Results of 2023 on the labor market: statistics, myths, quality of forecasts
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The state of the labor market has become one of the main “civic” topics in 2023 – in addition to discussions about the shortage of workers, interest in it was spurred by Vladimir Putin’s statements about the need to formulate a personnel forecast for the needs of the economy. However, given the data we currently have on the state of the labor market, the prospects for such forecasting are not obvious.
Without exaggeration, 2023 can be called the year of labor – it has become one of the most important economic topics in the Russian media. For as long as I have been running it at Kommersant (more than ten years), there was no such excitement even in 2020, when everyone was waiting for mass layoffs that seemed inevitable then due to a partial shutdown of business during the coronavirus pandemic.
The reason for the increased public interest in the Russian labor market is the so-called personnel shortage and the subsequent discussion of ways to solve the problem. For the first time, cautious forecasts about a future shortage of workers were made in the fall of 2022, after the start of partial mobilization, and subsequently there was not a month when representatives of any industry did not make statements about a personnel shortage.
The extent to which these statements correctly reflect the current realities of the labor market is a controversial issue. On the one hand, there are relatively objective indicators that indicate growing difficulties in filling vacancies – for example, both the cost and the average time to “close” one job have increased (For more details see “Kommersant” dated October 21). At the same time, this in itself says little: if it is difficult for a company to find a person willing to carry water in a sieve for pennies, in other words, if it has a specific or unattractive offer, the demand for it from applicants will naturally be small.
It is obvious that the labor market has lost a significant number of able-bodied candidates – those who were mobilized, those who volunteered, those who left and continue to leave the country.
Many of the first category, as follows from the Ministry of Defense collection “Army in Figures,” are men with secondary and specialized secondary education, that is, most likely, representatives of the very blue-collar professions that employers are talking about in short supply. However, among the volunteers there were probably many who were not in demand on the labor market, that is, unemployed or receiving a small salary, and a significant part of those who left, in most cases associated with the IT sector, still continue to work for Russian companies from abroad.
Most participants in the public discussion about labor market problems, however, during this year still chose to consider the lack of workers as the root cause of all problems and, as a result, probably pushed the state towards the idea of a large-scale solution to this problem using a “personnel forecast”. That from 2024 the government will release such a document indicating the needs of the Russian economy for various specialists and a breakdown by industry and region, in September 2023 stated Vladimir Putin.
Personnel forecasting is not an innovative tool; companies (mainly in the USA and in the healthcare sector) have been using it to predict their personnel needs for 30–40 years. There is already a scientific discussion about which method of calculation is better: we can consider the need for labor, its supply, and what would be the most effective set of employees for the company’s work. For this purpose, regression analysis, time series analysis, expert surveys, and other mathematical models are used. None, however, guarantees that its predictions will come true.
In Russia, the risks that personnel forecasting is usually associated with will be amplified due to difficulties with Rosstat data, to which, even despite the development of a system of administrative data on the labor market by the Ministry of Labor, there is still no complete alternative.
Firstly, there are a number of questions for the 2021 All-Russian Population Census. Thus, according to Evgeniy Andreev, a demographer at the Higher School of Economics, information about at least every sixth resident of Russia was taken from administrative sources, which led to large discrepancies between the census results and current estimates of the population in all age and sex groups. This, among other things, led to an undercount of children under the age of 15, and if in general the census results can still be considered reliable, then incorrect data on adolescents will directly affect the quality of the personnel forecast, which is also aimed at assessing the future volume of the working-age population.
Secondly, even if we put aside criticism of the census, the general population that can be built on its basis still cannot reflect the very events that led the Russian government to the idea of forming a personnel forecast – mobilization and emigration. For Rosstat, the concept of employed includes in addition to those employed in the economy and those employed in military operations, and even if the Ministry of Defense has data on the latter in the context of specialties, combining them is unlikely to provide a complete, reliable, and most importantly, accessible picture of the movement of workers to all interested parties between areas of activity. With information on emigration, the difficulties are approximately the same: supervisory authorities may know the number of those who left the country, but they do not know what they are doing and how long their departure will last (and they themselves do not know this).
As a result, it turns out that even the currently available data on the current state of the Russian labor market is incomplete – and building a personnel forecast on such a foundation means obtaining a document whose predictive power will be expressed by the well-known formula from the well-known joke about the likelihood of meeting a dinosaur on the street. But it looks like we’ll have to go out to meet him anyway.
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