Threat to Lithuanian business: shortage of qualified workforce

“According to the information obtained from the study, the overall situation in our country is viewed quite positively by entrepreneurs; however, there are major issues that create obstacles for business development and even threaten the survival in competitive space. And one of the most serious issues is the shortage of qualified workforce faced by more and more companies,” said Giedrė Kubiliūnienė, Head of the Small and Medium Businesses’ Department of Citadele bank.

37% of entrepreneurs voiced their concerns regarding the shortage of qualified workforce in 2017, while this year, this number grew, i.e. 38.6% of entrepreneurs saw the issue as an obstacle for business. The highest shortage of qualified workforce is in Klaipėda region, where this factor was identified as the major business issue by 50% of the respondents. The situation is equally as complicated in Vilnius region, where 46% of entrepreneurs are unable to find qualified workforce, Utena (43.5%) and Marijampolė (41%) regions.

“This problem is a lot more serious than it may seem at the first sight, because it is the qualified workforce that develops products and services with high added value, which is the key driving force of any developed economy. Furthermore, seeing these indicators foreign investors may decide to consider other possible alternatives before choosing to develop their business in Lithuania,” explained Mrs. Kubiliūnienė.

According to Sigitas Besagirskas, President of Vilnius Industry and Business Association (VIBA), Lithuanian companies have been facing the shortage of qualified workforce for quite some time now and some sectors, in particular logistics and construction, would no longer be able to survive without professionals from third countries.

“If we want to secure further development of our economy, we must simplify the procedure to grant work permits to foreign professionals, because in some areas, the situation is highly complicated. For example, long-distance drivers residing in Lithuania choose not to take on this demanding job for currently offered salary and often opt for less paid jobs that leave them more time to spend with their families,” said Mr. Besagirskas.

The labour market is also affected by opportunities to work abroad. For example, almost 90% of nurses and nursemaids receiving education in Lithuania leave to work abroad, where professionals in these fields are offered a lot better financial conditions.

“It could also be a good idea to reconsider the training policy for professionals. We have too many architects and lawyers, while there is shortage of workforce in other fields. Is it really worth investing in fields that already have excess supply of workforce?” asked the President of VIBA.

The study initiated by Citadele bank revealed that the lowest shortage of qualified professionals is in Tauragė (30.4%) and Panevėžys (31.3%) regions; however, the percentage of those unhappy with the situation remains high.

When looking for unqualified workforce, entrepreneurs do not face major difficulties and see no potential of it becoming a major issue. Only 2% of entrepreneurs predict that finding unqualified workforce may become difficult in the coming 5 years.

According to the results of the study initiated by Citadele bank, other major challenges for business in 2018 include tax burden, bureaucratic business regulation procedures, increasing costs of business and growing competition.