Georgia’s labor market continued to exhibit positive signs of a strong post-Covid recovery in the beginning of 2023, but concerns around a growing mismatch between labor supply and employer needs remain, analysis from PMC Research in its latest Employment Tracker shows.
The monthly publication, which tracks job openings through popular recruitment site Jobs.ge and gathers data on average salaries through Georgia’s Revenue Service, noted in its latest report that total job postings on the site for the last six months (August 2022 – January 2023) were up 24.3% compared to the same period a year prior. PMC Research Analyst Sopho Basilidze says this is a positive sign of growth but also may be indicative of increasing inefficiency in the labor market.
“On one side, the increase in job postings over the last six months is indicative that companies are expanding,” says Basilidze. “On the other hand,” she adds, “there is some concern that these numbers may be slightly inflated by re-postings of the same jobs, which supports our understanding that Georgia is currently facing a labor shortage.”
This labor shortage, notes Basilidze, is due to several factors. “In a recent survey conducted for the BAG Index, we found that 66% of companies in the last quarter of 2022 were having trouble recruiting staff, which is up almost 15% compared to a year prior,” she says. Of those surveyed, the majority reported issues in recruiting highly skilled staff; notably, the proportion of companies that struggled to fill low-skilled positions was also up nearly 17% compared to the previous year.
This, she adds, is a result of both a lack of qualified workers for in-demand positions, as well as a byproduct of large-scale labor emigration. “We’ve certainly seen the labor market become more inefficient post-Covid,” she notes. “There is a growing mismatch between the skills needed and the applications companies are receiving. Issues in filling low-skill jobs may be coming from emigration as people are no longer willing to work for the wages offered in Georgia for these positions.”
PMC Research’s wage report tells a similar double-sided story of both growth and concern. In January 2023, the number of persons receiving a monthly salary was up by 2.5% compared to the corresponding period of 2022 and 10.7% higher than the corresponding period of 2021.
By wage bracket, January figures also show a 6.5% YoY decrease in the number of people receiving a gross salary of less than 600 GEL ($233), paired with a 4.2% YoY increase in the number of people receiving a salary greater than 2,400 GEL ($932) and a 26.9% increase in the number of people receiving a salary greater than 9,600 GEL ($3729).
More salaried workers and higher average salaries are both positive trends, notes Basilidze. However, these positive results are partly mitigated by the impact of inflation. “Inflation stood at 9.4% in January, meaning that the growth of real wages is much less impressive. Furthermore,” she adds, “even though the number of people receiving a salary of 600 GEL or less is shrinking, it still makes up a significant portion of the labor force – around 26%. This means a quarter of the labor market is still working for very low wages, which have effectively become even lower due to high inflation.”
Sectors in demand
Looking at the vacancies posted on Jobs.ge from August 2022 – January 2023, PMC Research’s Basilidze says there is a clear upward trend in demand for jobs in sales and procurement (up 135% YoY) and finance (up 142% YoY). Demand for IT/computer programming work, she notes, is also increasing, with huge salary growth potential. “In the last quarter of 2022, we saw salaries in all sectors increase by an average of about 20%,” she says. “But wages in the IT sector jumped massively – around 65%.”
Overall, the labor market continues to be active as Georgia’s economy continues to grow, says Basilidze, with unemployment hitting a ten-year historic low of 15.6% in the third quarter of 2022. “That being said,” she cautions. “Unemployment of 15% is still considerably higher than we would like, and it will be crucial moving forward to address these inefficiencies in the labor market so that we have a workforce with the skills needed to meet demand.”