An economic boom instead of a crisis? There is a shortage of workers even for €8K

While some experts predict an imminent crisis, others discuss a possible upturn in the Lithuanian economy. At least for now, it is felt most in the labour market, where there are many, promising job offers, and salaries on paper reach up to EUR 8,000, Vilija Mačiulskytė says in TV3.lt

Vytenis Šimkus, Senior Economist at” Swedbank”, noted that the Lithuanian labour market shows surprising resilience. The sharp rise in the price of energy and other raw materials has led to a slowdown in economic activity while the European economy was flirting with recession last winter.  However, contrary to expectations, the unemployment rate fell to its lowest level in decades. The unexpected resilience of the labour market surprised many analysts and economic policymakers, the economist acknowledged.

He said that various factors can explain the resilience of the labour market. “These include the delayed recovery of the services sector, the structural shortage of labour due to an ageing population, and companies’ reluctance to let go of workers because it is costly in European countries, while the experience of the pandemic has shown that it is not easy to get back the workers who have been laid off,” Šimkus said.

Employment Service data also show this. According to them, registered jobseekers decreased by 3.9 thousand in August and reached 149.1 thousand on 1 September. After the mid-summer lull in the labour market, the search for workers intensified in August, more people returned to the labour market and the number of unemployed shrank. One thousand more employers posted vacancies in August than in July. The number of jobs offers rose by more than a quarter (4,200) to 18,600. Eighteen municipalities had the highest number of jobs offers since the beginning of the year,” said Jurgita Zemblytė, Head of the Monitoring and Analysis Division at the Employment Service.

Salaries are also growing

” Figure Baltic Advisory” expert Povilas Blusius, based on a recent study, calculates that over the last 12 months, the basic salary in the country has grown by almost 14%, compared to 11.5% last year. The active growth of salaries seems paradoxical in the current macroeconomic situation, which is not particularly pleasant. It is also worth noting that companies usually decide to increase wages well in advance: if wages are typically reviewed in April, the funds for the increase are planned for at least six months.

Over such a period, the economic situation often changes, sometimes radically. As a result, wage growth only sometimes correlates with the financial situation of a country or even a region. This year, however, we can say that the very high inflation of last year has put pressure on employers to increase wages,” commented Mr Blusius.

Offering salaries of up to €8,000

 Some job advertisements show a shortage of workers and that they are offered good salaries. For example, the job search portal cv online.lt. offers the highest salaries for IT specialists and managers in various fields. For example, an IT data engineer’s salaries range from EUR 2 000 to EUR 8 000. A software engineer is offered a salary between EUR 3,000 and EUR 7,000. An IT architect is offered a salary of almost EUR 7,000.

The compensation provided for sales managers or managers is around €5,000. P. Blusius noted that it is not only IT specialists who can earn high salaries in Lithuania. The survey data also revealed who had the fastest salary growth over the last 12 months – 20% or more. The average base salary has increased by a third or more for data protection specialists junior cloud computing engineers, and over 20% for documentation engineers, senior lawyers and junior copywriters.

 “While IT positions usually dominate such lists, this year there is much more diversity: lawyers, anti-money laundering specialists, copywriters,” commented Blusius on the salary growth trends in the different fields. Recruits also enjoy higher salaries, earning up to 2.1% more on average than their more senior colleagues. The difference is slightly higher, at 5.4%, for those in the IT sector.

As for the future, remuneration expert Mr Blusius shares a moderately optimistic outlook. He says that while average base salaries have grown by over 10% for two consecutive years, a more moderate growth of 7.1% is expected next year. “Despite the already implemented revisions and some of the most significant salary increases this year, companies will have a much more relaxed approach to the next year. Of course, it is never clear how companies’ budgets and plans will change as the year progresses.

However, given the economic forecasts and the general situation in the HR market, it is likely that there will not be any strong reasons to increase salaries more rapidly next year,” said Mr Blusius.