Intensifying staff shortage: labour market review
The number of official jobless people in the republic grows more and more
The unemployment rate has been reducing in Tatarstan since 2020 when it reached record-high figures in May amid anti-COVID-19 restrictions and the closure of commercial enterprises. The officially registered unemployment rate in the republic in May 2023 is record-low — 0,31%. Read in Realnoe Vremya’s analytic staff what this means for the economy and labour market and how topical the staff shortage issue is.
How did unemployment reduce in Tatarstan?
The registered unemployment rate in Tatarstan in May 2023 reached 0,31% — the lowest figure in the last four years. To compare, in May 2020, the unemployment rate was 2.9% — nearly 90% above today’s level. Unemployment has been reducing in Tatarstan since then — to 1,06% in May 2021, to 0,52% in May 2022.
The unemployment rate in the republic varies from district to district. The highest rate is registered in May 2023 in Nizhnekamsk, Sarmanovo and Saba districts. The top 10 districts with the highest unemployment rate also includes Kazan, Verkhny Uslov, Muslyumovo, Yelabuga, Bavly, Cheremshan and Vysokaya Gora districts.
The lowest rate is noted in Laishevo, Menzelinsk, Yutazy, Buinsk, Zainsk, Zelenodolsk, Rybnaya Sloboda, Leninogorsk, Aktanysh and Alkeyevsk districts.
Negative factor for the economy
“Statistical figures quite accurately illustrate the true state of affairs in the labour market because the number of jobless people really decreases,” head of RT-Invest and economist Rustem Shayakhmetov comments on the official numbers.“However, the number of officially registered jobless people in most cases doesn’t demonstrate the real situation in the labour market because not all jobless people are registered in official agencies, this is why one shouldn’t make a conclusion resting on these indicators.”
Consequences of the demographic situation in the 90s is the main reason for the workforce deficit in Russia. The collapse in the demographic policy led to a significant reduction in the share of a younger generation in the age pattern of the Russian population.
“If the share of the population from 20 to 35 years was 24.5% in 2012, in 2022, it was 18.3%. The share of the population from 20 to 24 years (the active age when people start working) was 4.7% last year, the population from 60 to 64 (when people retire) totalled 7.1%,” Shayakhmetov cited numbers. “Only 66% of the shortage of workers retiring can be filled thanks to the main population. As a result, now we annually have a deficit of 600,000 rubles. During the pre-pandemic period, it was compensated by labour migration.”
The deficit of workforce in developed countries is fill thanks to migrants and improvements in the demographic policy. New birth rate stimulation measures in Germany has raised the number of new-borns by 15-20% in the last year. Now the birth rate in the FRG is higher than in the Russian Federation. The amount of labour migrants from other countries has notably fallen today. This has to do with a fall in their real incomes in Russia as well as reorientation of labour migrant traffic to Arab and Western European countries and Turkey that have an opportunity of higher salaries than in our country.
“Effective mechanisms of raising the birth rate as strategic measures aimed to improve the stability of the country’s socio-economic development in the long run aren’t used. This will create an acute deficit of workforce in the Russian Federation in 20-25 years,” the economist forecasts.
The workforce shortage considerably reduces the country’s economic development pace. Also, domestic demand goes down due to the decreasing population, which has an impact on commerce, food consumption, cars and housing development.
Highest staff shortage now
The staff shortage is a fundamental problem of the labour market not only in Tatarstan but also in Russia in general. Over 36,000 job vacancies and 113,500 CVs were posted in the republic in May, notes the press service of hh.ru in the Volga Region. The number of vacancies is lower than CVs, but one should understand that there is such an indicator as competition level — it is calculated as the ratio of the number of active CVs to the number of active vacancies. The competition level (the so-called hh.index) was 3.1 CVs per vacancy in May. In April 2023, the index was higher — 3.5. In April-May 2022, it reached 5.3.
The figure below 3.9 CVs per vacancy is considered the job seeker’s market, that’s to say, a situation when employers compete for workers. The hh.index from 4 to 8 points means healthy competition. Over 8 CVs per vacancy is the employer’s market, job seekers compete for jobs whereas employers can meticulously select employees.
The hh.index has reached its maximum since early 2023, this means the staff shortage is an all-time high now.
There has been a staff deficit for a number of reasons: it is demography (the demographic pit in the 90s and the deficit of youth in the labour market), natural decline and migration flight of the population (according to the Russian Statistics Service, Russia’s population reduced by more than half a million people from early 2022 to December 2022), notes the press service of hh.ru. Also, the partial mobilisation attracts some workforce.
There is going to be a youth shortage because the number of kids under 10 years is now very low. And when they reach the most productive age from a perspective of labour, there is going to be a young workforce shortage again, forecasts hh.ru.
Specialists from the car business are the most deficient specialists in Tatarstan in May — just 1.4 CVs per vacancy. Also, the list of the most deficient staff whose index is below the average in the region’s labour market includes employees from retail trade (1.7), skilled staff (1.9), sales and client service specialists (2.4), construction and real estate (2.5), production and service (2.7), transport, logistics and transportation (2.9).
As for IT specialists whose is deficit is often discussed, the situation is ambiguous here: the number of vacancies doesn’t increase manifolds while the number of job seekers rises thanks to juniors, including those who did three-month courses (there are even CVs among seekers under 18 years). There are still few middle and senior specialists, but as a result, we don’t see a an IT staff deficit in Tatarstan, commented the press service of hh.ru.
The pandemic and remote working changed the labour market
Russian Minister of Labour and Social Protection Anton Kotyakov said in June 2023 that the registered unemployment rate of 3.3% was the all-time low in Russia’s contemporary history. This is mainly conditioned by the fact that now there are more opportunities of employment regardless of citizens’ place of residence and schedule. Employers often offer part-time vacancies — their number has risen 2.5 times across the country in June compared to the same period last year. The amount of remote work offers has doubled,” commented Nail Khafizov, regional representative of Avito Jobs in the Republic of Tatarstan.
According to Khafizov, taxi drivers and road workers are the most active in job hunting in Tatarstan. The number of applications for the latter vacancy is conditioned by the start of the season in construction, particularly in active work phases on the highway from Kazan to Yekaterinburg and the M12 road from Moscow via Nizhny Novgorod to Kazan. HR managers turned out to be first among office vacancies from a perspective of job seeking activity, IT specialists are second.
The most popular vacancies in Tatarstan in June 2023 is a taxi driver and salesperson as well as sales manager, administrator and client service manager among office jobs.