Easterners fill labor gap

  • 2005-10-05
  • By Kairi Kurm
TALLINN - For the last few years the tendency to hire people from abroad has increased, particularly among blue-collar workers from Russia and Ukraine, as a growing number of highly-qualified Estonians find better paying jobs in the West.

According to a recent study by Turu-Uuringute AS, 14 percent of Estonian companies are already hiring people from abroad or planning to do so in the near future.

Research conducted among 1,000 companies on behalf of the Estonian Labor Market Board shows that employers are primarily interested in cheap labor from Russia and the former Soviet republics for manufacturing. They are also searching for top-and medium-level managers from Finland. In addition, senior specialists are being hired from Germany, England and Switzerland to fix the machinery in production.

Estonian managers complain that young people want to study at universities, while others do not have proper training.

Of the companies questioned, 6 percent are considering employing imported workers in the near future and another 5 percent have already used this possibility. One-third of the companies hired foreign laborers for over a six-year period.

Foreign labor is not only cheaper, but of good quality as well. Eighty-three percent of respondents were satisfied with their experiences with foreign laborers.

Erko Vanatalu, spokesman of the Estonian Labor Market Board, commented that the situation is paradoxical in that there's an issue of unemployment and a lack of employees at the same time.

"It requires a political decision, whether we should train our people or bring them back from abroad," he said.

Harri Taliga, chairman of the Confederation of Estonian Trade Unions, said, "The Estonian government should think about how to keep Estonians on the job market and train them instead of bringing cheap labor from abroad. The government's approach is: 'Why train them 's they go abroad anyway.'

He said the country's wage policy needed major improvements. "People should receive a dignified salary," he said.

Janno Jarve, deputy secretary general of labor policy at the Ministry of Social Affairs, said the government had not discussed that matter yet. He added that it was a question of migration and culture and a public debate should be held.

Currently Estonia's job market is open to the EU, and five EU countries 's Ireland, England, Denmark, Netherlands and Sweden 's have opened theirs to Estonia. In May next year another round of countries might open its market for the free movement of labor.

Estonians have left for the EU to work mainly in such areas as construction, healthcare and public transportation. According to some speculation, about 6,000 's 8,000 people are working abroad.

Taliga said that Finland should consider opening its market since they would receive more taxes than they currently do, while Estonians work under the agreement of free movement of services. He said the Estonian job market was not attractive to EU employees due to poor earnings. Estonian minimum wage is fourth from the bottom in the EU followed by Latvia, Lithuania and Slovakia.

Only the top management can be paid decently, said Taliga. And given the lack of managers, foreign owners often bring in professionals from their own country.

Mentality is also playing a role in the changing labor market. Tarmo Kriis, chairman of the Estonian Employers' Confederation, said that Estonian workers were not interested in doing jobs that foreigners do. "Estonians do not want to be trained in certain areas where work is hard," said Kriisa, referring to welders as an example.

Several welders have quit their local jobs to find higher wages in Finland, Sweden and Germany, said Taliga. In his opinion, welders from the East are low-paid.

"Each country has its quotas, and according to that permits are granted," said Jarve. On certain occasions the government prioritizes giving working permits to laborers from third countries. As an example, welders have in the past been hired for extraordinary tasks to renovate electric power stations.

Toivo Vare, head of a medium-size metal industry Lapi MT in the south part of Estonia, said that eight out of their 10 welders left the company to work abroad, and he was looking for ways to get new employees from a Russian job agency. "There aren't any [welders] in Estonia. The few that advertise themselves in newspapers ask for 15 euros per hour. In Russia the wages are smaller, and the employees are good," he said.

Jaanus Pauts, spokesman for Elcoteq Tallinn, said that their company, which has 3,900 employees, has continuously drafted workers from its foreign operations to guarantee similar quality and keep up the seasonality of orders. Currently Elcoteq Tallinn has hired 50 people from Hungary.

Pauts said that the shortage of employees in Estonia and the European Union could be felt. Still, now it is simpler to hire employees within the EU.

Makarand Divekar, head of the tissue department at Horizon Pulp and Paper, said that they had not had problems finding people for management positions; rather, it's finding laborers the past two years that has proven difficult.

"We have a very open policy. If we can get (employees) from outside, we'd definitely consider it," he said.

The company is currently planning to double its number of employees due to expansion. "It will be difficult. Kehra has a small population. There are better jobs in Tallinn and these are better paid," he said.

Managers of such companies as a printing company Print Best, furniture producer Viisnurk, IT company Microlink and construction material producer Aeroc told The Baltic Times that they had no need for foreign labor.

The government's aim is to create 4,000 new jobs annually and bring the current labor participation rate up from 63 percent to 70 percent. Out of Estonia's population of 1.4 million, some 600,000 are working. The government wants to boost this to 623,000.

Most jobs have been created in the service and industry sector, while more people are leaving the agriculture sector. Some 10,200 people annually leave the job market due to retirement, death and other reasons, said Vanatalu.

The unemployment rate has been decreasing since 2002. The percentage of registered unemployed is 3 percent. Unemployment subsidy of 400 kroons (26 euros) per month is paid for nine months (270 days) only, and healthcare is provided for 10 months. Later the unemployed will only get first aid, but training and other active labor market measures are still provided to them.

The total share of unemployed in Estonia, according to research, is about 9 percent, which is still lower than the usual 10 percent rate, said Vanatalu. A robust economy and European Union funds have helped create more jobs, he added.

For 2004 's 2006 Estonia is to receive 500 million kroons of EU structural funds to improve the quality of human capital.