Promoting Better Career Mobility for Longer Working Lives in Czechia

Executive summary

Structural shifts driven by the green transition, digital transformation and most recently the rise of generative AI, are reshaping labour markets in Czechia and are likely to trigger significant job reallocation across firms, sectors, and regions. At the same time, population ageing, and widespread, structural labour shortages pose a major challenge. In Czechia, the working-age population (20-64) is expected to shrink by 23.9% while the old-age dependency ratio will rise from 35.7 in 2024 to 60.9 by 2060.

In this context, promoting job mobility and career adaptability among mid-to-late career workers is crucial. Employment rates of mid-career workers are high in Czechia, with the employment rate of workers aged 45-59 being the highest in the OECD (94.2%). However, participation drops sharply to 66.5% for men aged 60‑64 and 51.1% for women in the same age group. In addition, poor working conditions and low job quality limit the labour market prospects of many mid-career and older workers. By helping workers transition to high-quality roles that align with their evolving labour market skill needs and individual preferences, Czechia can promote longer working lives and support a more sustainable and competitive workforce.

However, job mobility in Czechia remains limited, particularly at older ages. Only 4.3% of workers aged 45 and 1.8% of workers aged 60 change jobs annually, compared to 10% at age 26. These mobility rates are substantially lower than the OECD average at all ages. To support older workers in moving into higher-quality, well-paid roles, targeted policy interventions, reforms and employer practices are essential.

Removing structural barriers to job mobility and career progression for all ages

Mid-to-late career workers in Czechia face several structural employment barriers that limit job transitions. Financial insecurity in the event of job loss discourages individuals from leaving low-quality jobs in search of better opportunities. For instance, 18% of households – and 36% of those with children – would fall below the poverty line if the main earner left work to search for a job while relying only on unemployment benefits. Recent reforms have substantially increased unemployment benefit support in the first months of unemployment to encourage job switching and access to better-quality employment, but their impact is yet to be monitored. In addition, employment protection legislation for dismissal of workers with regular contracts is the strictest in the OECD, discouraging job mobility among older workers.

Access to flexible working arrangements can enable workers’ participation as they age, but opportunities for part-time or otherwise flexible work, e.g. telework and flexible hours, remain limited in Czechia. While initiatives such as reductions in social security contributions for part-time work have been introduced, uptake of flexible work remains low. Similarly, while work can be combined flexibly with pensions after retirement and 27.7% of new pensioners remain employed at retirement onset, flexibility is largely absent before pension eligibility.

Women face additional barriers in the labour market, driven by long periods of inactivity following childbirth. Parental leave is one of the most generous in the OECD, and access to childcare and long-term care services is severely limited. While many women eventually return to full-time employment, career interruptions of several years negatively affect long-term job quality and career progression opportunities.

Expanding career guidance and promoting access to training for older workers

Mid-to-late career workers need effective employment support to enable mobility into higher-quality jobs, yet many Czech workers seeking to switch jobs miss out on critical support. Overall active labour market policies (ALMP) spending in Czechia is only 0.27% of GDP, compared to 0.4% across the OECD. The capacity of the Public Employment Service (PES) to provide career guidance and job placement support is constrained, due to poor use of data, needs identification and limited resources. According to an OECD/Generation survey, more than half of Czech workers aged 45 and over and 39% of the unemployed report difficulties with job search. In addition, career guidance services remain largely focused on students and unemployed individuals, leaving job-switchers underserved. At the same time, early intervention is needed for older workers who are most at risk of displacement in the context of economic restructuring. Regional Employment Pacts, which gather regional stakeholders to co-ordinate on labour market policy, could be an effective tool for managing transitions and anticipating shifts, but their potential is underused.

As the labour market evolves rapidly and people live longer, training and upskilling for older workers is crucial to unlock the benefits of extended careers. Participation in education and training is low in Czechia, particularly among older workers. In 2022, 48.1% of workers aged 45-54 and 35.7% of those aged 55-64 participated in education and training. Czechia is increasing access to education and training for all, piloting an Individual Learning Account. In addition, the National Register of Qualifications offers a framework for skills certification, but awareness among citizens and employers is low.

Promoting healthy and age-inclusive workplaces

The retention and career progression of older workers in Czechia are held back by weak implementation of age management practices. While some large firms have adopted age-inclusive approaches, uptake remains low among small and medium-sized enterprises. The ESF+ provides some targeted support to companies interested in age management, but a more coordinated and long-term approach is lacking.

Health is a key pillar of effective age management policies. In Czechia, 36.5% of workers aged 55-64 report long-standing health issues. The Labour Inspectorate lacks capacity to enforce occupational safety and health regulation, while the workplace health promotion landscape is fragmented. In addition, workers with chronic conditions or disabilities often face barriers to continued employment. Czechia lacks structured mechanisms for managing return to work after a sickness absence, with vocational rehabilitation services relying on voluntary participation. There is no option for graded return to work.

Key recommendations for policymakers

• Carefully monitor the effects of the unemployment benefit reform on labour market mobility.

• Balance strict employment protection legislation with labour market flexibility while strengthening PES capacity to provide high-quality job-search support.

• Continue efforts to increase access to flexible working arrangements, including the promotion of phased retirement. Consider introducing a right to request flexible work for all workers.

• Establish a high-quality career guidance system for all ages and improve labour market intelligence to help workers identify necessary skills needed. Encourage participation of mid-to-late career workers in training through carefully targeted measures, personalised guidance and outreach.

• Support the adoption of age management practices in companies through consulting services and toolkits, with the involvement of workers’ representatives and employers. Improve occupational health management through investment in prevention and mandatory case management for return to work.