The Hungarian labor market

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

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

The breakdown of employment by sector was as follows

The top ten largest employers are:

Sectors facing labor shortages:

Many sectors of the Hungarian economy are facing severe labor shortages, which means that employers are unable to fill the jobs that are available. This phenomenon affects both the private and the public sector. Currently, there are more than 60,000 vacancies in the Hungarian private sector, the most affected of these being the manufacturing sector with a shortfall of 23,000.

Foreign workers in Hungary:

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

Temporary work agencies/labor-sharing agencies:

A large number of workers coming to Hungary are employed through so-called temporary employment/labor sharing agencies. This type of employment, while in many ways makes employment in Hungary easier, 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 players are.

What does it mean?

Labor-sharing is a form of employment where the worker has a contract with an agency, which lends them out to other companies. Therefore this process has three actors:

1. Agency (lender company)

The temporary work agency (TWA) is the company with which the employee signs a contract and then temporarily transfers him/her to the borrower. It exercises the rights of an employer jointly with the borrower, but the right to initiate and terminate the employment relationship always rests with the lender.

2. Borrower company

The employer (factory, plant, building contractor, etc.) under whose direction the worker is temporarily working. The right of direct day-to-day management of the worker always rests with the borrower.

3. Employee

The worker always signs a contract of employment with the lender, receiving his/her salary from the lender, while the day-to-day work is carried out by the borrower.

Employment through a temporary agency makes it difficult to understand who exactly is the employee’s employer; and who to turn to when a problem arises. Several studies have shown that workers employed through temporary work agencies are more at risk of labor market exploitation.