After changing to a market-based democracy in the 1990s, Poland has become one of the fastest-growing economies in Europe. Poland’s economy has steadily expanded, with an average annual GDP growth rate of 2.784 percent over the last decade. Poland was also the only country in Europe to avoid going into recession during the 2008-2009 global financial crisis. Today, this Central European country is attracting international companies as an excellent place to invest, partly because of its skilled and affordable workforce.
If you want to hire employees in Poland, start with our guide, which will cover the basics international companies need to know before they start recruiting Polish professionals.
What to know before hiring in Poland
Any guide to hiring employees in Poland should start with the basic facts international employers need to know about the Polish labor force and the laws that govern the employment relationship.
1. The Polish labor market
Poland’s labor force is one of the country’s biggest assets attracting investors. The Polish labor force is ambitious, hard-working, motivated to learn, loyal, and entrepreneurial. The Polish workforce is also well-educated, with 44 percent of Polish adults having obtained tertiary education. Graduate-level education is especially popular among Polish professionals. Seven out of 10 tertiary-educated young adults have a master’s degree, more than twice the average across Organization for Economic Co-operation and Development (OECD) countries.
Poland’s unemployment rate has fallen every year for the last eight years and is currently just 6.5 percent. That’s substantially lower than the 8.3 percent average for the euro area. Poland’s tight labor market is great for the economy but means employers may need to work a bit harder to attract top talent to join their organization. It’s also helpful to note that unemployment rates vary dramatically from region to region in Poland, so some areas have higher levels of unemployed workers.
The largest industries in Poland are agriculture, manufacturing, energy, and tourism, but employers in various industries can find qualified Polish workers to join their company.
2. Languages in Poland
Over 95 percent of Poles speak Polish, the country’s official language. Poland’s second most commonly spoken language is English, which is spoken by 19.85 percent of the population. For the vast majority of these speakers, English is a second language. After English, Russian and German are the country’s most widely spoken languages.
While English is a common second language, you shouldn’t count on finding qualified employees who are also fluent in English. As soon as you begin the recruiting process, you’ll need a translator to help you navigate Polish job boards and draft your job ad in Polish.
3. Polish employment contracts
One of the key steps to hiring in Poland is providing new hires with a legally mandated employment contract by their start date with your company. Contracts must be written in Polish or have a Polish translation accompaniment. At the very least, the contract must include:
- Type of employment contract
- Employer and employee’s names
- Contract duration
- Date of signing and work start date
- Type of work
- Work location
- Breakdown of remuneration for the position
In addition to the above contract terms, you must also provide additional details within seven days of an employee’s start date. This includes the daily and weekly work schedule, pay periods, holiday entitlement, and notice period. If you don’t include these details in the initial contract employees sign, take the time during your employees’ first day to go over the details of their new position and employment terms.
4. Requirements for working hours and wages
Polish employment law sets the full-time workweek at 40 hours divided across five eight-hour days. Some days or weeks may exceed these totals, but the average over a four-month reference period should adhere to the limit. Employees can work overtime, but no employee should work more than 150 hours of overtime in a calendar year, unless the employment contract or collective agreement specifies a different limit. Under no circumstances should an employee work more than an average of 48 hours per week.
Just as it sets maximums on working time, the Polish government also sets minimums on wages. At the start of 2021, the minimum wage was raised to 2,800 Polish zloty (PLN) per month, which equates to roughly 630 euros. Make sure you check current minimum wage rates and look specifically at salary norms in your industry so you offer fair and competitive wages to your new employees.
5. Entitlement to paid time off
Poland has 13 public holidays which employees should get off from work. Polish employees also get a minimum vacation leave entitlement, the amount of which depends on the number of years they have spent in secondary or post-secondary education, in the workforce, or in a combination of the two. For employees with less than 10 years of experience, the minimum annual vacation leave is 20 days. Employees with 10 or more years of experience should receive 26 days of leave.
Polish employees are also entitled to paid sick leave when it’s warranted. Employers must pay their sick employees at least 80 percent of their remuneration for a certain number of days before the Polish Social Security Office (ZUS) takes over. For employees under the age of 50, employers pay sick leave for up to 33 days. For older employees, employers pay sick leave for up to 14 days.
6. Income tax and social security
The Polish government taxes employees on their income on a progressive scale. Poland uses a Pay As You Earn (PAYE) model for income tax, so employers are responsible for withholding income tax from their employees’ paychecks.
Employers must also deduct the right amount of social security contributions and make contributions themselves. Social security contributions are due to the social security office monthly. Social security includes pension, disability, accident, and sickness insurance. Employees and employers contribute equally to the pension fund. Employers contribute the bulk of disability insurance. Employers alone pay accident insurance, and employees alone pay sickness insurance. In total, employers can contribute as much as 18 percent of employees’ gross remuneration, and employees contribute around 14 percent of their gross remuneration.
