Russia’s labor market has hit a new record low, with the unemployment rate dropping to 2.3% in November 2024, according to Rosstat, the Russian statistics agency. This marks a significant decline from the 3.7% rate in 2022. Experts have noted that the unemployment rate in Russia has consistently reached new historical lows since the start of the conflict in Ukraine and the imposition of Western sanctions.
The labor market is characterized by a shortage of skilled workers, particularly in high-tech industries, logistics and the service sector, experts say. Despite high employment rates, companies are struggling to find the right talent, leading to a central problem for the Russian industry.
Meanwhile, wages are rising, with estimates suggesting a 15-18% increase in the past year. The record-low unemployment rate, however, hinders business growth and expansion.
Wladimir Moschenkow, an economist and founder of Mozhenkov Progress Consulting, stated in an interview with Gaseta.ru, “The labor market in the country is literally empty. Today, it’s a market for job seekers, not for employers. Companies are acutely feeling the shortage of qualified personnel, which hinders their development and expansion.”
Moschenkow also notes that the situation is exacerbated by a high rate of personnel turnover, forcing companies to dedicate resources to constant job searching and training, reducing efficiency and increasing costs.
The expert predicts that this situation will persist in 2025, braking the country’s economic growth: “In the coming years, companies will have to adapt to these circumstances: they will need to invest in automation, retraining of employees and new employment forms. This is not an easy, but a necessary path.”
The decline in the number of unemployed to a record low is a worrying sign, as the economy should ideally have a certain level of unemployment, rather than zero, according to Dmitri Kulikow, director of the group for country and regional ratings at AKRA, in an interview with the economic portal RBK. He highlights the importance of a certain level of unemployment, allowing people to search for better job opportunities and companies to select the best candidates, rather than the first available.
Kulikow also notes that the current situation is likely to be a temporary phenomenon, as companies will eventually start to prioritize the best candidates, leading to a temporary increase in unemployment. However, the statistics show the opposite, with the unemployment rate dropping. The expert concludes that the situation may not be as positive as it seems, as the increasing wages may lead to higher inflation, affecting real incomes in the long run.