FEBRUARY 2025
Ukraine’s Future
Rests on Its People
Strengthening Ukraine’s Workforce and Human Capital
By Romina Bandura
Introduction
Russia’s full-scale invasion of Ukraine in February 2022 has had an immense human cost, producing
a level of physical destruction, human suering, and displacement not seen in Europe since World
War II. Since the war began, a large share of Ukraine’s workforce has emigrated or relocated within
the country, enlisted in the military, or tragically become a casualty of the violence. In addition,
unpredictable changes to the conscription and mobilization of men have signicantly compressed
the labor supply.
This dicult workforce situation aects business operations across Ukraine and threatens the country’s
future reconstruction and growth prospects. According to an October 2024 survey by Ukraine’s Institute
for Economic Research and Policy Consulting, labor shortages are the private sector’s top concern,
with more than 60 percent of the companies consulted nding it dicult to hire qualied workers.
At the same time, recent estimates show that the current unemployment rate in Ukraine stood at 12.7
percent in late 2024, meaning unemployment coexists with labor shortages that reect pervasive skills
mismatches across regions and sectors of the economy.
Even before the war, Ukraine was experiencing a challenging demographic scenario characterized by
low birth rates, premature mortality among men, and emigration of young Ukrainians looking for better
economic opportunities abroad. As a result of these negative trends, Ukraine will have a large decit
of workers in the future. The International Labor Organization (ILO) estimates the country will need
an additional 8.6 million workers by 2032 (compared to 2022). The government of Ukraine, working
with the international community and relevant stakeholders, will have to develop and implement a
comprehensive human capital stratey to address current and future workforce needs. This will require
a combination of short-term and long-term actions that seek to expand the country’s talent pool.
