The Hungarian labour market has reached a turning point in 2025. Economic uncertainty, technological advancement, and evolving social expectations are reshaping the way companies operate. In the coming years, HR must simultaneously address labour shortages, the increasing importance of wages and benefits, as well as the growing impact of automation and artificial intelligence.
Economic challenges and the impact of technological progress on HR
With rising costs, companies need to place greater emphasis on efficiency and process optimisation – in many cases through the integration of AI and automation solutions. ESG and energy efficiency are no longer merely communication elements but the foundation of long-term competitiveness.
Employees are also voicing new demands: greater flexibility, more remote work opportunities, and workplaces that not only provide employment but also development, where colleagues feel genuine attention and care.
Wage spiral – Who can keep up?
Most companies raised salaries in 2025, yet employee expectations – driven by high inflation – remain significantly higher.
The gap between wage expectations and corporate possibilities is increasingly being bridged not solely with salaries but with comprehensive retention strategies.
The focus is shifting to the value employers can provide beyond pay.
This may take the form of fringe benefits such as cafeteria schemes, health insurance, company cars, flexible working arrangements, development opportunities, or a strong recognition culture – where not only pay matters but also public recognition, career growth, promotions, or participation in high-profile projects.
Wellbeing programmes are also gaining importance: supporting employees’ mental, physical, social, and financial wellbeing directly contributes to engagement.
Many companies also target critical roles and key talents with dedicated retention packages, bonuses, or accelerated development paths.
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Key HR strategy priorities for 2025–2026
In 2025–2026, HR remains of strategic importance. It is no longer enough to operate as an administrative support function: HR is the strategic engine of organisations, managing technological challenges, labour shortages, trust issues, and employee expectations simultaneously.
- HR as a Strategic Partner – HR goes beyond administration: through data-driven decision-making, business-oriented thinking, and leadership development, it directly contributes to value creation.
- Retention, Talent Development, and Succession Planning – internal learning platforms, mentoring programmes, and comprehensive talent initiatives ensure retention, continuous development, and the grooming of future leaders.
- Competitive Compensation and Benefits – continuous market benchmarking, aligning wages and benefits, and building cost-conscious yet attractive benefit packages are crucial to attracting and retaining talent.
- AI and Digital HR Solutions – automating repetitive tasks and payroll/HR processes, outsourcing, predictive analytics, and enhanced digital employee experiences increase efficiency and HR’s value-adding role.
- Workforce Planning and Skills Development – mapping future skills needs and implementing upskilling/reskilling programmes strengthen organisational adaptability. HR must align short-term recruitment needs with long-term workforce strategies to secure sustainable growth and competitiveness.
An ageing society – Generational challenges
One of the biggest challenges for the Hungarian labour market is demographic change and managing generational differences. The entry of Generation Z into the workforce has created significant challenges for employers. This cohort is digitally confident, expects fast feedback and flexible environments, yet is often less characterised by loyalty and long-term commitment. Companies must adopt new leadership approaches, enhanced employee experience, and modern HR solutions to successfully engage and retain them.
At the same time, more organisations are turning towards the 50+ age group, whose experience, stability, and professional commitment can offset younger generations’ higher turnover.
At the same time, more organisations are turning towards the 50+ age group, whose experience, stability, and professional commitment can offset younger generations’ higher turnover.
Remote work, office presence, and hybrid models
Remote work remains a constant debate. Employers generally seek to reduce it, while employees prefer to maintain it. Flexible working is a major motivator for employees. Companies that manage to find the right balance and design effective hybrid solutions will gain an advantage in the talent market. HR’s role is to balance flexibility with organisational efficiency while strengthening engagement.
Preparing for pay transparency – What does this mean in practice?
The EU Pay Transparency Directive will fundamentally reshape the labour market in the coming years. Companies will not only need to disclose and address pay gaps but also provide a new level of transparency to employees.
Key areas to prepare for:
- Reviewing pay structures – establishing clear, objective criteria for remuneration (e.g. experience, skills, performance).
- Data collection and analysis – mapping pay gaps by gender, position, and business unit.
- Communication strategy – explaining pay policies clearly and transparently to employees.
- HR and leadership training – ensuring leaders understand how to justify pay levels and differences.
- Strengthening employee trust – transparency is not only about compliance but also about enhancing credibility and loyalty.
AI and Digital Skills – The key to the future of work
By 2025, artificial intelligence is no longer experimental but a routine part of the workplace. AI supports efficiency, data analysis, and automation of repetitive tasks while enabling employees to devote more time to creative and strategic activities.
However, change requires new capabilities: digital skills are more critical than ever. Employees must continuously develop their technological knowledge not only to keep up with but also to shape the transformation of work. Companies are increasingly investing in internal training and digital competency programmes, recognising that future competitiveness depends on the harmony between technology and human adaptability.
The winners will be those organisations that are open to new methods, responsive to employee needs, and unafraid to use AI as a tool rather than fear it.
The Hungarian labour market enters a new era in 2025–2026
Wages, benefits, generational differences, hybrid work, and AI are all shaping corporate HR strategies. Those organisations that adapt flexibly, proactively develop employee skills, and remain open to new solutions will hold a clear competitive edge.
