The largest economy in Central Europe, Poland is considered a prominent outsourcing destination for companies worldwide. It features among the top nations in Europe for hiring remote software developers and IT specialists, given their high-quality service at a low cost compared to other countries.
Poland's economy has steadily grown in recent years, its GDP growth rate being 2.784% over the last decade. It is also the only country in Europe not to go into recession during the 2008 global financial crisis.
So if you're planning to hire developers in Poland, this guide will give you the overview you need.
Things to keep in mind while hiring in Poland
Outlined below are facts that international employers must keep in mind about the Polish labor force and prevailing employment laws.
Languages in Poland
Over 95% Poles speak Polish, which is its official language. English, spoken by around 19.85% of the population, is the second most commonly spoken language. After English, German and Russian are the country's most widely spoken languages.
Even though English is a common second language, finding qualified employees who are fluent in English can be challenging. You will have to hire a translator to help you navigate Polish job boards and post your job listing.
Labor market in Poland
The Polish labor force is hard-working, motivated to learn, and loyal. Given that 44% of the Polish population has a tertiary education, the workforce is also well-educated.
Agriculture, energy, manufacturing, and tourism are the country's largest industries. Compared to the unemployment average of 8.3% in the Euro area, Poland's unemployment rate has decreased consistently in the last eight years and currently stands at 6.5%.
Polish employment contracts
When hiring in Poland, you need to give an employee a legally mandated contract before their start date with your company. The agreement should be written in Polish or have a Polish translation. The following details are required in the contract:
- Type of employment contract.
- Name of employer and employee.
- Contract duration. Date of signing the contract and date of starting work.
- Type of work.
- Location of work.
- Breakdown of remuneration for the particular position.
Wages and working hours
According to Polish Employment law, the full-time workweek is 40 hours, split across five eight-hour days. Employees can work overtime, but no employee can have more than 150 hours of overtime in a year unless so written in the employment contract. An employee also cannot work more than an average of 48 hours per week.
The Polish government has set a minimum threshold on wages. The minimum wage increased in 2022 and currently stands at PLN 3,000 per month, roughly €630.
You should check current minimum wage rates and salary norms in your particular industry to ensure that you're offering fair wages to your employees.
Paid time off
Polish employees are entitled to 13 public holidays and vacation leave. The number of days off depends on the number of years the individual spent in secondary/post-secondary education and the workforce or is a combination of the two factors. Employees with less than ten years of work experience can only take 20 days of annual vacation, whereas employees with ten or more years of experience get 26 days of leave.
Polish employees get paid sick leave. Employers must pay their employees 80% remuneration for a certain number of days, afer which the Polish Social Insurance Institution, ZUS takes over the payment. The employer pays sick leave for up to 33 days for employees under 50 and 14 days for those above 50.
Social Security and Income tax
The Polish government uses the Pay As You Earn (PAYE) model for income tax which means employers must deduct tax from their employee's paychecks.
An employer must deduct the correct amount for social security contributions and make contributions as well. Pension, accident, sickness, and disability insurance are part of social security, and both employees and employers have to contribute equally to this fund.
Employers contribute the majority of disability insurance and pay for accident insurance, while employees pay for sickness insurance.
Overall, employers have to contribute 18% of employees' gross remuneration, and employees contribute 14% of their gross remuneration.
In addition, employers contribute 2.45% of employees' monthly remuneration to labor funds and around 0.1% to employees' guaranteed benefits fund.
Cost of labor in Poland
Poland's low cost of labor compared to other European countries attracts international companies to set up offices there.
Eurostat's present data shows that Poland's average hourly labor cost (wage and non-wage) is €10.70, considerably lower than the EU average of €27.70.
However, along with labor costs, you need to account for recruitment costs to be paid to a hiring agency or your in-house HR manager.
International hiring can come with some added expenses such as:
- Registration of your business entity in Poland.
- Cost of travel to Poland to set up your company.
- Hiring a translator to publish job ads, create Polish documents, and communicate with candidates.
- Overhead costs in case of physical employment location in Poland.
How does a company hire employees in Poland?
To legally employ Polish citizens, you need to set up a business entity in Poland. It takes around 37 days to start any business. Usually, international companies prefer setting up Polish limited liability subsidiaries, which require the following:
- Executing your plan through an attorney.
- Opening a bank account in Poland.
- Paying the share capital.
- Registering your company name in the National Court Register.
- Appointing a management board.
- Entering your company name into the commercial register.
- Applying for special licenses or permits depending on your industry.
The alternative to setting up your own entity is to hire employees through an Employer of Record (EOR). Your EOR will handle all technical aspects of employment (such as onboarding, benefits payroll, and legal compliance), allowing you to save time on HR and compliance matters and focus on expanding your business instead.
Besides abiding by the basic employment laws, you must observe certain things when recruiting Polish employees. Some aspects of hiring in Poland differ from the practices in your home country. So when you hire someone, keep these things in mind:
Virtually interviewing remote employees
Many international employers conduct virtual interviews when hiring employees in Poland. They prefer having remote staff to setting up a physical office in the country.
Poland has a solid internet penetration rate, so you don't have to worry about connecting with job candidates via any online communication channels. And, when scheduling virtual interviews, keep the time difference in mind so that you pick a time suitable for both the interviewer and the candidate.
Background checks
Unlike most countries where they are an integral part of the hiring process, background checks are prohibited for the most part in Poland. You need a candidate's consent to verify their personal information.
Please note that candidates can legally decline to give consent for background verification.
Final thoughts
Are you looking to hire in Ukraine instead? Read this guide to hiring in Ukraine.
Hopefully you found this article helpful, and it addressed your queries regarding the hiring process in Poland. If you want to hire Polish developers without getting hassled by the complexities of international expansions, contact us. We at Starkflow can streamline the process of international hiring for you, so that you can singularly focus on expanding your business.