Ukraine faces labor shortage amid drafting men into army

On May 16, the Ukrainian government approved a new procedure for the conscription of citizens for military service during mobilization and for a special period. Now, on instructions from the Military Commissariat or local military administration, employers have to hand out draft notices to their employees and ensure they are transported to the military commissariat's gathering points. 

These changes led to a range of outcomes: some male employees preferred to go underground and officially resigned from their jobs to avoid mobilization; private enterprises started feeling the pinch of workforce deficits, and the demographic composition of the Ukrainian job market underwent significant shifts in terms of gender and age.

Shortage of personnel in the Ukrainian labor market

According to a study of the Ukrainian labor market by the European Business Association, 74% of Ukrainian employers are experiencing a shortage of staff in 2024, marking a 19% increase compared to last autumn. At the beginning of the full-scale invasion, this was influenced by the moving of millions of working-age women abroad. 

The mobilization of thousands of able-bodied men also led to changes in the structure of the labor market in Ukraine. The number of vacancies has only been growing recently, while the number of job seekers has declined. In April, employers posted 111,095 vacancies on Work.ua, Ukraine's popular job search platform, marking a record high since the start of the full-scale invasion.

The new mobilization law, which came into effect on May 16 was supposed to help fill the ranks of the Armed Forces, but it also led to an even greater shortage of workers at enterprises, which are the backbone of the economy in times of war.

The labor market shortage worsened in May 2024. The lack of able-bodied men and women has become a burden for businesses, both large and small, across Ukraine. For example, the Kyiv Metro recently announced plans to extend train intervals due to the shortage of specialists resulting from migration and mobilization. Similarly, the city of Mykolaiv has already cut back on the number of buses due to the mobilization of drivers.

Jobs with a deferral from mobilization

During mobilization and martial law in Ukraine, certain groups of individuals eligible for military service may be granted deferments from army duty. Reserving individuals eligible for military service entails providing a deferment from mobilization to essential personnel without whom the operations of a company, institution, or organization would be severely compromised. These personnel are allowed to remain in their roles and cannot be mobilized during the deferment period. Reservations are extended to government officials, educators, researchers, employees of critical infrastructure firms, and organizations producing goods for the Ukrainian Armed Forces.

The demand for vacancies that require mobilization reservations has recently increased. Employers on job search platforms usually mention the possibility of getting a reservation. The most commonly mentioned are vacancies for drivers. At the same time, Oleh Risny, head of the Lviv City Employment Center, stated for Espreso that even companies that can reserve workers have problems finding them. "The reservation process is complex, and it takes time. Men are apprehensive that they might be mobilized before the reservation is confirmed", he said.

Shadow business benefits from the new law on mobilization 

Since the government obliged employers to hand out draft notices to their employees, many men have refused to take up formal employment. Some preferred to work unofficially or remotely. This primarily caused problems for the white business that pays taxes. Therefore, shadow business, which offers work without any contracts, found itself in a better position.

"An employer who was previously motivated to hire someone officially is now hesitant due to the risk that the employee may not show up for work," says recruiter Sofiia Papirnyk.

According to Oleh Risny, head of the Lviv City Employment Center, legal businesses are becoming less competitive due to the growing shadow market, where employees often ask not to be officially employed.

Some men started seeking remote employment. Consequently, businesses unable to facilitate remote work find themselves in a challenging position.

Halyna Dziadyk, director of the Lviv Consulting Group, notes the struggle to recruit workers for manufacturing firms. "They are hesitant to hire sales managers because of the extensive city travel involved, not to mention inter-regional or even cross-border travel, as cars are halted at checkpoints", she explains.

Changes in the labor market

Recently, employers have shown a willingness to hire individuals from categories of people they had not previously considered and to adapt jobs to their needs. 

In April, the number of vacancies for individuals with no prior experience increased by 13% compared to March. Students also found it easier to secure employment, with a 15% increase in job offers for them. Additionally, veterans saw a 20% rise in job offers in April. Moreover, the number of job offers for individuals with disabilities increased by 12%, and for pensioners, there was a 16% increase. This is stated in a study by the job search site Work.ua. 

Due to the war, the demographic situation in Ukraine has worsened: the birth rate is falling, the population is aging, and a share of the young working-age population has emigrated abroad. These demographic changes have had a significant impact on the Ukrainian labor market. 

As reported by Forbes, individuals aged 60-65 are opting to stay in the workforce. Many who had previously retired are now returning to work due to the war. This includes pensioners aged 75 and older.

Women in male-dominated industries 

Since the beginning of Russia's full-scale invasion of Ukraine, a new trend has emerged: women are increasingly entering professions that were traditionally dominated by men.

With the latest mobilization law details, this trend of hiring women is expected to continue rising. Throughout Ukraine, there has been a noticeable increase in the number of women taking on roles such as drivers, warehouse workers, and production managers. Moreover, women have begun working in traditionally male-dominated sectors like mining.

First Deputy Prime Minister of Ukraine Yulia Svyrydenko said that the Ministry of Economy will pay more attention to retraining Ukrainians on the home front, especially women, for professions whose representatives have been mobilized to the Armed Forces.

The Ukrainian labor market faces significant challenges from labor shortages and demographic shifts. At the same time, some Ukrainian employers have been able to adapt to the new labor force dynamics.