Labour market problems are getting worse: business calls for urgent easing of foreign recruitment, focus on older workers

According to the Employment Service's review, the situation on the unemployment market is slowly stabilising but remains tense. Registered unemployment is still high. Demand for workers is declining, and the supply of jobs is decreasing. According to the Employment Service, this suggests that both employers and workers have adapted to the new circumstances.

„We now have a steady process of a more even mix of both job offers and reentry into the labour market,“ the report says.

However, the number of companies facing staff shortages does not seem to be decreasing. Information from a survey of members of the Vilnius Chamber of Commerce, Industry and Crafts shows that businesses are looking for workers in a wide range of occupations, and labour market tensions are arising in various sectors.

„We would be happy to take on two employees: one as a sales manager and the other as a floor manager. There is a shortage of administrative staff, sales managers and accountants. In addition, we are tired of looking for an electronics engineer, especially with the competition from smaller companies for programmers.

We need engineering specialists in manufacturing – supervisors designers, and we can take on two to three locksmiths at a time. In addition, we are looking for plant operators, forklift truck drivers, electricians, mechanics and support staff“. These and similar calls for workers are reflected in the questionnaire submitted by almost all Chamber members.

„We talk to companies every day, and the main topic in all our conversations today is the shortage of workers. Companies are already calling the situation extreme, and it is only getting worse,“ said Dr Almantas Danilevičius, Director General of the Chamber, sharing the companies' views.

According to the data of the Employment Service, the number of workers in the labour market is rising this year. On 1 January, 176.1 thousand unemployed persons were registered in the country, a slight increase of 0.1% compared to the previous month. However, despite the seemingly large number of people available to fill the labour market, companies are not finding the right workers and professionals.

„We can look at the statistics, which clearly show how fast unemployment fell last year. Registered unemployment in the country on 1 January this year was 10.2%, and at the beginning of 2021, it will be as high as 16.1%. Moreover, in December, jobseekers had 40,100 job offers to choose from, an increase in labour demand of 78.5% compared to the same period in 2020. So it is not surprising that companies are almost no longer finding good, willing professionals on the local market,“ notes Danilevičius.

Sigitas Leonavičius, President of the Vilnius Chamber of Commerce, Industry and Crafts, has noted that the President's Office has already recommended „to address more actively the issue of balancing the supply and demand of labour“ and has proposed, among other measures, to consider „prudent changes in the conditions for the entry of missing workers from third countries culturally related to Lithuania“.

„We also hear proposals from the government, experts, ministries and trade unions increase salaries to find workers. But at the same time, it should be noted that wages in Lithuania are among the fastest-growing in the region. The Bank of Lithuania's survey only confirms that businesses are sharing the income they earn with their employees.

Wages and salaries in the national economy grew by 9.9% in the third quarter of 2021 compared to the same period of the previous year: 10.7% in the private sector and 8.3% in the public sector. Nevertheless, there is a catastrophic shortage of workers, and long-term measures are not saving business today“, says Leonavičius.

Dr Pranas Kiznis, Chairman of the Board of Lietpak and Vice President of the Chamber, confirmed this. „Our company is limiting the acceptance of orders from customers, something it has never done in its 30 years of operation. In a different situation, the company's production volumes could grow by up to 30%. Now, not only the companies but also the Lithuanian budget and the Lithuanian population are losing money because of this, as taxes are being lost“, he explained.

According to Dr Kiznis, there is a particular shortage of highly skilled workers with technical education.

„The current technical level of production processes is very high, which means that we need highly technically qualified workers, and there are no ready-made specialists. Moreover, it takes a year or even longer for a company to train such specialists. All these problems are now becoming the concern of business itself, which is forced to focus its efforts on finding and training employees rather than on creating added value,“ said the Vice-President of the Chamber.

Although Lithuania has seen a record number of job seekers in recent years, Dr Kiznis says no people are willing to work. This is because both European and Lithuanian policies are geared towards unemployment benefits and various incentives.

„When a person calculates what they get when not working and what they can get when working, they make a more favourable and easier decision. However, it is difficult to get them interested in work, even when the average monthly wage is between EUR 1,400 and 1,500, which is increased every year,“ he regrets.

„Focusing on education, vocational training, retraining, greater incentives for the elderly to return to the labour market, and the employment of people with disabilities are all necessary measures to rebalance the labour market. But we will not get results immediately, and some companies are already standing still – businesses have invested in new equipment. But, still, they are not using their production capacity because of a lack of workers.

The only way forward today is to make it easier to recruit foreigners. Germany has solved its labour shortage in its own way, and the UK has flown in workers from other countries after Brexit. If we continue to wait two months to recruit a person, we will have no chance to compete with the Poles,“ said S. Leonavičius, President of the Chamber.

The Council of the Vilnius Chamber of Commerce, Industry and Crafts has asked the authorities to focus more on the shadow economy, which „harbours“ illegal workers and distorts the dynamics of wages paid. It is also necessary to consider more support measures for new businesses and to facilitate tax payments, taking up the good examples of Western countries where tax exemptions are granted mainly at the start of a business.

„If all the vacant positions were filled, which today, according to the statistics, number over 40 000, and if the workers were paid an average wage, the budget could be replenished with almost €300 million a year in income and social security taxes. The government, seeing these figures, should urgently take measures, perhaps following the example of Denmark and other countries, to actively help find the missing workers abroad by offering various discounts and extra money, rather than imposing restrictions. We, business and the state, are competing not only for investment but also for people – specialists – on the international market, so we need to put our shoulders together and work together to find urgent solutions,“ said Mr Leonavičius.

And according to Dr Kiznis, the business could be saved by simplifying the migration policy when bringing in workers (especially those with technical education) from near abroad.

„I would like to point out that we are competing in the global market not only for markets and customers but also for workers. Unfortunately, at the moment, we are losing out to both Poland and other EU countries with our strict procedures for bringing in workers,“ pointed out the Chairman of the Board of Lietpak, noting that the company is currently able to recruit around 70 people.

Due to staff shortages, the Chamber has signed a cooperation agreement with the UT Vilnius Customer Service Department, which aims to implement mutual partnership and cooperation in order to increase the involvement of businesses in sustainable employment in Vilnius County.

„In a time of great tension in the labour market, the joint activities of the Chamber and UT will help businesses, educational institutions and organisations to find solutions to attract suitably qualified employees, encourage employers to pay more attention to older professionals and help them to reintegrate into the labour market,“ says Dr A. Danilevičius.

According to the Director-General of the Chamber, the members of the organisation also support the reform of the Employment Service, which will help to determine the actual number of people who are able and willing to work in the country today, and welcome proposals to facilitate the integration of people with disabilities into the labour market and to increase incentives for older people to re-enter the labour market.

„Systematic dialogue between the Employment Service and employers is one of the critical conditions for sustainable employment. Both job seekers and the unemployed expect job offers that match their expectations. At the same time, employers are inherently looking for employees who will fit into their teams at the lowest possible cost.

We hope that by exchanging information with the Chamber community about the needs and UT services and the opportunities provided to employers to compensate for the costs of integration of new employees, the integration of employees will improve“, says Ms Jurgita Bražinskienė, Head of the Customer Service Department of the Employment Service Vilnius.

In the near future, the Chamber will offer its members timely information and offers from the UT, regular meetings with UT representatives and new joint activities to help businesses find employees and employees find their dream employer.