Labor exodus from Ukraine hits emerging economies in Europe

  • Companies face vacancies as Ukrainian workers leave to fight
  • Finding solutions such as training women, hiring in Asia
  • Staffing issues add to supply chain and energy costs

GORZOW WIELKOPOLSKI, Poland, July 25 (Reuters) – Construction sites, factory assembly lines and warehouses across central Europe are scrambling to fill vacancies after tens of thousands of Ukrainian men quit their jobs blue-collar workers to return home after Russia invaded their country.

Ukrainian workers have been flocking to central Europe over the past decade – lured by higher wages and aided by a relaxation of visa requirements – taking jobs that were not paying enough for local workers in the construction, automotive and heavy industry.

Many of these workers have returned home to help the war effort since the invasion of Russia on February 24, sharply worsening labor shortages in some of Europe’s most industrialized economies.

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Reuters spoke to 14 business executives, recruiters, industry bodies and economists in Poland and the Czech Republic who said the departure of Ukrainian workers was leading to higher costs and delays in manufacturing orders and construction work. construction.

Prior to the Russian invasion, Ukrainians were the largest group of foreign workers in Central Europe. Poland and the Czech Republic have taken in about 600,000 and more than 200,000 Ukrainian workers respectively, according to industry trade groups.

The Polish Employers’ Trade Group, which represents 19,000 companies, estimates that around 150,000 Ukrainian workers, mostly men, have left Poland since the start of the war.

Wieslaw Nowak, managing director of Polish tram and rail line builder ZUE Group, said one of its contractors had recently not completed track-laying work because nearly all of its 30 Ukrainian workers had left.

“Many companies are looking for large-scale employees at various construction sites due to large outflows,” he told Reuters.

“It certainly affects the cost and the pace of work because if someone loses several dozen employees at the same time, rebuilding a team takes much more than a few days.”

While the European Central Bank said in June that an influx of Ukrainian refugees should ease a labor shortage in the eurozone, the opposite appears to be happening in Europe’s industrialized economies outside the currency bloc.

The hundreds of thousands of Ukrainian refugees, mostly women and children, who have arrived in the region are not easy candidates for many vacancies. Often the jobs are in physically demanding industries such as construction, manufacturing or foundries where legal limits apply on the number of women allowed to lift.

From training refugee women to drive forklifts to recruiting new workers in Asia, companies are scrambling to find innovative ways to fill the gaps in their workforce, the officials said. company executives to Reuters.

But for many businesses struggling to recover from the economic impact of the COVID pandemic, and now facing steep rises in energy costs and post-war inflation, the sudden shortage of labor -work poses a major challenge.

“The loss of Ukrainian workers has compounded the problems companies are facing,” Radek Spicar, vice president of the Czech Federation of Industry, told Reuters. “Companies say they cannot cover all the demand from trading partners: they deliver with delays and pay penalties.”

VACANT JOBS

With industrial production contributing 30% of GDP, the Czech Republic ranks as the most industrialized country in the EU. Poland follows closely with 25%.

Before the Russian invasion, Germany-based recruiter Hofmann Personal had more than 1,000 Ukrainian applicants due to arrive in the Czech Republic between March and June, mostly for jobs in the automotive, logistics and manufacturing sectors. .

Companies waiting for these workers are now struggling to fill these positions, said Gabriela Hrbackova, managing director of Hofmann Personal in the Czech Republic. The country has the lowest unemployment rate in the European Union, at just 3.1%.

“If this cannot be resolved quickly and recruitment opportunities for foreign candidates are not enhanced, it will have major implications, especially for manufacturing companies,” Hrbackova told Reuters.

“Companies are short of hundreds of employees for production operator positions, skilled manufacturing positions such as welders, (machine) operators, metalworkers and forklift drivers.”

Leaders and business groups said the impact of Ukrainian worker departures was particularly felt in emerging Europe, as the region is less automated than more developed economies in the European Union, such as Germany, weight regional heavy.

For Scanfil (SCANFL.HE) – a Finnish company specializing in electronics manufacturing, assembly and production outsourcing – the rapid loss of labor market workers in Poland, where it is based, has bolstered plans to to stimulate automation.

“Automation is possible in some positions but not everywhere,” said Magdalena Szweda, Scanfil Poland’s human resources manager in Myslowice. “We still need human hands in many workplaces, so that doesn’t solve the problem.”

ECONOMIC IMPACT

BNP Paribas Bank Polska chief economist Michal Dybula said it was clear that the loss of Ukrainian workers would hurt the Polish economy – the sixth largest in the European Union – at least in the short term, based on both economic data and conversations. with local businesses.

However, it was too early to quantify the scale of the impact, he said.

Petr Skocek, plant manager of German automotive supplier Brose Group in the Czech town of Ostrava, near the Polish border, said the past influx of Ukrainian workers had been a boon for companies due to their qualifications, work ethic and similar culture.

“That channel has now stopped,” he said.

The personnel problem adds to supply chain issues for manufacturers, who are facing soaring energy and material costs due to war and ongoing supply chain disruptions due to the pandemic.

The producer price index – a measure of inflation for businesses – reached almost 25.6% in June in Poland and 28.5% in June in the Czech Republic.

Some companies are increasing wage offers to attract replacement workers, seeking to attract local workers and avoid competing companies for the limited number of Ukrainians.

“We are looking for Ukrainian workers in the market, offering more money,” said Maciej Jeczmyk, managing director of Polish manufacturer InBet, which manufactures prefabricated materials for construction. “We adapt almost every week.”

WRITING BY WOMEN, OTHER FOREIGN WORKERS

To deal with the shortages, Polish recruitment firm Gremi Personal said its client companies had moved the men to more physically demanding jobs and hired Ukrainian refugee women to replace them.

“So, for example, a man would move from the production line to the logistics department where he has to carry heavy objects that have a legal limit for women,” the company’s deputy director, Damian Guzman, told Reuters.

The shortage has also forced companies to rethink the way they work and look further afield to countries like Mongolia and the Philippines where language, travel and visa issues make it difficult to quickly fill vacancies.

“The problem is that the number of workers brought in from these other countries is not high enough to fill the vacancies,” said Marcos Segador Arrebola, managing director of recruiter GI Group Poland.

He said the number of Ukrainian workers in Europe’s largest emerging economy had increased 38 times over the past 13 years.

Companies such as construction company Inpro in Poland are also turning to precast elements to meet construction project deadlines. Others are extending working hours and training women in positions traditionally held by men, such as driving forklifts.

Wojciech Ratajczyk, managing director of recruitment firm Trenkwalder Poland, said the company had vacancies for 50,000 logistics workers, most of them forklift drivers.

He said more than 600 women responded to an advertisement sent to 2,000 refugees to learn how to operate forklifts. A few dozen have recently started a 4-week training course organized in collaboration with companies.

One of the participants is Olha Voroviy, a former sales manager who found work in the Polish warehouse of automotive supplier Faurecia after fleeing her home in Ukraine.

“It’s hard work… but I need to work and earn money and there was no other work in Gorzow,” Voroviy told Reuters during a break from a class. certification that will pave the way to a better paying job in the warehouse. .

“In Ukraine I worked with my mind and here in Poland I work physically.”

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Writing by Michael Kahn, Reporting by Michael Kahn in Prague and Anna Koper in Warsaw, Additional reporting by Andrey Sychev, Hedy Beloucif, Malgorzata Wojtunik in Gdansk; Editing by Alison Williams

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