HR managers raise issue of labor force shortage

On May 8, Prime Minister L.Oyun-Erdene met human resource managers of enterprises, introduced the world and the current socio-economic situation and future prospects of the country and talked about labor force, wages and personnel policy.

The premier informed, “There are 1.1 million people working in Mongolia’s labor market, 22 percent of them work in the public sector and 74 percent in the private sector. According to this indicator, one out of every four people in Mongolia is dependent on the government. The government is pursuing policies such as outsourcing the work that can be done by the private sector, reforming the integrated salary network of the civil service based on results and performance, and optimizing the basic salary and productivity incentives.”

Minister of Labor and Social Protection Kh.Bulgantuya highlighted that as part of the salary structure reform, in 2022, the types of salaries of civil servants were reduced from 222 to 53. In the future, it is necessary to take measures such as eliminating the salary gap of civil servants, limiting the amount of salary increases, transferring public service offices to performance-based financing, and regulating the laws of the sector that regulate salary issues. In 2022, the government implemented seven programs to support employment and placed 26,200 people in jobs, and in 2023, 15 billion MNT will be spent on measures to support employers, she said.

The minister explained, “There is a shortage of workforce not only in Mongolia but also in the world, so it is necessary for the government and the private sector to work together to build a sustainable and comprehensive policy. There is a legitimate need to increase wages, but there is a need for a policy based on productivity, training specialists who are in demand in the market, and paying attention to the skills and attitudes of the trained specialists.”

During the meeting, Director of Onch Audit LLC D.Onchinsuren commented that if the salary is not increased, the personnel will be lost to abroad. However, it should be noted that the amount of taxes such as social security contributions is a burden for paying high salaries. Moreover, it is necessary to pay attention to the fact that labor costs are high when employing foreigners, he added.

“Organizations are faced with workforce issues. On top of that, we need a person with the right attitude. It should be included in the basic education program,” Head of HR Club Association Sh.Bayarmagnai expressed.

Director of Human Resources of Max Group D.Nyamlkhaajav said, “There is a shortage of qualified, experienced and skilled assistants in the workplace. We need to improve the skills of the graduates of the vocational education training centers, and support the wealth creators who have created many jobs with policies.”

Chairman of the Council of the National Mining Association of Mongolia G.Battsengel expressed his support for raising the minimum wage for civil servants, before saying, “This will create more equal distribution of social wealth. However, if we want to reduce the negative consequences for the private sector, it is better to tie it with productivity. For enterprises, the main issue in raising wages is the social security contribution.”

Head of the Mongolian Association of Professional Human Resource Managers T.Tsetsegmaa underlined that the government should make policy arrangements for the shortage of workforce. There was also a large outbound migration. It needs to be approached with a policy, she noted.

Director of human resources of Vitafit Group A.Delgermunkh commented, “About 10 years ago, the government implemented the Honeycomb Program, and at that time they were looking for skilled, highly educated and experienced people, but today they are looking for just workers. In particular, engineering and technical specialists are rare. For example, in the food industry, there will be no mechanical engineering and equipment engineering graduates this year, and no plumbing engineering graduates in the last four years. Government policy is needed in this direction.”

Minister of Finance B.Javkhlan underscored, “Globally, supply shocks from the COVID-19 and war have left countries facing wage challenges from inflation. It is no different for our country. The government has started implementing productivity and performance-based pay reforms. Wage reform in the health sector was initiated last year, while this year it is being implemented in the education and culture sectors. There is a need to make some adjustments during implementation.”

The suggestions made during the meeting will be studied and the sides agreed to work together, according to the government.