Stability is at a standstill: a difficult year awaits Hungarian workers

Decreasing sense of security

The Hungarian labor market operated in a particularly complex environment in 2025: global economic tensions, persistent inflation, and population decline and aging have combined to reshape the space for employers to operate. Today, companies must simultaneously offer stability and adapt to rapid technological and cultural changes. Weaker GDP growth and inflation, especially in the area of ​​food and energy prices, have burdened households, contributing to the fact that nearly half of workers no longer feel that their salaries keep up with the cost of living. According to PwC’s autumn Labor Market Survey, the feeling of financial security has decreased from 6.1 to 5.9 points on a scale of 10, which broke the improving trend of previous years.

The impact of unfavorable demographic processes determining the labor market is already indicating a serious structural problem. According to data from the Central Statistical Office, the number of the domestic population is continuously decreasing, and by the end of 2025 it was estimated at only 9.54 million people, which represents a decrease of more than 400 thousand over the past ten years. The average age of the adult population is approaching 50 years, and this will continue to rise in the coming decades due to declining birth rates and the emigration of young people. The average age of the total population has increased by almost five years over the past 25 years. “The aging society not only increases the pressure on the pension system, but also causes a significant labor shortage in the labor market. Some companies are already struggling with aging organizational structures, emigration, and a shrinking base of entrants,” pointed out Timár Szabolcs, PwC Hungary’s leading expert in statistical analysis and primary population research.

(New) generation employee expectations

According to the Central Statistical Office database, generations X and Y currently constitute the two largest groups in the labor market: generation X (approx. 46–60 years old) accounts for approximately 40% of employees, and generation Y (31–45 years old) accounts for approximately 36%. The proportion of Generation Z has increased by 9 percentage points in 5 years, but is still only 15% – much lower than the intensity of the discourse about it. This is particularly important from the point of view that although companies have increasingly adapted their operations to the needs of young people in recent years – fast feedback, flexible working, value-based operation, use of digital tools – in fact, Generation X-Y still carries a significant part of the corporate knowledge, responsibility and resilience.

At the same time, the emergence of Generation Z brings a new perspective to the world of work. They are those who were already born into the digital world, for whom AI is not a futuristic add-on, but a natural work tool. They have specific expectations about feedback, the meaning of work, customizable frameworks and wage transparency. In addition, Generation Z is the most sensitive to work-life balance ever and is less willing to compromise than their predecessors. According to the research results, flexible working and predictable development paths are no longer competitive advantages for them, but fundamental.

“In this situation, a particularly worrying trend is that young people have high expectations regarding development opportunities, which is why – since companies are currently freer to choose in a less tight labor market environment – they are hiring fewer junior employees”

– Ildikó Cserjés-Kopándi, Senior Manager of PwC Hungary and project leader of the research, drew attention to the contradiction.

Disappearing entry levels

The rapid rise of artificial intelligence is also making the situation of young, inexperienced, but high-expectation Generation Z more difficult: a significant part of entry-level, routine tasks are being automated: generative and agentic AI is increasingly replacing the work processes that previously provided a natural training ground for career starters. AI makes operations more efficient (42% of respondents already use artificial intelligence, a fifth of them for work), but at the same time it creates a new dilemma: if there are no juniors, who will become seniors later? Who will carry on the organizational knowledge?

The labor market