Three quarters of employers are experiencing staff shortages in Ukraine

24/ 04/ 2024

These are the conclusions of the Research Labour Market in Ukraine conducted by the European Business Association in partnership with Tetiana Pashkina, an expert in labour market analytics. The purpose of this study is to continue analytical work on identifying the main trends in the labor market in wartime. Changes in personnel that took place in 2023 Respondents noted that the following key changes occurred in their companies in 2023: 79% of respondents reported an increase in wages; 46% of respondents reported an increase in functionality and hiring new employees; 36% of participants reported an increase in budgets for staff development, training and retention; 27% reported an increase in bonuses and bonus payments; 10% of respondents reported staff reductions. Employee benefits in 2023 97% of respondents confirmed that companies pay wages in full, 85% of respondents reported that employees are paid bonuses. 49% of respondents reported that their companies provided psychological support to employees, and 47% of respondents reported that companies organized educational courses for all employees. Among other assistance, it was noted that some companies continue to pay taxes for employees living abroad and have opened international health insurance programs for employees. Some companies reimburse employees for electricity, internet, and part of the cost of renting housing. Positive changes that took place in companies in 2023 HR representatives reported positive changes that took place in their companies in 2023, namely: ensuring the continuity of business processes and employee booking; life insurance for employees; increased export sales; optimization of staff, improvement of production processes; paid for a kindergarten, opened our own gym and massage room; introduced a program to help demobilized veterans return to work; increased demand for training programs for employees; increased social responsibility of the business; support for employees who have partially or completely lost their homes as a result of military operations; connecting reading services with access to online books for employees and family members; pay more attention to employees, their well-being and mental health; continued to pay salaries to mobilized employees and provided them with the necessary assistance; improved staff engagement and loyalty; started developing a new direction and entering new markets; new customers were acquired and sales increased; financial performance began to return to pre-war levels. Changes planned for 2024 The research participants noted that the following changes are planned in companies in 2024: increase in wages (noted by 72% of respondents); increase in training and development budgets (39% of respondents); increase in the number of employees (35% of respondents); entering other markets and finding new partners (32% of respondents); Remote work 54% of the survey participants indicated that their companies have the opportunity to work remotely but not for all categories of employees. 28% of respondents indicated that remote work is possible for all employees, and only 17% of participants indicated that their companies do not allow remote work. Accordingly, there is a gradual trend of employees returning to the office. For comparison, in January 2023, only 4% of companies did not have the option of remote work. Categories of employees who do not have the opportunity to work remotely: warehouse and production employees; employees of retail outlets (directly in the store); banking specialists: employees of branches, cash collection, and recalculation offices; technical staff: cleaner, driver, security guard; administrative staff: secretary, office manager; mechanic, master receiver; director/deputy director, chief accountant; broker; teacher; sales manager; employees of the logistics sector; medical and laboratory workers; lawyers of judicial and criminal practices; managers who are required to sign paper documents; Customer service manager; HR manager; middle and senior management. It is important to note that the hybrid format of work is acceptable for most of the companies in which the survey participants work. There are isolated cases of salary reduction if an employee chooses a separate work format. Employees abroad 52% of respondents reported that the number of employees currently working and living abroad does not exceed 5% of the companys total staff, while 19% of respondents have 6-10% of their employees abroad. It is also important to note that 32% of respondents stated that all employees of the company currently live and work in Ukraine, which is higher than in previous periods. At the same time, some companies use temporary contracts abroad, after which employees can return to Ukraine. Among the countries with the highest number of employees, the following were named: Poland, Germany, the Czech Republic, Romania, the United Kingdom, Spain, Israel, the Netherlands, Slovenia, Austria, Norway, Belgium, the United States, Switzerland, Canada, Latvia, Italy, and Luxembourg. Does your company plan to return employees to the office in the near future? 41% of respondents wrote that their company does not plan to return employees to the office in the near future, 12% wrote that in the near future, the company plans to return all employees to the office, and 20% of respondents said that the company does not plan to return all categories of employees. Does your company plan to open new positions in 2024? 