Research on the Labour Market in Ukraine

18/ 10/ 2023

Listen to online Stop   The European Business Association, in partnership with Tetiana Pashkina, a labor market analysis expert, conducted another labor market research to determine whether and how the main trends have changed during the state of war regarding personnel. This includes planned salary changes for 2024, attitudes toward remote work, company plans regarding employees abroad, and more. The research results were presented today during the EBA event The Labor Market During War. Meanwhile, below, we offer a review of its key findings. Changes Regarding Personnel in 2023 In particular, business representatives noted the following key changes in their companies in 2023: 76% of respondents reported an increase in salary levels. 51% of respondents reported an expansion of job functions and hiring new employees. 21% of respondents reported budget freezes for development, training, and personnel retention. 8% of respondents reported staff reductions. 4% of respondents were informed about freezes on bonuses and incentive payments. 1.5% of respondents reported a decrease in salary levels. Meanwhile, companies continue to support their employees, understanding that people are the heart of the business. Nearly all companies pay full salaries (97%), most also provide bonuses and incentives (85%), half offer psychological support to employees (53%), and almost half organize educational courses for employees (47%). Among less popular initiatives are covering taxes for employees abroad, international medical insurance programs for employees, and compensation for electricity/internet/housing rental expenses. In response to questions about changes in 2024 regarding personnel, companies reported that they anticipate an increase in salary levels (72% of respondents), expect an increase in the number of employees (41% of respondents), plan to increase budgets for training and development (32% of respondents, aim to expand into new markets and seek new partners (30% of respondents), plan to redistribute employee functions toward multi-functionality (10% of respondents). Plans for 2024 The majority of businesses have plans for expanding their workforce in the coming year. Specifically, 65% of businesses plan to open job vacancies in 2024. Interestingly, over 80% of businesses do NOT intend to reduce their workforce (a 5% reduction is possible). 93% of research participants confirmed that in their companies, there are plans to increase salary levels in 2024. It is important to note that 29% of HR specialists mentioned that in their companies, there are plans to increase salary levels by 10-15%, 12% of HR specialists said that their companies are planning to raise salaries by 5-10%, 10% of HR specialists indicated plans for a 15-20% increase, and only 2% of respondents mentioned that their company is planning a salary increase of more than 20%. For information regarding salaries in 2023: 47% of companies had salary increases of 10-15%, 26% had increases of 15-20%, 8% had increases of more than 20%, and 8% had increases of less than 10%. Remote Work 61% of participants have the option to work remotely (28% claim that the option is available to all employees), while 11% do not have this possibility. Categories of employees who do not have the option to work remotely include: Warehouse and manufacturing workers Point of sale employees (directly in stores) Banking specialists: branch employees, cashiers, cash processors Technical staff: cleaners, drivers, security personnel Administrative staff: secretaries, office managers Mechanics, reception supervisors Directors/deputy directors, chief accountants Sales managers Employees in the logistics field Medical professionals and laboratory workers Lawyers practicing in courts and criminal law Managers who need to sign paper documents Customer service managers IT specialists and HR managers Middle and upper-level management personnel Employees Abroad We were also interested in the percentage of entrepreneurs who have employees working abroad. Indeed, 33% of businesses reported that they have no more than 5% of their workforce located overseas. In 19% of businesses, all employees of the company currently reside and work in Ukraine. Among the popular countries where employees of these companies are located, the following were mentioned: Poland, Germany, Czech Republic, Romania, United Kingdom, Spain, Israel, Netherlands, Slovenia, Austria, Norway, Belgium, USA, Switzerland, Canada, Latvia, Italy, Luxembourg. At the same time, nearly half of the respondents (49%) indicated that their company has no immediate plans to return employees to the office. 34% stated that the company plans to bring all employees back to the office shortly. 17% of respondents reported that the company plans to return only certain categories of employees. Overall Labor Market Situation A separate section of the survey focused on questions related to labor shortages, as there is a growing amount of information indicating that businesses are already experiencing a labor shortage. In this regard, 55% of companies confirmed that they are already experiencing a labor shortage, 33% partially feel this shortage, and 12% do not yet feel the shortage. According to the HR community, the most challenging positions to fill are: Middle and upper-level management (directors, managers) Specialized experts English-speaking professionals Marketers, IT specialists, HR personnel, secretaries, sales managers Lawyers, auditors, attorneys, financiers, logisticians, business analysts Engineers, chemists, pharmacists, agronomists, microbiologists Locksmiths, mechanics Production staff Store workers: cooks, bakers, fishmongers Service staff In general, HR specialists have identified the following challenges in the Ukrainian labor market at present: Talent shortage Mobilization Desire to work remotely Brain drain of qualified personnel abroad Employee burnout and fatigue Ukrainian businesses continue to operate in the gray or black market, which is not very appealing for the return of emigrants Discrepancies between candidates salary expectations and the financial capabilities of businesses Low salary levels Shortage of English-speaking professionals Ageism and gender bias within HR departments Official employment of reservists (due to the risk of mobilization) At the same time, employees are trying to support themselves by working with psychologists, painting, studying history, practicing yoga, volunteering, spending more time with family and friends, and more. Finally, we inquired about the skills that will be needed in 2024-2025 and received the following list: Stress management Multitasking Adaptability and flexibility Emotional intelligence Willingness to learn Foreign language proficiency Working with new technologies Critical thinking Work-life balance and understanding early signs of burnout Effective communication Change management You can also view the research results presentation by following the provided link.   For reference:  The study involved 131 human resources professionals, comprising 37% department heads, 32% middle management, 26% top-level management, and 5% junior staff. More than 70% of the participants in this research represent international businesses. Of the participating companies, 48% are large enterprises, 44% are medium-sized businesses, and 8% are small businesses. The majority of research participants come from the wholesale and retail trade, financial services (insurance, banking, securities), the pharmaceutical sector, and specialized consulting services (legal, auditing, marketing, recruiting, etc.).

