Discovered: Unique Aspects of Russian Job Market Analyzed by Experts
Laying Bare the Distinctiveness of Russia's Job Market
The Russian job market is a breed apart, sporting unique characteristics when it comes to adapting to crises, informal employment, digitization, and automation compared to other major economies.
The latest report from INVEB, "Development of the Labor Market and its Link with Scientific and Technological Development," raises some interesting points. In most economies, the typical response to crises is a hike in unemployment figures. However, Russia opts for a different approach, emphasizing worker wage and hour flexibility to maintain employment.
Due to earlier and sterner declines in the working-age population, Russia faces a structural worker shortage, leading to a substantial imbalance within its regional labor markets. Unemployment in depressed regions can be six to seven times higher than in the capital, contrasting sharply with regional employment inequality in EU and US countries. Additionally, informal employment resonates strongly in Russia, accounting for 15-22% of the workforce. This is significantly higher than the 10% threshold in OECD nations, yet not unheard of in developing economies, which can inch up to 30-40%.
INVEB also highlights Russia's tardy digitization and automation of workplaces as a pressing concern. Russia's reliance on robots per 10,000 workers falls well behind countries like Germany, Japan, and South Korea. In turn, labor productivity lags behind developed countries by 35-40%. However, analysts foresee growth in finance, processing, agriculture, and mechanical engineering by 2030.
INVEB fears that the country is lagging in the global pace of structural economic changes. For instance, advanced digital economies boast a 25-30% share of jobs in knowledge-intensive sectors, a figure that Russia does not surpass. Annual job automation rates in developed economies quintuple in Russia. Moreover, Russia grapples with a dearth of specialists with digital skills, a deficiency that's becoming a key growth constraint.
Despite these challenges, the education system is adapting, albeit with a time lag. Unfortunately, a significant chunk of programs doesn't meet the current demands of the labor market, as per INVEB's evaluation.
Additional factors at play include war, sanctions, labor shortages, and regulatory measures that influence the job market's resilience and transformation. For example, war has exacerbated labor shortages, with restrictions on labor migrants from Central Asia in 2024 posing a challenge.
Russia's digitalization woes stem from "reverse industrialization," where outdated tech continues to reign due to sanctions and limited access to modern technology; a situation that's led to a decline in demand for skilled IT workers despite a shortage in the sector. Digitalization has caused job cuts in sectors like retail and public services.
Lastly, Russia faces challenges in adopting new technologies due to sanctions and lack of access to foreign systems, limiting the potential for automation in various sectors. Consequently, the country shows economic resilience by investing in domestic production and infrastructure, albeit with limited scope due to the lack of modern technology.
In conclusion, while the Russian labor market demonstrates resilience in the face of significant challenges, its ability to adapt to crises and adopt new technologies is compromised by international sanctions and reliance on outdated technologies. Compared to other large economies, Russia's situation is more intricate due to its unique political and economic circumstances.
- The Russian job market's approach to crises, emphasizing worker wage and hour flexibility to maintain employment, may be contrasted with the traditional response in most economies, which involves an increase in unemployment figures.
- While analysts predict growth in certain sectors like finance, processing, agriculture, and mechanical engineering by 2030, INVEB expresses concern over Russia's slower digitization and automation of workplaces compared to developed countries like Germany, Japan, and South Korea, which may potentially limit Russia's productivity and competitiveness in the global technology-driven finance industry.