67% of the survey participants reported that their companies will be opening vacancies in 2024. Will the number of employees in your company change in 2024? 48% of respondents said that the number of employees in 2024 will remain unchanged, 26% of respondents said that the number of employees will increase by ≥5%. Also, 7% said that the number of employees would increase by 6-10%, and 5% of respondents wrote that their companies plan to reduce the number of employees. The rather low rates of reduction in the number of employees will also be confirmed by the results of the Business during the war survey for the first half of 2024. Were there any salary increases in 2023? If so, by what percentage? 44% of respondents said that their companies had increased wages by 10-15% 25% of respondents indicated that their companies had increased salaries by 16-20% 4% of respondents indicated that their companies had increased wages by more than 21% 16% of respondents indicated that their companies had increased wages by less than 10% 2% of respondents indicated that their companies have increased salaries by more than 31%. Does your company plan to increase salaries in 2024? If so, by what percentage? 72% of survey participants confirmed that their companies plan to increase salaries in 2024. It is important to note that 39% of HR professionals noted that their companies plan to increase salaries by 11-15%, 28% of HR professionals noted that their companies plan to increase salaries by 6-10%, 13% of HR professionals noted that their companies plan to increase salaries by 16-20%, and only 2% of respondents wrote that their companies plan to increase salaries by more than 21%. These data coincide with the CEOs plans and forecasts for increasing employee salaries, as outlined in the EBA Business Forecasts 2024 survey. Do you feel that there is a shortage of staff now? 74% of respondents indicated that they are currently experiencing a shortage of staff, 17% are partially experiencing a shortage of staff, and 7% do not feel a shortage of staff. This figure has increased significantly compared to the previous period (55% in the fall of 2023). The list of vacancies that the HR community believes are the most difficult to fill? middle and senior managers (director, head); specialist with a narrow profile; specialist with knowledge of English; marketer, IT specialist, HR, secretary, sales manager; lawyer, auditor, attorney, financier, logistician, business analyst; engineer, chemist, pharmacist, agronomist, microbiologist; mechanic; production personnel; shop workers: cook, baker, pizza maker; service personnel; commercial director; top management; foreign trade managers and customs brokers; In your opinion, what are the main problems in the Ukrainian labour market today? shortage of talents; mobilization; desire to work separately; outflow of qualified personnel abroad; employee burnout and fatigue; unwillingness of recruiters and employers to cooperate with candidates aged 40+; low level of inclusiveness, few initiatives to engage veterans and people with disabilities; lack of strategic management of demographic processes; students going abroad to study; redistribution of labor within the country (concentration of candidates in safer regions); Ukrainian business continues to operate in the “gray” or “black” field, which does not attract the return of the population that has left; disproportion between the salary expectations of candidates and the financial capabilities of the business; lack of specialists with knowledge of English; official employment of persons liable for military service (due to the risk of being mobilized); How do you assess your effectiveness and level of performance under martial law? 37% of HR professionals said they were in a state of burnout and 10% said they had started working worse, but 17% said they had started working better. Are you thinking about changing jobs? 60% of HR representatives do not plan to change jobs at this stage (74% in the fall of 2023). How do you support yourself during the war? The respondents to this survey noted that working with a psychologist, taking antidepressants, drawing, studying history, yoga, embroidery, cooking, meditation, walking, volunteering, spending time with family and friends, studying and working help to support themselves during the war. In your opinion, what key skills will be needed in 2024-2025? Among HR representatives, the following skills were emphasized: stress management and stress resistance; self-organization; adaptability and flexibility; emotional intelligence; humanity; willingness to learn; knowledge of foreign languages; working with new technologies and AI; critical thinking; effective communication; change management. For reference: The study involved 109 HR professionals (49% department heads, 24% middle managers, 26% top management, 3% junior staff). More than 60% of the survey participants represent international business. 50% of companies are representatives of large businesses, 43% of medium-sized businesses, and 7% of small businesses. The largest number of survey participants represent wholesale and retail trade, the pharmaceutical sector, food production, and specialized consulting services (legal, audit, marketing, recruiting, etc.). The survey participants also included representatives of the agricultural sector, financial services, processing industry, non-food consumer goods, industrial goods, IT, metallurgy, light industry, chemical industry, logistics, construction, hospitality, catering, and others. The survey was conducted from February to April 2024 and covered the period of August 2023 - April 2024. Participation in the study was anonymous.

