Non-EU citizens can apply for Hungarian Card, 65 thousand guest workers may come
Guest workers from third-world countries with high professional qualifications in mathematics, natural sciences, technology and IT can receive the Hungarian Card (Magyar Kártya), the Culture and Innovation Ministry (KIM) said on Friday.
The ministry said in a statement that the measure is among others aimed at ensuring the workforce necessary for a dynamic economy.
65,000 guest workers may come from 15 countries
According to hvg.hu, in 2024, 65,000 is the maximum number of guest workers who can come to Hungary. The 15 countries foreigners can come from are the following: Belarus, Bosnia and Herzegovina, North Macedonia, the Philippines, Indonesia, Kazakhstan, Mongolia, Montenegro, Vietnam, Russia, Brazil, Georgia, Kyrgyzstan, Venezuela, and Colombia.
However, there are lots of jobs non-EU foreigners cannot accept. For example, they cannot be government members, priests, engineers, dentists, or pharmacists. They cannot work as teachers at universities or schools, as actors or historians. They cannot be shopkeepers, metro, tram, or trolley bus drivers, shoemakers, or furriers. But as a non-EU citizen, you can work as a bus driver. We detailed in THIS article that, for example, Budapest welcomes foreign bus drivers to ease the labour shortage in the sector.
Number of registered jobseekers falls to all-time low in February
The number of registered jobseekers in Hungary fell by 10,000 to 235,400 last month, an all-time low for the month of February, the state secretary for employment policy said on Friday, citing data from the National Employment Service (NFSZ).
The number of registered jobseekers fell by 4 percent from the same month a year earlier, Sándor Czomba said in a statement. Compared with 2010, the number of jobseekers has fallen by more than 420,000, he added.
Anyone who is willing and able to work can find a job in Hungary, the state secretary said, adding that wages were also rising.
Having reined in inflation, the government is now focused on achieving an economic growth rate of 4 percent, Czomba said, adding that this required restoring consumption, raising the labour market activity rate and keeping the investment rate above 25 percent.
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Hungarian CEOs’ surprising experiences with foreign workers
What are Hungarian business leaders afraid of? What are their experiences with foreign workers? What are the prospects for 2024? Do CEOs want euros? These are some of the most burning questions in business right now in Hungary. Tamás Lőcsei, CEO of PwC Hungary, an audit and business advisory firm, answered these questions.
There are no indications that Hungarian workers might be laid off to be replaced by foreigners, Tamás Lőcsei, CEO of PwC Hungary, told Növekedés.hu. The CEO also talked about the economic outlook for the year and the experiences with foreign workers, among other things.
Hungarian business leaders are more optimistic now
According to Lőcsei, Hungarian CEOs are confident in Hungarian GDP growth because they see the volume of investment coming into the country in recent years. What is more, many announced projects could start production this year, which would help boost the economy.
PwC’s latest CEO Survey reveals that CEOs are relieved and feel that the country is over the economic difficulties, rather than the pessimism of last year. They feel like 2024 could be a better year for exports compared to 2023.
What are business leaders afraid of?
“Our research shows that the impact of inflation is what most people fear,”
Lőcsei said. This is followed by the shortage of skilled labour, then macroeconomic volatility, geopolitical conflicts and cyber risks, with almost the same results, he added. (It is important to note that the survey was conducted at the end of last year when inflation was much more unstable than now.)
Can labour shortage be addressed with foreign workers?
According to Lőcsei, the experience of foreign workers is quite positive. “It is important to underline that these workers come to Hungary in an organised way, after considerable screening,” he explained. Many manufacturing companies employ foreign workers in Hungary. In fact, in this segment companies employing guest workers are in the majority.
At the same time, I think that the Hungarian workforce will not be disadvantaged by all this. There are no indications that Hungarian workers might be laid off to be replaced by foreigners,
Lőcsei highlighted.
Is the introduction of the euro important for CEOs?
“This issue is not their focus at the moment,” Lőcsei said about the euro introduction. He said that CEOs do not want it to happen in the near future.
The euro has its advantages, of course, but the general view is that it is better to introduce it at a time when the Hungarian economy is stronger,
Tamás Lőcsei concluded.
Foreign workers: new draft resolution targets this demographic
As we wrote earlier, according to a new draft resolution, third-country nationals who wish to remain in Hungary to work must demonstrate a comprehensive understanding of Hungarian history and culture. The new law proposes that foreign workers undergo an examination on Hungarian culture and history. However, even so, permanent stay is still not on the cards.
The examination is structured around eight key points, including Hungary’s geopolitical position, national symbols and festivities, significant milestones in the country’s history, and more.
