Ain Käpp: let’s act, otherwise the real crisis is yet to come

The lingering economic downturn has dulled the pain of the labour shortage crisis a little, but it has not taken away its cause, explains Ain Käpp, head of the Central Employers’ Association’s labour market working group, in the columns of Äripäev newspaper. That’s why every step that brings more workers into the labour market is important.

“Although employers and businesses have been drawing attention to the shortage of skilled workers for years, we are only just beginning to see the real crisis,” stressed Yngve Rosenblad, chief labour market analyst at OSKA two years ago. The lingering recession has dulled the pain over the past few years, but not taken it away, and as the economy recovers, it will start to hold back companies again.

If we want to achieve economic growth, attract expansion of local businesses and new investment, and thereby increase the welfare of society, the issue of skilled workers is a key issue for the economy to address.

As a representative of employers, it is sometimes tiresome to repeat what I have been saying for years – that businesses already here and those hoping to get here need the people to make ambitious plans a reality. As the economy develops and businesses expand, tax revenue will also boost the collective public purse.

It pays for Estonia to invest in foreign talent

But this shortcoming is pervasive today. There is a shortage of people doing the simplest jobs, because many jobs are no longer desirable as people become more prosperous, or young people are not suited to routine work, for example, while in many sectors there are headaches filling jobs with specific skills. There are jobs for a wide range of technologists, engineers, technicians with specific skills and others. Health care, agriculture, industry, services, logistics and IT are all affected.

Of course, given our small population and labour market, skills shortages are a built-in problem, but they need not be inevitable. For example, Work In Estonia’s autumn survey found that Estonia should continue its upward trend of recruiting foreign workers – it improves opportunities for businesses and supports their competitiveness by helping to fill roles that cannot be filled by local workers.

In addition, steps to increase flexibility in work will help to attract new people into the labour market. On both these fronts, the new government has pledged to act with vigour and deserves praise.

However, both these changes have been accompanied by fears of mass immigration and of increasing employer discretion and worker insecurity. These are baseless and irresponsible claims.

Migration is temporary

Labour migration is not mass migration, but temporary controlled migration – when a work permit or a job comes to an end, the person leaves. Unfortunately, Estonia is not the first choice for foreign workers today, and this has been exacerbated by some of the toughest conditions in our developed world for recruiting foreign workers – immigration caps and wage requirements. If we increase the current limit by two or three times, that means up to 3,600 more workers. A smaller proportion of these newcomers will bring a family member. Our social labour market can cope with this well, as demonstrated by the tens of thousands of foreign workers and Ukrainians already working here who have integrated into society.

Moreover, we are facing mistakes made by other countries that we do not need to repeat. We can organise our immigration so as to welcome people with the necessary skills and the desire to contribute to the economy, to fit into the culture and to contribute to their own integration into society. These are the kind of workers employers are looking for.

More flexibility and more certainty

However, the planned changes to the Employment Contracts Act to allow more flexible working time arrangements would reduce the use of contractual agreements in employment relationships. This means that the security and guarantees for part-time workers will be strengthened, as they will be subject to limits on working time and rest periods, the right to annual leave, minimum wages, guarantees of safety at work by the employer or guarantees on termination of the contract.

In addition, it helps to bring into the labour market those who are unwilling or unable to work full time. Whether for health, family or learning reasons.

With the birth rate falling year on year – less than 10 000 children were born last year – fewer generations are entering the labour market. Therefore, steps to help boost the labour market are welcome and urgently needed for every working person. Otherwise, we will have to start looking for answers to the question of who and how is going to sustain the Estonian state.

The article appeared in the columns of the newspaper Äripäev.