The European Business Association, in partnership with Tetiana Pashkina, a labor market analysis expert, conducted another labor market research to determine whether and how the main trends have changed during the state of war regarding personnel. This includes planned salary changes for 2024, attitudes toward remote work, company plans regarding employees abroad, and more.

The research results were presented today during the EBA event “The Labor Market During War.” Meanwhile, below, we offer a review of its key findings.

Changes Regarding Personnel in 2023

In particular, business representatives noted the following key changes in their companies in 2023:

• 76% of respondents reported an increase in salary levels.
• 51% of respondents reported an expansion of job functions and hiring new employees.
• 21% of respondents reported budget freezes for development, training, and personnel retention.
• 8% of respondents reported staff reductions.
• 4% of respondents were informed about freezes on bonuses and incentive payments.
• 1.5% of respondents reported a decrease in salary levels.

Meanwhile, companies continue to support their employees, understanding that people are the heart of the business. Nearly all companies pay full salaries (97%), most also provide bonuses and incentives (85%), half offer psychological support to employees (53%), and almost half organize educational courses for employees (47%). Among less popular initiatives are covering taxes for employees abroad, international medical insurance programs for employees, and compensation for electricity/internet/housing rental expenses.

In response to questions about changes in 2024 regarding personnel, companies reported that they anticipate an increase in salary levels (72% of respondents), expect an increase in the number of employees (41% of respondents), plan to increase budgets for training and development (32% of respondents, aim to expand into new markets and seek new partners (30% of respondents), plan to redistribute employee functions toward multi-functionality (10% of respondents).

Plans for 2024

The majority of businesses have plans for expanding their workforce in the coming year.

Specifically, 65% of businesses plan to open job vacancies in 2024. Interestingly, over 80% of businesses do NOT intend to reduce their workforce (a 5% reduction is possible).

93% of research participants confirmed that in their companies, there are plans to increase salary levels in 2024. It is important to note that 29% of HR specialists mentioned that in their companies, there are plans to increase salary levels by 10-15%, 12% of HR specialists said that their companies are planning to raise salaries by 5-10%, 10% of HR specialists indicated plans for a 15-20% increase, and only 2% of respondents mentioned that their company is planning a salary increase of more than 20%.