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How the Hungarian government plans to boost the country’s GDP growth rate
Having successfully tackled inflation, the government has now turned its attention to revitalising economic growth. With a clear strategy in place to achieve their 4% target GDP growth rate, the question remains: how will they rebuild consumer confidence?
The strategy for GDP growth
In a recent announcement, Sándor Czomba, the Minister of State for Employment Policy at the Ministry of National Economy reiterated the strategy, which entails rebuilding consumer confidence, progressively reducing caution, maintaining an investment rate exceeding 25% and enhancing labour market participation, as reported by 24.hu. The government aims to boost participation among individuals under 25 and over 55 with the potential labour pool comprising jobseekers and a segment of inactive individuals of working age, totalling approximately 300,000 people. The Secretary of State highlighted that approximately 40,000 individuals possess the necessary skills and readiness for rapid employment. Additionally, there are 50,000 people who require training due to a lack of qualifications or skills hindering their job prospects. The government intends to target training programmes to address this need. Sándor Czomba also stated that around 150,000 jobseekers, who are not in an employable state, necessitate comprehensive assistance and development.
This assistance will encompass training, wage subsidies, assistance in job placement and access to health or social services. Furthermore, aside from these demographics, approximately 60,000 inactive individuals of working age have the potential to be encouraged and motivated to enter the workforce. Among these individuals, it becomes evident that a subset of inactive population desires employment but faces obstacles due to their living circumstances or health status. In such cases, comprehensive government assistance is warranted. The State Secretary emphasised:
We will prioritise support for young people who are neither in education nor employment
The government’s objective
The Hungarian government’s objective is to surpass the current EU average activity rate of 75% among 15-64 year olds in the long run, aiming for an increase from the current 78% to 85%. This endeavour stands as no lesser challenge than the successful creation of 1 million new jobs, previously committed to and delivered by the government. According to Sándor Czomba, prioritising Hungarian jobs and workers is paramount as reflected in the formulation of a stricter Migration Act, with implementing regulations soon to be published. Achieving the heightened activity rate necessitates mobilising the domestic labour market reserve, aiding jobseekers in finding employment and activating the inactive working-age population. To support these efforts the government plans to implement comprehensive action plans including initiatives like the GINOP Plus programme, which will receive over HUF 460 Billion (EUR 1,188,879,363) in funding to further boost activity rates and employment levels.
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Tens of thousands of guest workers cannot enter Hungary: large investments in trouble
Guest workers are crucial for a functioning Hungarian economy. Even the Hungarian government acknowledged that without Vietnamese, Philippine or Indonesian workers, the Hungarian economy would not be able to grow. Therefore, the Orbán cabinet plans to invite hundreds of thousands of guest workers, but paperwork was halted in January due to legislative deficiencies. As a result, large investments can be delayed in Hungary.
Hundreds of thousands of Hungarians seek employment abroad, lured by higher wages and superior working conditions in countries like Austria, Germany, and Great Britain. Despite government initiatives like “Come Home, youth!” enticing their return, many remain abroad indefinitely.
The underlying issue is structural, as Hungarian economic pundits often highlight. The Orbán cabinet’s strategy to attract low-value-added investments fails to entice most Hungarians working abroad. Consequently, Hungary relies heavily on foreign workers to fill crucial gaps in its labour force, with a significant portion hailing from non-EU countries, primarily Southeast Asia.
We wrote about that scheme in THIS article. In short, 25 Hungarian companies are “licensed” to acquire the needed documents for the guest workers. Válasz Online suggested last September that some of them are government-close, and the business generates a solid and calculable profit.
However, there is a problem now. A recent report by 444.hu underscores the bureaucratic logjam plaguing the processing of residency applications. From 1 January to 29 February, no new applications for interim, national,or EU residence cards could be submitted, disrupting the influx of guest workers. This hiatus also affected the evaluation of previously filed appeals, with exceptions made only for professional athletes.
The repercussions are profound, with 23,602 prospective guest workers stranded. The number of non-EU citizens working in Hungary is around 120 thousand, so 23 thousand is a considerable number. The largest group of foreign non-EU citizens working in Hungary are Ukrainians (approx. 40 thousand), Serbians and Vietnamese (16 thousand) and Philipines (10 thousand), portfolio.hu wrote.
Alternative solutions for guest workers
The Hungarian economy and the companies badly need the foreign workforce. Therefore, they tend to explore alternative solutions. According to telex.hu, some firms request a “C”-type business visa. That is regularly issued for foreigners travelling to Hungary for business negotiations or short-term missions, not for a Philippine guest worker to build walls and roofs on a construction site.
Another alternative is to do the paperwork in another EU country and transfer the worker to Hungary.
