According to market insiders, Ukraine’s quickly maturing business environment continues to spur demand for competent personnel
With many of Ukraine’s commercial markets seeing unremitting growth over the last several years, firms competing for a larger share of those markets have been finding the qualified personnel they need to build their businesses increasingly tougher to come by, human resources experts say.
They say that while that has meant more business for their business, it has also meant better working conditions for the personnel that recruiting companies pitch to employers, which have been providing employees – top management and otherwise – with more attractive benefits packages and bonuses in a bid to keep them from fleeing to the competition.
According to market insiders, Ukraine’s quickly maturing business environment continues to spur demand for competent personnel to fill an increasing number of mid- and top-management positions at rapidly growing companies, but the available pool of such personnel in Ukraine is far from sufficient to meet that demand.
Vera Tamko, human resources department head for Staff Service, a Ukrainian personnel consulting firm, said that the deficit of qualified personnel in Ukraine has been on the rise because businesses are growing faster than top Ukrainian managers and specialists are able to appear on the market.
She said that the rising demand for highly qualified top-level specialists has become especially evident in developing market niches in Ukraine.
“Companies today need more highly tailored specialists,” Tamko said.
“For example, there is a growing demand for lawyers who specialize in particular spheres – taxes, banking, or mergers and acquisitions. A lawyer who knows a little bit of everything is not in demand on today’s market,” she added.
Companies that are looking to fill mid-level positions with qualified specialists are also feeling the effects of the Ukrainian market’s personnel shortage, with vacancies for such positions sometimes far exceeding the number of candidates available to fill them.
According to statistics available on Rabota.ua, a Ukrainian on-line job portal, there are five times more vacancies for sales managers at companies doing business in Ukraine than there are qualified candidates to fill those vacancies. The job portal indicates that HR and financial specialists are also in high demand, as well as IT specialists, for whom demand has grown significantly in the last year.
Viktor Bolshakov, personnel director at Rabota.ua, said he is convinced that the next several years will see demand for services offered by recruitment firms diminish with respect to mid- and lower-level management positions, as HR departments within businesses develop and become increasingly capable of running searches for candidates to fill such positions on their own.
Nevertheless, market insiders say that recruitment firms in Ukraine will continue seeing more business, as competition among companies to attract the best top executives gets fiercer over the next several years.
Vitaliy Mykhaylov, country manager in Ukraine for Swedish-based recruitment firm World Staff, said this trend is largely driven by top Ukrainian executives seeking more fertile ground abroad after gaining experience at global companies’ offices in Ukraine.
Mykhaylov said that many top Ukrainian executives move on to posts in other CIS countries, especially to global oil-producing major, Russia.
“The reason is that Ukrainian management is cheaper than Russian [management for Russian companies], while compensation in Russia is much higher in comparison with the Ukrainian market,” he said.
Oleksiy Onishchyuk, the director of Total HR, a Ukrainian personnel consulting firm, said that job applicants currently have more negotiating power with respect to their salaries and benefits than they did two years ago, since they are receiving more job offers today, allowing them to weigh their options. Earlier, he said, employers were in the better position to choose their employees and call the shots.
Ever-improving benefits
According to Anna Sokolchuk, a salary survey specialist at Moscow-based recruiting agency Ancor, in the race for qualified personnel, more companies doing business in Ukraine have been offering full benefits packages.
She said that while around five years ago, such packages were offered almost exclusively by international companies operating in Ukraine, today, more Ukrainian firms are adopting Western practices and offering their employees more benefits and bonuses.
She added that full benefits packages offered largely by foreign companies in Ukraine typically include medical insurance, annual bonuses, and compensation for mobile phone and transportation expenses.
Sokolchuk said that while more Ukrainian companies have been offering better benefits to their rank-and-file employees, many still offer no more than free lunches and a bonus that amounts to an average of 8.3 percent of an employee’s annual salary.
“For top executives, [Ukrainian companies] often offer a non-typical package, which may include, along with the standard components, a personal car, advanced medical insurance (often for members of the executive’s family as well), and a vacation at the company’s expense, with a share in the company’s profit still being a rather exceptional option,” Sokolchuk said. “Though the policy of some companies is to provide the same standard package for all employment levels,” she added.
According to Sokolchuk, the benefits that companies offer their employees will continue to improve both in quality and quantity this year, responding to increasing demand from potential employees for additional benefits, such as compensation for studies and medical insurance – benefits that Sokolchuk said are becoming standard on the job market throughout the country.
She said that the next several years on that market will see the rise and expansion of additional benefits, such as companies creating non-state pension funds for their employees, and giving top management options to share in the companies’ profits.
World Staff’s Mykhaylov believes that despite the growing understanding among Ukrainian companies regarding the importance of offering better benefits packages, most Ukrainian firms still simply try to win staff by offering higher salaries.
“There are some rather large national companies where salaries are several times higher than in foreign companies of the same size,” Mykhaylov said.
He said that in addition to offering fewer benefits than Western companies offer their employees, Ukrainian companies also generally pose greater risks and provide less comfortable work conditions to their employees, and are less stable as businesses compared with Western firms.
Staff Service’s Tamko said that a substantial percentage of Ukrainian-owned companies still pay their employees unofficial salaries. However, Tamko said that with rising salary levels in the country, more people are turning to banks for loans and mortgages, which require official working documents from employers as proof of a private borrower’s ability to pay back a loan.
“For example, today about 70 percent of job applicants ask about the components of a benefits package in comparison with less than 50 percent even a year ago,” Tamko said.
According to Total HR’s Onishchyuk, around 25 percent of all Ukrainian companies currently offer full benefits packages.
“If we are talking about our clients, which are mostly large holdings, 99 percent of Western companies offer full benefits packages, while within national companies, this figure is about 50 percent,” he said.
Onishchyuk said that the growing presence of international businesses on the Ukrainian market will continue to push Ukrainian companies to adopt improved employment schemes, such as adding bonuses, perks, profit-sharing, and other benefits to employees’ packages.
