Overcoming labor shortage in Ukraine. Women, veterans, increasing productivity

Ukraine is a paradoxical country. Simultaneously, it has a fairly high unemployment rate – in 2023, it was almost 20% – and a small number of officially unemployed people – only 101,400 people. At the same time, there is a growing shortage of specialists. In January 2023, about 20% of respondents claimed so, while in December 2023, already 46% of respondents reported this.

The latest report from the National Bank of Ukraine says that in 2024 the demand for labor will grow. And the labor market will continue to have imbalances. That is, the chronic shortage of personnel will only get worse.

Given that 40% of the businesses that make up the European Business Association (EBA) plan to increase the number of staff, while no significant growth in the number of specialists can be expected, we should expect not only an increase in the shortage but also a forced increase in salaries as employers compete for employees.

Is there any way to overcome, at least partially, the staff shortage? Let's look at the most obvious options.

More active involvement of women in the labor market

According to the Confederation of Employers of Ukraine, the country has a certain reserve of women's involvement in labor. First, these are internally displaced persons (IDPs) who do not yet have decent jobs or are forced to care for children or elderly relatives.

An alternative employment option for them could be remote work (if there are no suitable vacancies at the moment) or part-time employment with a flexible schedule that can be combined with household chores.

Second, the share of women who are either full-time housewives or have unofficial part-time jobs remains unaccounted for. For instance, the pre-war rural labor market employed millions of people, but not all farmers worked officially.

That is, under certain conditions, these women can also be included in the formal labor market. For example, official employment is more profitable than running a household or doing informal work.

Women themselves are ready to engage more actively in the labor market. An analysis of new job seekers who created a resume on the Work.ua platform in January 2022 and 2024 showed that the share of women in the labor market increased from 57% to 62%.

The largest percentage is aged 18-24. This means that the demographic reserve is women aged 45+, who are not yet in demand among some employers due to ageism.

By the way, the new trend in military recruitment has shown that there is an active response to the vacancies of the Defense Forces with almost gender equality: 51% of men and 49% of women. In terms of age, people aged 35 to 44 are the most likely to respond among men and women. However, among men, a significant proportion of candidates are over 45, while among women, there is more activity from young people aged 18-24.

At the same time, Ukraine has a problem: increased mobilization exposes the civilian labor market. Therefore, the next trend is the active replacement of men by women in what are traditionally deemed "male" professions – tractor drivers, miners, security guards, etc.

To be fair, this trend did not emerge yesterday. It was reinforced by the abolition in 2017 of the famous List of hard work and work with harmful and dangerous working conditions, which prohibits the use of women's labor. In most cases, these were manufacturing professions such as foundry workers, welders, sealers, certain categories of locksmiths, machine operators, mining specialists, etc. The Ministry of Health considered these professions to be difficult and harmful to women. Thanks to technological advances and equipment upgrades, certain professions are now available to women.

Therefore, in addition to public transport drivers (we have seen women driving trams and trolleybuses for many decades), women are now being retrained to drive buses, garbage trucks, and trucks.

Successful cases of tractor drivers and combine operators encourage other women, especially the wives of farmers who are currently in the ranks of the Armed Forces. You have the equipment at home, you just need to learn how to use it. For example, in Chernivtsi Oblast, out of 132 vouchers issued by the State Employment Service for learning the profession of tractor driver, 70 applicants were women.

In Volyn Oblast, three women were trained as woodworking machine operators at the request of a Novovolynsk enterprise. The regional employment service is using vouchers to train four more Volyn women to become category C drivers, electric and gas welders, and tractor drivers.

In addition, the State Employment Service reports on the employment of women as boiler operators, agricultural maintenance workers, helpers, electricians at traction substations in the power supply service, security guards, and electricians at repair service businesses.

Businesses are also actively employing women as security guards, car wash operators, and gas station attendants. They even restructure business processes and automate, for example, some logistics operations. Because it is not always physiologically convenient for women to do work designed for men.

Involvement of veterans and persons with disabilities able to work

By the way, mobilized men are to some extent also a labor market reserve. However, it should be understood that not all of them will be able to return to their jobs due to injuries and related restrictions.

According to various estimates, in the coming years, Ukraine will have about 35,000-50,000 soldiers and civilians who will need prosthetics. And, accordingly, employers need to prepare for inclusion now. Moreover, the existing number of people with disabilities can also be involved in the active labor market. Currently, only 17% are employed.

In June 2023, there were 2.56 million people with disabilities who were able to work in Ukraine, almost 7% of the population. Most of them - 57% - have the third disability group, 35% - the second, 8% - the first. Only 430,000 of them have jobs. That is, more inclusive workplaces and overcoming employer bias will help add thousands of workers to the labor market.

