Business news from Ukraine

Business news from Ukraine

Associations of Industrialists of Ukraine demand resumption of employee reservation

17 October , 2024  

Associations of industrial, mining, building materials and cement producers are demanding the resumption of employee reservations, which have effectively stopped after the government suspended the process of assigning critical infrastructure status to enterprises.

“After the President drew attention to the fact that the number of reservations had tripled, the Cabinet of Ministers made a protocol decision to suspend the recognition of enterprises as critical. I emphasize that we are talking about new enterprises, not those that have been recognized as critical to the country’s economy for a long time and only need to confirm this status. But in fact, the entire reservation process has been put on hold at the level of the Ministry of Economy. We do not receive confirmations for enterprises previously recognized as critical and cannot book employees,” said Oleksandr Kalenkov, president of Ukrmetallurgprom, at a press briefing at Interfax-Ukraine.

Industrial companies are facing a serious staffing crisis. According to Kalenkov, booking 50% of employees is not enough for manufacturing companies, as the staff at the enterprises is already maximally optimized. Working in complex production requires certain qualifications, and it is impossible to quickly replace mobilized employees.

“People don’t come to work for us because we are transparent. Representatives of the TCC simply go to our checkpoint at the beginning of the day, where a thousand people pass through every day, hand out summonses and fulfill the work plan for the month ahead. This leads to the fact that people do not come to work for us because they are afraid that we will not have time to book them and they will be taken away the next day. This has actually happened, because we don’t even have time to go through this procedure,” he explained.

The situation is even more complicated with hiring employees at companies in regions close to the war zone, said Sergiy Kudryavtsev, executive director of the Ukrainian Ferroalloy Producers Association (UkrFA).

“We would like to increase the percentage of booked employees. A company located in the war zone has no way to replace a mobilized employee. We have repeatedly raised the issue with the Ministry of Defense to increase the reservation rate to at least 70%,” he said.

It is also important to allow companies to manage the reservation process independently in terms of changing the distribution of reservations among employees and refining the lists depending on the needs of the companies, Kudryavtsev said.

Changes should also be made to the process of recognizing an enterprise as critical, said Pavlo Kachur, chairman of the Ukrainian Cement Producers Association Ukrcement. According to him, the process of confirming the criticality status should be automatic based on established criteria.

One of the fundamental problems with the reservation mechanism is the lack of systematic information on the number of companies and their staff in Ukraine, said Konstantin Saliy, president of the All-Ukrainian Union of Construction Materials Manufacturers.

“In three years, we could have created a system where the Prime Minister and relevant ministries could see their industries and which enterprises are critical, and could automatically notify managers of their plans. No one knows how many mid-sized enterprises we have that are really critical. But there are no responsible persons in the government who would communicate and monitor the situation. We have a whole ministry for digitalization, so digitalize these processes,” the expert said.

In addition, the processes of booking employees in the mining, metallurgical and related industries require a specialized approach, taking into account the specifics of their work, said Georgiy Popov, representative of the National Association of the Extractive Industry of Ukraine (NADPU). According to him, the current booking periods are often insufficient, as some projects in these areas take up to five years and require the participation of highly qualified specialists.

“I support the proposals of my colleagues: we need a proper digitalization process, a specialized approach to the industry, taking into account its specifics and differences from other businesses. At the beginning of the full-scale war, there was a lot of talk about booking IT specialists. However, we should not forget that the mining business and the mining and metallurgical complex are responsible for the lion’s share of tax revenues, white-collar employment and foreign exchange earnings,” he emphasized.

Representatives of the associations called on the government, the President’s Office and relevant ministries to resume actual booking, to audit critical enterprises as soon as possible to avoid stopping the work of many companies and plants that provide significant tax revenues and materials important for the country’s defense capability.

“While we support the President’s decision to clean up the booking process, we appeal to the Cabinet of Ministers to solve the problems in this area. Not to stop the processes, but to conduct an audit and find out how so many reservations were made in six months. If the current situation drags on for days and weeks, it will lead to a halt in our work,” Kalenkov summarized.