Human capital: Foreign labor is becoming scarce in the global economy
There is a growing shortage of foreign specialists in the global labor market, which is becoming increasingly difficult to attract and retain, said Maxim Reshetnikov, Russia's Minister of Economic Development. How the shortage of foreign workers affects the Russian economy and its individual industries, what risks and opportunities arise for businesses in the context of a reduction in the number of foreign workers, as well as what measures the government should take to adapt the labor market to new realities, — in the Izvestia article.
Finding solutions
The shortage of specialists today is one of the key factors hindering the development of the economy, Ivan Abramov, First Deputy Chairman of the Federation Council Committee on Economic Policy, told Izvestia. The role of foreign workers is especially noticeable — they are the ones who support the activities of industries where a large amount of labor is required: construction, the agricultural sector, delivery services and taxis.
In some areas, for example, during the construction of large-scale industrial complexes or transport highways, the need to attract foreign workers becomes constant, because significant labor and production resources are needed to implement such projects.
"Reducing the number of foreign workers carries a number of economic risks: the cost of products and services increases, which leads to higher prices," the senator noted. — Companies are faced with the need to find replacements for staff, and they are also spending more resources on maintaining their previous efficiency and productivity.
According to him, the educational system is of key importance — it should provide training and retraining of specialists in accordance with the real demands of the economy and take into account long-term trends in the development of industries.
It is also important for the state to actively help businesses in the process of technological renewal: to stimulate the modernization and robotization of production facilities, as well as consistently support the creation and implementation of innovative solutions in all areas.
Recruitment of personnel
The historically low unemployment rate of 2.2% reflects not the strength of the labor market, but the consequences of the demographic downturn and the exhaustion of traditional labor force reproduction mechanisms, Sergei Grishunin, managing director of the NRA rating service, told Izvestia.
— The current deficit is about 4-4.8 million people, and by 2030 the need for workers will increase by another 3.1 million. Under these conditions, dependence on foreign labor, which has long served as a shock absorber, requires a systematic rethink and revision," the expert said.
According to him, the structural shortage of labor is one of the key causes of inflationary pressure in Russia, along with sanctions, and has a pronounced sectoral character. The shortage is most acute in construction — up to 50% of vacancies remain open, in the agricultural industry there is a shortage of up to 300 thousand workers, and industry and logistics are experiencing a shortage of about 600 thousand specialists.
To resolve the situation, a set of measures is needed: in particular, the creation of a transparent mechanism for targeted recruitment, pre-departure training, promotion of skilled migration and government increase in labor productivity, said Sergey Grishunin. Investing in digital technologies, retraining the population and creating modern working conditions is the only way to a sustainable, diversified and high—performance economy.
Due to the "demographic pit", the number of able-bodied people is decreasing, therefore, the full-fledged functioning of the economy requires the involvement of foreign workers, especially in construction, housing and communal services and trade, Lyudmila Ivanova-Shvets, PhD in Economics, Associate professor of the basic Department of Human Resources Management at the Russian University of Economics, told Izvestia.V. Plekhanova. The shortage of foreign labor is reflected in the volume of construction and the quality of public services.
— But at the same time, foreign labor comes into competition with local labor, and businesses mostly make decisions in favor of foreign labor because of lower personnel costs: taxes, social security and social guarantees. In some regions, there is a situation where foreign workers have the advantages in filling vacancies," the expert noted.
According to her, regional authorities should pursue a balanced policy, taking into account the state of the labor market. Currently, the regions are imposing restrictions on the use of foreign labor within the framework of federal quotas: for example, the share of foreign workers in construction could reach 80% by 2025, and in 2026 the Ministry of Labor plans to reduce it to 50%. At the same time, individual regions can set their own standards.
This allows businesses to more actively attract and train local specialists, optimize HR policies and processes, she stressed. It is important for the state to monitor the labor market, develop common approaches and give regions the opportunity to adapt requirements to their specific characteristics and the needs of the economy.
To improve the situation, it is necessary to expand quotas for foreign workers and the geography of donor countries, eliminate structural unemployment through retraining and labor mobility, stimulate part-time employment and attract reserves, including pensioners and teenagers, Vladislav Bukharsky, Associate Director for Sovereign and Regional Ratings at Expert RA, told Izvestia. Automation and robotization of processes remain key tools for improving labor efficiency.
A recurring story
Over the past 100 years, Russia has been facing an unstable demographic structure of the workforce, Andrei Zhukovsky, senior researcher at the Institute of Regional Economics and Inter-Budgetary Relations at the Financial University under the Government of the Russian Federation, noted in an interview with Izvestia. This is especially evident in the implementation of large infrastructure and sports projects.
In the short term, there is a moderate demand for cheap labor for point tasks, which has led to a significant presence of foreign workers in housing and communal services, logistics, agriculture and construction, the expert emphasized. Such dependence carries the risk of money leakage abroad and limits the economic benefits to the national economy.
In the near future, it is possible to transform the labor market with more active involvement of young Russians in traditionally migrant areas, including logistics, housing and communal services and construction, Andrei Zhukovsky said. Digitalization of these industries increases qualification requirements, creating new opportunities for cooperation between educational institutions and enterprises. A comprehensive youth and social policy that provides protection and decent conditions for young professionals will help keep money flowing within the country and at the same time improve the skills and involvement of young people in the economy.
Izvestia sent inquiries to the Ministry of Economic Development, but no response had been received at the time of publication.
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