According to 444.hu, it is uncertain what will happen after 1 March. Guest workers will be able to submit the relevant papers after that date. However, the different ministries have conflicting interests, so the legal framework may not be ready by then.
That is because the interior, foreign and economic ministries do not agree on which nationalities should come to Hungary.
Consequently, multiple companies miss out on important deals. As a result, autumn plant inaugurations can be delayed since there is no workforce to build them.
The National Directorate-General for Aliens Policing told 444.hu that they aim to decide about the submitted appeals by 30 April.
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Number of Filipino workers in Hungary revealed
Currently, there are nearly 10,000 Filipino migrant workers in Hungary, and this figure is expected to multiply by 2024.
Rowena Paragasa, Vice President of the Philippine Association of Employment Agencies (PASEI), said that there are currently 8-10,000 Filipino guest workers employed in Hungary. In Europe, there are about 100,000 Filipino workers, mainly in the health, manufacturing, hospitality and logistics sectors.
Filipino workers are in high demand within the labour market. Hungary offers a monthly pay of only EUR 550-600 compared to the range of EUR 1,500-1,700 in Western Europe. However, Hungary provides additional perks such as free accommodation, complimentary travel to the workplace and food subsidies.
The challenge in Hungary lies in the inability to settle here long-term, in contrast to Austria and Germany, HR Portal writes..
“Many cry with joy when they step on Hungarian soil. One of their first trips is to a Roman Catholic church. Those who arrived in the spring and summer have just seen snow for the first time in their lives,” says the manager.
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Hungarian workers cannot be expelled from Continental’s factory in Hungary, says Minister Nagy
Economic Development Minister Márton Nagy held talks with the executives of car parts supplier Continental in his office on Monday, and he made it clear that Hungarian jobs belonged to Hungarians, his ministry said.
Nagy and Continental Automotive Hungary CEO Róbert Keszte and the company’s other leaders reviewed strategic trends in the economy, and specifically the car industry, touching on recent press reports concerning Continental, the economic development ministry said in a statement.
The minister reaffirmed the government’s commitment to protecting families and jobs, saying businesses first had to offer job openings to Hungarians before employing other nationals.
Keszte said that contrary to the media reports, Continental’s plant in Makó had yet to carry out any collective layoffs. He added, however, that the layoffs concerned the termination of temporary and fixed-term employment contracts as well as employees who are reaching retirement age.
He said Continental provided more severance pay to its employees than what is required by law. He said the company was committed to observing the legal regulations and supported the amendments tightening the law on the employment of guest workers.
Continental employs close to 8,000 people in Hungary.
As we wrote before, while many perceive Hungary as being anti-foreign, the statistics do not support this notion. It is estimated that there are already 500,000 guest workers employed in Hungary, details HERE.
Also, as we reported earlier, the minimum wage agreement was signed in Hungary, details are HERE.
Breaking: minimum wage agreement signed in Hungary – UPDATE
An agreement reached recently by unions and employers associations on minimum wage rises was signed on Monday, the economic development ministry said.
The agreement was signed by all members of the VKF, a forum of employers, unions and the government, with the exception of unions association MASZSZ.
Under the deal, the monthly minimum wage for unskilled labourers will rise by 15 percent to 266,800 forints (EUR 704), while the minimum wage for skilled workers will increase by 10 percent to 326,000 forints as of December 1, the press release said.
The agreement contains a recommendation for businesses to increase pay to a degree that ensures real wage growth. It also paves the way for talks on changes to the minimum wage system that would preserve earners’ purchasing power and expresses a commitment to encouraging collective contracts.
Sandor Czomba, state secretary at the economic development ministry, said the agreement would favourably impact the whole of the national economy. He said the deadlines agreed on were “such signal points of direction that convey an important message to all players of the economy.”
During the wage negotiations, he added, the sides had seen eye to eye. “It is worth making joint decisions in the longer run and focusing on strengthening the economy following this year’s measures aimed at reining in inflation,” he said, noting the government’s commitment to increasing real wages “every year in line with economic performance”.
Trade union federation MOSZ head Imre Palkovics said the agreement was “an acceptable compromise in light of the circumstances and economic reality”. He said employees had sought a pay hike to compensate for inflation and to reduce the gap between the minimum wage and the average, goals “we have managed to meet”.
Ferenc Rolek, deputy head of national employer federation MGYOSZ, said the early date on which the agreement had been reached indicated “a positive attitude” on the part of the sides in the talks. He said employer representatives had made “huge compromises” but they “felt a commitment to increasing the living standards of the poorest”. In view of a planned 6 percent inflation next year, the real income of minimum wage earners will increase by 9 percent, he said, adding that it was a great achievement by “an economy just recovering from recession”.