These are the conclusions of the Research Labour Market in Ukraine conducted by the European Business Association in partnership with Tetiana Pashkina, an expert in labour market analytics. The purpose of this study is to continue analytical work on identifying the main trends in the labor market in wartime.

Changes in personnel that took place in 2023

Respondents noted that the following key changes occurred in their companies in 2023:

79% of respondents reported an increase in wages;
46% of respondents reported an increase in functionality and hiring new employees;
36% of participants reported an increase in budgets for staff development, training and retention;
27% reported an increase in bonuses and bonus payments;
10% of respondents reported staff reductions.

Employee benefits in 2023

97% of respondents confirmed that companies pay wages in full, 85% of respondents reported that employees are paid bonuses. 49% of respondents reported that their companies provided psychological support to employees, and 47% of respondents reported that companies organized educational courses for all employees.

Among other assistance, it was noted that some companies continue to pay taxes for employees living abroad and have opened international health insurance programs for employees. Some companies reimburse employees for electricity, internet, and part of the cost of renting housing.

Positive changes that took place in companies in 2023

HR representatives reported positive changes that took place in their companies in 2023, namely:

ensuring the continuity of business processes and employee booking;
life insurance for employees;
increased export sales;
optimization of staff, improvement of production processes;
paid for a kindergarten, opened our own gym and massage room;
introduced a program to help demobilized veterans return to work;
increased demand for training programs for employees;
increased social responsibility of the business;
support for employees who have partially or completely lost their homes as a result of military operations;
connecting reading services with access to online books for employees and family members;
pay more attention to employees, their well-being and mental health;
continued to pay salaries to mobilized employees and provided them with the necessary assistance;
improved staff engagement and loyalty;
started developing a new direction and entering new markets;
new customers were acquired and sales increased;
financial performance began to return to pre-war levels.

Changes planned for 2024

The research participants noted that the following changes are planned in companies in 2024:

increase in wages (noted by 72% of respondents);
increase in training and development budgets (39% of respondents);
increase in the number of employees (35% of respondents);
entering other markets and finding new partners (32% of respondents);

Remote work

54% of the survey participants indicated that their companies have the opportunity to work remotely but not for all categories of employees. 28% of respondents indicated that remote work is possible for all employees, and only 17% of participants indicated that their companies do not allow remote work. Accordingly, there is a gradual trend of employees returning to the office. For comparison, in January 2023, only 4% of companies did not have the option of remote work.

Categories of employees who do not have the opportunity to work remotely:

warehouse and production employees;
employees of retail outlets (directly in the store);
banking specialists: employees of branches, cash collection, and recalculation offices;
technical staff: cleaner, driver, security guard;
administrative staff: secretary, office manager;
mechanic, master receiver;
director/deputy director, chief accountant;
broker;
teacher;
sales manager;
employees of the logistics sector;
medical and laboratory workers;
lawyers of judicial and criminal practices;
managers who are required to sign paper documents;
Customer service manager;
HR manager;
middle and senior management.

It is important to note that the hybrid format of work is acceptable for most of the companies in which the survey participants work. There are isolated cases of salary reduction if an employee chooses a separate work format.

Employees abroad

52% of respondents reported that the number of employees currently working and living abroad does not exceed 5% of the company’s total staff, while 19% of respondents have 6-10% of their employees abroad. It is also important to note that 32% of respondents stated that all employees of the company currently live and work in Ukraine, which is higher than in previous periods. At the same time, some companies use temporary contracts abroad, after which employees can return to Ukraine.

Among the countries with the highest number of employees, the following were named: Poland, Germany, the Czech Republic, Romania, the United Kingdom, Spain, Israel, the Netherlands, Slovenia, Austria, Norway, Belgium, the United States, Switzerland, Canada, Latvia, Italy, and Luxembourg.

Does your company plan to return employees to the office in the near future?

41% of respondents wrote that their company does not plan to return employees to the office in the near future, 12% wrote that in the near future, the company plans to return all employees to the office, and 20% of respondents said that the company does not plan to return all categories of employees.

Does your company plan to open new positions in 2024?

67% of the survey participants reported that their companies will be opening vacancies in 2024.

Will the number of employees in your company change in 2024?

