Hungary’s labour market is entering a critical period as demographic decline, labour shortages and slow workplace adoption of artificial intelligence combine to create what business leaders describe as a “perfect storm”. Experts speaking at the Business Summit organised by Prohuman Group, the Hungarian Chamber of Commerce and Industry (MKIK) and the Joint Venture Association warned that the challenges are no longer future risks but present realities.
Labour force shrinking by 50,000 people every year
According to speakers at the conference, approximately 50,000 more people leave the Hungarian labour market each year than enter it. As large generations approach retirement and fewer young people join the workforce, the gap is expected to widen further by the end of the decade.
“The labour market storm is not coming — it is already here,” said Sándor Zakor, Chairman of the Board of Prohuman Group. He noted that demographic decline is affecting not only Hungary but much of Europe, with falling birth rates reducing the number of young workers available to replace retirees.
The situation is already creating recruitment difficulties across multiple sectors, while businesses increasingly struggle to find qualified employees.
Hungary ranks last in Europe for workplace AI use
Although artificial intelligence is widely discussed as a potential solution to labour shortages, experts highlighted that Hungary is currently failing to take advantage of the technology in the workplace.
While Hungarians increasingly use AI tools in their private lives, workplace adoption remains extremely low. Data presented at the summit showed that only 1.3% of Hungarian employees use AI as part of their work, compared with a European average of 15.5%.
Speakers warned that this places Hungary at the bottom of European rankings and could weaken the country’s competitiveness at a time when businesses across the continent are accelerating digital transformation.
However, several experts stressed that AI alone will not solve labour shortages. Hajnalka Csorbai, President of the Joint Venture Association, noted that improved productivity among office workers does not automatically create more employees for manufacturing or logistics roles.
Escaping the middle-income trap
A recurring theme throughout the event was Hungary’s struggle with the so-called middle-income trap.
MKIK President Elek Nagy argued that long-term economic growth will require a significant increase in productivity and added value. Drawing comparisons with countries such as Singapore, Taiwan and South Korea, he said successful economies had escaped similar situations by investing heavily in knowledge, education and innovation.
According to Nagy, a knowledge-based economy requires a complete ecosystem, including vocational training, adult education, higher education, research and development, and innovation.
The chamber is currently working on a new quality assurance framework for adult education programmes, aiming to improve standards and ensure more effective use of public funding.
Education system criticised for failing to prepare students
Several speakers argued that Hungary’s education system is not adequately preparing young people for a rapidly changing economy.
Zakor said the key issue is not necessarily a lack of professional knowledge but the absence of skills that enable people to continuously learn and adapt. Communication, collaboration, problem-solving and independent learning are becoming increasingly important in a labour market shaped by technological change.
Because reforms to public education take years to produce results, experts suggested that adult education and vocational training offer the fastest path to improving workforce skills.
At present, only 9.6% of Hungarians participate in learning alongside work, placing the country among the weakest performers in the European Union.
Older workers may become increasingly important
Data scientist Károly Bozsonyi, Vice-Rector of the John von Neumann University, highlighted another possible solution: keeping older workers active for longer.
He warned that the X Generation currently forms the backbone of the Hungarian labour market, but many members of this generation will retire within the next five years. The smaller size of Generation Z means there will be fewer workers available to replace them.
According to Bozsonyi, maintaining workforce participation among older employees will require better healthcare and policies that support longer careers.
He also argued that healthcare should be viewed not only as a social service but as a key economic investment, since healthy workers are essential for productivity and growth.
Foreign workers and automation may play larger roles
The summit also explored how businesses are responding to labour shortages through international recruitment and automation.
Representatives from major employers noted that foreign workers have become increasingly important in sectors where domestic labour supply is insufficient. Some business leaders warned that tighter restrictions on guest workers could affect future investment decisions.
At the same time, companies are accelerating investments in robotics and automation. Several speakers argued that the fourth industrial revolution is already underway, requiring employees to develop new technological and creative skills.
Examples presented at the event showed that AI-powered automation can significantly improve productivity while creating demand for workers who can develop, manage and optimise advanced systems.
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A race against time
Despite differing perspectives, participants largely agreed on one point: Hungary’s competitiveness over the next decade will depend heavily on how effectively it develops its human capital.
Demographic decline, skills shortages and technological transformation are reshaping the labour market simultaneously. Experts concluded that investment in education, adult learning, innovation and workforce development is no longer optional if Hungary wants to remain competitive.
As one speaker put it, the challenge is no longer whether action is needed, but how quickly the country can adapt.
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