Exodus of Ukrainian Workers Hits Europe’s Emerging Economies
Tens of thousands of Ukrainian men abandoned their blue-collar occupations to go home when Russia invaded their nation, and construction sites, factory assembly lines, and warehouses all around Central Europe are trying to fill vacancies.
Ukrainian workers had migrated to Central Europe in the previous ten years, attracted by greater pay and easier to obtain visas, filling occupations in heavy industry, the automobile industry, and construction that weren’t paying well enough for local employees.
Since Russia invaded on February 24, many of these employees have unexpectedly returned home to aid in the war effort, causing labour shortages in some of Europe’s most industrialised industries.
According to 14 business executives, recruiters, trade associations, and economists contacted by Reuters in Poland and the Czech Republic, the exodus of Ukrainian labour has increased costs and caused delays in manufacturing orders and building projects.
Before the Russian invasion, Ukrainians were the largest group of foreign workers in central Europe. Poland and the Czech Republic hosted Ukrainian workforces of around 600,000 and more than 200,000 respectively, according to industry trade groups.
The Employers of Poland trade group, which represents 19,000 companies, estimates that around 150,000 Ukrainian workers, mainly men, have left Poland since the start of the war.
According to Wieslaw Nowak, CEO of the Polish company ZUE Group, which constructs tram and railway lines, one of its subcontractors recently failed to finish track-laying work because almost all of its 30 Ukrainian workers had gone.
Due to significant withdrawals, “many businesses are seeking for staff on a vast scale at various building sites,” he told Reuters.
“It undoubtedly affects the cost and pace of business since recreating a team takes much longer than a matter of a few days if someone loses several dozen people simultaneously.”
While the European Central Bank predicted in June that the arrival of Ukrainian immigrants will help the labour shortage in the eurozone, it appears that the reverse is occurring in the industrialised nations of Europe that are not part of the currency union.
Many of the open posts are not well suited for the hundreds of thousands of Ukrainian immigrants, mostly women and children, who have just arrived in the area. The positions are frequently in physically demanding industries like construction, manufacturing, or foundries, where there are regulatory restrictions on how much weight female employees may lift.
Companies are rushing to find novel methods to fill the holes in their workforces, the corporate leaders told Reuters, from training female migrants to drive forklift trucks to hire new workers in Asia.
However, the unexpected labour shortage creates significant difficulty for many businesses that are still working to recover from the COVID pandemic’s economic effects and are also dealing with high increases in energy prices and inflation as a result of the conflict.
According to Radek Spicar, vice president of the Czech Federation of Industry, “The loss of Ukrainian workers has deepened the problems companies are facing,” he told Reuters. Companies claim they can’t meet all of their partners’ demands, so they deliver late and incur fines.
The Czech Republic is the most industrialised country in the EU, dedicating 30% of GDP to industrial output. Poland comes in just behind with 25%.
More than a thousand Ukrainian job applicants were scheduled to come to the Czech Republic between March and June before the Russian invasion, primarily for positions in the industrial, automotive, and logistics industries.
According to Gabriela Hrbackova, general director of Hofmann Personal in the Czech Republic, the businesses that were anticipating those personnel are now having trouble filling those positions. With a mere 3.1%, the nation boasts the lowest unemployment rate in the EU.
“If this cannot be resolved quickly and opportunities for recruiting foreign candidates are not strengthened, it will have major implications, especially for manufacturing companies,” Hrbackova told Reuters.
“Companies lack hundreds of employees for positions of production operators, qualified manufacturing positions such as welders, (machine) operators, metal workers and forklift drivers.”
According to business leaders and trade associations, developing Europe is feeling the effects of the exodus of Ukrainian employees more severely than more developed European Union countries, such as regional powerhouse Germany, because the region’s economy is less mechanised.
For Scanfil, a Finnish company specialised in electronics manufacturing, assembly, and production outsourcing — the swift loss of workers from the labour market in Poland, where it has operations, reinforced plans to boost automation.
“Automation is possible in some positions but not everywhere,” said Magdalena Szweda, human resources manager of Scanfil Poland in Myslowice. “We still have a need in many workplaces for human hands, so it doesn’t resolve the problem.”
Based on economic statistics and discussions with local firms, Michal Dybula, chief economist at BNP Paribas Bank Polska, stated that it was obvious that the loss of Ukrainian employees will hurt the Polish economy, which is the sixth-largest in the European Union, at least in the near term.
He said that it was still too early to estimate the scale of the impact.
The recent influx of Ukrainian workers, according to Petr Skocek, director of the Brose Group plant in Ostrava, a city in the Czech Republic close to the Polish border, has been beneficial to businesses because of their skills, work ethic, and shared culture.
“This channel has now stopped,” he said.
The manufacturers’ supply chain issues—including rising energy and material prices as a result of the conflict and lingering pandemic supply chain disruptions—are exacerbated by the workforce crisis.
The producer price index, a gauge of industry inflation, reached roughly 25.6 percent in Poland and 28.5 percent in the Czech Republic in June.
Some businesses are increasing their pay offers to entice replacement employees, woo local workers, and fend off rival businesses for the scarce Ukrainian workforce.
“We’re searching for Ukrainian workers on the market, offering more money,” said Maciej Jeczmyk, chief executive of Poland-based manufacturer InBet, which makes prefabricated materials for construction. “We are adapting almost every week.”
DRAFTING IN WOMEN, AND OTHER FOREIGN WORKERS
In order to deal with shortages, Ukrainian immigrant women were hired to take the place of males by their client companies, according to the Polish recruiting agency Gremi Personal.
“So, for example, a man would move from the production line to the logistics department where they have to carry heavy things that have a legal limit for women,” the firm’s deputy director Damian Guzman told Reuters.
Companies have also been forced to reconsider their processes and expand their search to nations like Mongolia and the Philippines where it is more challenging to swiftly fill positions due to language, travel, and visa constraints.
The issue, according to Marcos Segador Arrebola, CEO of the recruiter GI Group Poland, is that there aren’t enough individuals from these other nations to fill job vacancies.
He said that over the previous 13 years, the number of Ukrainian employees in the greatest economy in developing Europe surged 38-fold.
Pre-fabricated building components are also being used by businesses like the Polish construction firm Inpro to complete projects on schedule. Others are lengthening workdays and preparing women for jobs that have historically been filled by males, including operating forklifts.
CEO of the recruiting business Trenkwalder Poland, Wojciech Ratajczyk, stated that the company had available positions for 50,000 logistics employees, the majority of whom were forklift drivers.
He said that more than 600 women responded to an advertisement regarding forklift training sent to 2,000 migrants. Several dozen people recently began a 4-week course planned in cooperation with businesses.
Olha Voroviy, a former sales manager who fled her home in Ukraine and found employment in automotive supplier Faurecia’s Polish warehouse, is one of the participants.
“It is hard work … but I need to work and make money and there was no other job in Gorzow,” Voroviy told Reuters during a break in a certification course that will pave the way to a higher-paying job in the warehouse.
“In Ukraine, I was working with my mind and here in Poland I’m working physically.”
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