As we wrote a few weeks ago, Half a million guest workers in Hungary – details HERE
Also, we listed the best-paying jobs in Hungary as of 2023.
Staggering! Half a million guest workers in Hungary
While many perceive Hungary as being anti-foreign, the statistics do not support this notion. It is estimated that there are already 500,000 guest workers employed in our country.
The share of foreign workers is on the rise
“If an employer cannot find local workers, they can look abroad. This has been available for several years, but previously, importing guest workers was a complex process that could take 3-5 months. There was a need for expediency, and to facilitate this, a simplified procedure was established, significantly shortening the process. Furthermore, the scope has been expanded to include workers from 15 non-EU countries,” explained Endre Kovách, director of Prohumán 2004 Service and Consulting Ltd.
The Labour Section of the Hungarian Economic Society organised an online conference on labour imports. Hungary is witnessing the creation of thousands of jobs, yet there is an insufficient local workforce to fill them.
According to the Hungarian Central Statistical Office, the number of potential job seekers currently stands at approximately 280,000. Eight years ago, this figure was half a million, and in 2010, it was 700,000.
What is behind this trend?
“If domestic wages were 20-30% higher, we wouldn’t be facing such a labour shortage,” said Balázs Pinczés, head of HR-Network Association. Therefore, the most pressing concern is not the labour shortage but the wage disparity.
Pinczés agrees with the growing sentiment in Hungarian politics that up to 500,000 guest workers could be potentially employed in Hungary. However, he believes the focus should shift towards keeping people in Hungary and encouraging the return of Hungarians who have emigrated abroad instead of attracting foreign labour.
Hvg.hu notes that the Hungarian government’s stance on migrant workers is unclear. A few months ago, the government endorsed a guest worker law, which was subsequently revoked in early October. Now, Hungary allows labour imports from 15 non-EU countries.
Secretary: Foreign workers to be recruited only when necessary
Under “rigorous” new regulations, foreign workers will be employed in Hungary solely if there is an absolute need for them, as stated by a government official in an interview with public television on Tuesday. Hungarian nationals will be given employment opportunities as long as local jobs remain available to them, according to Sándor Czomba, the state secretary for employment policy at the economic development ministry. Additionally, he mentioned that under the current regulations, foreign employees may retain a residence permit after the termination of their employment contract, and the new rules aim to tighten this loophole.
Czomba also highlighted that Hungary’s employment statistics are among the best in the EU, and job opportunities can be found in the country sooner or later for everyone. Employers, Czomba said, are keen to retain their workforces, while previously inactive individuals are increasingly entering the labour market. He further suggested that employers and employees are likely to reach an agreement on raising the basic minimum wage and the minimum wage for skilled workers next year, with the gap between these two categories diminishing over time.
Hungarian radical party welcomes law tightening on guest workers
Opposition Mi Hazánk has claimed credit for the government’s recently announced changes to rules on guest workers, saying the government’s move was a rearguard reaction to the radical party’s rising popularity and protests against the law.
The economic development ministry on Thursday said the government is drafting legislation to further tighten regulations on immigration and labour of third-country citizens.
“[Ruling] Fidesz has backed down on the import of guest workers,” Mi Hazánk deputy leader Dávid Dócs told a press conference on Friday.
Instead of a mass influx of guest workers to Hungary, Mi Hazánk wants vacancies to be filled by enticing Hungarians who have emigrated to return home, Dócs said.
The party is also in favour of supporting domestic small businesses over basing the economy on battery production, leading to the sector’s multinationals importing masses of guest workers, he added.
“We don’t want to become a country of immigrants,” Dócs said, adding that there were already “hundreds of thousands” of guest workers in Hungary, “while close to a million Hungarians have left as economic refugees”.
Mi Hazánk would only take in a limited number of guest workers who would not be a burden to society, Dócs said.
“We’re not xenophobic, we simply fear for our country,” he added.
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Indian women to drive Hungarian lorries from August
Hungary has been fighting a serious labour shortage in the last couple of years. A Hungarian company is recruiting Indian women to fill in the vacant lorry driver positions. The company thinks that the Indian women are very neat and they are hoping to see them on the roads around the middle of August.
The demand for shipping is constantly growing, but there are fewer and fewer people delivering more and more packages. As Forbes reported, the average age of drivers working for Hungarian road transport companies is 47. Similarly to bus driving, only a few young Hungarians tend to choose this career path, as we wrote before HERE. Most Hungarian youngsters cannot afford to obtain a category C-E driving licence and a driver qualification certificate. These would cost roughly HUF 600-800,000 (EUR 1,560-2,080). Further special qualifications could double the price.
