Statistics from the largest recruiting services, hh.ru and Superjob, demonstrate that at the end of the first quarter, the number of new vacancies continues to far exceed the number of new CVs. By the first quarter of 2023, the number of vacancies on hh.ru had increased by 30%, while the number of resumes increased by only 3%. At Superjob, the gap in growth was fourfold: +44% compared to +11%. However, the first quarter of 2023 was still crisis-ridden for the labour market, the explosive growth of vacancies began in the second quarter. From April to October, vacancy growth was 50% compared to 2022 levels, while there was no increase in CVs. Data from the first quarter of 2024 shows that the frenzy in the labour market persists, although its scale has slightly decreased.
According to Rosstat data for February, the unemployment rate dropped to 2.8% (among urban residents — to 2.2%), and demand for personnel increased by more than 18%, or almost 1.9 million people compared to February 2022. The frenzy translates into wage growth.Over the year, the nominal average salary, according to Rosstat data, increased by almost 17% to 75,000 rubles, while in real terms wages rose by 7.8%. As a result, consumption is growing faster than production in the consumer sector. Moreover, labour productivity is falling. In 2022, according to Rosstat, it fell by 3.6%. Data for 2023 is not yet available, but the Ministry of Economic Development expected to see an increase of only 1.7% in 2023, and 1.6% in 2024.
As a result of the war-related wave of emigration, mobilisation and widespread hiring of contract workers, the real labour market could lose more than 1 million people, or about 1.5% of those employed (→ Re:Russia: Record Underemployment). At the same time, increased demand for labour in a number of sectors was created by broad budget financing of military needs and the 'structural transformation' of the economy. Thus, the current rush is a consequence of two factors — the withdrawal of labour resources from the productive part of the economy and the structural transformation of the economy. Moreover, the demand for new employment is not accompanied by an adequate reduction in other sectors, or this reduction is absorbed by the withdrawal of the above-mentioned contingents from the labour market.
The current 'structural shock' in the labour market and in the structure of the economy is the second within a short period of time, says prominent Russian economist Rostislav Kapelyushnikov in a recent study. The first occurred in 2020, during the pandemic. In the face of the pandemic-induced crisis and production cuts, the vacancy rate not only did not fall, but even saw an increase, and subsequently exceeded the unemployment rate for the first time in history. This unusual effect is explained by the fact that the Covid lockdown triggered a massive reallocation of labour between sectors and individual businesses. Sectors whose development was not interrupted by the lockdown but rather accelerated (primarily Internet businesses) rushed to hire, while compensatory reductions did not occur to a sufficient extent. In 2021, the economy was actively recovering, and the flood of vacancies persisted.
The economic restructuring triggered by the war set in motion a massive new redistribution of labour and jobs. And this is occurring in a completely different direction — in the direction of traditional industrial production, where employment had stagnated over the past decade. This was reflected in the explosive growth of gross labour turnover: Russians have not changed employers so actively since the early 2000s. This, in itself, indicates the scale of structural adjustment. At the same time, the overall situation is aggravated by two circumstances. Unlike the structural shock caused by the pandemic, the current additional demand for labour is artificial and non-market in nature, and budgetary restrictions for employers are not severe. When receiving defence orders, enterprises seek to increase their staff by offering 'above-market' salaries.
Both structural adjustments — pandemic and military — are associated with additional demand for workers in specific sectors, but the resulting distortions extend to almost the entire labour market. In 2023, the gap between the vacancy rate and the unemployment rate reached 4 percentage points. At the same time, the number of vacancies has increased in all sectors and occupational groups, Kapelyushnikov notes. The most acute deficit today is in the service sector, as well as in the cluster of skilled workers. The growth rate of the vacancy rate in the latter group was significantly higher in 2016-2022 than the average for all occupations. Recruitment services provide similar data. According to hh.ru, in February, the number of vacancies in the category 'production, service maintenance' increased by 25% year-on-year, and in the ‘blue-collar workers’ category, by 43%. The Superjob service observes the most acute labour shortage in machine building and machine-tool construction, production of metal products and blanks, metallurgy, the food industry and instrument making.
This imbalance — acute shortage of labour resources — will persist for a long time, because all potentially significant sources of labour force replenishment have been largely exhausted, notes Kapelyushnikov. Analysts at the ACRA agency have calculated that there are 1.5 million potential workers among young people, and 5 million among the elderly, but they are not counted as unemployed because they do not meet the formal criteria of Rosstat (lack of employment, job search within the last month, willingness to start to work within a week). However, in order to partially involve them in the labour market, employers must offer them flexible forms of employment — for example, part-time work on a contractual basis. At present, only about 1% of those employed in Russia work in this way. Kapelyushnikov believes that this will not solve the market's problems: it is not profitable to pull young people into employment as they are better off studying, the economic activity of women with children is already high, and employment among the elderly has been boosted by pension reform. Finally, Russia is becoming less and less attractive for labour migrants for various reasons (→ Re: Russia: War and Labour Market), and this situation will worsen.
That being said, at the moment, Russia is roughly in the middle of a fertility decline cycle. By 2030, it will approach the turning point, but it is precisely at this moment that this will reach the labour market — the number of new workers will start to decline. By that time, however, according to the Ministry of Economic Development's 2021 forecast, the economically active population will have already fallen from roughly 75 million today to 66-68 million.
In any case, in the near future the Russian labour market will be under strong pressure from structural adjustment, in which non-market incentives will play a significant role and which will require additional workers against the backdrop of an actual reduction of the potential force. The harsh reality is that Russia has no additional labour force for 'import substitution' and the corresponding 'simplification' of the economy.