UKRAINE LACKS LABOR FORCE
“I won’t make as much in Spain as I do in Ukraine, – says Anastasiia, 28, a housecleaner. – “Now, a lot of our girls are working there but here, in Ukraine, I have no competition. I'm already turning away new clients. Besides, there are high taxes there, while I have only a 5% rate, and I don't have to share with anyone."
Anastasia benefits from the changes in the Ukrainian labour market caused by the war: the lack of labour force. Unexpectedly, many Ukrainians, who did not emigrate when the full-scale invasion began, have discovered that their competition simply disappeared. Now, it is clients and employers who compete for professionals in different spheres.
Vasyl, who is leading a fence construction team, values each worker: there is a shortage of professionals, so they are snapped up immediately.
Hence, “It became a tradition during job interviews to ask applicants about the number of offers they have and the amount of time we have to make the decision, – noted Yana Dekusar, HR Director of the Nota Group Company. – This is all because candidates often accept offers from other companies within a day or two. This requires us to make prompt decisions–on the spot.”
In May 2024, employers posted a record number of vacancies on Work.ua, a job-hunting website: since 2022, surpassing 100,000 for the third consecutive month. The number of vacancies continues to increase, while the number of job applicants has slightly decreased, leading to a continued decline in competition. Considering that only 26% of companies are operating at 100% capacity or more, and 52% are operating at only half capacity, even large companies keep complaining about the lack of workers.
"Interpipe plants risk shutting down due to a shortage of workforce," the company's press quoted a statement by Vitalii Pakhomov, HR Director. This trend is true for Kyiv and other major cities in Ukraine, yet the businesses in areas under constant shelling are facing even more severe challenges.
The shortage is particularly acute among doctors. Despite continuous medical aid and equipment supplied by Western partners as well as substantial humanitarian assistance, it is extremely dangerous and difficult for doctors to stay in the frontline towns. Recently, my mother, a neonatologist and pediatrician by profession and a pensioner by age (she is 63), accepted an offer for her second job. Now she not only works at the regional children's hospital in Kherson, visiting villages throughout the region, but has also been employed by a private clinic. The need for doctors is critical, mirroring shortages of teachers and other workers who are fleeing regions affected by the ongoing war.
With winter drawing near, Ukrainians are getting prepared for constant power outages, in the worst-case scenario lasting up to 20 hours. Despite our efforts to find a better solution, Russia persists in targeting the energy sector. It will inevitably impact the labor market in Ukraine.
The mobilization has exacerbated the previously evident issues with employment. Following the drafting of 27% of employees, Kyiv energy company "Kyivmisksvitlo" is facing a 14% staff shortage. Taking into account the current staffing situation, the intervals between trains in the Kyiv subway have been increased since June this year.
And with that, mobilization has instilled fear in a significant part of the Ukrainian population and, in some cases, underscored mismanagement and human rights violations.
A friend of mine told me that an electrician who worked in his house quit his job because he was afraid of receiving a mobilization notice on public transportation when he was traveling from the Left Bank to the Right Bank in Kyiv. Now, many men who do not have documents exempting them from mobilization are reluctant to leave their homes. Personally, I have never seen so many women driving in Ukraine.
To protect critical personnel, companies can reserve certain employees. This means that some employees of military age in companies will not be allowed to be mobilized by the military authorities. Only companies that match certain economic criteria (which include total revenue, taxes etc.) or work in critical sectors (e.g. defense or energy) are eligible to have their employees reserved. They have to pass a tedious bureaucratic process to receive approval from the government and the business community is being increasingly vocal about the need to streamline the process.
Usually the companies can reserve up to 50% of their personnel eligible for military conscription, though in some cases (defense and energy in particular), up to 100% can be reserved. However, despite this system, motivation in the market remains rather insufficient, and as long as the war continues, the majority of Ukrainians see limited opportunities for stability and professional development. This can worsen problems in the labor market. But also, in principle, help people like Anastasia become irreplaceable and highly paid.
To learn more about the lives of Ukrainians, the country, and our meritocratic path, you can read the book “The Fight of Our Lives”.
Iuliia Mendel,
Knight-Wallace Fellow 2023-24
WCEE Distinguished Fellow 2023-24