In Ukraine, the vast majority of employers (about 90%) have announced plans to increase salaries in 2024, and the majority also plans to open new vacancies. At the same time, the size of the increase will most often be at the level of inflation, and the real salary will increase by only 8.5%, the government calculated.
After a significant drop in wages in 2022, such an increase will not allow a return to the level of income that was before the full-scale war. About how much Ukrainians will earn in 2024 and who will find it easier to find a job
What will happen to salaries?
87% of companies plan to increase salaries in 2024 (an October study showed a result of 93%), according to the results of a survey of employers by the European Business Association. This step is forced. Due to a fairly high level of inflation, without an increase in wages, its real size will rapidly decline. In addition, there is already a significant shortage of employees, so without creating a specific advantage in the form of high or at least market wages, it will be extremely difficult to retain, let alone attract, new employees.
About half (46%) of companies in the survey noted that the increase would be up to 10%. For comparison: in 2023, according to NBU estimates, prices will increase by 10.6%. That is, such an increase will keep salaries at the same level.
Natalya Slinko, head of recruiting and executive search at the GRC.ua portal, said that large Ukrainian employers and international companies often use the practice of increasing salaries at or close to the inflation rate.
“Not all companies officially pay the entire salary,” explains Slinko. Therefore, in some situations, the increase will only be on paper. For example, an employee who is currently registered for the minimum wage and will receive the rest of his salary in an envelope will receive an increase in the minimum wage by almost 20% in two stages in 2024. However, some employers will reduce the envelope salary, and the employee's total income will not change.
When developing the budget for 2024, the government calculated that on average Ukrainians will receive UAH 21,809. And if wages actually reach this level, even taking into account inflation, real wages will increase by 8.5%. This will partially offset the rise in prices over the past few years.
The increase in average wages is partly due to an increase in the minimum wage. So, in January 2024 it will be increased from 6,700 to 7,100 UAH, and in April – to 8,000 UAH. This is a significant increase in salaries (about 20%). Until April, the government will actually freeze the situation, adjusted for rising prices, and already in April it expects that there will be an opportunity for a significant increase in wages.
What will happen to vacancies?
In Ukraine, experts are already talking about structural unemployment. Many Ukrainians moved to other regions. As a result, the number of unemployed is significant, but some vacancies cannot be filled. For example, it is extremely difficult to find employees with three years of experience.
Problems also arose due to mobilization. It is difficult to find employees for blue-collar jobs, workers who do physical work. The war radically affected the situation on the labor market.
Medical workers and psychological assistance specialists will be in demand in 2024. Already now we need builders, people with engineering specialties. “Sales specialists will also traditionally be in demand. At the same time, specialists with knowledge of languages (this includes English, Turkish, and German) will be especially valued,” explains GRC.ua.
The European Business Association surveyed business representatives and published the results of the study. She estimates that 65% of companies plan to open jobs in 2024. However, more than half are already experiencing a shortage of personnel. The hardest thing to find will be:
- directors, managers;
- specialists of a narrow profile;
- employees with knowledge of English;
- marketers, secretaries, sales managers;
- lawyers, lawyers, auditors;
- engineers, chemists, pharmacists, agronomists.
In addition, employers predict that it will be difficult to find fitters, mechanics, shop workers, and production personnel. There are a number of problems that make it impossible to hire even those specialists who previously could be quickly found on the market. This is not only mobilization. Ukrainians more often want to work remotely. There is a big gap between the expected salary and the amount that employers can offer, etc. In general, the number of vacancies will increase. At the same time, it will be difficult for companies to find new workers.
What should the salaries be?
In Ukraine, the average salary is UAH 18,542 (according to estimates from a large personnel portal). At the same time, in neighboring Romania, where wages are low compared to the EU, workers are paid on average 62,305 UAH, that is, 3.3 times more. After the end of the war and Ukraine’s accession to the EU, the issue of salary levels will actually become one of the main ones. The scale of labor migration depends on this.
Scientist Lyudmila Cherenko says: traditionally, cheap labor has been a competitive advantage. As a result, Ukrainian highly qualified engineers earned several times less than their colleagues in nearby EU countries. This should be abandoned. “If we decide to move to a new economic model, which will not be based on low wages - and this should be the path if we go to the EU - we must take the first steps,” says Cherenko.
At the same time, Ukrainian business, even if employers had such a desire, does not have the economic opportunity to significantly increase employee salaries. Wage increases should occur in parallel with the opening of new markets and economic development. The first most important step could be a significant increase in the minimum wage.
The minimum wage should be about 50% of the average, according to calculations by the International Labor Organization. The EU has stricter guidelines. They believe that the minimum wage should be 60% of the average. So, if you follow the recommendations of the International Labor Organization, then the minimum wage in 2024 should be 10,904.5 UAH, and not 8,000 UAH. If we use the EU recommendation, then – 13,085.4 UAH.
In Ukraine, without increasing wages, it will not be possible to improve the situation on the labor market after the war. Otherwise, Ukrainians will work where they can earn more.
