Labor shortage in Hungary leads government to seek workers abroad

The usually immigrant-reluctant government in Budapest is looking for foreigners to help with labor force shortage, writes Cristian Gherasim, Bucharest correspondent.

Hungary’s foreign minister said that companies will be allowed to recruit skilled work-force from non-EU countries. Peter Szijjarto, the foreign minister, backed the move by saying that this will help with Hungary’s 5.5% growth target set for this year.

For example, one sector hit by labor shortages is the hospitality industry in Hungary which has recently voice strong concerns about the lack of cooks and cleaning staff. Tamás Flesch, head of Hungarian Hotel and Restaurant Association said during an interview that hotels owners in Budapest go to great lengths to secure the much needed workforce, offering the example of hotel manager needing to clean rooms themselves.

Many other countries in central and eastern Europe have been struggling with workforce shortages amid a faster than expected economic recovery following the pandemic restrictions.

The government in Budapest has been reluctant until now to opening its doors to foreigners amid Prime Minister Viktor Orban’s anti-immigrant policies that have sparked frequent clashes with the European Union.

Another sector where Hungary’s labor shortage makes its presence felt is agriculture. Hungarian farmers are struggling to find enough workers to harvest their fruits and vegetables, with more than 190 million euros worth of goods being destroyed in the last year alone.

Experts believe that the best way to attract people to work on farms is to increase wages. They believe the industry will need at least a decade to recover from job losses and reorient itself to a new way of doing business.

And probably the most surprising sector impacted by workforce shortage in Hungary is online retail. The labor crisis is restricting e-commerce, with many online stores being forced to suspend online advertising because they cannot cope with higher demand. Kristof Gal, founder of Klikkmarketing, an online marketing company based in Budapest, estimates that between 30 and 40% of online stores could be affected by this problem.

Szijjarto said new legislation, including on temporary workers, aimed to "help the fast restart of the economy, to be the fastest to restart in Europe".

As Hungary’s economy is doing better than expected in the first quarter of this year despite coronavirus lockdown measures, the government in Budapest announced other measures including easing bureaucratic burdens on small- and medium-sized enterprises as well as cheap loans to help Hungarian companies expand abroad or invest in green projects.

The government in Budapest has been criticized repeatedly by the EU for its stance regarding migrants, attacks on press freedom and against LGBT community. The European Commission and the European Parliament have previously launched a "rule of law" action against Hungary regarding civil freedoms. MEPs are asking the European Commission to move ahead with legal action, and to even refuse Hungary access to the €750bn Covid-19 pandemic recovery plan, if Orban's government does not reverse course.

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