Hungary’s labour market is sending HR teams two signals that don’t match. According to KSH (Központi Statisztikai Hivatal, the Hungarian Central Statistical Office), employment fell by 24,000 in one year, and unemployment has risen to 4.8%. At the same time, survey data reported by Pénzcentrum shows that 59% of workers plan to change jobs within a year.

For a People & Culture lead deciding on next year’s budget, this matters. A cooling market looks like a reason to ease retention spending. Employee sentiment points the other way.

A labour market that is cooling quickly

The headline figures from KSH show a market losing momentum. Beyond the 24,000 drop in employment and the 4.8% unemployment rate, the share of long-term unemployed has climbed to 33.7%. That means roughly a third of jobseekers have been looking for work for at least a year.

Workers feel it. Nearly two-thirds say it is much harder to find a job in their profession than it was a year earlier. Normally this would hold attrition down, because people stay where they are when outside options shrink.

Pay dissatisfaction is high and has not gone away

The same survey data complicates that picture. In early 2026, only 48% of private-sector employees received a pay rise, while 64% of employees were dissatisfied with their pay. Most people are not actively job-hunting, but 40% would accept an attractive offer.

The size of the expectation gap matters most. Among employees unhappy with their salaries, 62% said only a raise above 20% would have satisfied them. Few employers can close a gap that size in a single review cycle, so a modest rise is unlikely to change how these people feel.

Why the quiet won’t last: what this means for HR

Put the two sets of numbers side by side and you get suppressed, not resolved, attrition. Employees who want to leave but can’t find a safe exit today are likely to stay with lower engagement. When hiring picks up again, they are a ready pool of departures.

Several implications follow for HR decision-makers:

• Low turnover can hide risk. A calm exit rate in 2026 may reflect a tight market more than loyalty.
• Pay freezes have a delayed cost. With fewer than half of private-sector staff getting a rise, any recovery in hiring is likely to hit organisations that held back hardest.
• Competitors only need one strong offer. Because 40% would accept an attractive offer, a rival does not need a broad campaign to reach your people.
• Flexibility now counts as part of the offer. A February survey found that home office is an expectation for 33% of employees, so remote work policy affects retention as well as operations.

Retention moves to consider before the market turns

Organisations that handle this well tend to spend selectively rather than across the board. In practice, that can mean:

• Mapping where flight risk is concentrated. Find the roles and teams where pay sits furthest below market, and put your limited raise budget there instead of spreading it thinly.
• Being open about the pay path. If a 20% correction isn’t affordable, a clear and credible timeline for pay progression reduces the uncertainty that drives people out.
• Using non-salary levers deliberately. Hybrid arrangements, development paths and workload balance won’t make up for an underpaid role, but they can tip the decision for people who are on the fence.
• Watching sentiment, not just exits. Employer reviews, stay interviews and pulse surveys pick up dissatisfaction long before a resignation does.

Basing decisions on real employee data

The KSH figures describe the market, and the survey data describes how people in it feel. HR teams need both. A labour market with fewer jobs and a workforce where 59% intend to move is not stable. It is a pause.

The next review cycle is the point at which to act. Treat this period of low mobility as a window to address pay gaps and expectations before the next hiring upswing, when the workers who want to leave will be able to do so.