SERGEI TSUKHLO: “CHRONIC SHORTAGE OF PERSONNEL FORCES RUSSIAN INDUSTRY TO PLAN FOR WAGE GROWTH”

The domestic manufacturing industry is expected to grow by around 7% by the end of the year. However, the positive growth trend is overshadowed by a chronic shortage of personnel and the situation is at its worst in manufacturing and light industry. According to the Gaidar Institute, 80% of light industry businesses report a shortage of workers. In addition, according to Rosstat, clothing production is the lowest-paid sector in the Russian Federation. This year, companies have been actively recruiting workers through wage increases and other incentives, however, their financial capacity is limited, which leads to tensions in some and other sectors.

"The chronic shortage of personnel compels the Russian industrial sector to plan a significant increase in wages. In 2023, the leader in terms of these plans was the light industry where 80% of enterprises reported a shortage of workers due to expected changes in demand," follows from the October business survey conducted by the Gaidar Institute.

In other sectors the shortage of personnel in 2023 is more modest: for example, in machine building and chemical industry 43% of firms claim a shortage of workers, in food industry - 27%. "Which enabled these industries to most likely have more reserved plans to raise wages," Sergei Tsukhlo noted in the survey.

However, the issue of wage growth in the light industry remains unresolved, especially in the clothing industry, which is now the lowest paid in Russia, despite attempts to replace foreign brands. Thus, the latest data from Rosstat show that in July the average salary in the Russian Federation amounted to just over Rb71,000 and in clothing manufacturing it was around Rb33,000. So it is not surprising that businesses struggle to find people willing to work for such salaries.