The labor market in Ukraine is suffering from serious transformations. Large-scale flows of forced migrants abroad, mobilization, relocation of the population within the country – all this deepens the crisis in the employment sector and destabilizes the market. Despite the partial adaptation of the economy to wartime conditions, the unemployment rate is still quite high. According to the research agency “Info Sapiens”, by the beginning of 2024, it was 17%. In absolute units, this is 96.1 thousand people. It is significant that 40% of them have a higher education. And this means that such unemployed specialists have certain expectations regarding jobs and functions that they can perform according to the acquired competencies, and they are not ready to take on any, especially “black” work.
Regional imbalance
Since the beginning of the war, the labor market has been recovering little by little. However, its recovery is uneven if you look at this process regionally. By data of the National Institute of Strategic Studies, the number of vacancies is increasing rapidly in Zakarpattia (+155%), Ivano-Frankivsk (+146%), Khmelnytskyi (+125%), Lviv (+123%), Vinnytsia (+120%), Rivne ( + 118%) and Chernivtsi (116%) region.
In terms of the absolute number of job offers, the remaining leaders are: Kyiv (30,913 vacancies), Lviv (8,473), Dnipropetrovsk (8,452), Odesa (5,752), and Kharkiv (3,347) regions]. 63% of all vacancies are concentrated in these areas.
Self-employment is quite common in Ukraine. Compared to the pre-war year 2021, this indicator increased by 7%.
In order to understand the regional specificity of the challenges and needs faced by business in the conditions of war, the Center for Economic Recovery proposed appropriate zoning, distinguishing
Recovery regions
These are the regions that suffered significant losses from the war. There is significant destruction of infrastructure, population declines due to evacuations and displacement, which negatively affects consumer demand as the number of shoppers declines and businesses lose customers.
Auxiliary regions
These are regions that have lost access to maritime exports, which are critical for many types of business. These are blocked ports and routes that were previously used for international trade. Here, business needs to improve logistics chains and economic reorientation to find alternative ways to export and import goods.
Remote regions
These are regions where businesses lack information about development opportunities and capacity for retraining. Although there is less immediate destruction of infrastructure, there are significant economic challenges. In particular, there is unemployment due to the closure of enterprises, insufficient information and resources for the development of new business areas.
Frontline regions
These are regions directly adjacent to the war zone. Constant shelling, destruction of infrastructure, and danger to the lives of residents are observed here. Business is suffering great losses, because the population has decreased significantly due to evacuation, so it is problematic to ensure the stable operation of enterprises.
The statistics of the National Institute of Strategic Studies prove the uneven recovery of regional labor markets. Remote regions show the greatest dynamics, where the number of vacancies in 2024 compared to 2022 increased by 123-155%. On the other hand, the front-line regions hardly develop the labor sphere. In particular, in the Luhansk region, the increase in vacancies is 0.
What does the imbalance in the labor market look like?
This is a situation where there is a certain mismatch between the demand for labor from employers and the supply of labor from employees. It can manifest itself in the form of a shortage or surplus of labor in certain industries, professions or regions.
Our labor market suffers from both problems.
According to the forecast of the International Labor Organization, over the next 10 years, the deficit in the labor market of Ukraine will amount to 8.6 million people. The Ministry of Economy gives a slightly more optimistic forecast – 4.5 million people. Despite the fact that today, approximately 10.5 million people are officially employed.
Such forecasts are easily explained by the crisis demography of our country. According to the Institute of Demography, about 31 million people currently live in Ukraine (in the controlled territory). It is predicted that by the beginning of next year, the population will decrease by another 6 million to 25 million. Indeed, the data World population review look somewhat more encouraging – 37.9 million as of now and 38.8 million in the perspective of 2025. The evaluation methods are different, as are the data, which is why the forecasts are different. The negative forecast of the World population review has a much more distant perspective.
What other demographic features are we talking about? According to Deputy Minister of Social Policy Daria Marchak, there are 1 million people with disabilities living in Ukraine who do not work.
A low birth rate of 0.9 children per woman and a high mortality rate also contribute to the crisis in the labor market in the long term. In particular, men in Ukraine live an average of 10 years less than in European countries.
What is the way out?
At the summit of HR specialists of leading companies of Ukraine held yesterday by the Ministry of Social Policy, a strategy for stabilizing the labor market for the next 15 years was proposed. It states that the theory popular among businesses that the solution to the problem of personnel hunger is possible at the expense of migrants is not viable. First of all, because immigration policy is very expensive. Specialists among migrants need not only to be found, but also to be integrated into Ukrainian society. Instead, the Ministry of Social Policy considers the creation of a barrier-free environment and the involvement of people with disabilities in the labor market to be more promising.
