Ukraine’s Outflow of Workers: Why The Crisis is Only Deepening

Deutsche Welle Ukrainian service reports…

Even though Ukrainian firms are trying to keep their workers, they are filling the ranks of labour migrants. And higher salaries are not the only impulse that drives them.

Not even favourable location, where there aren’t any other large firms, not even increase in salary, not even bonuses for workers saved a firm with German investment ,the Private limited company “Elektrokontakt Ukrayina”, in the Lvov region, from the lack of workers. The factory of 2.5 thousand workers makes electrical equipment for German cars. The number of orders the firm receives is constantly growing but the number of workers, especially with the beginning of spring, is on the contrary dropping.

The director of HR of the company Roman Kuybida explains:

“Abroad, seasonal works begin and workers often go there to make money. After the season is over they come back, and the majority wants to work for our firm. Their main argument is usually salary, which is higher over there than in Ukraine.”

To keep workers, the factory constantly improves upon the conditions of work, in particular they increase the salary. The median salary is now 9.5 thousand HRN for the manufacturing personnel. Apart from that, the workers are being offered opportunity for career growth, official employment, free healthcare, transport to work, cheap meals, and so on.

Kuybida continues:

“The shift is eight hours in our factory, safe conditions for work. In Poland, to receive a decent salary, for instance twice that as in Ukraine, one ought to work 12 hours per day.”

Why Ukrainians are leaving for abroad

Millions of Ukrainians are working abroad. We do not have exact statistics as to the number of Ukrainians who became labour migrants. The counting is complicated by the fact that many people work illegally, or on seasonal basis. But this trend continues even now. In September, the Minister of Foreign Affairs, Pavlo Klimkin estimated the volume of labour migration out of Ukraine could be million persons per year.

The fact of significant outflow of workers from Ukrainian firms was also mentioned at the Federation of Ukrainian employers. The director of the federation, Ruslan Illichov says:

“The staff shortage crisis caused by the outflow of workers abroad is the result of a badly thought out policy which was conducted in the country for years. Ukraine was built up as a resource exporting country. In such countries where industries with low added value are developed, there cannot be high salaries.”

According to him, Ukrainian employers no longer have the reserves to further increase salaries. The reason he says is the increase of financial burden on business, in particular the growth of tariffs, by 30% the tariff on gas in September-October.

Ruslan Illichov asks rhetorically:

“We are now calculating a yearly plan of production. We are including the cost of wages, energy, and other expenses. And suddenly the state increases the tariff by 30%. What should as entrepreneur do? How can I plan to increase the salary under these conditions?” 

The experience of the Lvov region

In Lvov region they hoped that the increase in wages by employers would be stimulated by the arrival of new investors.

The head of Lvov Region State Administration, Oleh Synyotka said:

“Competition between firms would automatically lead to increases in salary.”

In 2017, the Lvov region even took sixth place in Ukraine as to the amount of investments received. But а jump in salaries hasn’t been felt. The median salary in the region is 8415 HRN, slightly lower than median Ukrainian salary.

The government of the Lvov region has recently decided to complicate life to agencies that search employment for Ukrainians abroad. According to the politicians, the activity of these agencies is one of the main reasons behind outflow of workers abroad.

In September, the head of administration suggested at a meeting to restrict advertisement to such businesses but has rejected this idea in an interview with DW.

“We cannot prohibit a company, which does not break the law from advertising. That’s illegal. I am just saying that we shouldn’t support activity which is detrimental to the state. Moreover, if there are violations in this business, the state ought to react to such violations. There cannot be cases that a company which engages in the export of people has no license. That’s why we have directed a submission to Ministry of Social Policy to inspect these companies.”  

The head of All Ukrainian Association of International Employment Companies Basil’ Voskoboinyk doubts that such an initiative can influence the flow of labour.

“According to data of a sociological research which we have ordered from the sociological group “Rating”, 59 percent of Ukrainians look for job abroad through relatives, friends or colleagues. It is therefore overstated that taking down work agencies would decrease the flow of migrants abroad.” 

Although, he acknowledges that plenty of scammers without a license work on the market. In his opinion, if as the result of inspections only legal recruiting agencies remain, this will be of benefit because people will travel to real employers.

The salary is not the only impulse

However, Ukrainians are leaving not only for higher salaries as we were reminder in the Federation of Employers. According to a study which they ordered last year, 40% of labour migrants polled that apart from salary they have other reasons to leave the country, that is instability in the country, lack of fair social policy, [lack of] security, poorly developed healthcare.

Ruslan Illichov expalins:

“Today there are cases where absolutely competitive salary, comparable to Polish is offered. But the people are still leaving because they do not see a future here. It’s politics, which does not depend upon employers.”

Oleh Synyutka also admits that it is not just the salary which is the reason behind migration of Ukrainians. However he gives also different arguments:

“Very often, the people are fleeing their personal problems, from [their] responsibilities. They find it easier to be far away, to once per month send money to [their] families, and to think that they have done their duty to [their] families this way. Therefore it is necessary to instill family values. And that is a collective task of family, church and society.” 

***

Earlier this website published the words of Olga Pishchulina from the Razumkov centre, who said Ukraine is fast losing her human capital.