In addition to social security contributions, employers must also contribute 2.45 percent of employees’ monthly gross pay to the Labor Fund and 0.1 percent to the Employees’ Guaranteed Benefits Fund.
Note that general taxation funds Poland’s public healthcare system. This means employers are not obligated to provide private health insurance policies. However, supplementary health insurance benefits have become more popular in recent years, so this can be a nice perk to offer your employees.
The cost of hiring an employee in Poland
The low cost of labor in Poland is a draw for international companies looking to expand their presence in Europe. Eurostat’s most recent data shows that Poland’s average hourly labor cost, which includes both wages and non-wage costs, is 10.70 euros. That’s considerably lower than the European Union (EU) average of 27.70 euros and just over a third of the 31.40 euros average for the euro area.
Poland’s labor costs have been consistently increasing since 2008, and those increases have come at a faster pace than many other European countries. However, labor costs in Poland remain relatively low compared to other European countries.
Labor costs aren’t the only expense you have to consider when hiring, though. The recruitment process itself can cost your company considerably, making it critical that you make the most of the process and find excellent employees who will be an asset to your company long term. Recruitment costs may largely go to a hiring agency, or if you handle hiring in-house, to your own human resources (HR) team. In either case, international hiring can come with some added costs you may not be used to in your home country, including costs associated with:
- Incorporating your business entity in Poland.
- Traveling to and from Poland to set up your company and meet employees.
- Hiring a translator to help you create job ads and documents in Polish and communicate with job candidates.
- Partnering with local experts to help you navigate Polish employment, business, and tax laws.
- New overhead costs if you’re establishing a physical employment location in Poland.
What does a company need to Hire employees in Poland?
Your focus may be on how to hire in Poland, but before hiring anyone, your company must have a business entity in Poland so you can legally employ Polish citizens. According to the Trading Economics, it takes approximately 37 days to start a business in Poland. However, the process is likely to take much longer when you factor in the research and planning that goes into an international expansion.
Most international companies choose to create a limited liability company as their Polish subsidiary. Setting up a Polish limited liability company involves several steps, such as:
- Executing your articles of association via an attorney.
- Opening a Polish bank account.
- Paying the necessary share capital.
- Registering your company with the National Court Register.
- Appointing a management board.
- Entering your company into the commercial register.
Depending on your company’s industry and the business you plan to conduct in Poland, you may also need to apply for special licenses or permits. You should complete all the legal requirements for setting up your company before you turn your attention to recruiting Polish employees. You won’t be able to onboard employees and set up payroll until you’ve officially established your company.
The alternative solution, if you want to start hiring new employees in Poland right away and skip setting up your own entity in the country, is to use a professional employment organization (PEO), or Employer of Record (EOR). A Polish EOR can be the official employer for your Polish personnel. You still get to recruit your own employees and direct the work they do, while the EOR handles the technical aspects of employment, including managing onboarding, payroll, benefits, and legal compliance.
Tips for hiring in Poland
Aside from understanding the basic employment laws you need to abide by, there are also some tips you should keep in mind when recruiting in Poland. Some aspects of hiring practices in Poland may differ from the practices in your home country. When hiring someone in Poland, make sure you follow these tips:
- Publish job ads on popular Polish job boards: Olx.pl – praca is Poland’s most popular job-related website, with over 3 million users. Linkedin, with 2.82 million users, and Pracuj.pl, with 2.74 million users, are also popular job-related sites in Poland. Other sites to consider posting your job ad on include Gowork.pl, Indeed, and Jooble. You can also publish job ads in the classifieds sections of Polish newspapers.
- Be aware of Polish CV differences: You may notice that many Polish curricula vitae (CVs) include personal details, such as a person’s date and place of birth and their current marital status, along with a headshot of the applicant. These details are common in some countries, but may appear unusual to you if you’re used to resumes or CVs that are less personal.
- Interview remote employees virtually: Many international employers choose to conduct interviews virtually, especially if you’re hiring remote employees in Poland rather than setting up a physical office location there. Poland has a high internet penetration rate, so you shouldn’t have trouble connecting with job candidates via online communication channels. If you’re scheduling virtual interviews, be sure to keep the time difference in mind so you can pick a time that’s suitable for both the interviewer and the interviewee.
- Adhere to background check laws: You may be used to conducting background checks as part of your hiring process before you officially offer candidates positions with your company, but in Poland, background checks are mostly prohibited. You can ask for candidates’ consent to verify information on their CV, but candidates can decline if they want.
Start hiring in Poland with Globalization Partners
If you want to hire employees in Poland without dealing with the time, expenses, and complexities involved in international expansions, reach out to Globalization Partners. As a global EOR with a presence in Poland, we can streamline the process of international hiring so you can start recruiting Polish employees and leave the logistics up to us. Learn more about our EOR solution in Poland and consider whether working with an EOR is the right fit for your international hiring goals.