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Poland - National Level

Short overview of the labour market

 

General information on Poland

Poland lies between the Baltic Sea in the north and the Sudetes and Carpathians in the south, predominantly in the Vistula and Odra basins. It is bordered to the north by Russia and Lithuania, to the east by Belarus and Ukraine, to the south by Slovakia and Czechia, and to the west by Germany. With an administrative area of 312 696 km², Poland ranks 69th in the world and ninth in Europe. With nearly 38.38 million inhabitants (2019), it is the 36th most populous country in the world and the sixth most populous country in the European Union. Poland is divided into 16 provinces, consisting, in total, of 66 cities with district rights and 314 districts. Warsaw is the largest city and at the same time the capital of Poland. Other large cities include Kraków, Łódź, Wrocław, Poznań, Gdańsk and Szczecin.

Poland is a democratic country with a developed, high-yield economy and a high quality-of-life index. It is attractive to tourists and active leisure enthusiasts, as by evidenced by approx. 20 million tourists (2019) visiting Poland annually, making it one of the most visited countries in the world. The diverse landscape of individual regions of Poland and different forms of recreation to choose from, from sea bathing, through sailing on lakes, to skiing and mountain climbing, bring tourists from faraway countries to Poland.

Poland is the eighth largest economy in the European Union and one of the fastest growing economies in Europe. Its 38-million sales market is one of the largest in the European Union. Convenient location in the centre of Europe and at the crossroads of its main communication routes makes it possible to export goods from Poland to all European countries, thus reaching over half a billion consumers. Poland’s main trading partners include Germany, Russia, China, France, the United Kingdom, Italy, Hungary, Ukraine and Spain.

Poland offers foreign companies a range of investment incentives. One of the many options is to locate investments in a Special Economic Zone (SEZ). There are 14 such zones in Poland. These are separate areas where business activities may be conducted on special, preferential terms. SEZs offer attractive tax relief, employment opportunities and well-prepared investment areas to new investors.

 

The labour market in Poland before the outbreak of the COVID-19 epidemic

With a result of 73% (2019), Poland belongs to the group of EU-28 Member States that achieved an employment level in the 20-64 age group consistent with the targets set by the European Commission for 2020. In general, the main indicators reflecting the situation on the labour market in Poland were improving from year to year and we were steadily moving closer to the EU average.

In 2019, the economic activity rate in the 15-64 age group was 70.6% and increased by 0.5 percentage points compared with the previous year. At the same time, the employment rate in that group increased by 0.8 percentage points to 68.2%, while the unemployment rate decreased by 0.6 percentage points to 3.3%. As regards the unemployment rate, it is important to note that while upon its accession to the EU Poland was the country with the highest unemployment rate in the EU, that rate has remained below the EU average since 2012, and we have ranked among the countries with the lowest unemployment rate for several years now.

In 2014-2019, the level of registered unemployment continued to decrease in Poland. In 2018, the number of unemployed persons dropped below 1 million for the first time in 30 years, standing at 968 900 (a decrease by 10.4% compared with the previous year), while the registered unemployment rate decreased to 5.8%.

A record low number of persons were registered as unemployed at labour offices in October 2019 (840 500). The registered unemployed rate was 5% in that period. At the end of 2019, the number of unemployed persons stood at 866 400, while the unemployment rate was 5.2%.

In 2019, 674 800 new jobs were created in Poland, the vast majority of them (89.9%) in the private sector. Most new jobs were created in the smallest enterprises, employing up to nine persons (43.8%), and the least in enterprises employing more than 49 persons (26.7%). In 2019, the average number of job vacancies in Poland was 142 100. During that year, the highest number of job vacancies were recorded at the end of the second quarter (151 800). The highest number of job vacancies in 2019 were in the manufacturing industry (31 300 job vacancies). A relatively high number of job vacancies were recorded in the following industries: construction (24 500), trade and motor vehicle repair (24 200) as well as transportation and storage (11 200).

 

The impact of the COVID-19 epidemic on the economy and the labour market

In its summer forecast (2020), the European Commission lowered its forecasts for most countries compared with its spring projections. GDP is now expected to decline by 8.3% throughout the EU, and by 8.7% in the euro area (by 0.9% and 1% more than projected in May 2020 respectively). Against this background, the forecast for Poland, reduced by a mere 0.3% (to -4,6%), still looks good and that decrease is still the smallest among all EU countries. It was stressed that Poland had proved resilient to the economic effects of the COVID-19 pandemic in the first quarter of 2020, mainly due to its varied economic structure and a relatively low share of sectors most affected by the crisis. The Polish economy is also expected to rebound faster. GDP is expected to increase by 4.3% in 2021: in May 2020, the Commission projected a 4.1% growth for Poland in the following year.

After a relatively good first quarter of 2020, GDP is expected to decline in the second quarter of 2020, but Poland should see a recovery in the subsequent quarters of 2020. The European Commission also notes that the pandemic will deal a heavy blow to international trade, including trade with Poland. It is estimated that imports will be less affected, which may disrupt Poland’s trade balance.

The outbreak of the COVID-19 epidemic affected the level of registered unemployment in Poland.

