Best Practices to Address Key Labour Market and Labour Mobility Challenges in Hungary

On 25 November 2023, the International Organization for Migration (IOM) – Hungary and UNHCR Representation for Central Europe, organized the first Job Fair for displaced people from Ukraine, and from other countries legally residing in Hungary, who are experiencing difficulties accessing the Hungarian job market. The event provided people with the opportunity to meet employers and recruitment agencies, get professional advice on their CVs and job applications from trained IOM Labour Market Counsellors, participate in workshops on career development and safe employment, and learn about their labour rights in Hungary. 

Hungary, like many other European countries, faces demographic challenges such as an aging population and declining birth rates. A significant portion of its skilled workforce, including professionals, scientists, and researchers, has been leaving the country in search of better economic opportunities and improved living standards abroad. Addressing these labour market challenges requires a multifaceted approach that combines the retention of skilled Hungarian professionals, the attraction of skilled migrants from abroad, and the ethical recruitment of migrant workers to meet the needs of foreign investments. In the context of destination countries like Hungary, labour migration can be a strategic response to skill shortages. 

Labour mobility, when managed effectively, brings forth an array of advantages for countries of origin, destination countries, and migrant workers themselves. Migrant workers often bring diverse skill sets, knowledge, and perspectives that enrich the local workforce and foster innovation. The injection of skilled labour not only bridges gaps in critical sectors but also boosts overall economic productivity. Furthermore, labour mobility can contribute to cultural diversity and cross-cultural exchange, enhancing societal cohesion and understanding.

“Hiring migrants and refugees can significantly contribute to addressing skill shortages, fostering innovation, and infusing workplaces with fresh perspectives,” stated Dániel Bagaméri, Head of Office at IOM Hungary. “Despite their potential, many face barriers in securing employment due to systemic hurdles. IOM and its partners are dedicated to eradicating these disparities, ensuring equal opportunities for all job seekers, particularly those displaced from Ukraine. It's vital that labor migrants are well-informed about their rights and employment standards to prevent vulnerability to exploitation during their job search or employment.”

IOM advocates for ethical recruitment practices that prioritize the well-being of migrant workers. This includes ensuring that recruitment agencies adhere to fair labour standards, do not charge exorbitant fees, and provide transparent information about job opportunities and working conditions. By working with recruitment agencies, IOM can help establish guidelines and codes of conduct that foster ethical recruitment, protect workers' rights, and promote responsible business practices. The Job Fair is just one instrument to highlight key labour market and labour mobility challenges in Hungary by offering targeted solutions to safe labour market access and integration for refugees and migrants while strengthening the dynamism and growth of the Hungarian economy in several important sectors. A transparent and ethical labour migration system is crucial to striking the right balance between addressing labour shortages and ensuring that the well-being and rights of all workers, both domestic and foreign. Labour mobility, when managed effectively, brings forth an array of advantages for countries of origin, destination countries, and migrant workers themselves. By promoting ethical recruitment practices, providing support to migrant workers, and collaborating with different stakeholders, Hungary can create a fair and inclusive environment that maximizes the benefits of labour mobility for all involved parties.

Displaced people from Ukraine and the Hungarian labour market
Ukrainian refugees have strong experience in high-priority sectors such as tech, health care, social services and education. Therefore, there is a certain risk that Ukrainian refugees will be considered overqualified in the labour market. According to the latest IOM Displacement Tracking Matrix data, 40% of displaced people from Ukraine in Hungary are still looking for employment. The early employment uptake has been concentrated in low-skilled jobs, therefore, skill mismatches have been widespread. On the other hand, Ukrainian refugees are integrating into the labour market of their host countries at a much faster pace than all other refugee groups. Having the right to work upon arrival with the help of Temporary Protection Status facilitates their immediate access to the labour market. The estimated impact of Ukrainian refugees on the Hungarian labour force shows about a 1-1.5% increase. 

