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More jobseekers increases competition on Estonia's labor market

Road maintenance worker in Tallinn.
Road maintenance worker in Tallinn. Source: Priit Mürk/ERR

Increased unemployment along with the rising cost of living have led to larger numbers of jobseekers in Estonia and therefore stiffer competition in the labor market.

"We have seen that the number of job vacancies has decreased due to the economic situation as well as all the other crises, which actually makes the competition a bit more difficult for the applicant. In other words. there are more people to compete with for that nice, new job opportunity," Grete Adler, head of recruitment at job portal CV Keskus, told ERR.

The Estonian Unemployment Insurance Fund's experience over the past few decades shows that unemployment always increases at the beginning of the year. However, this year's increase has been higher than usual. Anniki Paulus, head of the Unemployment Insurance Fund's jobseeker services department, said the number of people registered unemployed rose by 1,800 over the past month.

"In these times of economic downturn, the rise in unemployment is rather uniform everywhere. While tourism, culture and entertainment suffered a lot during the coronavirus pandemic, now unemployed people are coming from different sectors. There has been a lot of talk about manufacturing, and indeed there have been a lot of redundancies in that sector over the last year. However, it is also the biggest sector," said Paulus.

There are currently about 55,100 people registered as unemployed with the Unemployment Insurance Fund. According to Bank of Estonia's (Eesti Pank) most recent forecast, that number is expected to rise to 60,000 this year.

According to Paulus, unemployment is rising in all regions of Estonia and is highest in Ida-Viru County and Valga County.

"In terms of regions, the situation is actually most complicated when an employer [operating in] a smaller place closes down, and there are more or less the only employer there. For example, last year when E-Betoonelement in Tamsalu, Lääne-Viru County, made layoffs, that had an impact across the region. However, now we can actually say that, fortunately, more than half of those who were laid off there have found new jobs. At the moment, the latest major announcement is from Valga, where a furniture manufacturer is laying off 55 people. That will definitely be a major blow for the region," Paulus said.

More people applying for vacant posts

There are currently 2,600 job vacancies listed at the Unemployment Insurance Fund, which is comparable to the number listed in 2019, prior to the pandemic. However, at that time the number of people registered as unemployed was much lower, at 35,000, Paulus added.

According to CV Keskus, interest in vacant positions has been at a record high recently.

A survey conducted by the payroll agency and CV Keskus showed that many people are also looking for new jobs due to the rise in the cost of living.

"Cleaning and transport are the sectors with the highest numbers of people actively looking for work. Something we cannot deduce from our own surveys, is whether they are unemployed or not –we can't see that. But what we do see is just that people who are open to job offers, or people who have indicated that they are actually interested in job offers. They are not necessarily actively applying themselves, and may be property management workers. There are also actually people in marketing, manufacturing, information processing and the trade sector, who on average, are looking around more," Adler said.

The current unemployment rate in Estonia stands at 8.2 percent. The Unemployment Insurance Fund's so-called "black scenario" is triggered when unemployment climbs above 10 percent. However, even now, it is not worth being too picky about where to look for a job, Paulus said.

"It's important to bear in mind that finding a job takes time. It's time to act now, and maybe not just to look for that dream job. For those who think they will rest for a while and then look, the job search may end up taking even longer."

However, Adler says the Estonian labor market has not yet gone completely crazy.

"There's a lot of talk about layoffs and things, but what we're seeing is that people are actually confident and they believe that they can get a new job. So, there's actually still that confidence in the labor market."

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Editor: Michael Cole

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