The war has tilted the labor market sharply in favor of Ukrainian employers, who see no need to raise salaries despite the crippling effects of the hryvnia's devaluation (down roughly 60 percent against the dollar in the last 15 months) and inflation.
The conditions make life hard for wage earners and even harder for the jobless.
Andriy, a 31-year-old network operations engineer, said his paycheck has taken a serious hit in the last year because of devaluation. He refused to have his last name published because his company’s policy prohibits employees from talking publicly about their wages.
His monthly salary, pegged to the hryvnia, now comes to less than 50 percent of his required monthly mortgage payment, a loan pegged to the U.S. dollar. He’s now looking for extra income, but it will be some time before employees like him have the upper hand.
“Now is a great time for employers because lots of people are out there in the market,” says Andriy Krivokorytov, the head of Brain Source International Ukraine, an outsourcing company.
“Now you have 10 really good candidates who really want this job,” he says. “It gives the employer the advantage to bargain the best deal.”
Job seekers with three years or more experience have an advantage in getting hired over recent graduates, since companies are not willing to pay additional costs for educating newcomers, says Ruslana Berezovskaya, a research specialist at hh.ua, a leading Ukrainian human resources think tank.
Yet overall, the tight labor market will only get worse. In 2014, 10 percent of jobs in Ukraine were eliminated, according to hh.ua.
“About a third of those questioned (in a recent hh.ua survey) said that they are planning to lay off employees this year,” Berezovskaya says, estimating that every third employer will have to dismiss 16-30 percent of its staff.
Those most susceptible to layoffs are in the banking, auto dealership, telecommunications and oil-and-gas sectors, according to hh.ua. Employees in the information technology, insurance, consulting and agriculture sectors are on more solid ground.
At the same time, wages will largely remain frozen, Berezovskaya says, with only 6 percent of employers pegging salaries to the dollar. The dollar value of the average monthly wage in Ukraine in 2014 was about $160, compared to $330 in 2013, according to the State Statistics Service of Ukraine.
Some companies are even getting away with wage cuts on top of the devaluation.
Job candidates are more lenient because it is “difficult to find a job, a preferred position and at a preferred level,” she says. “So job seekers are willing to be paid between 5-15 percent less.”
For the time being, job seekers and employees should be in survival mode, flexible to changes and not competing for their dream job, Krivokorytov says.
In order to achieve this they should concentrate less on technical skills, and more on how to cope and adapt under difficult and stressful situations, he says.
Marina Makarenko, director of Intercomp Ukraine, an outsourcing and human resources firm that serves international companies in Ukraine, agrees that professionalism, perseverance and flexibility need improvement.
“Quantity doesn’t always mean quality,” she says. “Theoretically, people should have become more innovative. But in practice, we see the opposite situation. Maybe this is because of a certain passivity among the candidates, being worn out by everyday problems and a lack of resources for survival.”
Yet active job seekers like Andriy are wise to pursue employment with international firms, or those with international investments, which are generally performing better than their Ukrainian counterparts.
About 60 percent of Intercomp Ukraine’s 110 clients have not resorted to layoffs, she says. About 20 percent have kept their wages pegged to a hard currency, and about 80 percent of her firms have said they’re considering wage hikes.
They are cutting other costs, such as rent, marketing and service prices, rather than cutting wages.
Companies that earn revenue in hard currency for exports and pay employees in hryvnias are doing the best, Brain Source International’s Krivokorytov says.
“It’s a relief actually from the cost point of view,” he says. “In this scenario, it’s the employees who lose the most.”
Kyiv Post staff writer Ilya Timtchenko can be reached at [email protected].