The registered unemployed rate (at labour offices) at the end of July 2020 was 6.1%, an increase of 0.9% compared with the previous year. It should be added that a comparison between the unemployment level at the end of July 2020 and the number of persons registered at the end of February 2020, i.e. before the state of epidemic was declared in Poland, shows that the unemployment level increased by 109 600 persons (i.e. by 11.9%) and the registered unemployment rate increased by 0.6 percentage points. At the end of July 2020, 51 900 persons made redundant for reasons related to their establishments were registered at labour offices compared with 35 100 in the previous year.

In July 2020, as in June that year, a steady downward trend in unemployment that had continued in those months for many years was disrupted by the ongoing epidemic and the resultant limited number of job offers.

At the end of July 2020, 180 800 unemployed persons entitled to unemployment benefits were registered at labour offices. They represented 17.6% of the total number of persons registered as unemployed. Over the year, the group of unemployed persons entitled to benefits increased by approx. 40 000 persons, i.e. by 28.2%.

Territorial disparities in terms of unemployment have been considerable in Poland for years. This is due to imbalances in both the socio-economic development of regions and their geographical location. The territorial disparities, measured by the difference between the lowest and highest unemployment rate, varied. At the end of July 2020, the difference between the lowest and highest unemployment rate in provinces was 6.4% (3.7% in the Wielkopolskie Province, 10.1% in the Warmińsko-Mazurskie Province).

According to the Polish Agency for Enterprise Development (Polska Agencja Rozwoju Przedsiębiorczości), 195 100 new job offers were published on the 50 largest recruitment portals in Poland in May 2020, a decrease of 41.6% compared with the same period in the previous year. 246 300 job offers (a decrease of 18.9% compared with the previous year) were published in July 2020. Most of the new job offers were addressed to blue-collar workers (56% of all job advertisements). Demand for blue-collar workers has been on the rise since the beginning of the pandemic due to job vacancies in the trade, construction, courier or healthcare industries. Hiring prospects in the restaurant/hotel, other services, and retail and wholesale sectors are at the lowest level in 12 years. The largest decrease (by 28 percentage points) was recorded in the restaurant/hotel sector. A decrease of 10 percentage points was declared in the industrial production sector, while the forecast for the construction industry is down by 8 percentage points. Recruitment plans of companies from the finance/business services, and retail and wholesale sectors are down by 7 percentage points.

It should be noted that, while the level of registered unemployment increased in the wake of the outbreak of the COVID-19 epidemic, the highest growth dynamics in relation to the previous month were recorded in April 2020, and the unemployment growth rate was slowing down month on month in subsequent months.

It is estimated that the registered unemployment rate at the end of August was 6.1% and did not change compared with July 2020. The level of registered unemployment at the end of July 2020 was up by 109 100 compared with the end of February 2020 (an increase of 11.9%), while the registered unemployment rate increased by 0.6% in that period.

According to Eurostat data, in July 2020 Poland had the second lowest unemployment rate in the EU (for the 15-74 age group), after Czechia, with its rate standing at 3.2% compared with 7.2% in EU-27 countries and 7.9% in the euro area.

In the second quarter of 2020, the basic LFS (Labour Force Survey) indicators did not point to a sharp downturn in the labour market. The economic activity rate in the 15-64 age group in the second quarter of 2020 was 70.1% (a decrease of 0.4 percentage points compared with the second quarter of 2019), while the employment rate in that age group was 67.9% (a decrease of 0.3 percentage points).

The number of persons employed decreased to 16.3 million, although only the number of persons employed under fixed-term contracts decreased to 2.4 million, and the number of persons employed under open-ended contracts increased to 10.5 million.

The percentage of employed persons who did not perform their work increased. Among the 1 962 000 persons who had work in the second quarter of 2020 but did not perform it in the week considered, as many as 1 221 000 (i.e. 62.2%) cited the coronavirus as the immediate reason. Of particular relevance here seem to be persons who indicated that they did not work in the week considered because their establishments temporarily stopped operating. There were 684 000 of them in the second quarter of 2020 (675 000 cited the COVID-19 pandemic as the immediate reason). Compared with the previous quarter, the number of employed persons who did not perform their work for that reason increased over threefold.

The impact of the COVID-19 pandemic was also evident in data on places of work. In the second quarter of 2020, the number of persons who usually work from home was 2 124 000 (which represented 13.1% of all employed persons), double what it was in the first quarter of 2020 (an increase of 1 077 000 persons) and in the same period in the previous year (an increase of 1 262 000 persons). Out of all the persons working from home in the second quarter of 2020, 1 539 000 (i.e. 72.5%) worked from home because of the COVID-19 pandemic (1 493 000 of them performed their professional duties remotely).

After a period during which the Polish economy was frozen and the resulting restrictions, the situation on the labour market seems to be heading towards stability. Employers’ initial, alarming reactions and announcements of redundancies have clearly subsided. Measures proposed by the Polish government as part of the ‘Anti-Crisis Shield’ have undoubtedly contributed to that situation. As a result, the dynamics of registered unemployment growth have slowed down, although the number of unemployed persons is likely to increase once periods of notice are over.

 

Text last edited on: 04/2021