SERGEY TSUKHLO: “35% OF INDUSTRIAL ENTERPRISES IN RUSSIA FACE STAFFING SHORTAGE

The shortage of workers in the Russian industry broke another record: thus, in April, 35% of the enterprises surveyed by the Gaidar Institute (IEP) reported a shortage of workers. Along with uncertainty, weak ruble and weakening demand, the staffing problem is one of the main factors holding back industrial growth, said Sergey Tsukhlo. “Personnel is a serious and long-term issue, and people are not a resource that you can get in six months,” voiced the economist of the Gaidar Institute.

The Gaidar Institute has been carrying out monthly business surveys of top managers of industrial enterprises since 1992 in accordance with the standards of the European harmonized methodology of the EU and the OECD, which allows comparing the data on Russia with other countries. The questionnaire is asking how enterprises assess their production capacities in connection with the expected changes in demand aiming to evaluate the situation regarding personnel. About 1000 enterprises take part in the surveys.

In April 2023, amid rising output, the worker shortage was 35%, demonstrating “the absolute record since 1996,” the economist noted. He described the dynamics of staff shortages reflected in IEP surveys since 2022. For example, in January 2022, 26% of businesses reported a shortage of employees; in October 2022, this figure was 33%; and in January 2023, the shortage dropped slightly to 27%.

The issue of personnel is most acute in the light industry. According to Sergey Tsukhlo, companies are “just screaming” about the lack of specialized secondary vocational educational institutions that would train workers in the qualifications they need. “The market after the start of the sanctions war has fantastically vacated, as not only expensive but also mass brands that could have been replaced by products of the Russian light industry have left, however, there is simply no one to produce them,” said the economist.

The press service of the Ministry of Industry and Trade reported that an educational program "Professionalitet" was developed for colleges in the regions. The Ministry proposed “ to create new educational clusters for the real needs of regional industrial enterprises, including specialized, that is, leather, linen and worsted cloth educational clusters.”

Since September 2022, Russian companies' hiring plans are “in the plus,” said Sergey Tsukhlo. In March 2023, according to Rosstat, the unemployment rate was 3.5%. The Gaidar Institute calculates an index of industrial optimism based on surveys of enterprises. It reflects 4 indicators: the actual dynamics of demand, estimates of demand, estimates of stocks of finished products and output plans.

According to Sergey Tsukhlo, the index of industrial optimism shows that Russian industry, despite the start of the special operation and Western sanctions, has not shown a crisis decline. “Nothing comparable to what industrial enterprises experienced in 2020, 2008, 1998 and 1994 has happened,” he said. The expert added that in February 2023, enterprises' optimism returned to pre-crisis levels and consolidated, therefore, enterprises are not experiencing any “particular problems now.”