Russia’s full-scale war against Ukraine has caused unprecedented changes in the labour market. Mass migration, mobilisation, and displacement of the population have led to an acute shortage of staff, increased structural unemployment and the need to retrain a large part of the population. The government and international partners are actively working to address these issues by implementing employment and human capital development programmes. However, the complexity of the situation lies in the simultaneous existence of a shortage of skilled personnel and high unemployment, which requires innovative solutions and long-term strategies.
HMH recounts the main points of the research conducted by the independent analytical platform VOX Ukraine.
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Staff shortage: loss of qualified specialists
One of the biggest challenges is the loss of a large part of the skilled labour force. According to UN estimates, 6.7 million Ukrainians have moved abroad, including 1.7 million who were employed before the full-scale invasion. These are mostly women of working age and children. Many of them have found work abroad and do not plan to return to Ukraine in the near future.
The war also led to changes in the structure of labour demand. The need for specialists in defence, security, logistics and medicine has increased. At the same time, some industries, such as tourism and hospitality, are experiencing a decline. This creates additional difficulties for people who lost their jobs due to the war.
Structural unemployment: a mismatch between skills and market demands
The high unemployment rate, which the NBU estimates at 14% in 2024, is indicative of its structural nature. This means that the skills and qualifications of the unemployed do not meet the requirements of employers. Many people who lost their jobs due to the war do not have sufficient qualifications or experience in areas of demand.
The problem of structural unemployment is exacerbated by the fact that many IDPs are unable to find work in their new places of residence. They face discrimination, lack of information about vacancies and limited access to educational and retraining programmes.
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The role of women, veterans, and people with disabilities in the labour market
The war has significantly changed the role of women in the labour market. They have become more active in looking for work and starting their own businesses. The number of women serving in the Armed Forces of Ukraine has increased. This demonstrates their growing economic independence and desire to be active participants in society.
The return of veterans from the frontline and the increasing number of people with war-related disabilities create new challenges for the labour market. These categories of people need special support and reintegration programmes to help them find jobs and adapt to civilian life.
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Long-term strategies
The government of Ukraine is aware of the complexity of the labour market problems caused by the war and is developing long-term strategies to address them comprehensively. These strategies cover a variety of aspects — from fertility promotion to modernising the education system — and aim to create conditions for sustainable human capital development and economic growth in the post-war period.
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The key strategies include the following:
1. Demographic Development Strategy until 2040.
This strategy aims to overcome the demographic crisis that has been exacerbated by the war. It includes a set of measures aimed at increasing birth rates, reducing mortality and attracting migrants.
- Support for families with children: creating favourable conditions for the birth and upbringing of children, expanding the network of preschool educational institutions, ensuring access to quality medical care for mothers and children.
- Improving the quality of medical care: modernising the medical infrastructure, introducing modern treatment technologies, and upgrading the skills of medical professionals.
- Attracting migrants: creating attractive conditions for foreign specialists, simplifying the procedure for obtaining a residence and work permit in Ukraine.
- Development of territories: creation of new jobs in the regions, infrastructure development, improvement of living standards in rural areas.
2. Modernisation of the State Employment Service (SES):
The PES should become an effective instrument of state labour market policy. To this end, it is planned to modernise it, which provides for:
- Transition to a service-oriented model: The PES should become a reliable partner for job seekers and employers, providing them with quality employment, career guidance, retraining and entrepreneurship support services.
- Establishing a network of partnerships: cooperation with training companies, recruitment agencies, NGOs and other stakeholders to improve the effectiveness of SES services.
- Implementation of modern technologies: use of information systems and online platforms to automate processes, improve access to information and provide services remotely.
- Developing the analytical function: collecting and analysing labour market data to forecast the needs of the economy and develop effective employment programmes.
3. Reform of the vocational education system:
The vocational education system should be flexible and adaptive to changes in the labour market. The reform envisages:
- Adaptation of educational programmes to the requirements of the labour market: updating the content of training, introducing new specialities focused on the needs of the modern economy.
- Improving the quality of professional training: involvement of practitioners with experience in the relevant industries in the educational process, use of modern teaching technologies.
- Development of dual education: combining theoretical training with practical training at enterprises, which will allow graduates to adapt more quickly to the requirements of employers.
- Creating a system of lifelong learning: providing opportunities for professional development and retraining throughout life.
The implementation of these long-term strategies is an important step towards creating an efficient and competitive labour market in Ukraine. This will help ensure economic growth, improve living standards and strengthen social stability in the country.
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