The Russian labor market is in crisis – what should HR departments do?
The Russian labor market is currently experiencing a crisis and HR departments constantly face new challenges. In order to effectively organize the work of the HR department in the current turbulent conditions, it is necessary to realistically assess the situation with personnel that has developed in Russia. An unprecedented personnel shortage is growing under the influence of several inevitable factors. The main one is the demographic hole, which was a consequence of the difficult economic and political events of the 90s and 2000s. The string of black swans that have emerged since 2020 has put recruiters and HR professionals in an even more difficult position.
As a result, the dynamics of supply and demand in the labor market continues to set anti-records – the gap between them is approaching a critical point. Thus, according to hh.ru (Russia’s largest vacancies website), at the end of August 2023 the ratio of active resumes to open vacancies was only 3.4 points. This is a clear indicator of a tougher labor market than ever before, with high competition for personnel. Against the backdrop of a rapid increase in the number of vacancies since the beginning of this year, the increase in resumes is not enough to meet the growing need for workers. Thus, according to hh.ru, in
August 2023, 45% more vacancies were published than in the same month last year. But the dynamics of resumes for the year is negative; their number decreased by 3% compared to August 2022.
According to statistics from hh.ru, a critical situation with personnel shortages has developed in the professional areas most in demand among employers, where the most vacancies are posted: sales, working staff, production, construction, transport, retail. Here there are only 1.7 – 2.5 resumes per vacancy. Another problematic professional area is IT, where at first glance there are quite a lot of people willing to find a job. Upon closer examination, hh.ru experts found that there are too many beginning specialists in IT ( hh-index 15.5), a sufficient number of resumes for middle-level positions ( hh-index 5.7), but the share of senior specialists is catastrophically small: The hh index for them is only 0.7 points. Against this background, the inevitable is happening: rising wages and increasing personnel costs in general, from recruiting to retention and motivation.
In the future, tension in the labor market will only increase – the numbers show this. As Rosstat’s demographic forecast shows, there is yet another dip ahead in the share of the working-age population. The nation is aging and the number of employees aged 20–29, traditionally popular with employers, is rapidly declining. This means that there is nowhere to expect a miracle, difficulties with personnel are a long-term phenomenon and it will not be possible to wait them out. This situation leads to a difficult but necessary conclusion: the field of personnel management is facing an inevitable transformation. But in which direction should we move to find solutions that really work?
One direction that clearly will bring a relief to this crisis will be an increase of international recruitment. By tapping into labor markets outside of Russia, it will be possible to increase supply to meet the growing demand.
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