Detachable Subdivision
"Rivne Professional College of
National University of Life
and Environmental Sciences of Ukraine"
The protracted war is bringing significant changes to the functioning of the economic system of Ukraine in general and the labor market in particular. The labor market of Ukraine, which during the period of full-scale war significantly changed both in structure and geography, is gradually recovering in conditions of turbulence and uncertainty, responding to new challenges and requirements. Along with this, in conditions of hostilities, structural and territorial changes in labor needs, large-scale population displacement and mobilization, employment problems are deepening. Thus, according to estimates by the National Bank of Ukraine (NBU), the number of the labor force in the age group 15–70 years at the beginning of 2024 decreased by more than a quarter compared to 2021. Almost half of this reduction occurred due to external migrants who do not work remotely (the assessment took into account the CES study on the share of external migrants who work remotely - in 2023 it was 8–10 %). According to the NBU, about 40 pp of the reduction in the labor force in 2023 compared to 2021 occurred due to demographic losses and occupation, as well as the transition to an economically inactive population - due to possible difficulties in finding work for internally displaced persons (IDPs), the need to care for other family members, an increase in the number of pensioners, and a lack of skills required in the labor market.
Since the beginning of 2024, along with the recovery of the economy, the supply of vacant jobs has been restored, but the trend in the activity of job seekers does not correspond to changes in labor needs. Thus, in the first half of 2024, according to Work.ua, the number of vacancies increased by almost 19 thousand and in June 2024 it amounted to over 110 thousand. However, the number of resumes updated or created in the same month amounted to 304 thousand, which is almost 47 thousand less than in January 2024 - this indicates low activity of job seekers, which is also lower than the corresponding indicators of 2023 and 2022. Under these conditions, the competition index for vacancies is decreasing (in June 2024, this index reached its lowest point in more than three years), and it is extremely difficult for employers to find employees. A study of the Ukrainian labor market conducted by the European Business Association shows that in 2023, 74 % employers noted a significant shortage of personnel, 17 % - a partial shortage of personnel, and only 7 % - did not experience a shortage of personnel. The aggravation of the problem is largely due to the large-scale migration of Ukrainians abroad and mobilization to the Armed Forces of Ukraine, the deepening of sectoral, professional and interregional disparities in the labor market. Therefore, current trends in the demand and supply of labor in the domestic labor market do not contribute to the easing of the problem of personnel shortage. The Ministry of Economy of Ukraine estimates the shortage of personnel in the labor market at almost 30 %.
Against the background of the aggravation of the problem of personnel shortage, today the Ukrainian labor market maintains a fairly high level of unemployment, including structural, which is primarily due to rapid geographical and structural changes in the labor market and an insufficient level of adaptability of the workforce. According to estimates by the research agency "Info Sapiens", the unemployment rate during the first half of 2024 fluctuated within 20.9 % - 13.1 %.
One of the features of the modern labor market is that the highest competition among job seekers is for positions with remote work. Remote forms of work, introduced during the pandemic crisis, made it possible to maintain a certain stability of production processes even during a full-scale invasion. In June 2024, more than 14 % candidates were looking for online work, while among the total number of vacancies there were less than 7 %. A significant part of job seekers prefers flexible forms of employment.
Remote work during the pandemic and full-scale war has become one of the most desirable solutions for employees - in terms of personal safety, the ability to save time on the way to the office, rational and productive use of working time, and availability of employment (specialists seeking to find remote work have the opportunity to find employment not only in Ukrainian companies throughout the country, but also in international organizations). For employers, remote work means reduced costs for renting premises, consumables, equipment, and greater flexibility in organizing work. And the absence of territorial restrictions makes it possible to expand the possibilities of hiring more qualified employees.
The issue of wages is important in the process of finding a job and staff. According to the NBU, due to increased competition for employees (especially highly qualified ones), further wage growth is forecast. NBU experts predict that wage growth will occur due not only to internal competition, but also to increased competition for labor with foreign employers. According to optimistic forecasts, in the coming years, the growth of real wages in the private sector, together with a soft fiscal policy, will contribute to further growth in private consumption by 5–9% annually. Consumer demand will be stimulated by increased employment and the return of forced migrants.
Sources:
– Official websites of the NBU;
– Analytical data from Work.ua;
– Analytics of the research agency “Info Sapiens”.
Ellina OBARCHUK,
teacher of economic disciplines
