The government may fire thousands, but huge salary raises can be expected

Salaries were raised by an average of 4% in 2015 and similar raises can be expected in 2016, reported napi.hu, if companies in the private sector realise that the work of untrained workers they were forced to employ has incredibly low quality.

On the one hand, there’s a huge worker shortage in Hungary, which could further raise the salaries in 2016; according to the Central Statistical Office (KSH), salaries were 4.1% higher in January-November 2015 than in the previous year. Bank analysts have predicted a 3-4% gross rise and a 5-5.5% net rise for 2016.

Despite the increasing wages, 77% of the Hungarian companies have experienced worker shortage according to the survey of the Korn Ferry Hay Group. Hungarian workers do not only leave the country to work in Austria, Germany, Great Britain, or in other popular locations, but more and more Hungarians are emigrating to nearby countries, such as Slovakia, because they provide better opportunities than the Hungarian companies do.

Ten years ago workers from other countries considered Hungary a favourable workplace, and e.g. Slovakians have worked in several Hungarian cities, such as Esztergom (Suzuki), Rétság (TDK), Vác (IBM), Göd (Samsung) or Győr (Audi), but in 2016, their number is relatively low. Meanwhile those Hungarians who are working abroad rarely come back.

Due to this shortage, salaries are bound to rise and workers in several field (IT, engineering) often got 10% more than the offered salary, as they were in a good position to bargain. However, not only skilled workers can expect raises in 2016, but e.g. factory workers as well, although the percentage is going to be much lower in their case. However, this is only a temporary reaction to the shortage and employers use this technique to prevent rival companies from offering higher wages. Other workers can expect a permanent, higher raise, if companies experience the drawbacks of employing unskilled workers, who may often make low quality products. Keeping the wages higher to employ skilled workers who do quality work might require several changes from the companies.

On the other hand, metropol.hu writes that the government is ready to fire thousands of people (approximately 50.000 based on János Lázár’s recent announcement), by disbanding several governmental institutions. According to the current plans, 73 governmental-and research institutions will be terminated, 13 will have no successor, and 60 will merge with other institutions, or will form new organizations.

The government’s goal would be to make the administration process more efficient, less time-consuming, and to make bureaucratic institutions more transparent. There is no final list yet of the institutions that will be disbanded, but based on János Lázár’s announcement trade unions expect that 20% of the workers will be fired. Lázár is obligated to hand in his plans for reforming the governmental institutions by 1 February 2016.

Copy editor: bm

Source: napi.hu, metropol.hu