Survival Kit I.South Moravia: Geography, Labour Force, Economy Wages

Wages

South Moravia can be rated as one of the most favourable locations in the Czech Republic from the employers’ point of view. Qualification levels are among the highest in the country (Brno itself having 37.3 % of the workforce with university education, in comparison to the 38.3 % in Praha) whereas the wages are still substantially lower than those in the capital city (approximately amounting to 75 %). This is the case with the managerial and middle management positions throughout the region. As for employees in manufacturing and related services, the wages in Brno tend to be slightly over the national average, but they are significantly lower in other parts of the region.

The Czech law stipulates that employees must not receive wage that is lower than the minimum wage. The minimum possible wage is declared by a decree of the government of the Czech Republic and published in the Collection of Acts. As of 1st January 2021, the wage for employees remunerated by a monthly wage is 15,200 CZK, for employees paid by hourly wages was 90.50 CZK/hour. This wage for that purpose does not include overtime bonus, premium for work in difficult and harmful-to-health working conditions, premium for night work and work on holidays (a premium for an hour of night work is amounting to 20 % of average hour income, it quotes at least 18.10 CZK). The minimum wage is valid for any employment (both for a fixed and indefinite contract for full and part-time employment), however, it does not apply to contract work agreements concluded outside the employment contract.

According to the national statistics, the average monthly gross salary in 2019 was 34,125 CZK in (annual increase +7.0 %), the average monthly gross salary in the South Moravia was 32,896 CZK (6.8 % growth) but two thirds out of all employees have their average earnings below this level. From the regional point of view the highest salaries have been paid in Prague (about 25 % higher than the nationwide average but 29 % above the South-Moravian average). The city of Brno achieves overall wage level just about the nationwide average but the rest of the region has wages lower than that.

Although the labour costs in the South Moravian Region are still distinctively under the Western Europe level, in general, neither the whole Czech Republic nor the region are no more indicated as low-cost. It is due to the progressive wage increase (wages have been doubled since 2000) and Czech currency strengthening (+36 % compared with EUR, 2000).

The actual labour costs, however, will depend on the overall remuneration policy and the benefit package offered to employees. People in South Moravia, just like anywhere else in the Czech Republic, are willing to commute to get a good job (normally up to 30 km a day; for managerial positions even more than 100 km. However, Czech people are quite reluctant to move permanently which is a fact that every investor should keep in mind.

Tab. 10: Average hourly wages in South Moravia by the educational level (CZK)

Level of education	2002	2005	2008	2011	2015	2016	2017	2018	2019
Primary education	63.09	68.74	89.04	97.94	112.39	115.87	130.71	139.36	141.06
Secondary without final exam	73.88	85.77	106.13	110.21	120.49	126.32	139.10	147.56	161.69
Secondary with final exam	95.54	113.48	140.93	143.82	155.05	162.55	173.36	182.53	200.72
Higher secondary and bachelors	103.77	125.36	156.97	164.82	189.11	200.07	214.25	226.96	237.31
University degree	172.83	191.75	239.95	237.21	254.37	264.10	276.51	280.91	303.46
Total – private sector	88.09	105.37	136.12	141.79	158.93	167.24	179.85	189.54	206.91

Source: Regional Statistics of Labour Cost – Ministry of Labour and Social Affairs; private sector data

Tab. 11: Average hourly wages in South Moravia by main employment categories (CZK)

Main employment categories	2002	2005	2008	2011	2015	2016	2017	2018	2019
Managerial positions	205.80	231.01	281.98	308.72	356.66	352.23	357.84	366.64	447.69
Researchers, specialised expert workers	134.28	161.02	201.57	217.72	257.98	271.03	287.35	295.15	309.64
Technicians, workers in health-care and education	104.49	129.03	159.04	158.92	174.87	183.56	195.49	205.50	224.20
Lower administrative positions	73.96	88.00	107.93	121.81	133.01	139.90	151.43	158.02	175.29
Operators in services and trade	58.05	67.81	85.05	82.69	93.20	99.15	108.46	119.87	138.34
Craftsmen and manufacturing workers	76.37	87.17	112.48	118.99	136.63	141.92	153.89	161.18	173.74
Manufacturing operators	76.55	87.92	109.48	115.02	125.31	133.15	146.31	155.98	165.57
Unskilled workers	54.38	62.69	72.42	86.43	97.03	98.91	108.38	121.89	127.96
Total – private sector	88.09	105.37	136.12	141.79	158.93	167.24	179.85	189.54	206.91

Source: Regional Statistics of Labour Cost – Ministry of Labour and Social Affairs; private sector data

Tab. 12: Average hourly wages in South Moravia by gender and employment categories (CZK)