Increasing labor productivity

Increased productivity can come from the skills and abilities of specialists, which leads to an increase in their salaries. Or automation/optimization of equipment at the workplace, which also increases the company's costs.

But there is a nuance. Many employers are now forced to hire specialists with inadequate qualifications or no experience at all and train them at their own expense. This is also a cost, but it increases the recruitment funnel. Automation and simplification of work will help attract more candidates. And better-paid work on automated devices adds to the attractiveness of such a position.

Currently, many employers are reviewing the scope of work and trying to combine related vacancies if each is not 100% full-time. For example, a cashier, a bartender-administrator, an operator-accountant.

This is not to mention attempts to add something extra to the functional responsibilities "rolled into one." On the one hand, it's great that the employer has a thorough understanding of the business process and the workload of each link and can increase productivity in general. But on the other hand, the main emotions of Ukrainians over the past year have been tension and fatigue.

Therefore, it is probably not worth counting on the "pre-war" productivity of the staff. Even if some people give 120% of their best, trying to exceed the employer's expectations, they may quickly experience professional burnout. That's why some employers are already taking care of their employees' mental health and providing psychological support.

Returning emigrants and involvement of the diaspora in cooperation

This is a matter of a peaceful future, because in most cases, those forced refugees who wanted to return have already done so. Most of the refugees surveyed (64%) returned to Ukraine in 2022, most often from May to September (46%), when Ukraine regained control of the territories in the northern regions.

According to the surveys, we should expect a significant flow of refugees after the war ends or at least the aerial attacks stop. The only economic factor that may affect the desire to return is restrictions on staying in the current country or the elimination of benefits for refugees.

They also want guaranteed employment and a better quality of life "here and now." It is important to understand that even before the war, Ukraine had the lowest average income in Europe. Now, according to the survey, we see a decrease in the number of people willing to return.

In general, the share of refugees who plan or hope to return to Ukraine in the future has decreased from 77% to 65% compared to last year. At the same time, the share of those who have not yet decided whether to return has increased from 18% to 24%. And the number of those who have lost hope of returning has increased from 5% to 11%.

That is, along with the return of a certain number of migrants, we need to count on the impact of negative trends.

Perhaps the end of the war will provoke the Ukrainian global diaspora to volunteer to rebuild Ukraine. And some will want to stay in their homeland. But to realize this hope, Ukraine needs a program like Israel's. This country has seven million Israelis inside the country and eight million ethnic Jews outside of it, with whom it works systematically.

Since its founding, the State of Israel has had a Ministry of Diaspora Affairs, governmental and non-governmental organizations that systematically encourage and help immigrate to Israel or maximize the use of the diaspora for the benefit of the country. There are dozens of repatriation programs. For example, there are two-week government programs for young people with Jewish roots: For two weeks they are shown the beauty of the country. After that, 27% of them decide to build their lives in Israel. And some repatriation programs for talented entrepreneurs have an even higher rate: up to 80% of the program participants, able-bodied and talented Jews, move to Israel.

It should be noted that, according to various estimates, up to half a million of Ukrainians have moved from Ukraine to Israel, excluding refugees in recent years.

Therefore, the attitude toward global Ukrainians not only as people who can potentially return to their homeland, but also to support it politically and financially, should be constant and systematic.

Ukrainians have large diasporas, for example, in Canada. They have been living in another country for several generations and still consider themselves Ukrainians. For example, the population of some towns in western Canada is more than half Ukrainian. And this increases the influence of former Ukraine residents on the overall population of Canada.

Kyiv should not count on foreign migrants

Given the low level of wages and security, Ukraine should not expect a long line of people from other countries to work here. Again, those who want to work will either come from poorer countries or from countries with even less security. And in most cases, these are not Ukraine’s closest neighbors or those close to Ukrainians in terms of beliefs and cultural values.

Given Ukrainians’ low tolerance, conflicts may increase due to unreasonable labor migration. As an alternative, it is possible to attract volunteers to rebuild the country after the war and "gentle labor mobilization" in the process.

In addition, Ukrainian labor legislation is not aimed at attracting foreign workers in large numbers. To attract migrant workers, it will need to be updated and adapted. The new version of the Labor Code may take into account the required changes.

So, the labor market is currently suffering from a shortage of workers.

The situation is exacerbated by ageism and sexism of some employers, which hinders the employment of certain categories of workers and increases recruitment problems. However, the available number of candidates and employees is all Ukraine can count on for now.

What is certain is that Kyiv should not count on the return of a large number of refugees, mass labor migration, or the involvement of the diaspora.