Slovakia’s labour market, long buoyed by years of economic growth, is now showing signs of strain. After a decade of steadily rising employment, driven by expansion in key sectors, the country is experiencing stagnation – and in some areas, a modest decline, particularly within the private sector.
Economists and employers alike point to the twin pressures of an ageing population and what they describe as repeated policy missteps by successive governments that have deterred business investment. Without swift intervention, analysts warn, the situation is set to deteriorate further.
“Until 2040, the number of working people will drop significantly due to demographic change,” said Pavol Piestansky, vice-president of the National Union of Employers (RUZ). “Even today, Slovak employers are facing a severe labour shortage. In the transport sector alone, there are more than 16,400 vacancies – a shortfall more acute than in many other EU countries.”
This shortage, Piestansky added, was a structural issue already eroding productivity and placing long-term pressure on public finances and living standards. To mitigate the crisis, RUZ is calling for deep structural reforms, including better alignment of education with labour market needs, changes to the pension system, integration of the long-term unemployed, and greater reliance on skilled foreign labour.
Yet Slovakia lags behind much of the European Union in its openness to foreign workers. As of January 2024, only 4% of residents were foreign nationals – 2.9% from EU member states and just 1.1% from outside the bloc. In stark contrast, Austria and Germany report foreign-born populations of 22% and 20% respectively.
“Migration has proven to deliver positive economic effects,” Piestansky said. “Countries like Germany, Poland and the Czech Republic have successfully used migration to strengthen their labour markets. Slovakia, by contrast, is grappling with both low levels of inward migration and a significant outflow of its own workforce.”
Around 300,000 Slovaks now live elsewhere in the EU, while the country itself employs only about 115,000 foreign workers – a mere 5% of its working population, compared with around 1 million in the Czech Republic (19%).
A legislative amendment introduced in July 2024 aimed to streamline the hiring process for foreign workers. The update to the Act on the Residence of Foreigners shortened the timeframe for work permit decisions from 90 to 60 days and simplified the process for issuing Blue Cards for highly qualified workers, extending their validity to five years.
“Some bureaucratic hurdles have been removed and the onboarding process has been accelerated,” said Alexander Karsay, chief economist at RUZ. “Nevertheless, we still lag behind our neighbours in attracting skilled foreign professionals.”
To boost competitiveness and address chronic labour shortages, Karsay and Piestansky argue, Slovakia must create more attractive conditions. This means not only simplifying administrative procedures, but also improving integration efforts and adopting a modern migration strategy that positions the country as a serious destination for international talent. (The Slovak Spectator)