In trade and construction, those planning to reduce their workforce are in a definite majority over those planning to expand, in manufacturing the two proportions are roughly equal, while in business services, staffing is expected to increase.
Expected evolution of the number of persons employed, 2019-2025
(balance indicators*, seasonally adjusted data)
![\"35,000](\"https://www.hrportal.hu/images/uploaded/modules/journalsys/journalsys_files/18/contentadmin/162564/gki.jpg\")
*/ The balance is the difference between the proportion of positive and negative responses
Format: CCI
New jobs will be created primarily in the private sector - for example, job growth is expected in logistics, business services, tourism and industrial start-ups.
The unemployed totaled 210,000 in May, putting the unemployment rate at 4.3%, which is essentially the same as a year earlier. Doubts about the tightness of the labor market are reinforced by the fact that the average time to find a job is now 12.8 months, or more than a year. A significant proportion of the unemployed are long-term unemployed: a third of jobseekers have been looking for a job for at least a year, although 42% can find a job within 3 months.
This highlights that despite favourable aggregate indicators, there are groups of people who are difficult to re-integrate into the labour market
.Unemployment also varies by region within the country (e.g. South Transdanubia has a higher rate, while in many places in West Transdanubia employment is - on paper - almost full). Also a problem is that some of those who have dropped out of the registration did not find a job (they appear in the potential labour reserve)
The number of job vacancies remains significant: according to the KSH, there were on average around 65,000 vacancies nationwide in 2024 (39,000 in the competitive sector, 24,000 in the public sector and 2,000 in other jobs). Although this is slightly lower than the peak in 2022, it is still high.
.In recent years, foreign guest workers have played an increasing role in the Hungarian labour market, with some 104.6 thousand foreign nationals working in Hungary in spring 2025, an increase of 2,100 in a year. The share of foreign workers is thus around 2% of total employment, but their presence is concentrated in certain industries. The industry and construction, especially large factories and construction sites, as well as logistics and agriculture, employ a significant number of foreign workers. In terms of their country of origin, many come from third countries (outside the EU), such as Ukraine, Serbia, Vietnam, Philippines. In 2025, the government introduced restrictions on the employment of guest workers:
In 2025, a maximum of 35,000 people will be allowed to obtain new work-related residence permits in Hungary (the previous quota was around 55,000 in 2024). However, this can be waived, which does not improve transparency.
A number of large plants (BMW, CATL and Eve Power battery factories, BYD, etc.) are scheduled to start operations in 2025, which will exacerbate labour shortages locally and drive up wages in the regions concerned. Some of the companies are therefore trying to address the labour shortage through wage increases, automation or by bringing in foreign workers (guest workers).
Employment will remain high throughout 2025, but is likely to fall. Improving productivity and ensuring a supply of skilled labour is essential to address structural tensions in the labour market in the medium term.
Longer-term labour market challenges include demographic squeezes (fewer young entrants while the number of retirees is rising) and a renewed acceleration in emigration (20,000 net emigrants in 2023 alone). These will make labour shortages in some occupations more acute, which will be a constraint on economic growth.
Showing where to hire and where to lay off - latest data on the Hungarian labour market
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image: freepik