The greatest challenge for private companies in Central and Eastern Europe is the increasing shortage of skilled workforce, according to a study by professional services network PwC entitled the CEE Private Business Survey 2019.
The survey was conducted involving 600 private businesses in 15 countries of the CEE region. PwC estimates some EUR 358 billion in revenues are lost in the region due to this problem, which is higher than the combined GDP of Croatia, Hungary and Slovakia.
PwC says the lack of skilled labor leads to earnings losses of more than 5% per year for companies.
"The lack of skilled labor limits companiesʼ development: it reduces revenues and has a significant impact on economic growth in the CEE region," says Gergely Juhász, partner at PwC Hungary, cited in a press release sent to the Budapest Business Journal. "The increasingly strict limits on immigration from outside the EU exacerbate the problem, as does the influx of skilled labor seeking more profitable work opportunities in Western Europe and Russia."
"Confidence in the CEE region is further damaged by concerns over Brexit, the stability of the eurozone, and the weakness of West European economies," adds PwC partner Balázs Mészáros.
Even so, half of private firms in the CEE region expect growth, the study notes. In Croatia 67% are optimistic about growth, and in Hungary 56%, while on the pessimistic end of the scale this figure is 50% in Romania, and 42% in Russia.
According to the survey, some 68% of business executives expect digitalization to improve their business results. At the same time, only 23% of private firms in the CEE plan to devote more than 5% of their investments to digitalization; in contrast, this figure is around 35% in more technologically developed regions of Europe such as Scandinavia, PwC notes.
The full survey can be viewed here.