One of the socio-economic consequences of Russia's full-scale invasion is the exacerbation of the labor shortage problem in the Ukrainian labor market, particularly in skilled trades. According to recent studies [1], 74% of surveyed employers noted a current labor shortage (compared to 53% in 2023). This problem is indirectly evidenced by increasing reports in Ukrainian media about enterprises hiring migrant workers [2].
The current military-political situation in the country is one of the most significant factors affecting regional labor markets. Active combat operations have led to people fleeing abroad (especially in the early days of the invasion) and necessitated mobilization measures to counter the enemy. The labor shortage is typical not only for frontline and geographically close areas to the combat zone but also for so-called "rear regions," indicating a complex problem.
For example, on April 4, 2024, an online meeting titled "Vocational Education: Training Opportunities and Business Needs" was held within the "Dialogue between Government and Business" platform. During the meeting, industrial enterprises in the Transcarpathian region highlighted a shortage of skilled labor (trades) and the inadequate alignment of vocational training programs with current labor market requirements. The issue of labor market development under conditions of workforce shortages was a central topic at the Second International Congress of the Coordination Platform "Interaction."
Volodymyr Khymynets, Head of the Western Region Research Sector at NISS and Doctor of Economics, noted an additional factor affecting the labor market: the relocation of enterprises to the Transcarpathian region (as well as other rear regions) with specializations not typical for the region. The local labor market and the network of educational institutions (both vocational and higher education) do not yet have the capacity to meet the needs of relocated enterprises. A notable example is the "Kramatorsk Heavy Machine Tool Plant," which requires skilled workers.
In these circumstances, there is an increased need for educational institutions to update existing and develop new educational programs tailored to the current regional labor market requirements. Critical to improving the quality of training for skilled workers is the development of public-private partnerships, involving employers in upgrading the material and technical base of educational institutions (e.g., CNC machines for training purposes) and organizing internships for teachers and instructors at enterprises. However, a significant challenge to the development of the vocational education and training system is the persistent stereotype of perceiving skilled trades as non-prestigious.
Addressing the labor shortage issue in the regions requires a comprehensive approach, including improving the educational component and enhancing cooperation and communication between employers and educational institutions. Potential measures to achieve these goals include:
Promoting dual education, where students from vocational education institutions undertake internships at relevant enterprises, including relocated ones, alongside classroom learning. This partnership between vocational institutions and businesses (potential employers) will help graduates acquire necessary skills and competencies and encourage businesses to invest in the educational infrastructure.
Attracting international donor funds to update the material and technical base of vocational and higher education institutions and develop new educational programs to improve education quality. Effectively utilizing the expertise of regional development agencies and project managers' associations in writing grant project proposals and preparing applications for cross-border cooperation programs is crucial.
Developing short-term (2-4 weeks) retraining/upskilling programs for workers, with employer involvement.
Another potential solution, which may intuitively seem unpromising, is attracting qualified migrants (including from geographically close regions of EU countries) to temporarily fill in-demand vacancies. These issues were discussed at the Ukrainian-Slovak Round Table on Regional Labor Market Development on June 20, 2024, in Uzhhorod. The event, organized by the Transcarpathian Regional Development Agency and the National Institute for Strategic Studies, involved Slovak and Ukrainian enterprise leaders (including relocated ones), representatives of the Uzhhorod City Council, the State Migration Service, experts, and academics. During the discussion, representatives of relocated Ukrainian enterprises noted that they could offer competitive salaries ranging from 40,000 to 80,000 UAH or about 1,000 to 2,000 USD, which could serve as an additional motivating factor for migrants (with appropriate informational support and recruitment campaigns).
It is also necessary to improve public awareness in the region about employment opportunities and establish effective interaction among executive authorities, local governments, businesses, employment services, educational institutions, and the expert community to determine the region's labor needs and organize vocational training and retraining according to economic needs.
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[1] The labor market research of Ukraine conducted by the European Business Association (in Ukrainian). URL: https://eba.com.ua/try-chverti-robotodavtsiv-vidchuvayut-defitsyt-kadri…;
[2] The labor shortage in construction is up to 40%. Ukrainian developers are starting to hire migrant workers (in Ukrainian). URL: https://forbes.ua/company/defitsit-kadriv-u-budivnitstvi-do-40-ukrainsk…
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