Ukrainian workers are being lured abroad, leaving businesses at home short of staff
Some four million Ukrainians work abroad, the latest study by the Kyivbased Center for Economic Strategy has estimated. That’s almost 16 percent of Ukraine’s working-age population. The majority are men, and manual laborers.
These laborers go abroad seeking opportunity: most importantly, jobs with higher wages. But for businesses back home, this is bad news. As workers move west, Ukraine’s shop floor workforce is declining in numbers, and manufacturers are scrambling to lure workers back.
Not long ago, labor migration was a headache only for the western parts of Ukraine.
But the trend has spread. Today, employers across Ukraine report shortages of skilled and unskilled workers. Hardest-hit are businesses in agriculture, construction, and industry, which rely on manual labor.
Much of this migration is seasonal, according to the study by the Center for Economic Strategy. Ukrainians even have a word for seasonal job-hunters: zarobitchany. These workers tend to leave Ukraine in spring and summer, mostly to neighboring countries like
Poland and Russia, where there is less of a language barrier. Many also go to the Czech Republic, Portugal and Israel.
Ukraine’s European neighbors often look to these migrants to ease their own labor shortages.
In Poland, for example, Ukrainians replace Poles who have left for work in Ireland and the United Kingdom. The number of work permits in the EU issued to Ukrainians tripled in 2014-2016, according to the study.
The Czech Republic, Poland, and Israel have even introduced employment quotas for Ukrainians in particular sectors such as construction.
In Russia, migrants from Central Asia do the dirty jobs Russians don’t want to take. In Ukraine, however, there’s no one to take the place of those who leave.
The main driver of Ukraine’s worker exodus is wages, which are the lowest in Europe. As of 2018, the minimum salary in Ukraine was Hr 3,200 ($121) per month, while the average salary was Hr 8,480 ($326).
These low wages do little to benefit businesses. While cheap labor is touted as a competitive advantage of Ukraine in attracting foreign investment, the supposed benefit is a myth, says Vitaliy Mykhailov, director for Eastern Europe at the World Staff recruitment agency.
“Indeed the official wages are low. But try to find people for that money,” Mykhailov said in an interview with the Kyiv Post. In pursuit of better pay, Ukrainians go abroad, or go on strike. This, year steel mining company Arcelormittal in Kryvyi Rih saw massive strikes organized by the trade unions, who demanded a raise of workers’ salaries to 1,000 euros per month. The current average salary there is Hr 12,414 ($471).
While the management agreed to a raise, officials say the union has set its expectations too high.
“Nobody in metallurgy pays salaries of 1,000 euros,” said Elena Pilipenko, HR director for Arcelormittal. “We believe the issue there is political.” And salary rises are only a short-term solution to keeping staff, says Lyudmyla Yanok, chief of staff at Cersanit, a Polish tiles and sanitary ware manufacturer based in Chyzhivka village of Zhytomyr Oblast. Their Ukrainian factory employs 1,200 people.
“We raise salaries every year. But it is clear that in Ukraine we can’t pay on the same level as in Poland. Similarly, Polish employers can’t pay like they can in Germany,” she told the Kyiv Post.
Unable to pay internationally competitive salaries, some Ukrainian companies try to compensate with good work conditions and benefits.
This is a draw; many zarobitchany who work abroad often have long hours without employment contracts, paid leave, and medical insurance.
Besides benefit packages, perks include free lunches and transport from their homes to factories and back.
Different companies find different solutions to keep workers. For example, Cersanit is testing a program to allow its Ukrainian employees to work for three months at its Polish plants. Arcellormittal subsidizes the utility bills of its low-paid staff and sends employees’ kids to summer camps beside the Black Sea.
As a general trend, Ukrainian companies also train employees and help them upgrade their qualifications. They also focus on working with young people and local communities. They organize excursions for high school students to their production facilities. During summer holidays, they provide internships to students and hire them for part-time jobs.
“Improving an employer’s brand is crucial. The better the reputation of a company, the more people are willing to work in it,” said Yanok of Cersanit.
Most companies have adopted “Bring a friend” program, rewarding an employee for referring someone for a job. This is believed to be more effective way to find new staff than an open call.
Some have started hiring older people, at pre-retirement age, as they are more loyal and less likely to migrate.
Mykhailov of the World Staff recruitment agency forecasts that the shortage of labor force will only get worse due to irreversible migration and unpopularity of blue-collar jobs.
“The only solution for businesses is to adapt: To reduce manual work, increase productivity, switch to robot automation,” he said.
A man makes tiles on May 17 at a Ukrainian plant of the Polish tiles and ceramic sanitary ware manufacturer Cersanit. The plant is in the village of Chyzhivka in Zhytomyr Oblast. (Kostyantyn Chernichkin)