Latvia

In spite of a significant decrease in registered unemployment and an increase in the number of vacancies, the number of jobseekers still significantly exceeds the number of available vacancies. The number of employed people in the main sectors of the economy will gradually grow in the mid-term, with the exception of the public services sector where a further decrease in employment is expected. In the mid-term, the greatest increase in demand is expected in medium-skilled occupations. This will mainly be driven by the growing demand in the construction, sales, and processing sectors.

According to the data on vacancies registered with the State Employment Agency, job offers may be found in such sectors as the processing industry; the wholesale and retail trade; transport and warehousing; professional, scientific, information and communication services; and accommodation and catering services. The highest number of vacancies is for qualified workers and craftsmen. At the end of January 2012, the occupations most in demand from employers who registered their vacancies with the State Employment Agency were auxiliary workers, cooks, programmers, truck drivers, seamstresses, retail shop assistants, security guards, customer service specialists, forest workers, operators of sewing machines, and electricians.

SHORT OVERVIEW OF THE LABOUR MARKET: 

In 2015, the population of Latvia was around 2 million (1 979 100). Of these, approximately half or 1 million people (994 200) were economically active. At the beginning of 2015, 1.22 million or 61.6% of the total population were Latvian, 512 000 or 25.8% were Russian, and the remaining 12.6% were from other ethnic groups. Economic activity is concentrated mainly in and around Riga, where around half of the country’s population lives. Many of the inhabitants of surrounding districts work in the capital city. 

The decline in economic activity caused by the financial crisis, which began at the end of 2007, had a negative impact on employment indicators starting from late 2008: the number of economically active persons and the employment rate decreased, and there was a rise in the level of unemployment. However, since the beginning of 2010, the economic downturn in Latvia has been halted and growth has resumed.  Since the middle of 2010 the situation on the labour market has slowly been improving, with a gradual increase in economic activity and a decline in the level of unemployment. The registered unemployment rate has decreased from 17.3% in March 2010 to 8.7% at the end of 2015. Differences between regions remain considerable – the lowest registered unemployment rate (in the region of Riga) is more than three times less than the highest rate (in the region of Latgale). At the end of 2015 the registered unemployment rate in the Riga region was 5.4%, whereas in Latgale (eastern Latvia) it was 18.5%. 

The labour-market situation will continue to improve in the forthcoming years, but more slowly than in 2015. At the same time, demographic problems will become increasingly apparent, with a decline in the amount of free labour. The results of the Labour Force Survey conducted by the Central Statistical Bureau show that the number of persons employed rose to 896 100 in 2015, which is 1.3% or 11 400 more than in 2014. The employment rate reached 60.8% in 2015, while the unemployment rate declined to 9.9%. The overall number of people looking for work declined in 2015 to 98 200, which is 9 400 people less than in 2014. The Ministry of the Economy estimates that the number of people in employment could rise in 2016 by around 0.9% in comparison to 2015, whereas the unemployment rate could fall to 8.7%.

There is demand on the labour market for flexible and competent workers ready to concurrently perform duties associated with several posts and who, in addition to the required specific professional skills, also have some general skills, for example, knowledge of foreign languages. Demand for highly qualified specialists will increase rapidly. This will be led primarily by growth in labour demand in the processing and service industries, particularly the commercial services sector. In terms of occupations, it is expected that demand will increase in the medium term for specialists in science, engineering and information and communications technologies, and in business, administration and legal, social and cultural fields. There will also be increased demand over the medium term in medium-skilled occupations, mainly in the processing industry. The most important occupations for which demand will increase are operators of electrical and electronic equipment, workers in the machinery and related sectors, and workers in the food processing and wood processing industries. There will be a concurrent decline in demand for agricultural workers. The most significant decline in demand is expected for low-skilled labour; the number of jobs with low educational requirements will decline by more than a quarter by the year 2030.

A skilled labour shortage is already apparent in some occupational areas: there is a lack of computer programmers, medical staff (doctors, nurses), electricians, surveyors, motor vehicle mechanics, auto electricians, ship fitters, telemarketing specialists, turners, welders, etc. Finding themselves confronted with a lack of local specialists, an increasing number of employers are ready to recruit specialists from third countries. According to State Employment Agency statistics, the most vacancies registered in 2015 were in the core group of medium-skilled occupations (retail shop assistant, lorry driver, cook), followed by low-skilled occupations (ancillary worker, cleaner, construction worker) and only then by highly skilled occupations (sales manager, programmer, sales representative). Nevertheless, in comparison to the previous year, the greatest demand was precisely for people working in highly skilled occupations, especially in the core group of senior specialist and managerial occupations.

Text last edited on: 04/2016