Kyiv Consulting's HR Director, Katerina Krivozub, shares her team's expert insights into the labor market situation in Europe and Ukraine.
BATTLE FOR TALENT
As one of the most brilliant American managers of the 20th century, Mr. Lee Iacocca, CEO of Ford, once said: "In the end, all business operations can be reduced to three words: people, product and profits. Unless you’ve got a good team, you can’t do much with the other two”. The importance of human resources is hard to overestimate.
Modern employers are acutely feeling the shortage of talent. The days of passive recruiting are long gone, and the competition for the attention and engagement of top employees is only intensifying. The ratio of job openings to resumes on popular job platforms has reached a critical level of one-to-one, meaning employers have very few options to choose from.
According to the European Commission, the overall labor force in the EU is expected to shrink by 2% by 2030, leading to an increasingly competitive environment for employers.
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The EU Directive 2023/970, which focuses on equal pay and transparency, has begun to impact hiring practices and wage structures, promoting more equitable pay across gender and other demographic lines.
02
Job vacancies have reached new highs, with a vacancy rate of around 3.2% across the EU. This reflects a tightening labor market where companies are struggling to find suitable candidates for open positions.
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Europe is facing critical labor shortages in several sectors, particularly in healthcare, IT, construction, and engineering. Doctors, heavy truck drivers, and electricians are in high demand, with shortages being most severe in these areas.
According to a report by the European Business Association:
65% of employers plan to open new vacancies in 2024;
Over 80% of employers do not plan staff reductions;
93% of employers plan to increase salaries.
The competitive battle for talent will only intensify. Companies will be forced to focus on retaining and satisfying their existing workforce. As we can see, almost all employers are ready to improve the financial package.
But why has the labor market crisis emerged? Is the military aggression by Russia the only reason? The HR team at Kyiv Consulting shares their insights.
1. Demographic crisis
Significant declines in birth rates were observed long before the full-scale invasion, particularly in the 1990s due to the social and political crisis caused by the collapse of the Soviet system. Currently, the active workforce comprises Generation Y (1981-1995) and Generation Z (1997-2000). Thus, the talent pool was limited from the start.
2. Business mentality and ageism
In Ukraine, there has been a clear bias against candidates over 45. Previously, many job postings included the phrase: "Looking for employees aged 25 to 45 with at least 3 years of experience." Such phrases are now prohibited, but attitudes toward older candidates have changed little. Most companies, in the pre-war period, were not ready to hire and develop candidates who had crossed the 45-year mark. This negatively affected their professional qualifications, especially given the rapid digitization. This attitude harms businesses as they lose out on a large pool of skilled and willing candidates.
3. Pre-war inclusion in hiring people with disabilities
Before the war, people with disabilities were not popular candidates for highly qualified positions. Now, most employers understand the importance of inclusion. Companies are developing strategies to reintegrate veterans and those affected by the war into normal working conditions, ensuring comfortable work environments and training.
1. Mobilization
Many conscripts and volunteers have been mobilized into the Armed Forces of Ukraine, and unfortunately, many of them will be permanently lost to Ukraine's labor market. This has significantly impacted enterprises, especially industrial ones, which are experiencing a shortage of male workers. Women have stepped into roles traditionally held by men, including in sectors like agriculture and manufacturing, ensuring that these critical areas continue to function.
2. Forced emigration
Since the beginning of the full-scale war, the difference between those who left and those who entered Ukraine stands at 2.7 million people. Most of them, 2.4 million, are Ukrainian citizens. However, according to Gradus, 64% of Ukrainian migrants plan to return after the security situation improves and new jobs are created.
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We've developed a comprehensive concept for a company-wide training system, including budget planning. In the first quarter alone, employees have already benefited from learning courses.
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Listening to our employees' needs, the Administration Department has embarked on an active transformation of all aspects of its activities, from the assortment of food in the kitchen to corporate culture projects.
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The HR department has developed and is actively working on various projects. For instance, we have completely revamped our onboarding system for new employees and introduced a phased training program.
We believe in our victory and in the labor market's triumph over the current crisis. Ukrainian people continue to work hard under the most challenging conditions. Their efforts have been pivotal in maintaining the country's economy and ensuring societal stability during the war. Ukrainians have shown remarkable resilience and dedication to their work despite the ongoing war.
Our priority is people and their well-being, so we invite candidates to join our team in Kyiv and discover numerous opportunities for professional growth.
Learn more about relevant Kyiv Consulting’s vacancies below.
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