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03 January 2021

Employment trends in CEE

After another turbulent year marked by the COVID-19 pandemic, the new year brings (perhaps) some hope of a return to at least a "new normal" both as far as economic recovery and the world of work are concerned. With mass vaccination becoming a real possibility, this hope does not seem unfounded.

After the first year of the pandemic, it was already clear that COVID-19 did not only pose a risk to public health and the economy as a whole but had a massive effect on how we work.

Workplace closures, stoppages, remote work and other measures to decelerate and control the spread of the virus caused headaches for most employers, not to mention sectors which had to completely shut down, leading to financial distress and job losses. In today's increasingly global economy, downturns in certain sectors rarely leave other sectors unaffected and the negative effects of several sectors may easily add up.

Consequently, governments and legislators had to scramble to introduce rapid and effective legislative changes to help employers (e.g. by short-time work, subsidies) and to allow them to take operative measures (e.g. work from home and remote work rules, health and safety, etc.). In many cases, the hastily adopted legislation was difficult to apply and raised more questions about its application.

2021 brought many positive changes, as vaccination campaigns seemed to have at least partial effects in slowing down the pandemic, employees started returning to the office and the economic recovery got underway. These trends were also reflected in the job market. Many businesses started hiring, and most CEE countries experienced an even higher need for workforce. Together with all these positive signs, it also became apparent that the virus is here to stay and that a complete recovery from the effects of the pandemic will not happen quickly. This can also be seen in recent economic developments, like high energy prices and higher inflation. Unfortunately, a fourth wave of the pandemic is also picking up pace.

While there were (and still are) several positive signs for the economic recovery, the effects of the crisis on work and the projected recovery continues to be highly uneven throughout the CEE region, with differences across countries, among economic sectors and among professions. Nevertheless, towards the end of 2021 the general outlook seems to be relatively positive in the CEE region as far as economic growth and opportunities are concerned.

The relatively quick economic upturn after the pandemic drew more attention to some structural problems of CEE labour markets, such as the shrinking working-age population and the relative shortage of workforce. Remarkably, the increased flexibility of work, especially remote work and hybrid work structures, will likely increase the participation rate of less economically active groups such as young people, the elderly and women. Flexible work arrangements and hybrid work structures, supported by investment in digital infrastructure, could help foster the employment of these groups and contribute to a faster economic recovery.

The pandemic also brought positive changes in the world of work. Many companies have rediscovered the interdependence between the company and its workforce and took measures to keep their employees and strengthen cohesion, from offering greater work flexibility to medical screening and company vaccination programmes. The concept of a "caring employer" thus became more widespread.

Increased flexibility in the world of employment has also led to several practical questions that employers need to address daily. The new developments, such as vaccination campaigns, returns to the workplace, remote and hybrid work continue to be in the spotlight in most CEE countries. We have therefore created an overview of remote work regulations in CEE that we hope our readers will find useful.



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