48% of respondents said that the number of employees in 2024 will remain unchanged, 26% of respondents said that the number of employees will increase by ≥5%. Also, 7% said that the number of employees would increase by 6-10%, and 5% of respondents wrote that their companies plan to reduce the number of employees. The rather low rates of reduction in the number of employees will also be confirmed by the results of the Business during the war survey for the first half of 2024.

Were there any salary increases in 2023? If so, by what percentage?

44% of respondents said that their companies had increased wages by 10-15%
25% of respondents indicated that their companies had increased salaries by 16-20%
4% of respondents indicated that their companies had increased wages by more than 21%
16% of respondents indicated that their companies had increased wages by less than 10%
2% of respondents indicated that their companies have increased salaries by more than 31%.

Does your company plan to increase salaries in 2024? If so, by what percentage?

72% of survey participants confirmed that their companies plan to increase salaries in 2024. It is important to note that 39% of HR professionals noted that their companies plan to increase salaries by 11-15%, 28% of HR professionals noted that their companies plan to increase salaries by 6-10%, 13% of HR professionals noted that their companies plan to increase salaries by 16-20%, and only 2% of respondents wrote that their companies plan to increase salaries by more than 21%. These data coincide with the CEOs’ plans and forecasts for increasing employee salaries, as outlined in the EBA Business Forecasts 2024 survey.

Do you feel that there is a shortage of staff now?

74% of respondents indicated that they are currently experiencing a shortage of staff, 17% are partially experiencing a shortage of staff, and 7% do not feel a shortage of staff. This figure has increased significantly compared to the previous period (55% in the fall of 2023).

The list of vacancies that the HR community believes are the most difficult to fill?

middle and senior managers (director, head);
specialist with a narrow profile;
specialist with knowledge of English;
marketer, IT specialist, HR, secretary, sales manager;
lawyer, auditor, attorney, financier, logistician, business analyst;
engineer, chemist, pharmacist, agronomist, microbiologist;
mechanic;
production personnel;
shop workers: cook, baker, pizza maker;
service personnel;
commercial director;
top management;
foreign trade managers and customs brokers;

In your opinion, what are the main problems in the Ukrainian labour market today?

shortage of talents;
mobilization;
desire to work separately;
outflow of qualified personnel abroad;
employee burnout and fatigue;
unwillingness of recruiters and employers to cooperate with candidates aged 40+;
low level of inclusiveness, few initiatives to engage veterans and people with disabilities;
lack of strategic management of demographic processes;
students going abroad to study;
redistribution of labor within the country (concentration of candidates in safer regions);
Ukrainian business continues to operate in the “gray” or “black” field, which does not attract the return of the population that has left;
disproportion between the salary expectations of candidates and the financial capabilities of the business;
lack of specialists with knowledge of English;
official employment of persons liable for military service (due to the risk of being mobilized);

How do you assess your effectiveness and level of performance under martial law?

37% of HR professionals said they were in a state of burnout and 10% said they had started working worse, but 17% said they had started working better.

Are you thinking about changing jobs?

60% of HR representatives do not plan to change jobs at this stage (74% in the fall of 2023).

How do you support yourself during the war?

The respondents to this survey noted that working with a psychologist, taking antidepressants, drawing, studying history, yoga, embroidery, cooking, meditation, walking, volunteering, spending time with family and friends, studying and working help to support themselves during the war.

In your opinion, what key skills will be needed in 2024-2025?

Among HR representatives, the following skills were emphasized:

stress management and stress resistance;
self-organization;
adaptability and flexibility;
emotional intelligence;
humanity;
willingness to learn;
knowledge of foreign languages;
working with new technologies and AI;
critical thinking;
effective communication;
change management.

For reference:

The study involved 109 HR professionals (49% department heads, 24% middle managers, 26% top management, 3% junior staff).

More than 60% of the survey participants represent international business. 50% of companies are representatives of large businesses, 43% of medium-sized businesses, and 7% of small businesses.

The largest number of survey participants represent wholesale and retail trade, the pharmaceutical sector, food production, and specialized consulting services (legal, audit, marketing, recruiting, etc.).

The survey participants also included representatives of the agricultural sector, financial services, processing industry, non-food consumer goods, industrial goods, IT, metallurgy, light industry, chemical industry, logistics, construction, hospitality, catering, and others.

The survey was conducted from February to April 2024 and covered the period of August 2023 – April 2024. Participation in the study was anonymous.