How to Retain and Bring People Back: We Build Ukraine Outlines Labor Market Prospects and the Future of Human Capital

Without a strategic approach to human capital, economic growth is impossible. It’s not just about the number of working-age people — it's about motivation to work, willingness to change professions, wage levels, productivity, and modern skills. The situation is even more complex considering that, even in optimistic scenarios, Ukraine’s labor force could shrink by 20% by 2040.

These issues were the focus of the sectoral conference "People Matter: A New Architecture for the Recovery Economy", organized by the We Build Ukraine think tank. The event emphasized human capital as a critical resource for recovery and long-term development. Topics included labor migration, informal employment, education, and public-private cooperation.

No Growth Without People

Oleksandr Kubrakov, Chair of the Supervisory Board at We Build Ukraine, emphasized that human capital is one of the four key enablers of economic growth in the joint strategy developed by We Build Ukraine and Boston Consulting Group. These enablers are essential — without them, even the most promising sectors cannot scale.

“We’ve lost people, territory, and production. But we also gained new opportunities: Ukrainian products are entering new markets, and international companies exiting Russia are now considering Ukraine. This shift has created greenfield sectors — opportunities for investors to build from scratch,” said Kubrakov.

He stressed that security and decent wages are decisive in competing for talent. Even after relocating to the EU in 2014, many Ukrainians chose to return.

“Within 2 to 4 years, the majority of those who left — especially in the IT sector — came back. They tried living abroad and realized it wasn’t sustainable. Their incomes didn’t increase, but the cost of living did,” Kubrakov explained.

A similar trend was observed in construction and metallurgy. As the government pushed businesses to raise wages, labor outflow slowed before 2022.

“We actively worked with businesses, urging them to raise minimum wages. As a result, average salaries in construction rose from 9,000 to 25,000 UAH, and in metallurgy to nearly €1,000. And it worked — people started coming back. So when there’s safety and fair pay, people return. And with that, the economy grows,” he concluded.

Every Fifth Person Lost Is a Blow to the Economy

László Juhász, Managing Director of BCG for Central and Eastern Europe, highlighted the demographic crisis. Even before the war, Ukraine had negative population trends — the war only worsened them.

“We project a 20% decline in the labor force by 2040. The most painful loss is among young people aged 20–30 — the most economically active group,” said Juhász.

In addition to the shrinking labor force, he pointed to widespread informal employment and a large shadow economy, which reduce the tax base and undermine policy effectiveness.

Juhász warned that Ukraine’s EU integration ambitions could increase migration — a pattern observed in other countries at this stage. Therefore, Ukraine needs a human capital strategy not only for recovery, but for long-term growth.

“There are three key factors: the size, quality, and productivity of the workforce. Productivity, in turn, depends on quality of life and wages. Ukraine has a chance to leap forward, especially in tech sectors where the gap with the EU isn’t as wide,” he said.

Despite current challenges, he emphasized that Ukraine’s education system remains strong and competitive with Europe.

Unemployed Workers Are Unwilling to Commit Full-Time or Learn New Skills

Olena Kolesnikova, Chair of the Industry Council of the Federation of Metallurgists of Ukraine, presented results from the country’s largest labor market study — covering 55,000 companies and 69,000 unemployed individuals.

“We asked: why is there high unemployment while businesses say they can’t find people? It turns out the issue isn’t just about vacancies — it’s about a mismatch in expectations,” she explained.

Key findings:

• Only 56% of unemployed individuals are willing to work full-time, while 94% of employers require it;

• 80% of unemployed people expect salaries under 20,000 UAH, even though average wages are higher;

• Just 23% are willing to undergo retraining, and a third are unwilling to change professions at all.

“Only half are open to upskilling. People say it takes too long, is hard, and offers no guarantees. But without learning, it’s impossible,” said Kolesnikova.

Meanwhile, 35% of employers are ready to raise salaries, and 32% plan to hire — with a projected demand for over 100,000 workers. The highest demand is in utilities, energy, healthcare, education, and agriculture. Most in-demand roles include drivers, welders, mechanics, seamstresses, and tractor operators.

“The biggest problem isn’t just labor shortages — it’s low motivation to work. Addressing this requires action from the state, business, and educational institutions alike,” she concluded.