Job seekers from other countries legally residing in Hungary
The Job Fair represented a significant step in facilitating the connection between recruitment agencies and job seekers from third countries. Recruitment agencies play a significant role in facilitating labour migration, and their practices can profoundly impact the well-being of migrant workers. The enthusiasm displayed by recruitment agencies and their active participation in this Job Fair shows their recognition of the importance of such initiatives. It indicates their willingness to engage and support efforts that contribute to the overall success and impact of events like this. Hiring third-country nationals holds substantial significance, providing economic benefits, fostering cultural diversity, and positioning the nation as an active participant in the global economy. Embracing and leveraging the skills and talents of job seekers from non-EU countries contributes not only to the success of individual businesses but also to the overall prosperity and vibrancy of Hungarian society. Moreover, the inclusion of third-country nationals in the workforce contributes to a multicultural society, fostering cultural understanding and integration. Exposure to different traditions, languages, and perspectives in the workplace promotes a more inclusive and globally aware society.

Concrete solutions
A transparent and ethical labour migration system becomes crucial to strike the right balance between addressing labour shortages and ensuring that the well-being and rights of all workers, both domestic and foreign, are protected. Labour mobility, when managed effectively, brings forth an array of advantages for countries of origin, destination countries, and migrant workers themselves. For countries of origin, the remittances sent by migrant workers contribute significantly to economic growth and development. These remittances act as an injection of capital, which in turn can help reduce poverty levels and improve living standards within these countries. Beyond the economic impact, remittances often play a role in supporting social infrastructure, such as education and healthcare, benefiting entire communities. 

As the leading UN agency on migration IOM advocates for the protection of migrant workers' human rights and the promotion of ethical labour migration worldwide. IOM emphasizes the importance of a whole-of-society approach, ensuring that the needs of migrants are considered across all policy areas. By collaborating with governments, businesses, and civil society, it seeks to reinforce policies and regulatory frameworks that protect migrant workers and facilitate their integration into host societies. 

Together with its many partners, IOM Hungary is building labour migration management capacity by helping different stakeholders in diverse ways. Refugees and migrants are being assisted to gain safe employment with labour market counselling, labour market trainings, the job fair, skills trainings and thematic workshops (interview techniques, cv writing and translation, legal rights), and materials such as videos and dedicated webpages. IOM is providing information to migrant workers about their rights and entitlements under the law; and to employers, service providers, schools and health professionals about their responsibilities towards their foreign staff and to foreign diplomatic missions. Moreover, IOM offers a free interpretation service to displaced Ukrainians to review contracts and interact with employers, doctors, recruitment agencies and Government offices.

Since many of these people are vulnerable and at risk to labour exploitation in all its forms, IOM case workers are building capacities in the system by establishing rapport with schools, doctors, service providers and employers to ease social inclusion, better guarantee the rights of migrant workers. Labour exploitation may take many physical and/or psychological forms, for example: deception, restriction of movement, isolation, physical and sexual violence, intimidation and threats, retention of identity documents, ungrounded deductions from salaries, withholding of wages, debt bondage, abusive working conditions or excessive working hours.

At the policy level, IOM is working with accredited recruiters supporting social integration and social dialogue to ensure effective labour migration management; offering policy and technical advice to decision-makers; encouraging the development of policies, legislation and administrative structures that promote efficient, effective and transparent labour migration flows; assisting governments to promote safe labour migration practices for their nationals; and promoting the integration of labour migrants in their new workplace and society. 

Future Hungarian legislative landscape

Hungary is currently facing a labour shortage. The Hungarian government is trying to fill the shortage with foreign workers through a facilitated system that speeds up the issuing of work permits to nationals of 15 countries, mainly in Asia but also in Ukraine and Serbia. This will be facilitated by the new legislation on the entry and residence of third-country nationals in Hungary, which focuses on labour inflows. The law will enter into force on 1 September 2024. The Ministry of Foreign Affairs and Trade has designated 28 qualified employers to ensure a more efficient and effective supply of labour and to reduce the possibility of labour exploitation of foreign workers. In addition, these agencies often work with businesses in various industries to help them identify and recruit skilled professionals to address labour shortages. This cooperation contributes not only to the success of individual businesses, but also to Hungary's overall economic development.

The Job Fair took place at the Devai Inn, a community center for refugees from Ukraine run by the Budapest-Józsefváros Lutheran Congregation.

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The Job Fair was organized and funded as part of the Enhancing Social Inclusion Opportunities for Displaced People Fleeing Ukraine project (MMIA-2.2.15/17-2023-00003; running between 1SEPT-31DEC 2023 with a total funding of HUF 120,440,693) co-financed by the Asylum, Migration and Integration Fund of the European Union (75%) and the Hungarian Ministry of Interior (25%).



SDG 8 - Decent Work and Economic Growth