According to Ukrainian analysts and economists, the country's economy is facing a critical labor shortage, which will have a domino effect, which will initially lead to a reduction in production at enterprises and economic losses.
Points of attention
- The labor shortage is becoming a critical problem for the Ukrainian economy, which can lead to reduced production and economic losses.
- The problem of labor shortage already takes second place after the increase in costs of Ukrainian companies, in particular, it is becoming more difficult for businesses to find employees.
- Mobilization and military actions complicate the situation, because the lack of able-bodied men and women threatens both the economy and the defense capability of the country.
- It is predicted that the labor shortage will affect the amount of tax revenues and the financing of military efforts from the state budget.
- Ukrainian companies are already facing problems finding employees, large enterprises have faced the refusal of most men to find employment.
How the labour shortage threatens to shrink the Ukrainian economy
Journalists of the publication refer to a survey conducted by the Kyiv Institute of Economic Research and Political Consultations at the beginning of the year.
It is noted that the problem of labour shortage ranks second after the increase in costs of Ukrainian companies.
About half of the surveyed Ukrainian entrepreneurs complain about the labour shortage.
The squeeze on labor has become one of the top concerns of businesses struggling to hire, with job searches taking up more of managers’ energy. In a time of war, wages are set to exceed their levels before Russia’s invasion in February 2022. A mobilization law that went into effect last month is aimed at replenishing Ukraine’s military ranks with hundreds of thousands of troops. But the lack of able-bodied men and women is emerging as a burden for businesses large and small that make up the backbone of a wartime economy., the publication says.
How labour shortages and production cuts will affect the situation at the front
The publication's analysts emphasise that the problem will worsen because Russia's criminal war requires mobilisation and the involvement of an increasing number of additional forces.
As the Ukrainian military struggles to hold the front line, Ukraine's economy, which has lost a quarter of its output since the invasion began, risks weakening further due to layoffs. According to Deputy Chairman of the National Bank of Ukraine Serhiy Nikolaychuk, the drop in economic output against 2021, due to the reduction of personnel, will amount to about 27% of the pre-war level. In addition to more than 6 million people who fled the war, the situation is complicated by men who disappeared in the shadow economy and evade mobilization, the authors of the publication emphasise.
According to Tetyana Petruk, director of sustainable development and interaction with personnel of the "Metinvest" group, the company, which currently has almost 60,000 employees, is trying to fill about 4,000 vacancies and has encountered problems finding employees for the March production plant in Zaporizhzhia.
Petruk explained that the search for 89 workers took three months of intensive work, compared to three times less time before the war.
It is noted that the process is complicated by the reluctance of most men to work for large enterprises, which TRC employees monitor.
According to Petruk, once employees of military commissariats handed out summonses even to candidates for employment.
It is predicted that the so-called "domino effect" will initially lead to a reduction in production, which will affect the amount of tax revenues and ultimately harm the financing of the military effort from the state budget.
If the draft continues in this way, we will be forced to stop some processes or production facilities, because we will not have enough workers physically, — Petruk warns.
