Yulia Zhovtyak, Employment Service: Those who work with their hands can earn 100,000 hryvnias or more.

In an interview with RBC-Ukraine, the Director of the State Employment Service, Yulia Zhovtiak, discusses significant imbalances in the labor market during the war, the situation with informal employment, exorbitant salaries, and staff shortages, the employment of veterans, people with disabilities, and pensioners, the presence of women in traditionally male professions, and the conditions for the return of refugees.

The labor market during the war has vividly demonstrated the structural disproportions of the domestic economy. On one hand, Ukraine is experiencing the anticipated results of years of short-sighted personnel policy, compounded by the challenges of wartime. On the other hand, society and the state have finally come to realize the necessity of radical changes in the labor market, without which the Ukrainian economy is doomed to lag behind the global economy.

Yulia Zhovtiak, the head of the State Employment Service, spoke about what the domestic labor market looks like during the war, how the state’s personnel policy is changing, what is being done to correct past mistakes, and what to expect in the future.

The Labor Market During War

– According to the Ministry of Social Policy of Ukraine, by December 2024, out of approximately 5 million internally displaced persons, only 29 thousand have returned to their previous places of residence. Of these 29 thousand: one thousand returned to temporarily occupied territories; 18.9 thousand returned to conditionally safe areas; 9 thousand returned to areas of potential military action. One reason for their return is the difficulties in paying for housing in territories controlled by Ukraine. It is clear that these difficulties stem, in particular, from the lack of work for IDPs. Why is this happening? What is the Employment Service doing in this situation? And what will happen next?

– The full-scale invasion by Russia has posed a challenge for every person in Ukraine, including state structures. Many critical quick decisions had to be made. There had never been such an experience in Ukraine or in other countries during a large-scale armed aggression. When millions of people in Ukraine registered as internally displaced persons, they indicated whether they needed employment. In reality, many people among IDPs are of retirement age, many are working remotely, and some relocated with their businesses.

At the beginning of 2023, we called all IDPs who needed employment and offered our services. I can't say that a million people turned to us. After that, legislative changes were introduced regarding the procedure for receiving unemployment benefits. In particular, after three months of receiving social benefits, a person must either find a job, look for work, or, for example, take a training voucher, thus facilitating their entry into the labor market. At that time, I expected that many people would come to the Employment Service. But I was mistaken. No more than 100 thousand people reached out to us. However, among those who contacted us, every third person was employed.

– How many people did you call?

– We called 68 thousand people.

– And 100 thousand people came?

– Yes. 100 thousand is the total number of individuals who registered with the Employment Service as IDPs. In total, almost 400 thousand people were registered as unemployed in the Employment Service in 2024. Through employment centers across Ukraine, 250 thousand were employed. Overall, 330 thousand of our citizens were provided with employment. What do I mean? There is direct employment when a person approaches the Employment Service and we find them a job. And there is employment through active employment programs. Currently, we are employing people in temporary, socially beneficial jobs such as construction of fortifications and repairs, sewing uniforms, etc. We also provide employment through grants, training, retraining, and requalification, which also contributes to employment. People find jobs after training, or thanks to compensation from the Employment Service for employers. The total number of people employed directly, as well as through various programs, amounts to 330 thousand.

– It is known that since the beginning of the full-scale war, the number of registered unemployed in the Employment Service has decreased significantly. Is it true that this is partly due to men's reluctance to register due to the risk of being mobilized?

– It is quite difficult to verify this version. And it is not the function of the Employment Service. Before the full-scale invasion, the Service served about a million citizens annually. Accordingly, almost all of these people received unemployment status. However, in 2024, 400 thousand unemployed were registered with the Service. Why is this so? There are several reasons.

First, a large number of the working-age population has left the country. However, people who are abroad, even if they have the opportunity to register as unemployed, in particular through the "Diia" portal, do not have the right to receive benefits.

– So people just have no reason to register as unemployed?

– Yes. In my opinion, the main reason for the decrease in the number of registered unemployed is that many men and women are defending Ukraine. This part of the Ukrainian population could potentially be our target audience.

Moreover, many Ukrainians were forced to leave the country.

Another reason is that all conscripted individuals must provide military registration documents when registering with the Employment Service. This approach aligns with the principle of "Work or Fight!" This has indeed reduced the number of registered unemployed men. If before the full-scale invasion the ratio of men to women among the unemployed was traditionally about 50 to 50, now 80% are women and 20% are men.

– By the way, what is the reason that grants for personal businesses from the Employment Service are more often received by women? Is it not because there are significantly more registered unemployed women?

– In the case of grants, the difference is not that significant – women receive about 52% of the grants. I view this positively. It indicates that women are increasingly adapting to new challenges, especially in conditions where many men are involved in defending the country. Women demonstrate leadership in difficult times. Today, a woman is not only a mother but also a soldier, politician, volunteer, and successful businessperson. Such changes and leadership break down gender stereotypes that have developed over the years. Therefore, the active involvement of women in all spheres of life is not only a matter of equality but also a strategic tool that positively affects economic growth.

Additionally, a possible factor influencing people's desire to register with the Employment Service is the reduction in the duration of unemployment benefits during martial law. Previously, benefits were provided for up to one year, and for some categories of the population (citizens of pre-retirement age) for up to two years, but now it is a matter of three months. For pre-retirement age individuals, it is one year. The freed-up funds have been directed towards development and opportunities, grants for starting or scaling businesses, training people, and expanding compensation for employers, employment, and the creation of new jobs.

The Situation with Informal Employment

– What is the actual unemployment rate in the country?

– That’s a good question. Informal employment existed in Ukraine even before the full-scale invasion. The war has intensified negative trends.

I have always insisted that workers should be officially registered at work. Not everyone understands why this is necessary, especially the youth. Often, they underestimate the importance of insurance experience, believing that it is enough to earn a lot of money before retirement. But it is impossible to predict what will happen in 20 to 25 years.

What does official employment provide? First, it offers insurance experience, which determines future pension payments. Second, it guarantees state payments in case of workplace accidents. No one thinks about this until such an incident occurs at work. I won't even mention sick leave payments.

Additionally, our taxes and fees fund the army, schools, hospitals, pensions, etc.

Combating informal employment is a challenging task. EU countries have also gone through this process; they also had a significant informal employment sector in the past.

– How do you think businesses can be compelled to officially register their employees?

– I once asked my European colleagues how they combat informal employment. The first thing they mentioned was preventive measures. Their tax service can see the turnover of companies and the number of hired workers through relevant registries. If the number of workers does not match the company's turnover, the management of such a company receives a "motivational" letter. The essence of such a letter is conditionally as follows: the analysis of the company's activities revealed signs of possible informal employment of employees, so the management is advised to responsibly approach the registration of workers. The next control measure will occur after a certain time. If the situation regarding worker registration does not improve, the company will face an inspection.

According to European colleagues, this approach works. It does not exclude control measures regarding businesses. I see no other way. However, before conducting inspections, the aforementioned preventive measures should be