With a shortage of labor, Ukrainian business has to work harder to find and keep staff
It’s a good time to be looking for work in Ukraine. With Ukrainians leaving the country in record numbers — 1.3 million people in the period from 2015 to 2017, according to the State Statistics Service — the job market has shifted in favor of employees over employers.
Businesses are now in fierce competition for a shrinking pool of workers — offering increased wages, social benefits and improving their corporate culture to attract applicants.
But even this may not be enough.
The main trend of the labor market is that it is increasingly difficult to find people to perform any job, in any sector.
“Top management, middle management, unskilled labor, young professionals — with each of these categories there will be problems in hiring,” said Serhii Marchenko, the founder of recruitment agency Borsch. He previously worked as company director for development for recruitment website Work.ua.
With labor migration continuing apace, Ukraine is storing up problems for itself in future.
One problem will be with highly qualified staff: Students are leaving Ukraine to study abroad, and most of them won’t come back. According to the CEDOS Analytical Center, 72,000 young people left the country in 2016 and 2017–56 percent more than in the 2012 to 2013 period.
Nine out of 10 of those students are not planning to return to Ukraine, according to Tetyana Pashkina, an HRexpert at Rabota.ua, an online recruiting resource for more than 50,000 companies.
“The lack of young people could be fatal for Ukrainian employers,” she said. “The average salary in European countries is Hr 34,895 ($1,340), while in Kyiv it is Hr 11,400
($440). Judging by the dynamics of wage growth, foreign employers need our workers more.”
Companies are trying to hire people for low wages, but this leads to a large turnover of staff and brings extra costs on training and searching for replacement employees, experts warn.
“It seems to me that the Ukrainian labor market is now at the point of rethinking the role of wages in the efficiency of the enterprise,” said Marchenko.
“The only way to make the work meaningful for employees is to make the reward meaningful.”
Since 2015 vacancies have tripled, according to the PROHR analytical platform, but this has not been matched by the number of job seekers, so job seekers can shop around for the best offer. The number of job refusals doubled in 2017, while salaries increased by 25 percent. Compared to this time last year, headhunters have seen an increase of more than 30 percent in requests from employers.
The shortage of candidates is so severe that employers and recruiters often complain that applicants fresh out of university are asking for salaries of $1,000 a month, which is well above what is commonly offered for entry-level positions in Ukraine — even in the information technology industry.
More experienced candidates have their own set of problems, according to Andrey Krivokorytov, CEO of Brain Source International, a Kyiv-based recruiting agency.
In past years, experienced candidates were often very willing to change jobs if approached by headhunters with a targeted offer. But now, it’s not unusual for an experienced professional to be bombarded by offers from multiple companies. Overwhelmed by the options, many simply choose to remain in their current positions.
This shortage is in large part due to Ukrainians leaving the country for better opportunities abroad. But even foreign countries can’t acquire Ukrainian workers as easily as they used to, because Ukrainians are not leaving the country for the same reasons as before.
In 2014–2015, Ukrainians simply wanted to get out to escape war and economic crisis. Now Ukrainians have greater choices at home and abroad.
Demand for Ukrainian labor and specialists remains strong, but there are fewer people to fill the vacancies. Ukrainian staffing companies that fill vacancies abroad have begun to hire and train inexperienced candidates, and countries such as the Czech Republic and Israel are increasing their quotas for Ukrainian workers, while Poland is taking steps to simplify its work visa application process.
Ukrainian companies are adapting to the new conditions, but aren’t able to solve this issue by increasing wages alone — the market is just too competitive. Instead, they are focusing on perks and working conditions. These include a good corporate culture, transport to and from work, team building and social packages.
Another big motivator is stability. Employers who can convincingly argue that their businesses are likely to weather Ukraine’s recurring economic and political crises will be more attractive, especially to employees with families.
Business also adapts by targeting young people, who compensate for their inexperience with talent and drive. It is less expensive to hire and train an inexperienced candidate than headhunt experienced specialists. he readiness of companies to train new employees has “increased with colossal speed,” according to representatives of the Golden Staff recruiting company. Employers understand that by developing an employee, they are also developing their company.
“The IT business, like any creative business, is about human capital. Therefore, in our company there are special services that help people learn, obtain various certificates, in order (for the company) to be in a leading position,” said Yuriy Antoniuk, the managing director of IT company EPAM Ukraine.
Younger employees are cheaper, but companies still have to make an effort to attract them, especially because they often can’t pay them what they would like.
On average, they want salaries 10–20 percent higher than employers can pay, according to Katerina Kryvoruchenko, head of expert-analytical center Headhunter Ukraine, an online resource for job search and recruitment for more than 66,000 companies.
However, “the most effective teams are ones formed with specialists of different ages, since they can exchange experience,” said Kryvoruchenko.
Businesses take several approaches here. In addition to cultivating “cool” corporate environments, they also offer flexible schedules for students, often stretching to the very the limit of what is feasible. This is highly beneficial for young people, especially in the IT sector, where employees can get real, well-paid work experience while working to obtain degrees or doctorates at the same time. After completing their degrees, these students usually transition to full time at the company they worked at during their studies.
But for some positions, only a highly qualified candidate will do. For these, companies often turn to specialized headhunting agencies, which are seeing a boom in demand. Most large companies now allocate part of their budget to head- hunting services, according to Prohr.com, in addition to hiring experienced HR to retain people. Essentially, they are adopting a more Western model, to compete with Western companies.
But even with all the efforts Ukrainian businesses are making to adapt, Krivokorytov of Brain Source International expects the labor shortage will only get more severe.
“This is going to challenge lots of businesses. And I think for some this could be a fatal factor… only the best businesses will survive.”
Employers who can convincingly argue that their businesses are likely to weather Ukraine's recurring economic and political crises will be more attractive, especially to employees with families.
People attend the Kyiv Post Employment Fair in Ukrainian House in Kyiv on March 31. (Volodymyr Petrov)
Human resources specialists speak with visitors at the Kyiv Post Employment Fair in Ukrainian House in Kyiv on Sept. 16. (Oleg Petrasiuk)
More and more of Ukraine's best and brightest are opting to move abroad for study and work, with the number of young people leaving the country doubling in recentyears.