Forced shutdown
In the long run, the lack of new entrants will lead to a forced shutdown of the service. If many people change careers, the dramatic shutdown will come even earlier. Tivadar Árvay, the Communications Manager of the Hungarian Road Transport Association (Magyar Közúti Fuvarozók Egyesülete, MKFE), told Forbes:
Approximately 80,000 drivers work in Hungary. 42 percent of professional drivers are over 50 years old and will retire in the foreseeable future. The share of the 20 to 30 age group is 10 percent, with hardly any new entrants.
For a long time, many drivers from the neighbouring countries worked in Hungary. Ukrainian drivers left because of the war, and Serbian and Romanian drivers left for a better salary in Western Europe.
Indian lorry drivers
Recruiting companies are constantly looking for new people willing to drive lorries. Baton Transport started recruiting women too. The first applicant was a 52-year-old woman from Southeastern India who did not have a lorry licence and eventually ended up failing the driving exam. She was not the right choice for the company, but she gave a ray of hope. Since then, many men have passed the exams and women are halfway to finishing them. The company said that the Indian women are neat and hopefully, we will see them on the road towards the middle of August.
Basic expectations
Female applicants are expected to have completed primary school studies and have good English skills. Candidate drivers arriving in Hungary have already obtained their driving licences and practised driving thanks to Indian NGOs. After a short career as a taxi driver, they can take the Hungarian C-category exam and apply for a residence permit. As for men, they are expected to have a category C or E licence and several years of professional driving experience. Indian workers arrive in Hungary alone, but later on, they would like to bring their families to Europe. The recruiting company does not discriminate between male and female employees in terms of salary.
Filipino bus drivers to save Hungary from labour shortage
Hungary has been facing a serious shortage of bus drivers. Filipino employment agencies are trying to recruit Filipino bus drivers to fill in the positions and solve the labour shortage in Hungary.
As we reported HERE, Asian workers have been flooding Hungary lately. The foreign workforce is very much needed for the country, as it has been facing a serious labour shortage. In general, Hungary has a high demand for skilled workers to do simpler jobs. A Hungarian bus driver, János Hrucsár, has told RTL that there are not enough bus drivers either. Hrucsár has been on the roads for over 34 years, he drove 750,000 kilometres without any accidents. He says that his profession has its beauties but unfortunately, fewer, and fewer people choose this occupation in Hungary. He says:
We got a bit old; I started here when I was young, we had a lot of young bus drivers at that time. Now the average age is over 40 years.
There are only a few new entrants who seek to work in this field. Even if someone decides to become a bus driver, it is not granted that the person will pass all the tests. Those who pass the tests usually move abroad, hoping for a better salary.
Lack of bus drivers
The President of the United Transport Workers’ Union, Gábor Naszályi, thinks that this is a present problem in all of Europe. As we write HERE, Italy is actively struggling with a labour shortage as well. Despite that, the lack of bus drivers is a more serious issue in Hungary, as the salaries make Hungarian workers move to other European countries. Due to the shortage of bus drivers in Hungary, those who work in the field must work harder. Hungarian bus drivers are often exhausted. Naszályi says:
The timetables are set up in a way that there is less and less time to even get off the bus between two journeys to do something, for example, to go inside, escape from the heat and cool down for ten minutes.
Open positions
To solve the labour shortage, foreign bus drivers are welcome in Hungary. An employment agency is trying to recruit about a hundred bus drivers to a Hungarian town, Székesfehérvár. The only criteriums are that the driver must be experienced and over 150 centimetres. The advertised salary is HUF 250,000 (EUR 670). Budapest’s public transport company (BKV) is also experiencing a shortage of drivers. The company offers a one-off HUF 500,000 (EUR 1340) to new employees. Drivers can earn an average gross salary of HUF 730,000 (EUR 1950). Although, this salary also depends on the shifts, the days and the time of days, drivers take. BKV also awaits applicants who only have a licence for trucks or cars.
The Hungarian government has simplified the process of obtaining a bus driver’s licence to reduce labour shortages. The bus driver training course will no longer require a truck driver’s licence, a category B licence will suffice. The first courses are expected to start in September.
Italy to tackle labour shortage following the Hungarian scheme
There have been mixed reactions to the Italian government’s decision to gradually increase the number of work permits issued to non-EU workers. Is Italy following Hungary’s example?
