Economic

From blackouts to demographic crisis: what affects employment in Ukraine

Forecasting – especially long-term – in conditions of uncertainty, is like guessing on coffee grounds. In particular, the situation on the labor market depends not only from current trends, but also from the challenges that still await us.

However, the analysis of changes in the number of vacancies on the popular job search platforms robota.ua and work.ua shows similar trends throughout the year. The general dynamics of vacancies is repetitive: at the beginning of the year, activity is low, but in the spring, due to the revival of business processes, there is an upswing. In the summer, there is a small decrease again, which is replaced by an increase in the number of offers in the autumn. From the middle of November, vacancies begin to decrease, because some companies postpone the active search for personnel until the end of the winter holidays. Although microtrends such as blackout periods may occur every year, they generally do not fundamentally change the picture of the labor market.

Regarding this year’s forecasts, if there are no significant changes in global trends, the situation on the labor market will probably develop according to last year’s scenario. At the same time, we can expect an increase in the number of vacancies, although this does not always mean the appearance of new jobs.

Some of them will appear due to a change in the demographic situation. Another migration wave last year led to an increase in the number of open vacancies. According to the data The opendatabase, the number of Ukrainians who left the country and did not return increased by 3.3 times compared to 2023. If in 2023 this indicator was 134 thousand, then in 2024 – 443 thousand people.

In addition to emigration, the emergence of vacancies is affected by mobilization, because companies are forced to look for replacements for employees who unexpectedly fall from the regular schedule. At the same time, there are also vacancies related to the creation of new jobs on the market. For example, last year by the number of vacancies led retail companies, offering thousands of new jobs: “Fora” – about 4 thousand, “ATB” and “Aurora” – 3.5 thousand each, “Silpo” – approximately 3.2 thousand vacancies per year.

The impact of the global economy on the domestic labor market

Ukraine, as a part of the global economic puzzle, feels the influence of international crises, sanctions and geopolitical changes. These developments shape the country’s economic landscape and directly affect employment in key sectors: IT, manufacturing, logistics and retail.

The Ukrainian IT industry is well known in the world, but economic downturns force Western companies to cut costs and reduce the number of outsourcing orders. However, sanctions against Russia open new opportunities for Ukrainian developers, especially in the fields of cyber security and financial technologies. The devaluation of the hryvnia makes Ukrainian services cheaper, but political instability can scare away customers.

It so happened that the Ukrainian industry is export- and import-dependent. Sanctions and trade restrictions can create problems, for example, stopping the modernization of factories due to restrictions on the supply of equipment from the EU. During the global financial crisis of 2008-2009, the Ukrainian economy suffered significantly, and this negatively affected industry and employment. However, the transfer of production from Asia to Europe can be a chance for Ukraine to attract new investments and create jobs.

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Crises in global logistics such as the blockage of the Suez Canal in 2021, show, how vulnerable international transport routes can be. For Ukraine, this means that it is necessary to develop alternative ways of delivering goods. Thus, the blockade of the Black Sea ports during the war forces the use of rail and road routes through the western borders. This creates a demand for logistics specialists, but also requires a lot of investment in infrastructure.

What professions will be most in demand in 2025

The shortage of personnel is felt in many branches of the domestic economy. In accordance with survey of the Ministry of Economy, 2/3 of employers cited mobilization as the key reason for the lack of qualified workers, and 54% pointed to migration processes. There is a particularly acute shortage of personnel in the fields of protection and security, labor specialties, and medicine.

Continues to grow demand for qualified IT specialists – developers, cyber security specialists, big data analysts and artificial intelligence experts. According to forecasts, these professions will remain among the most in demand in the current year.

Due to changes in demographics and the need for quality medical care, the demand for medical professionals remains stable. Although technology is increasingly used in education, it remains relevant need in qualified teachers.

It remains high demand for skilled workers – builders, fitters, mechanics and electricians. This is due to the need to restore the infrastructure and the shortage of personnel in the production sector.

At the same time, office professions remain in demand, primarily in the IT and administrative sectors. Thus, the balance between labor and office specialties is gradually equalizing, reflecting the needs of the modern economy.

