Trends of Labour Market and the Need for the Labour resources in Lithuania,

WIT Seminar: Development of “The 21st Century Skills” of Social Professionals, Vilnius, 26th of June 2014

Prof. Boguslavas GRUŽEVSKISVilnius University

With financial support from the European Union

European Commission as contracting Authority

CONTENT

1. Global crisis of qualified workforce supply;

2. The 21st century profession challenges for social professions;

3. Changes in the labour market and the problems of workforce deficit in Lithuania;

4. Possibilities of workforce deficit problem solution.

Global crisis of workforce supply (1)

The deficit of qualified workforce is becoming more visible in the EU countries:

a) Due to demographic changes (In 2012 the workforce was decreased in the EU for the first time in addition to the

population ageing process);

b) Due to the growing competition and structural inconsistencies;

c) Due to changing values (NEET youth).

Global crisis of workforce supply (2)

The global crisis of workforce supply: on the one hand, youth unemployment on the increase; on the other hand, qualified workforce deficit is becoming more visible.

In 2013 the ILO estimate in the developed countries was about 75 mn. unemployed people up to 25 year of age.

Global crisis of workforce supply (3)

In 2013 only 43 percent of employers (Brazil, Germany, India, Mexico, Morocco, Turkey, Saudi Arabia, USA, GB) could relevantly satisfy their need for qualified workforce;

In 2020 the deficit of high and medium qualification specialists in the world will reach approximately 85 mln. (McKinsey Global Institute);

OECD countries 12-13 percent Among 15-24 y.o.

youth NEET is obvious.

The 21st century challenges

1. The dematerialization of the economic activities;

2. The domination of the IT use and work in the virtual sphere;

3. The importance of creative skills and LLL;

4. Change and flexibility in professional activities (concept of modern career, profession vs. self-realization).

The 21st century profession challenges for social professions

1. Community life disintegration (anomie, E.Durkheim), egocentrism (ego-mania, Meister

Eckhart, 13th c.)

2. Domination of virtual space in people's contacts;

3. Self-motivation and self-control;

4. Creativity, flexibility, generation Y ....

Employment problems in Lithuania

1. Decrease of total population numbers, population ageing;

2. Decrease of labour resources, deficit of qualified workforce;

3. Low salaries, lack of attractiveness of the Lithuanian labour market;

4. "Poverty trap" and illegal employment;

5. Low work efficiency and technological level of workplaces.

34,1 30,5 35,1 34,1 30,938,9

43,8 43,8 40,9 41,5

-4,8 -13,3 -8,8 -6,8 -10,7

-20,3

-8,8 -7,7

-21,6-16,8

-40

-20

0

20

40

60

2000 2005 2008 2012 2013

Birth rate Death rate Natality Migration balance

Birth rate, death rate and migration balance in Lithuania in 2000-2013, thous.

Source: Data provided by the Statistics Department.

POPULATION OF LITHUANIA CLASSIFIED BY POPULATION OF LITHUANIA CLASSIFIED BY GENDER AND AGE 2010 and forecast for 2060GENDER AND AGE 2010 and forecast for 2060

050001000015000200002500030000

0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

75

80

85

90

95+

0 5000 10000 15000 20000 25000 30000

2010 2010 MenMen

20102010

WomenWomen

2060206011

11

the share of 65 y.o. and older population in the total population, 2013 (%)

