Seasonally adjusted unemployment rates reported by Eurostat in July 2020 across CEE were the lowest in the Czech Republic at 2%, followed by Poland at 3.2%. Rates of below 5% were also reported in Bulgaria, Romania and Slovenia. At the same time, salaries have increased, in some years, reaching double digit growth. Candidates have started to become aware of their value on the scarce labor market and have become more selective in terms of their future employers. With numerous possibilities available, even though the salary remains to be the main selection criteria, other factors have started to play an important role. These include the company’s reputation on the market, good working conditions and atmosphere, career progression opportunities and work-life balance.
Skilled, blue-collar candidates remain the biggest challenge in terms of recruitment for the production and logistics industries. After the fall of the vocational school system in most of the countries, the availability of skilled employees is slowly growing thanks to the efforts of employers, who train their personnel, on a regular basis to ensure production continuity. There is also a relentless need for engineering and R&D roles.
The COVID-19 pandemic has had and continues to have an impact on labour markets. Production stoppages have forced companies to reorganize their workforces. Although a reduction of part of the personnel might seem like the quickest solution to cut costs, most of the companies were hesitant to do so, having in mind the effort and funds invested in building up their teams. Instead, reductions in salaries and hours worked, asking employees to use up their outstanding holidays and freezing bonus systems were introduced. Many companies stopped using contingent workforce and utilizing the advantage of flexibility in such contracts. As a result, and rather surprisingly for many, the pool of available candidates didn’t increase as much as one would expect and unemployment rates went up but remained relatively steady. Candidates coming from different industries also hit hard by the pandemic, like the HoReCa sector, were not interested in taking jobs in production or logistics. There were also other industries that had growing needs for personnel during that time, like pharmaceutics, medical equipment and e-commerce.
Currently, as the situation is slowly improving, we are again observing limited availability of the most desired positions on the market. However, companies are rather rebuilding their workforce than increasing headcount, still having in mind the possibility of a second wave of COVID-19. As a result, we predict that the temporary workforce will become an even more popular solution on the market. The pandemic also made further changes to the way employees look at their future employers. In the near future, we expect that job security and a company’s financial stability will close the gap to the salary and benefits in the job selection criteria.
Payments in Ukraine
At the beginning of the year, many companies conducted planned reviews of white-collar salaries. However, companies that were scheduled to undergo the review in March-April 2020 were forced to keep their wages at the level of the end of 2019 due to the quarantine and subsequent financial instability. The desire for employees to improve their financial situation continues to be the most common motivator for changing jobs.
Blue-collar salaries have increased by 10-15% compared to the previous year. The main reason was the growth of inflation in the country and increase of the minimum wage.
In the logistics sector, the following specialists are in demand: transport logistics specialists with a knowledge of foreign language (English) and supply planners. In the production sector, the most sought after positions are: technical personnel (unskilled and experienced production operators, forklift operators, electricians, mechanics), project managers (modernization of production lines, introduction of Lean Production projects) production shift chiefs, occupational health and safety engineers with onsite experience and production planners.
Knowledge of a foreign language (in particular, English) is becoming compulsory for a number of vacancies. There is also demand for management-level staff, who are able to find non-standard solutions to business problems, especially in the area of non-material staff motivation.
At the beginning of the quarantine (March 2020), the labour market frozeand no one was in a hurry to change jobs or hire new employees. Some industries had to send workers on vacation and many people had to return from work in EU countries.
The demand for employees in logistics companies increased sharply due to the growth of online orders. Couriers and drivers were especially in higher demand. Strategic manufacturing enterprises (FMCG sector and raw materials) continued to operate as usual.
Currently, the market is stabilizing with international manufacturing companies, large and medium-sized local companies continuing to work. Small-scale industries were forced to cut staff or even suspend their activities. Producers of goods for export have also been hit hard since their performance is closely tied to the political and economic situation of the importing countries.
The eastern and central regions are characterized by the highest availability of white-collar workers, while they are less typical for Vinnytsia, Khmelnytsky, Kherson and Nikolaev regions. Blue-collar workers are more highly available in the Kyiv, Kharkov, Dnipro and Odessa regions. The lowest level of blue-collar availability is observed in the Cherkasy, Sumy, Ivano-Frankivsk and Lutsk regions.
It is currently difficult to predict the situation for white-collar workers. as many companies have stopped hiring new employees until the end of 2020. All major reductions, in a number of companies, have already taken place or are currently in progress. As for blue-collar employees, a shortage of personnel is expected in the production sector due to the fact that there is an opportunity to travel to Germany, Lithuania and Estonia for higher wages.