Hungary is attempting to alleviate part of the “huge competition” for labour in Central and Eastern Europe (CEE) by trying to attract workers from Ukraine.
Historical redrawing of Budapest’s borders last century means there are still Hungarian speakers in Slovenia, Ukraine and Romania, which makes transfer slightly easier, although Kiev’s position outside the European Union could pose challenges when it comes to securing work.
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Nonetheless, the very fact Hungary is mooting an approach to Ukrainian labour is indicative of the wages arms race currently besetting the Visegrad 4 countries, which also include Czech Republic, Slovakia and Poland.
One supplier in Czech Republic recently noted how salaries were shooting up 14% every year, with the four countries’ skilled and educated workforce proving attractive for overseas OEMs and component producers, anxious to capitalise on competitive labour rates, albeit ones which are rising.
“Wages [are] increasing hugely because labour [availability] is not too much at the moment,” Association of Hungarian Component Manufacturers (MAJOSZ) president, Jozsef Nyiro told just-auto at the recent CEE European Automotive Forum organised by Adam Smith Conferences in Prague.
“We try to solve this problem, maybe from Ukraine, [it is] very close to us. We have to deal with this problem, at the moment we can’t do anything, competition is huge in our region.”
An example of the pressures associated with rising wage demands in Hungary came earlier this year when around 1,500 Audi workers in the country downed tools in a protest concerning salary. Although the stoppage was brief – just two hours – it nonetheless illustrates the pressures on CEE countries anxious to retain a diminishing worker pool.
Data from 2016 shows just how important vehicle manufacturing is to the Hungarian economy, with the country exporting 85%-90% of its automotive production while the sector contributes a hefty 15% to domestic GDP.
Around 150,000 people work in the Hungarian automotive sector in 600 companies with total exports totalling EUR19.6bn (US$23bn), while 15 of the world’s top 20 suppliers have factories in Hungary.
“We would like to search for more companies in our industry,” added Nyrio. “We have lots of skills and infrastructure, [as well as] good universities.
“We have very good contact with [the] Hungarian Investment Promotion Agency.”
