Russia's war economy depletes workforce in oil sector, Bloomberg reports

The Russian oil and gas industry is facing a labour shortage as the Russian economy's mobilisation for war and a demographic crisis exacerbate the personnel crisis.

Source: Bloomberg

Details: Analysts and recruiters say energy companies are being forced to compete for workers with the Russian army and arms manufacturers. A single advance payment for a soldier fighting in Ukraine can be equivalent to almost a year's salary for an average worker in the oil and gas industry.

This problem is not entirely new – Russia has been facing a decline in its working-age population for almost two decades. The drop in birth rates in the 1990s was the initial cause, and the COVID pandemic added to the challenge, but the invasion of Ukraine has made it much more acute.

Recent reports from the Russian Central Bank indicate the labour shortage is now hitting businesses in all sectors of the economy. While the oil and gas sector appears to be operating smoothly, it may have a more long-term impact.

"Staff shortages have affected even the wealthy industries," said the president of one of Russia's recruitment companies, Alexei Zakharov. "The oil and gas sector can afford to attract employees with higher salaries, but the state competes by offering military contracts."

Estimates from Kasatkin Consulting, a Moscow-based firm and former research centre for Deloitte in the region, show the Russian oil and gas sector is short of about 40,000 workers this year. According to Russia's largest recruitment platform, hh.ru, in the first quarter, the industry increased the number of online job postings by 24% compared to last year, seeking qualified personnel and unskilled workers.

"This industry has open vacancies for electricians, drivers, mechanics, welders, machinists, general workers, sales managers, design engineers, salesmen," said Anna Osipova, head of regional external communications at hh.ru.

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