Poland's labor market loses momentum. Hiring slows as cost pressure displaces employment dynamics

NEI at the 50-point boundary: formal equilibrium, but a real cooling of hiring activity.

Employment in Poland has come to a halt exactly at the equilibrium line. The National Employment Index (NEI), developed by the Gremi Personal Analytical Center, stood at 50 points in Q1 2026, returning to the neutral level - the line separating the dominance of positive and negative trends.

The reading signals formal stabilization, yet on an operational level it points to a clear fading of growth momentum on the employment side. Companies are increasingly competing for workers less through recruitment and more through managing their workforce structure via cost cutting and reduced turnover.

On the one hand, this means stabilization after earlier declines. On the other - the absence of any growth momentum that would suggest a return to a dynamic labor market.

As Evgenij Kirichenko, founder of the Gremi Personal Analytical Center, points out, the current reading should not be interpreted as a sign of market strength: an NEI of 50 points is not a signal of growth equilibrium, but rather a moment of suspension. Companies are not expanding employment, they are managing risk. This is a market that isn't accelerating - it's simply stopping weakening.

Beneath the surface of stable data, however, a clear structural shift is building: companies are cutting back on recruitment, slowing down staffing decisions, and focusing on retaining current teams rather than expanding them.

Recruitment under cost control. Companies choose a “retention over expansion” strategy

While the business sentiment subindex remains at 55 points, its structure shows a clear shift toward caution. The market is ceasing to be a space of employment expansion and starting to resemble a labor cost management system. More than 62 percent of companies say they will maintain current employment levels, while only a quarter plan to increase headcount. At the same time, the group of companies planning workforce reductions is growing, though it still remains a minority.

The key issue is not the number of jobs, but their “fluidity.” - The most visible change isn't that companies are laying people off en masse. They are stopping recruiting and stopping rotating employees. The labor market is losing its exchange dynamics, and that is often an early signal of a deeper slowdown, - Kirichenko assesses. In practice, this means a shift from a market with high employee mobility to one dominated by defensive strategies and maintaining the status quo.

Employment falls, layoffs rise. Industry under the greatest pressure in years

Labor market data confirm the growing structural pressure. In Q1 2026, the number of people employed in the enterprise sector was 51,300 lower year-on-year, representing a decline of 0.76%.

At the same time, the scale of formal employment reductions is growing. Large companies have announced collective redundancy plans covering more than 11,300 employees, almost a quarter more than a year earlier.

The greatest strain is concentrated in industry, particularly in sectors heavily dependent on exports and energy costs. In the automotive industry, employment fell by 3.4% y/y, and in furniture manufacturing by 3.2% y/y.

We are entering a stage where some of the employment declines are not the result of a temporary slowdown, but of a lasting change in the cost and competitive structure of European industry. Poland is not an exception here, but part of a broader trend, - emphasizes the founder of the Gremi Personal Analytical Center.

Wages lose momentum. The slowest wage growth since 2021

One of the report's most important signals is a clear slowdown in wage pressure. In the enterprise sector, wages are currently growing at a rate of 6.3% year-on-year, the lowest level since the first quarter of 2021. By comparison - in 2023-2024, wage growth reached as much as 10-13% annually, driven by the battle for workers and high inflation.

Now, however, the market is clearly changing its underlying logic. As many as 68 percent of companies have frozen pay raises, while only about 30 percent are still implementing them. In some companies, the first signals of real wage cuts or real-terms stagnation are also appearing. The period in which wage pressure was the main mechanism balancing the labor market is coming to an end. Today, companies are returning to cost discipline, and wages are ceasing to be the main tool for competing for workers.

The economy delivers impulses but doesn't build a trend. March as an episode, not a turning point

Macroeconomic data show a short-lived rebound in activity that, however, has not been followed through in business decisions.

In March, retail sales rose 8.7% y/y, industrial production 9.4% y/y, and exports 6.1% y/y. However, this was the effect of one-off factors - deferred demand, seasonal factors, and a reaction to geopolitical tensions and rising energy prices.

Monthly data show rebounds, but they do not yet form a new growth trajectory. Companies do not make investment decisions based on a single month, but on expectations for the coming quarters, and those remain cautious, - emphasizes Kirichenko.

Migration and flexible employment stabilize the system

The labor migration subindex rose to 61 points, confirming the growing importance of foreign workers in maintaining labor market balance.

The number of foreigners registered with ZUS (Social Insurance Institution) reached 1.295 million, an increase of 8.6% y/y, while the number of workers from Ukraine approached 865,000.

Their role is no longer limited to filling staffing shortages - in many sectors they are becoming a condition for maintaining operational continuity.

At the same time, the importance of temporary and seasonal work is growing, allowing companies to adapt more quickly to demand fluctuations and limit cost risks.

AI and automation as a new factor in employment restructuring

For the first time in the NEI survey, artificial intelligence and automation have entered the top five most important challenges for business.

This is a significant qualitative shift: part of employment optimization is no longer driven by the economic cycle, but is becoming the result of technology adoption.

In practice, this means that the labor market is increasingly dividing into segments resistant and vulnerable to automation, which in the coming quarters may further deepen structural differences in employment.

A labor market without growth momentum. Stability as a result of caution, not strength

In summary, the NEI report shows a labor market that formally remains stable, but whose dynamics are clearly weakening. Companies are cutting back on recruitment, slowing wage growth, and focusing on cost control. At the same time, the economy is not generating a strong enough impulse to reverse this trend.

The coming quarters will not bring drastic changes, but they will test the durability of the current balance. This is a market that remains stable not because it is strong, but because all sides are simultaneously limiting their exposure to risk.