Work in progress: inside Georgia’s evolving labor market

Recent data from Policy and Management Consulting Group (PMCG)’s latest Labor Market Overview paints a mixed picture for Georgia. Employment and wages are rising compared to pre-pandemic benchmarks, but job vacancy rates have slumped for three consecutive months, signaling higher employer caution. Meanwhile, entrenched structural challenges—including gender disparities and the urban-rural divide—persist with little progress.

Job vacancies

In May 2025, job postings on Jobs.ge rose by 10.8% compared to April, reaching 7,290 vacancies. This recovery was largely driven by a 25.7% increase in sales and procurement roles. However, the broader trend remains muted: over the March–May period, job postings totaled 20,032 — a 13.1% YoY decline.

Some sectors were hit harder than others. Administration and management roles dropped by 17.7% compared to the same period in 2024. Only finance and statistics jobs recorded YoY growth, with a slight increase of 1.7%.

According to Project Manager at PMCG’s Research Center Grigol Pantsulaia, several factors likely contributed to the overall decline: fewer newly registered businesses in 2024, reduced foreign direct investment in Q1 2025, and heightened caution among existing businesses due to geopolitical uncertainty.

“Additionally, the decline may reflect improved labor market efficiency, as indicated by the seasonally adjusted Beveridge curve. Both the seasonally adjusted unemployment rate and job vacancy rate decreased in Q1 2025. The decline is not seasonal, as the downward trend has continued over several consecutive months,” says Pantsulaia.

While vacancies improved slightly from April, YoY figures remained soft, and the unemployment rate rose to 14.7%, up from 14.2% in Q4 2024. Labor underutilization — including discouraged and underemployed workers — remains significantly above the official unemployment rate.

Labor market resilience

Despite sluggish hiring in early 2025, Georgia’s labor market has outperformed pre-pandemic benchmarks. Key indicators from Q1 2025 compared to Q1 2019 include:

• Employment rate: up 4.6%
• Labor force participation: up 2.2%
• Unemployment rate: down 5%

Nevertheless, Georgia’s unemployment rate remains more than twice the EU average (5.8% in Q1 2025). The continued prevalence of underutilized labor highlights ongoing inefficiencies in the market.

The labor force has grown by 2.5% compared to Q1 2019, driven by an 8.9% increase in employment and a 6.1% decline in the population outside the labor force. These changes may reflect both improved participation and emigration among working-age Georgians.

Wages

Between Q1 2019 and Q1 2025, nominal wages nearly doubled — rising from 1,093 GEL to 2,170 GEL. However, when adjusted for inflation, real wages increased from 934 GEL to approximately 1,332 GEL — a more modest gain.

Wage distribution is also shifting:

• Workers earning less than 600 GEL: down 40.3% since 2021
• 600–1,199 GEL earners: down 17.7%
• 2,400+ GEL earners: more than doubled, now 31.8% of salaried workers (May 2025)

Notably, the share of high earners dipped slightly in May (down 1.2% from April), while the share of low earners ticked up — possibly hinting at compression at both ends of the wage spectrum.

Business sentiment

PMCG’s business survey from Q1 2025 shows mixed expectations:

• 40% of companies raised salaries, mostly by 0–20%
• 23% increased staff
• 29% plan to expand employment in Q2

However, only 18% expect to raise salaries in Q2. Meanwhile, the BAG Employment Barometer fell by 4.0 points from Q4 2024 and 20.3 points YoY — a sign of softening sentiment, likely due to rising political uncertainty.

Structural labor market challenges

Several persistent gaps continue to characterize Georgia’s labor market:

• Gender gap: From 2019–2025, women’s labor force participation averaged 21.5 percentage points below men’s. Women also earn significantly less on average.
• Urban-rural divide: Urban participation remains higher, but the gap is narrowing. Employment rose in both areas from 2019–2025.
• Sectoral shifts: Employment grew in trade, industry, and education, but fell 9.1% in agriculture.
• Foreign workers: As of September 2024, 18,935 foreign nationals (2% of the workforce) were employed in Georgia — mostly in IT, construction, and hospitality.

Efficiency and the Beveridge Curve

The Beveridge Curve — which measures the relationship between job vacancies and unemployment — improved slightly in Q1 2025 versus Q4 2024. Both unemployment and vacancy rates declined marginally, suggesting a minor gain in labor market efficiency.

Still, overall efficiency remains below pre-pandemic levels. Labor underutilization continues to exceed the unemployment rate by a substantial margin, signaling latent labor market slack.

Outlook

Georgia’s labor market in early 2025 presents a paradox: rising wages and stronger employment figures coexist with falling vacancies and unresolved structural issues. The post-pandemic rebound is real — but so is the fragility underlying labor demand, especially in skilled sectors. The coming months will test whether recent declines in job postings are a temporary response to political volatility, or an early sign of a more prolonged recalibration in the country’s employment landscape.