Demographic Situation and Human Capital in Ukraine
For the last few years businesses have faced a shortage of skilled labour in the labour market. Recruiters confirm that it is becoming more and more difficult to find the specialists that employers request.
Why does this trend exist in Ukraine? Do Ukrainian professionals really go abroad to find new opportunities? What re the main things that businesses and the state can do to keep professionals in Ukraine? We discussed these issues during the European Business Association Roundtable “The Demographic Situation and Human Capital in Ukraine”. This is what we discovered.
Experts agree that businesses should pay particular attention to the following points:
Yes, people are moving. And naturally they go to richer and more successful countries. For example, in Poland we have more than two million Ukrainians. Mostly young people leave the country. At first, they go there to study, but after graduation the majority do not return to the homeland. According to statistics, the percentage of arrivals in the country are growing. Here the situation is a bit different, but it is also natural. People come mainly for poorer countries in Asia and Africa.
This is an objective reality and the near future of Ukraine. As mentioned already, young people go abroad to study and do not return. Employers, whether they want it or not, will have to pay attention to workers over 45. An important role here will be played in retraining the workforce, where informal education will come to define the process. In other words, people will have to educate themselves: attending courses, trainings, and lectures that interest them.
Yes, none of us are perfect in this area. However, just take a look at how valuable our specialists are overseas. Maybe not everything is so bad? At the same time, promising scientists prefer to go to Europe or the United States for understandable reasons – Ukraine simply lacks the logistical and technical support for high-quality and modern researchers.
Salaries and Taxes
The wage level in Poland compared with the same positions in Ukraine in many specialities is 4-10 times more. An increase in wages will be an effective motivational factor if the level of pay is increased substantially and can be maintained for several years. If the increase is insignificant, and taxes and fees are deducted from that, then a financial stimulus will not solve the problem.
Professions of the Future
We are experiencing an information revolution and can currently find many excellent professions in the IT industry. However, after 20 years, even these specialities are likely to become antiquated – all types of technical activities will be replaced by work. According to futurologists, humanitarian specialties will be more in demand. Psychologists, culturologists, historians, and artists will be required – specialists with unique skillsets that can not be replicated by robots.
Without a doubt, the escalation of the conflict in the East is frightening people, because many are rather pessimistic about the possibility of a quick conclusion. Additionally, there is a need to improve the justice system, restore confidence in law enforcement, and create conditions for the protection of citizen’s rights in general. Another important issue is safety in the workplace as, unfortunately, statistics in Ukraine are disappointing.
What should businesses do and what can be expected from the state?
Typically, employers can entice staff by raising wages. In this case, companies can give raises every few years, although they should be substantial. The transition to a “white” salary will help reduce the shadow economy share and give employees confidence and loyalty in the company’s brand. One more valuable incentive can be the provision of medical insurance for workers. It is also worth taking care of working conditions and safety, allowing employees the opportunity to study and develop.
It is important for the state to stimulate business through a variety of steps, such as creating conditions for a noticeable increase in the minimum wage, to free the salary from all deductions, to create conditions for the provision of social packages from businesses, to increase the level of security (effective police and army), and to improve the legal environment and justice in Ukraine.
The EBA will continue to monitor the situation concerning the issues raised above. After all, it goes beyond the business community and concerns every citizen and member of our society! To this end, we have launched a questionnaire – the Barometer of Happiness in Ukraine – in order to discover why people leave the country. We will let you know the results on our website.