Businesses and employers are significantly affected by the mobilization processes in Ukraine, creating a number of challenges related to personnel shortages and the need to adapt to new conditions. Mobilization led to to a significant reduction in the workforce. According to the National Bank of Ukraine, the workforce in the 15-70 age group at the beginning of last year decreased by more than a quarter compared to 2021. This reduction is due to both mobilization and population migration.

Last year in Ukraine significantly grew up the number of vacancies for remote work by 31%. However, the demand among those looking for such jobs decreased slightly – by 3%. The average salary for remote work was UAH 19,100, which is 16% more than in 2023.

In March 2024, robota.ua data showed, that the number of telecommuting vacancies increased by 39% compared to February 2022. The largest growth was in Kyiv (by 96%), Kharkiv (by 68%), Lviv (by 35%), Odesa (by 34%) and Dnipro (by 16%).

Ukrainian specialists, especially in IT, actively compete for remote work on the international market. They are attractive to foreign employers due to their high qualifications and moderate salary expectations. However, competition with highly qualified foreign specialists requires our compatriots to constantly improve their skills and adapt to international standards.

Should we expect an increase or decrease in salaries and how the exchange rate affects salaries and living standards

In 2025, the average salary in Ukraine will be grow up from 21.8 thousand UAH up to 24.3 thousand UAH, which is an annual increase of 10.5%. But due to inflation of 9.5%, the real increase in wages will be only about 1%. Average salary last year grew up by 13% and reached UAH 20,985. The largest growth was in the fields of information technology, finance and construction.

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It is obvious that exchange rate fluctuations significantly affect the domestic economy of Ukraine. When the dollar strengthens, imported goods and services become more expensive, which reduces the purchasing power of people with hryvnia incomes. For example, in 2021, the minimum wage was UAH 6,000, which was approximately $220. In 2025, with a minimum wage of UAH 8,000 and the projected exchange rate, it will be around $178, which shows a decrease in real purchasing power.

Will Ukrainians continue to leave in 2025

This year is expected continuation of migration processes among Ukrainians. According to forecasts of the National Bank of Ukraine, about 200,000 citizens may go abroad during the year due to security issues, power outages and general deterioration of the quality of life.

At the same time, the government of Ukraine initiates programs to facilitate the return of citizens. In particular, at the beginning of 2025 is planned launch of a pilot project for the return of Ukrainians from Germany, which involves the creation of support centers for reintegration.

Simultaneously, according to survey data, every fifth Ukrainian is considering the possibility of emigrating after the end of the war, especially young people aged 18-29 (33%). The main destination for moving is Poland.

Adaptation of Ukrainian business to the challenges of mobilization, legislative and tax initiatives to support the employment of veterans

To overcome the shortage of personnel, domestic enterprises implement various strategies. In particular, women, teenagers, students and pensioners are actively involved in the work. For example, in the field of transport, drivers of trucks and public transport are more and more common women work.
The war forced Ukrainian companies to look for ways reduce dependence on people. The development of AI and automation is gradually leading to the disappearance of some professions. According to the World Economic Forum, by 2030 more than 20% of existing jobs will change or disappear due to automation. At greatest risk are: postal workers, secretaries, payroll specialists, graphic designers and lawyers.

Automation is changing the structure of employment, reducing the need for routine and physical work and increasing the demand for highly skilled professionals. More IT specialists, engineers, data analysts and other professions related to the development, implementation and maintenance of automated systems are needed. This means that employees must constantly improve their skills and adapt to new technologies.

Some businesses are also pushing for legislative changes that would allow book critical personnel from mobilization or introduce alternative mechanisms to support the army, such as the payment of a special military levy.

Soon in Ukraine implementation is planned a number of legislative initiatives to support employment and stimulate business. The Ukrainian government has allocated 6.3 billion hryvnias for support and training of job seekers, reform of Vocational Education Centers and cooperation with business.

To help war veterans with employment and post-war adaptation, in the Verkhovna Rada registered the draft law. It provides that employers will be obliged to create jobs for war veterans, including special jobs, and provide them with other social and economic guarantees.

To encourage employers to hire war veterans draft law has been developed. It provides that businesses where 60% of the employees are veterans will be exempt from taxes. This should create additional incentives for enterprises to actively employ veterans.

Tetyana Viktorova

 

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