As we have reported HERE, Asian workers are flooding Hungary to fill the gaps in the country’s labour market. According to napi.hu, Italy has been struggling with the same labour shortage issue. The right-wing cabinet has been forced to change its course, as the attempt to increase the country’s birth rate and to involve more women in the labour market has not met the expected results. Giorgia Meloni, the Italian PM, has faced harsh judgement for her measures. As the leader of the right-wing Fratelli d’Italia party, she has been emphasising the importance of supporting Italian families to increase the nation’s birth rate. She believed that demographical issues should be resolved within the borders of the country and not by opening the doors to immigrants.
Labour shortage
The Italian economy has been on the recovery path following the Covid-19 pandemic. However, the Bank of Italy has warned the government that a shortage of skilled labour could jeopardise the progress. The industrial areas of Northern Italy have been facing a serious shortage of skilled workers for a long time. Representatives have already made a complaint to the government, saying that they need foreign workers. Despite that, the government tried to solve the problem by attempting to include more Italian women in the labour market. Now, other sectors, such as tourism, are also struggling with finding skilled workers.
Hungary’s solution
Similarly, to Italy, Hungary was critical about accepting non-EU workers. However, the labour shortage turned so severe that the country was left with no other choice. There are constantly new businesses and investments popping up in Hungary, thus the demand for workers will only increase. A new legislation has been accepted a short while ago concerning the maximum duration of stay of foreign workers. Guest workers will be allowed to stay in Hungary for up to three years. The residence permit will be valid for a maximum of two years, renewable for one more year.
Italy is next
Prior to the Covid pandemic, Italy only issued less than 31 thousand work permits per year. Now, the number has increased significantly. This year, there have been 82 thousand approved work permits so far. In addition to that, more than 40 thousand requests are to be approved by the end of the year. The Italian government is planning to increase the number of work permits year by year, allegedly aiming at 165 thousand by 2025. Italy welcomes skilled workers, such as fishermen, plumbers, nurses, bus drivers and construction workers. A certain number of permits will be reserved for each country. An agreement will be also signed with the leaders of these countries to combat illegal migration.
Indians, Filipinos, Indonesians flooding Hungary: premeditated population change?
Hungary has a high demand for welders, truck drivers and even skilled workers to do the simplest jobs. Therefore, there is more and more foreign workforce coming to Hungary.
As Index wrote, many foreigners have chosen to work in Hungary. There are workers who have been here for over six years. However, a new act might put an end to that. If the new legislation comes into force, no one will be allowed to stay longer than three years. There are over 4.7 million workers in Hungary. Thus, unemployment is not an issue. On the contrary, there is a lack of workforce in the country.
According to the Hungarian Central Statistical Office (KSH), there are around 85,000 foreigners working in Hungary. Due to labour shortages, Hungary has expanded its list of non-EU countries from which it is legal to import labour. Now, the list contains Belarus, Bosnia and Herzegovina, Brazil, Colombia, North Macedonia, Georgia, Indonesia, Kazakhstan, Kyrgyzstan, Mongolia, Montenegro, Russia, Serbia, Ukraine, Venezuela, the Philippines, and Vietnam. It is possible to come and work in Hungary from other countries as well, such as India, but there are stricter regulations.
Who gets picked?
The Hungarian labour market prefers skilled individuals with basic education and good English skills. The Philippines has been experiencing dynamic population growth. Approximately, there were 27 million people living in the Philippines in the sixties. Now, the number is close to 108 million. There are about one million Philippines every year who choose to leave their country behind and work abroad. Due to the American school system in the Philippines, Filipinos make the perfect workforce for the Hungarian labour market.
Some companies have Mongolian and Indonesian employees as well, but communication is harder, as not all of them speak and understand English. Naturally, these companies demand at least one person in a group of ten to speak English (or Russian). Of course, the workers must somehow tell their bosses if someone got sick over the weekend or has another kind of problem. If a dispute at work occurs, it is much easier to resolve it with an English-speaking “representative”.
How do these workers end up in Hungary?
As mentioned before, Hungary has a high demand for these workers. But how do they manage to come and work here? Workers arriving in Hungary can legally come in two forms. One way is that an intermediary company recruits the workers, and once the workers have been posted to the employer, the foreigners will be in contact with the company that employs them. This way, the intermediary does not have to deal with accommodation or payroll.
The other option is that the temporary employment agency brings in foreigners, takes them into its own staff, and lends them to Hungarian companies. There are 25 Hungarian temporary employment agencies that can legally bring workforce from Asian countries. Most of the Asian workers will work in the industry, in factories.
What do Asian workers do when they are not working?
