Page 45 - Russia OUTLOOK 2024

The diminishing labour supply due to the pre-war demographic decline has been further aggravated by the war on the back of a partial mobilisation in September 2022 and a large-scale emigration of especially highly skilled people.
For months the defence-industrial complex syphoning workers away from other industries has been causing problems for the Russian economy. The prioritisation of the war, military mobilisation, the flight of tens of thousands of skilled professionals and workers, and a demographic slump have all resulted in record low unemployment rates.
According to the CBR’s September report
labour productivity
on regional economies, 60% of
companies have experienced labour shortages. The situation is especially bad
in transportation and manufacturing
–
industries that now work around the
clock to serve the state defence order. In addition, according to RosStat,
in Russia dropped by 3.6% against 2022, the biggest
one-year drop since the global economic crisis. This itself could be the
consequence of labour shortages, as companies are now hiring less qualified
workers (often for higher salaries).
Factories in Russia now have their lowest staffing levels since the start of
records in 2020, according to an October report from the Central Bank. The
biggest labour shortages are in industrial production and agriculture. The
situation is such that low unemployment is a drag on the economy, Economic
Development Minister Maxim Reshetnikov said earlier this year.
The extent of labour shortages can be measured by looking at the gap
between supply and demand on the labour market. In October, this gap was
down to 230,000 people, compared with an average of 1.2mn in 2022 and
1.6mn in 2021.
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