Labor shortage is on the rise in Estonia and an increasing number of sectors have trouble finding workforce, the Unemployment Insurance Fund labor barometer and the CVKeskus labor market survey showed yesterday. The corona crisis support measures have also played a negative role – people do not want to go to work.
“We could use more than 50 security guards immediately, but it is very difficult to find them,” Raul Parusk, the manager of private security firm Forus Grupp, admitted. ”People do not want to work full-time, especially in summer. Many use the Unemployment Insurance Fund support and take temporary jobs. This is not only our problem; the entire services sector is in trouble.” Forus Grupp employs presently 1,500 people. The salary of security guards is 800–1,000 euros per month or well below the Estonian average (1,549 euros).
According to the labor market survey of CVKeskus, demand for specialists and skilled labor has increased the most. The fastest rise of demand was recorded in June in the marketing, mechanical and technical sectors.
According to the labor barometer, labor shortage hits the employers of every county. The list of required professionals is long: it starts with welders, care providers and IT specialists, but somewhat surprisingly, the servicing staff dismissed last year due to the corona pandemic cannot be replaced now.
“Last autumn’s barometer showed that the tourism and travel sector were his hard; there was a surplus of these specialists. Fortunately we do not have any surplus this year,” said Livia Laas, service manager of the Unemployment Insurance Fund.
According to the labor market survey, the tourism sector employers published three times more job offers this June than a year ago.
“There is no explosive growth in that sphere in Võru county or in Tartu,” admitted Ene Kerge, head of the Unemployment Insurance Fund Võru county office. It is clear, however, that people laid off do not want to return to work. “Being more than four months out of work has a devastating effect on motivation,” Kerge said. “People get used to staying at home. They think that they can rely on unemployment benefit or hold temporary jobs; besides, it is summer.”
Siim Sarapuu, head of the Unemployment Insurance Fund Tallinn and Harju county office, said the same. “If a person can choose whether to work in a room or bask in the sun on a beach, he reckons that the work will be available next week but there need not be sunny weather. The economy opened up very suddenly in the beginning of June, many firms began recruiting at the same time, but the people had already made their plans for summer. The enterprises able to pay higher salaries or offer more flexible terms, will find workers.”
But Kerge and Sarapuu recommended not to wait until autumn when everybody would seek for work all at once.
Ene Kerge pointed out a new trend: workers have begun to return to Estonia from abroad, especially the Nordic countries. Several dozen men from Võru county did just that this spring. Why? “Got bored, too much travel,” Kerge said. “A good worker can earn a decent salary in Võru county as well.”
On the other hand, some returnees from Finland shock with the wage demands. One former migrant worker from Finland walked in the office and announced that he wanted a salary of 30 euros per hour. “This is unrealistic,” Kerge said. “I do not believe that anyone would pay that much, even without officially registering the worker.”
Kerge explained that hourly pay in Võru county is 7–10 euros. Larger employers, which pay higher wages, e.g. the Toftan and Barrus sawmills and Osula Graanul, are not seeking for labor. “They said at Osula Graanul that those planning to return from Finland contact them directly and come to see about the work,” Kerge explained. “They can tell a good man and if there is a vacancy, he will be hired.”
Production and catering companies in Võru county have serious problems finding labor. “I can say about catering that the stronger ones will survive and the weak firms will fold,” Ene Kerge said, referring to the large number of catering establishments.
The number of the unemployed has now slightly increased, Kerge said, and there is an interesting trend: people come from the north to live in Võru county and seek for employment there. “But the good sign is that we used to have 300 unemployed with higher education; now there are only 200,” she said.
According to the Unemployment Insurance Fund, the average unemployment rate in Estonia in the end of June was 7.7 percent and the Fund has registered 50,370 jobless. The highest rate of unemployment was in East Viru county (12.5 percent). At the same time the labor barometer there shows a long list of vacancies. Why won’t the jobless go to work?
“East Viru county is a land of contrasts,” said Anneki Teelahk, head of the Unemployment Insurance Fund East Viru county office. “For example, sewing firms are looking for labor all the time. There are some firms with pay higher wages and carry out more demanding work, for example make working clothes. But firms with simple tasks and low wages have difficulties hiring workforce.”
Skilled industrial workers predominate among the unemployed in East Viru county. “If a large enterprise makes staff redundant – like Eesti Energia or VKG – when 1,500 people are registered all at once, they cannot find work overnight,” Teelahk said.
Having worked as staff manager of Eesti Põlevkivi for 12 years, Anneki Teelahk could point out that employment in the oil shale sector has been declining for a long time: “As I went to work there, they had 7,500 workers; when I left ten years ago, there were only 3,500.”
The number of the unemployed in East Viru county is currently only half of what it used to be at that time. There are now 2,000 long-term unemployed but their number was 7,000 then. The miners’ monthly salary is 2,000 euros which means high unemployment benefits and people are unwilling to leave it for a low-pay job.
But the wage gap is not the main consideration. “Large enterprises have proper personnel and wage policy, trade unions, the workers are issued working clothes, they are taken care of throughput the day, wages are revised every year,” Teelahk said. “If they are now seeking for a new job, they want to know whether the firm has a systemic organizational culture they are used to.”
For the same reason there are relatively fewer people in East Viru county who can become entrepreneurs after losing their jobs.
Teelahk said that the Unemployment Insurance Fund is handling the jobless in East Viru county with special intensity. “In case of those losing their jobs one often has to start with psychological counseling, because the shock is that strong – they have worked there for more than 20 years and hoped to retire from that post,” she said.
She added that the shale oil plant presented by the government as a rescue plan for East Viru county would not solve all problems, but industry in a broader sense would do it. “The unemployed mine workers have many advantages: they are competent in mechanical matters and are used to working in a large company in various shifts. Entrepreneurs from other regions have said that they cannot believe how good they are,” Teelahk said. “This is our advantage. Interest in East Viru county has increased and we hope that it will keep growing.”