European Union (28 countries)79157686 92257825 116,5 18,2 Romania 103,8Belgium 1898072 1959654 103,2 17,6 Czech R. 113,3Bulgaria 989989 1395471 141,0 19,2 Sweden 113,4Czech Republic 1560296 1767618 113,3 16,8 Finland 114,2Denmark 977596 999801 102,3 17,8 Estonia 115,1Germany (including former GDR)10736998 17002915 158,4 20,7 Spain 116,5Estonia 206819 238053 115,1 18,0 EU 28 116,5Ireland 1004258 562405 56,0 12,2 Malta 117,9Greece 1622022 2226134 137,2 20,1 Slovenia 118,1Spain 7089998 8262078 116,5 17,7 Hungary 118,9France 12171227 11520640 94,7 17,6 Croatia 121,5Croatia 636539 773141 121,5 18,1 Lithuania 124,2Italy 8348338 12639829 151,4 21,2 Austria 125,3Cyprus 141794 114442 80,7 13,2 Latvia 129,9Latvia 292316 379784 129,9 18,8 Portugal 131,1Lithuania 436576 542198 124,2 18,2 Greece 137,2Luxembourg 91233 75057 82,3 14,0 Bulgaria 141,0Hungary 1430865 1701675 118,9 17,2 Italy 151,4Malta 61319 72278 117,9 17,2 Germany 158,4Netherlands 2877922 2824345 98,1 16,8Austria 1219363 1527257 125,3 18,1

Source: Eurostat data.

3,6

13,3

3,6

10,2

-13,2

3,8

5,5

0

2,7

6,5

5,6

10,3

12,5

20

0

4,8

1,9

6,7

3,7

10

5,6

11,8

14,3

11,5

3,2

44,4

24,1

-27,6

0

10,9

-7,7

0

13,7

7,8

27,3

37,5

-22,7

-14,4

-18,2

40

0

3

17,7

-19,5

5

5,6

23,7

-11

-18,7

34,7

19,2

-6,1

-3,2

-2

-3,7

-0,3-4,5

-5,6

-2,8

6

-40 -30 -20 -10 0 10 20 30 40 50

ES 27

Ireland

Austria

Belgium

Bulgaria

Czech R.

Denmark

Estonia

Greece

Spain

Italy

Great Britain

Cyprus

Latvia

Poland

Lithuania

Luxembourg

Malta

Netherlands

Portugal

France

Romania

Slovakia

Slovenia

Finland

Sweden

Hungary

Germany

Norway

Switzerland

2010-2060

2010-2025

EU member states' total population forecast changes (%)(Calculated based on the Eurostat 2011 forecast (EUROPOP) and current statistical data of the national

statistics services)

Unemployment indices 2008-2014

73,4

203,1

312,1

247,2

216,9203,5 198,6

19,241 46,6 39,2 32,2 22,8 21,9

5,8

13,8

17,8

15,413,4

11,1 10,8

13,3

29,6

35,7

32,6

26,7

21,9 21,4

0

50

100

150

200

250

300

350

2008 2009 2010 2011 2012 2013 2014*

Th

ou

s.

0

5

10

15

20

25

30

35

40

Perc

.

Unemployed, thous. Young unemp. (15-24), thous.

Unemploym. Level Youth unemploym.

Source: Data of Statistics Department, Labour Exchange.

* As of April 1, 2014; youth unemployment index, perc. – data of February 2014.

Unemployed according to education,as of beginning of 2014

Education of the unemp. Amount Share,%Total 203544 100Higher university 18546 9,1Higher non-universuty 28048 13,8Secondary 107050 52,6Basic 36290 17,8Elementary 13296 6,5No elementary 314 0,2No professional training 81944 40,3

Source: Lithuanian Labour Exchange.

Assessment of the workforce deficit in Lithuania in 2011 (perc.)

Based on the data of Lithuanian Confederation of Industrialists. Internet access: http://www.easystart.lt/media/dynamic/files/292/2012_i_ketv_pli_apzvalga.pdf.

Source: Už. Ruokytė, A.V.Rutkauskas, V.Navickas Tax and labour market interaction, Vilnius, 2012, p. 121.

