Since the start of Russia's large-scale invasion in February 2022, the Ukrainian population has decreased by 8 million inhabitants (and even 10 million if we go back to 2014 and the start of the war in Donbass) – or almost a quarter of the inhabitants according to United Nations figures. Among the consequences of this fall in demographics: the country is losing its workforce.
Ukrainian business leaders are distraught, and the country's economy is more than ever on its knees.
Because of the mobilization but also the numerous departures abroad, approximately six out of 10 companies lack workers, figures given by the Ministry of Social Policy: a third of the 11 million workers in the country. before February 2022 no longer works.
Last week, the International Economic Forum was held in kyiv, which brought together representatives of business, government and society to discuss the main economic issues in the country.
This problem is absolutely on everyone's minds, whether we are talking about SMEs, the Tech sector, including large industrial companies or agriculture. The labor shortage affects ALL sectors, and as much or more than bombings or power cuts.
How to replace employees who have gone to the front?
It is very difficult for Ukrainian companies to replace employees who have gone to the front. Mobilization creates uncertainty.
How do you know if an employee will be at his job the next morning if he is recruited in a brutal manner and sent to training on a military base?
At the international economic forum, Virginie Pironon met the head of an SME, a beer producer which employs around 100 people. His logistics manager was arrested by the army while driving his car and enlisted. Since then, his employer is still looking for a new recruit who would have the same skills.
Consequence of this shortage: the average salary increased by more than 20% in the first quarter of 2024 compared to 2023. And the government estimates that it will even increase from 440 to just over 500 euros by the end of the year.
What solutions?
One of the solutions put in place by the authorities is to exempt certain men who work for strategic companies. kyiv has compiled a list.
On paper, they can thus avoid the mobilization of their staff – up to 50% of the workforce. But in reality, the system remains complex, bureaucratic and excludes small businesses.
In search of more effective solutions, deputies have tabled a bill. It would allow companies to pay a military tax… around 450 euros per worker per month to avoid the front line. If adopted, the project would exempt nearly 900,000 men and bring in around 4.3 billion euros for the army.
But in the country, this proposal is strongly criticized because there could be abuses. People who could afford it could pay bribes to avoid mobilization. The money would then not go to the State… but directly into the pockets of corrupt officials.
