The Hungarian labor market

Hungarian labour market in general

Hungary is a high-income, mixed economy, the 53rd largest economy in the world. It is a member of the European Union and part of the Schengen area, the WTO and the OECD.

In 2022, the employment rate among the working age population was 74.1%, or 4 million 696 thousand people.

Employment by sector was distributed as follows

The top ten largest employers are:

1. Magyar Posta Zrt.
2. Volánbusz Zrt.
3. MÁV Zrt.
4. Spar Magyarország Zrt.
5. AUDI Hungária Zrt.
6. MÁV-START Zrt.
7. TESCO-GLOBAL Zrt.
8. Lidl Magyarország Bt.
9. Magyar Közút Nonprofit Zrt.
10. Prohumán 2004 Zrt.

Labour shortage sectors:

Many sectors of the Hungarian economy face severe labour shortages, which means that employers are unable to fill the jobs available. In 2023, there were more than 60,000 unfilled vacancies in the competitive sector in Hungary, the most affected sector being manufacturing, with a shortfall of 23,000.

Foreign workers in Hungary:

There are currently more than 70,000 foreign workers officially employed in Hungary. The majority of foreign workers are employed in the competitive sector, including industry.

Labour leasing:

A large number of workers coming to Hungary are employed through so-called temporary work agencies (TWA). This type of employment, although in many ways facilitating employment in Hungary, often leads to complicated and difficult to understand employment relationships. It is therefore very important to review what is meant by this and who the key stakeholders are.

What does it mean?

Temporary agency work is a form of employment in which a worker is employed by a company that hires out workers, but works for other companies that hire them out. There are therefore three actors involved in this process:

1. Temporary Work Agency

The company with which the worker signs a contract and then temporarily assigns them to the borrower. It exercises the rights of an employer jointly with the borrower, but the right to create and terminate the employment relationship always rests with the lender.

2. Borrowing company

The employer (factory, plant, building contractor, etc.) under whose control the worker is temporarily employed. The right of direct day-to-day management of the worker always belongs to the borrower. This includes, for example: the scheduling of working hours, the definition of specific work tasks, the granting of leave, etc.

3. Employee

The employee always concludes a contract of employment with the hirer, receives their salary from the hirer and performs his/her day-to-day work for the hirer.

In the case of employment through a temporary agency, it is more difficult to understand who exactly is the employee’s employer; different problems may arise and it’s hard to decide who to contact, the borrower or the temporary agency. Several studies have shown that workers employed through temporary employment agencies are more at risk of labor market exploitation.