For information regarding salaries in 2023: 47% of companies had salary increases of 10-15%, 26% had increases of 15-20%, 8% had increases of more than 20%, and 8% had increases of less than 10%.

Remote Work

61% of participants have the option to work remotely (28% claim that the option is available to all employees), while 11% do not have this possibility. Categories of employees who do not have the option to work remotely include:

• Warehouse and manufacturing workers
• Point of sale employees (directly in stores)
• Banking specialists: branch employees, cashiers, cash processors
• Technical staff: cleaners, drivers, security personnel
• Administrative staff: secretaries, office managers
• Mechanics, reception supervisors
• Directors/deputy directors, chief accountants
• Sales managers
• Employees in the logistics field
• Medical professionals and laboratory workers
• Lawyers practicing in courts and criminal law
• Managers who need to sign paper documents
• Customer service managers
• IT specialists and HR managers
• Middle and upper-level management personnel

Employees Abroad

We were also interested in the percentage of entrepreneurs who have employees working abroad. Indeed, 33% of businesses reported that they have no more than 5% of their workforce located overseas. In 19% of businesses, all employees of the company currently reside and work in Ukraine. Among the popular countries where employees of these companies are located, the following were mentioned: Poland, Germany, Czech Republic, Romania, United Kingdom, Spain, Israel, Netherlands, Slovenia, Austria, Norway, Belgium, USA, Switzerland, Canada, Latvia, Italy, Luxembourg.

At the same time, nearly half of the respondents (49%) indicated that their company has no immediate plans to return employees to the office. 34% stated that the company plans to bring all employees back to the office shortly. 17% of respondents reported that the company plans to return only certain categories of employees.

Overall Labor Market Situation

A separate section of the survey focused on questions related to labor shortages, as there is a growing amount of information indicating that businesses are already experiencing a labor shortage. In this regard, 55% of companies confirmed that they are already experiencing a labor shortage, 33% partially feel this shortage, and 12% do not yet feel the shortage. According to the HR community, the most challenging positions to fill are:

• Middle and upper-level management (directors, managers)
• Specialized experts
• English-speaking professionals
• Marketers, IT specialists, HR personnel, secretaries, sales managers
• Lawyers, auditors, attorneys, financiers, logisticians, business analysts
• Engineers, chemists, pharmacists, agronomists, microbiologists
• Locksmiths, mechanics
• Production staff
• Store workers: cooks, bakers, fishmongers
• Service staff

In general, HR specialists have identified the following challenges in the Ukrainian labor market at present:

• Talent shortage
• Mobilization
• Desire to work remotely
• Brain drain of qualified personnel abroad
• Employee burnout and fatigue
• Ukrainian businesses continue to operate in the “gray” or “black” market, which is not very appealing for the return of emigrants
• Discrepancies between candidates’ salary expectations and the financial capabilities of businesses
• Low salary levels
• Shortage of English-speaking professionals
• Ageism and gender bias within HR departments
• Official employment of reservists (due to the risk of mobilization)

At the same time, employees are trying to support themselves by working with psychologists, painting, studying history, practicing yoga, volunteering, spending more time with family and friends, and more.

Finally, we inquired about the skills that will be needed in 2024-2025 and received the following list:

• Stress management
• Multitasking
• Adaptability and flexibility
• Emotional intelligence
• Willingness to learn
• Foreign language proficiency
• Working with new technologies
• Critical thinking
• Work-life balance and understanding early signs of burnout
• Effective communication
• Change management

You can also view the research results presentation by following the provided link.

For reference: 

The study involved 131 human resources professionals, comprising 37% department heads, 32% middle management, 26% top-level management, and 5% junior staff.

More than 70% of the participants in this research represent international businesses. Of the participating companies, 48% are large enterprises, 44% are medium-sized businesses, and 8% are small businesses.

The majority of research participants come from the wholesale and retail trade, financial services (insurance, banking, securities), the pharmaceutical sector, and specialized consulting services (legal, auditing, marketing, recruiting, etc.).