46

23

42

57 6151 48

53

77

58

43 3949 52

0

10

20

30

40

50

60

70

80

90

100

Food industry Textileindustry

Wood industry Electronicindustry

Chemicalindustry

Vehicleindustry

All industries

No deficit Deficit

Supply and demand of the qualified workforce in Lithuania in 2013

The qualified workers and craftspeople have

57.9 thousand work places, the majority of them:Job

vacancies

(thousand)

Unempl

oyed

(thousand)

welders; 3.8 2.2

builders using traditional materials; 3.7 1.7

mechanics and service technicians of the engine-powered

vehicles; 3.7 4.3

construction carpenters and woodworkers; 3.4 3.9

bakers and confectioners; 3.3 1.4

bricklayers; 2.4 2.1

electricians for buildings, etc.; 2.4 1.7

concrete workers; 2.2 1.1

water supply and piping fitters; 2.0 1.2

forestry and wood processing employees; 1.9 0.7

butchers and fishery workers as well as related professions; 1.5 0.4

mechanics and service technicians - industr. & agricult.

machines; 1.4 1.0

toolmakers and workers of related professions; 1.4 1.2

seamstresses and hatters; 1.1 0.2

The main reasons for non-employment classified by gender (percent, research data as of 2009).

0 10 20 30 40 50 60 70 80 90

Not satisfied with work conditions

Found another job

Due to violation of work discipline

Started out studies

Men Women

%

Net income in EU 27 and Net income in EU 27 and Lithuania,Lithuania, Euro per month Euro per month

*Income of a single person without children, 50 percent of the average income.**Income of a married couple with two children, income of one – 100 percent, of the other one – 67 percent of the average income.Source: Eurostat.

  2005 2006 2007 2008 2009 2010 2011 2012

EU 27* 1,191 1,223 1,254 1,255 1,240 1,288 1,317 1,373

Lithuania*

183 214 263 308 287 282 290 303

EU 27** 3,978 4,085 4,189 4,192 4,140 4,302 4,398 4,583

Lithuania**

610 716 880 1,030 959 942 967 1,012

Possibilities of workforce deficit problem solution (1)

Where will we look for the necessary employees???

1. Macro-level (state) actions;

2. Micro-level (company) actions.

Possibilities of workforce deficit problem solution (2)

1. On the macro-level (state)

1.1. Improvement of professional training;

1.2. Organizing practical professional training;

1.3. Adequate funding of ALMP instruments;

1.4. Promotion of immigration policies: a) for Lithuanian citizens, b) for foreign citizens (esp. Third world countries);

1.5. Decrease in "poverty trap" and shadow economy manifestations;

1.6. Increasing employment attractiveness for retired people.

Possibilities of workforce deficit problem solution (3)

2. On the micro-level (company)

2.1. A more effective use of the current personnel;

2.2. Company attractiveness publicity/increase (e.g., CSR);

2.3. Integration of personnel use issues in the implementation of other production tasks;

2.4. Purposeful cooperation with territorial labour exchange offices;

2.5. Direct contact with graduates and alumni, targeted scholarships.

Which sources of workforce search do not we make use of?

a) Employee (potential employee) data banks;

b) Activation of workforce search (premiums, contacts, publicity campaigns);

c) Direct contacts with NGOs.

The best solution to the workforce The best solution to the workforce

deficit problem is the increase of deficit problem is the increase of

effective use of the currently available effective use of the currently available

personnel.personnel.

THEN ALL WILL WIN.THEN ALL WILL WIN.

This training material is supported by the European Union Programme for Employment and Social Solidarity - PROGRESS (2007-2013). This programme is implemented by the European Commission. It was established to financially support the implementation of the objectives of the European Union in the employment, social affairs and equal opportunities area, and thereby contribute to the achievement of the Europe 2020 Strategy goals in these fields.The seven-year Programme targets all stakeholders who can help shape the development of appropriate and effective employment and social legislation and policies, across the EU-27, EFTA-EEA and EU candidate and pre-candidate countries.For more information see: http://ec.europa.eu/progress.The information contained in this publication doesn’t necessarily reflect the position or opinion of the European Commission.The sole responsibility of this content lies with the author. The Commission is not responsible for any use that may be made of the information here contained.

With financial support from the European Union – European Commission as Contracting Authority