Most Asian workers are happy to work overtime because they would like to take home as much money as possible. However, when they do decide to rest, it is highly important to have a comfortable bed and good Wi-Fi in their accommodation. After all, they would like to keep in touch with their families at home. Some workers try to learn Hungarian in their free time, but there are people who prefer to travel. These workers might visit Budapest, Lake Balaton, or other EU countries even. Filipinos like to play basketball or cook together as a joint leisure programme. There are smaller towns in Hungary that are flooded by Asian workers, but usually, there are no conflicts or perceived difficulties in living together.
More and more foreign workers are flooding Hungary
The number of foreign nationals residing in Hungary has been steadily increasing over the past decade. As of January, foreign nationals accounted for 2.3 percent of the country’s population.
Neighbouring countries’ nationals constituted half of the foreign population in 2013. However, their share has declined and stabilised at around 35-37 percent since 2019. In January, approximately two-thirds of foreigners in Hungary were European citizens. The remaining 29 percent came from Asia, 4 percent from Africa and 3.4 percent from the Americas, writes Portfolio.
Where do they come from?
Official figures show that the number of foreign workers in Hungary increased by 14 percent. It was up to 81,000 in the previous year. Ukrainian workers accounted for the largest increase, with 5,200 more workers arriving in one year.
Additionally, the analysis by the Hungarian Central Statistical Office (KSH) indicates that there is a slight shift in nationalities, with an increase in employees from non-EU countries such as the Philippines and India. This change is attributed to the relaxation of admission conditions for workers from several non-EU countries.
Foreign migratory trend
At the beginning of 2019, Hungarian companies employed approximately 50,000 foreign workers. This number rose to 60,000 by the end of that year, before seeing a decline during the Covid crisis. However, the temporary decline was soon followed by a resumption of the trend of growth in foreign employment.
Experts believe that the trend of increased influx of foreign workers and residents will persist. The government argues that the availability of sufficient workforce, which requires the employment of guest workers at least on a temporary basis, is crucial to maintain and develop investments and ensure competitiveness.
Way for development or dead end?
Meeting the above-mentioned labour needs is essential to retain Hungarian jobs and attract foreign investment to the country. Although some regions have extremely low unemployment rates, new labour sources are required to support investments and draw in foreign investors. This has to be done, as the existing reserves of Hungarian workers are insufficient.
But some analysts argue that increasing the labour force may not be the best way for a country to catch up.
“The question arises whether extensive growth based on attracting additional labour is the right way for the Hungarian economy to catch up. Wouldn’t it be better to take advantage of the constraints of labour scarcity to move on and start to lead the country towards higher value-added, more efficient, less labour-intensive sectors?”
- asks Orsolya Nyeste, chief economist at Erste Bank.
She further added, that by investing in human capital, improving education and healthcare, we would be more likely to break out of the middle-income trap than by importing large numbers of foreign labour.
Opposition Jobbik has other ideas than bringing guest workers to Hungary
Opposition Jobbik is calling for free retraining opportunities for Hungarian labourers instead of “organised imports of guest workers”, deputy leader Dániel Z Kárpát said on Friday.
The costs of training could be financed from an “inflation premium” of several hundreds of billions of forints “collected by the government after the brutally high prices paid by Hungarian families”, Kárpát said.
He also called for finding out the reasons why a portion of the population was inactive. If normal wages and fair working conditions were offered, some of them could also be involved in employment, he added.
The companies importing guest workers should instead focus on finding ways to motivate the economically inactive to enter the labour market, he said.
He said an earlier Jobbik proposal to offer non-refundable support to companies that employ at least 90 percent of workers from Hungary or the European Economic Area could improve the situation.
When in Hungary, Hungarian workers and Hungarian small businesses should come first, he said.
Record numbers: Non-EU guest workers flooding Hungary
More than 80 thousand foreign workers were employed in Hungary in 2022, which is a new record. The war in Ukraine and the relaxed rules under EU guidance mean that guest workers from new countries are discovering the Hungarian market for themselves.
In 2022, the number of foreign employees in Hungary increased by 14 percent, to 81 thousand compared to the previous year, according to the Hungarian Central Statistical Office (KSH).
The number of Ukrainian workers increased most dramatically. However, this cannot be called organic growth, as most of them chose to work in Hungary after Russia invaded Ukraine. The number of them increased by 5200 – 24 percent in a year.
This was also signalled by a shift in nationalities in the second half of 2022. The share of employees from some non-EU countries, such as the Philippines and India, increased compared to 2021.
As we have previously written, the EU relaxed some of its requirements for foreign workers from non-EU countries to obtain work permits. The effect of this change can be seen in Hungarian data as well.
A previous estimate stated that 80-100 thousand people are missing from the Hungarian labour market. József Nógrádi, Commercial Director of Trenkwalder, told Portfolio that the entire competitive market is interested in foreign labour. Foreign workers are especially important for those firms that have already been hindered by labour shortages.
