ACRA analysts estimated the personnel reserve of the Russian labor market at 7.5 million people

According to ACRA estimates, the “expanded” talent pool of the Russian labor market is 7.5 million people, which is about 10% of the economically active population. Among them, the agency includes those who do not work, but are not looking for work, as well as the elderly and those who are ready to work only in a flexible employment format. An attempt to bring potential workers in these categories into the labor market, however, will most likely require additional expenses from employers in the form of either increasing the salaries offered to them or re-equipping workplaces.

The Russian labor market has a talent pool of about 7.5 million people, but in order to use it, employers will have to make their vacancies more attractive in a number of ways, ACRA analysts state. Now, let us remind you, some employers are reporting a shortage of personnel and accelerating growth in wage fund costs (for more details, see “Kommersant” dated November 25, 2023). At the end of 2023, we note that according to Rosstat, the increase in real wages in the Russian Federation amounted to 7.8%, which, however, does not allow us to estimate how much the payroll costs of specific enterprises have increased. Nevertheless, companies began to explore the possibility of attracting new groups of applicants to work – even importing labor from India (see Kommersant on February 4). At the same time, according to ACRA analysts, unemployed labor can be found in Russia, but it is necessary to look for them outside the official group of the unemployed, that is, those actively seeking employment. It has already dropped to a historical low (2.8%). ACRA believes that the labor market reserve now consists of those who, being of working age, do not have a job, but are not looking for one. Their number already exceeds the number of unemployed and reaches 4% of the labor force. However, as the authors of the study note, in order for these people to become interested in work, they need to be stimulated by government policy measures.

The expansion of flexible employment could further increase the number of job seekers in the Russian labor market, ACRA notes. According to their estimates, if at the beginning of the pandemic about 20% of employed people worked this way, now their share has dropped to a few percent. At the same time, many job seekers, as Kommersant previously wrote, would like to work remotely, although employers consider this type of employment questionably productive. ACRA sees another “reserve” in those retiring and those who, thanks to the increase in the retirement age, have become “pre-retirees”. By 2028, as a result of this reform, the potential increase in the number of employed citizens could be about 1 million people, or about 1.5% of the labor force.

The possible effect of ACRA analysts was assessed based on the indicators of countries with similar duration of education and mortality rates to the Russian Federation. If we focus on them, then the internal reserves of the Russian labor market can be estimated at 7.5 million people. However, it is obvious that attracting them one way or another will require additional expenses from employers either for refurbishment of workplaces or for increasing salary offers.

Anastasia Manuilova