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Russia’s tight labor market is forcing companies to turn to teenagers and retirees to fill vacancies

Russia’s tight labor market is forcing companies to turn to teenagers and retirees to fill vacancies

(Bloomberg) — Russia’s record low unemployment rate should be the envy of any country, but instead it underscores how a labor shortage caused by the Kremlin’s 2022 invasion of Ukraine is making it harder for companies to operate.

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The share of the unemployed labor force in Russia, already at a record low, fell to 2.3% in October, the Federal Statistics Service reported late on Wednesday. This surpassed Japan, which traditionally has low unemployment, and all other G7 countries.

“The labor market in Russia is currently experiencing a rather difficult situation,” said Yevhen Suvorov, Chief Economist of CentroCredit Bank from Russia. “There are several hundred thousand people who have left Russia, and there is a fairly significant influx of workers in the industry who work on government contracts.”

According to him, salaries have increased by almost 20% compared to last year. This poses a “significant risk of inflation” in a country where price growth is approaching 9% this year, according to the Economy Ministry.

Russia’s war in Ukraine caused the economy to overheat, in turn exacerbating the acute shortage of workers in most industries. Competition for employees has pushed up wages, fueling inflation as civilian companies compete with the military — and each other — for scarce talent. Labor shortages also act as constraints on production, threatening to slow the growth of the wartime economy.

According to the analysts of Avito Jobs, a Moscow classifieds service, the demand for workers aged 16 to 18 has doubled, Kommersant newspaper reported in October, in the catering and retail sectors. According to Russian legislation, a person can be accepted for limited work from the age of 14 with the consent of the parents.

A boutique hotel in central Moscow had to hire high school students to clean rooms and wash dishes because it could not find enough maids, even after a significant increase in monthly wages, the hotel manager said on condition of anonymity. .

However, companies are not just chasing young workers. Over the past two years, the average age of qualified specialists has increased by three to six years, the recruiting service SuperJob reports.

“We literally have to beg people to postpone retirement because there is simply no one to replace people,” says Iryna, 49, a manager of a large construction company. The total number of employees of her firm is 12,000, and a third of them are people of retirement age or over 60 years of age.