Filipino employees in need in Budapest
Portfolio reports that in the hospitality sector, the number of Filipino employees is constantly increasing. This sector was already suffering from a labour shortage before the pandemic. Thus, Filipino waiters, who speak good English, are well educated and reliable are popular among restaurants and cafes in Budapest.
Magdolna Mihályi, managing director of Jobtain HR Services also reported good experiences with Filipino workers, as they have practically zero turnover, they keep to their fixed contracts and commitments and complete the agreed period. She also received good references from the small number of Kyrgyz workers in Hungary.
The Hungarian government would like to see even more workers in the Hungarian labour market to keep the economic growth. They calculate that the Hungarian economy could sustain 500 thousand new employees.
Economy development ministry: Hungary needs some half a million new jobholders by 2030
Prospective investments that will ensure stable economic growth in Hungary require some half a million new jobholders during the period until 2030, the economic development ministry said on Tuesday. The country needs further investments for catching up in terms of economic growth which cannot be hindered by a shortage of labour, the ministry said in a statement.
A tool in ensuring adequate workforce is in boosting the economic activity of the Hungarian population and creating work opportunities for the unemployed, the ministry said, underscoring the need to train or teach new skills to the estimated pool of 300,000 people in labour reserve. Foreign workers may only be employed if vacant jobs cannot be filled with local workforce, it said, noting that compared with the other three Visegrád countries, Hungary employs the fewest foreign workers relative to the size of its labour market. Hungary applies a quota on foreign guest workers coming from non-EU member states with the aim to protect its domestic labour market.
The number of jobholders has been hovering around 4.7 million for more than six months in Hungary which has an unemployment rate well below the EU average. The number of employed has increased by 1 million since 2010 during which period the number of registered jobseekers has dropped by 400,000, the ministry said.
Hungarians are out of money
Fully 86 percent of Hungarian consumers are cutting back on spending, according to an EY consultants survey conducted in January and February.
Fully 79 percent of respondents said their choice of what to purchase was based mainly on its price in the case of all products.
Consumers are maintaining spending on food, medicine and communication services but are spending less on household appliances, clothing and travel, while 77 percent are fixing broken possessions rather than buying new ones.
The high number and volume of investments in Hungary requires the involvement of foreign guest workers on a temporary basis given the tight local labour market, the state secretary for employment policy at the ministry of economic development said on Thursday.
Sándor Czomba told an event greeting the twenty largest taxpayers in Komárom, in northern Hungary, that companies should however strive to support the Hungarian workforce where possible.
He said that the increasing number of investments would undoubtedly also require foreign workers, citing the example of Debrecen where some 30,000 positions will have to be filled.
“At the same time, we have a responsibility about who can enter [the country], from where and under what conditions,” he said.
Businesses that stagnate due to staff shortages or unrealised investments will also have a bad effect on Hungarian workers, he said.
Horror prices await guests in Hungarian hotels this year
After the drastic effects of the COVID pandemic, the number of accommodation properties is now falling again. At the same time, the energy crisis keeps forcing more and more hotels to close their doors. With costs rising sharply, those who stay open are constantly raising prices. In March, it cost HUF 50,000 (EUR 132,93) a night in a 4-star hotel.
It is no wonder, then, that the number of domestic visitors is falling, as the population is also suffering from inflation, which is at its highest level for decades. Domestic tourism is becoming increasingly vulnerable, Portfolio writes.
In March, a double room with half-board cost HUF 50,000, according to the latest data from the Central Statistical Office (KSH). What is more, this price is valid for weekdays; on the weekends, it was even more expensive.
Why is accommodation getting more expensive?
The main reason for the horror prices is that the tourism and catering sector is one of the most energy-intensive sectors. The unprecedented rise in energy prices over the past two years has pushed many companies in the sector to the brink of bankruptcy. With costs rising, they had no choice but to build them into consumer prices. However, even this could not always be done. Thus, many hotels and restaurants had to operate at a loss.
On top of the rise in energy prices, a steep rise in food prices has also been observed. To the tourism and catering sector, this has also been a huge increase in expenses. Labour shortages also remain a major challenge for the sector. Wages continue to rise and raw materials keep becoming more expensive. This makes breakfast and dinner in accommodation more expensive. This is not surprising, Portfolio notes, given food inflation of 40-50 percent.
The wave of closures of hotels is still ongoing
The energy crisis has led to many hotels closing down. The latest figures show that the wave of closures is still ongoing. In February this year, fewer than 850 bed and breakfasts were operating and the number of hotels fell to under 800. The former represents an annual decrease of 12 percent, the latter 8 percent.
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