Employment categories	2002	2005	2008	2011	2015	2016	2017	2018	2019
Male	98.61	116.88	153.75	158.12	175.92	185.29	197.85	207.81	226.33
Female	72.56	85.09	108.24	117.99	132.18	137.82	150.12	160.23	176.47
Manual workers	71.75	81.43	101.39	105.73	117.98	124.84	137.09	146.25	158.07
Non-manual workers	117.50	144.71	178.39	182.67	197.81	208.40	220.65	229.39	251.98

Source: Regional Statistics of Labour Cost – Ministry of Labour and Social Affairs; private sector data

Tab. 13: Average month wages in South Moravia by employment categories in 2019 (CZK)

Employment categories	Average wage	Of which
Employment categories	Average wage	Basic wage (%)	Other benefits, contributions (%)
Managerial positions in human resources	89.400	72.4	27.6
Managerial positions in marketing	92.735	64.2	35.8
Managerial positions in research and development	92.403	74.4	25.6
Managerial positions in manufacturing	71.188	70.7	29.3
Managerial positions in freight, warehousing and telecommunications	69.193	68.6	31.4
Managerial positions in ICT	98.811	71.8	28.2
Managerial positions in financial services	110,664	60.9	39.1
Mechanical engineers	51,569	79.3	20.7
Electrical engineers	66,909	73.7	26.3
Financial analysts, finance specialists	48,946	69.4	30.6
Programmers	70,584	72.8	27.2
System analysts	73,854	72.6	27.4
IT system administrators	54,276	78.8	21.2
Building technicians	34,693	71.9	28.1
Technical positions in electrical engineering	43,424	70.8	29.2
Technical positions in mechanical engineering	39,737	71.3	28.7
Technical positions in other industries	37,691	67.9	32.1
Specialists accounting, economics, human resources	34,956	73.5	26.5
Purchasing specialist	38,444	75.6	24.4
IT operators and maintenance	45,108	74.0	26.0
Secretaries	30,280	73.5	26.5
Emplyees in customers centres	31,391	70.1	29.9
Employees in accounting and budgeting	27,876	79.3	20.7
Warehouse clerks	29,124	70.8	29.2
Production clerks	34,334	70.0	30.0
Shop assistants	22,826	74.9	25.1
Bricklayers	23,276	73.1	26.9
Welders	24,596	72.8	27.2
Plumbers, locksmiths at construction works	31,881	62.6	37.4
Tool-makers and metal workers	29,555	66.7	33.3
Machinists, machine and device repairers	34,330	65.9	34.1
Electricians	32,600	71.2	28.8
Quality controllers, laboratory technicians	29,697	63.5	36.5
Skilled workers–metal tooling	32,217	59.6	40.4
Skilled workers – electrical engineering	28,273	68.4	31.6
Truck drivers	26,374	68.4	31.6
Unskilled workers	23,061	70.6	29.4

Source: Regional Statistics of Labour Cost - Ministry of Labour and Social Affairs, 2019; private sector data

No doubt, the concrete remuneration policy is a matter of your company’s strategy. Yet, we also present the information on wage factors based on direct experience with companies (mainly foreign-owned) that have already established their existence in South Moravia. On top of this, remuneration packages offered by multinational companies to their employees in South Moravia are also stated, as well as a few hints and points for consideration that your HR department may want to know about.

There are several important factors to be considered when considering the remuneration package:

Size of the company
Production/service sector
Location of the company (big cities, transport infrastructure accessability, unemployment rate)
Level of working and professional experience of an employee

Most companies offer salaries and benefits on the local labour market average level. We suppose the potential key motivators for the successful attraction and retention of quality candidates could be as follows:

All employees (both white and blue collars)
- Realistic performance related bonus or premium
- Company contribution for meals (vouchers)
- Extra days of holidays
- Training courses – language etc.
- Sport, cultural benefits
- Insurance other than provided by the State
- A private or corporate pension fund
- Full salary in case the employee is sick

Better working conditions and professional growth, housing facilities and company shuttle-buses for people who cannot commute every day can be considered other attractive factors.

Managers and Professional Staff
- Realistic performance related bonus
- Car
- Mobile phone
- Notebook
- A private or corporate pension fund
- Insurance other than provided by the State
- Stock options
- Business trips abroad
- Training – MBA, ISO, VDA etc.
- Relocation package where necessary with an accommodation, as well as possible work for family members (spouse), childcare support

Any combination of the above along with a competitive salary should help the investor to become a competitive employer in the region.

Unemployment

Regional Development Agency of South Moravia
Výstaviště 405/1
603 00 Brno
Czech Republic
www.rrajm.cz