War could start to affect labor market just recovered from Covid

Unemployment Insurance Fund office.
Unemployment Insurance Fund office. Source: Unemployment Insurance Fund

Despite labor shortage in the service sector, the labor market situation in Estonia is balanced, while Russia's war could soon change that once more.

While the number of unemployed hit 57,000 during the peak coronavirus period, the rate has come down to 45,000 according to information from the Estonian Unemployment Insurance Fund. Work can be found also in Ida-Viru and Valga counties where the unemployment rate is traditionally highest.

Department chief for the fund Katrin Liivamets said that while the service sector was forced to lay off workers in the coronavirus crisis, the situation has by now changed and there is no more labor surplus. Companies are bouncing back from the coronavirus period but Katri Urge, economist for the Bank of Estonia, added that the war in Ukraine could see unemployment spike again.

"Finding short-term labor is more difficult. Many foreign short-term workers have returned home. These jobs will have to be manned with local residents that could prove difficult after years of relying on foreign seasonal labor. There might not be enough people with the necessary skills in Estonia," Urge said.

Head of recruitment for classifieds portal CV Online Kaire Kleesment said that even though the general picture is good, the information technology, commerce and service sectors are still short on labor. Kleesment suggested employers should review their requirements.

"One possibility is for employers to critically go over candidates' requirements. For example, language requirements – it is very difficult to find trilingual people who speak Estonian, English and Russian. These are the most sought-after languages."

She added that next to demands, salaries should also be paid attention. While it does not happen often, specialists are willing to move sectors if the work pays more elsewhere.

"Specialists today are willing to consider other offers if the salary bump is at least 30 percent - a considerable hike for the employer," she said.

The effect of the war on the labor market can be evaluated in more detail come fall.


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Editor: Marcus Turovski

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