Czech Republic: Education, Personnel and Labor Market
Skoda auto (part of Volkswagen group), Foxconn, Arcelor Mittal Steel, TPCA automotive and Panasonic AVC were among Czech Republic top ten companies by revenue in 2008. They are all pleased with the conditions in the Czech Republic. Companies such as Hyundai motor, Tesco stores, Asus, Raiffeisen bank and others made their largest investments into their Czech affiliates. They all praise the Czech Republic’s highly qualified, less expensive and available labour force.
The young people have the opportunity to study on Czech Republic’s 27 universities – some of them are public and some private. Government financially covers all educational costs of state universities as well as public basic and secondary schools with 4.5% of GDP (0.6% on universities). In 2007 18,258 students graduated in technology, in social sciences 36,709 students and in natural sciences 8,711 students.
The country has a large pool of talented individuals in the fields of science and technology. The country is one of the leaders in the CEE region in scientific and engineering development, with a leading number of 8.4 scientists and engineers in research & development per one thousand working persons. By comparison, this ratio in the Slovakia is 5.4, in Hungary 5.5, in Poland 4.6, and in Romania 3.4. Because of the small size of the country and locally small R&D budgets, many top Czech science and technology professionals have to choose between inconvenient relocation to pursue better paying opportunities abroad or often unchallenging, local jobs with low salaries. Several foreign high-tech companies have already recognized these opportunities. World-leading IT and technology firms such as Oracle, HP, IBM, SAP, SUN, Microsoft, Siemens and Honeywell are already well established and growing in Czech Republic.
The level of knowledge of foreign languages is still increasing. 40% of Czech population should communicate in German (but this applies most to the older generation) and about 27% of the population should communicate in English or Russian. One third of Czech society should speak two foreign languages. The situation is better with people under 30 years: most of young people start to speak English and some also German.
In 2008 average wage was 25,381 CZK per month (approximately 940 EUR) and has grown in past years, but is still more than twice lower than in old-EU member states. Since 1st of January 2007 minimal wage is 8,000 CZK per month. Income tax for personnel is flat at 15%. The health insurance and social security contribution is 13.5% of gross wage (employee); the employer also contributes to pension, social and health insurance system with 35%. It means if an employee has a gross salary of 20,000 CZK per month, the costs for the employer (together with social security and pension and health system) are 27,000 CZK per month (35% more of the gross salary of the employee). This belongs to regular fulltime labour contracts. The labour contract has to contain working activities (tasks), place of work, starting date, salary conditions, pay day, working time, paid leave days and term of notice. The usual trial period is three months.
Usual working time in Czech Republic is eight hours per day and 40 hours per week. According to labour code employees can work overtime, but only 150 extra hours per year. This can be also extended somewhat, but with limitations. Workers, technicians and other employees in manufacturing, who do shift work, change shifts at 6 am, 2 pm and 10 pm. Other employees, who are working on flexible time, usually work from 9 am to 5 pm.
In Czech Republic there are 13 days of bank holiday. The employees have four weeks of paid leave for vacation per year according to labour code and some companies give as benefit a fifth week per year.
