Russian officials, businesses, and media have been facing shortages in the labor force across various sectors for over a year. The CEO of Russia’s leading online recruitment platform, HeadHunter, Dmitry Sergienkov, mentioned that the country is likely to deal with a labor deficit for years to come, as the younger workforce cannot replace retirees. Data reveals a significant increase in Russia’s gross labor turnover rate, reaching record levels in recent years.
Russian companies are now offering better conditions to attract new employees, including older job seekers. Real wages are expected to rise significantly in 2024, following a period of stagnation. The pandemic and sanctions have disrupted the labor market, leading to increased demand for workers in specific industries.
In the coming years, the labor market may experience a slowdown in demand for workers as companies adjust their hiring practices. Economists warn that the current surge in wages may not be sustainable in the long term, potentially leading to a decline in real incomes for workers.
What’s Causing the Shortage?
The changing labor demand structure due to pandemic impacts and geopolitical factors has contributed to the current labor shortage in Russia. Companies are struggling to find enough workers, with some industries experiencing heightened demand.
What’s Next?
To address the imbalanced labor market, either the labor supply must increase or demand needs to stabilize. The current wage growth may not be sustainable, especially if not supported by increased labor productivity. Economists predict a gradual adjustment in wages and demand for labor in the near future.