The answer is: Professional human resource management
In recent months exploding energy prices, an unprecedented high inflation and the war in Ukraine have distracted the attention from another crisis that is keeping management in Central and Eastern Europe (CEE) busy: the labor and skills shortage. Most thought that the pandemic would alleviate the situation – and Brexit would help by reversing the brain drain. However, a strong economic recovery in 2022 made unemployment rates fall again to the lowest levels and there they stay. The Czech Republic (2.5%), Poland (2.8%) and Germany (3%) posted the lowest unemployment rates in January 2023 in the whole EU (6.1%). Firms in Austria (5.1%) are complaining about unfilled positions too. For Western manufacturers, the leading investors in CEE, outsourcing to CEE seems to be no option anymore. Empty labor markets lead to the postponement or even stop of business expansion and new investments in the region. The “CEE business model” based on available skilled labor at lower costs that guided the “going east” of Western firms has to be questioned in this context. Austrian regional players in the financial services sector like VIG or Erste Group are feeling the tight labor markets in the CEE markets as well. Unlike manufacturers, they cannot move production to another country but have to make the best out of the local market situation.