Balanced approaches to mobilization would help us to keep the economic front – Mauro Longobardo

Businesses in Ukraine are being forced to hire women to fill positions previously held by men due to a shortage of staff, according to a Financial Times article. In particular, they are in demand at steel plants.

Out of 18,000 employees of ArcelorMittal Kryvyi Rih who worked at the company at the beginning of the war, about 3,500 men were mobilized, and this year their number is likely to increase.

«If they continue to mobilize, we will not have enough [staff] to work. We are talking about the existence of the company,» Mauro Longobardo, CEO of ArcelorMittal Kryvyi Rih, told the Financial Times.

According to him, the company is trying to break the paradigm that only men can do certain jobs. The hiring strategy is partly aimed at replacing mobilized employees, as well as thousands of workers who have moved to safer regions of the country. This approach is also used because it has become very difficult to hire men. The plant has previously employed women, but mostly in administrative positions. Now they are increasingly performing more physically demanding jobs.

In order to work at ArcelorMittal Kryvyi Rih, male employees are required by law to register with the territorial center for recruitment and social support, which discourages many potential candidates. The plant is a permanent reserve of personnel for the army, with locomotive drivers, electricians, and mechanics being the most in demand.

Mauro Longobardo believes that a balanced approach to mobilization would help keep the economic front, and the country is losing from the current situation.

In an effort to fill the vacancies, the plant was forced to cut production, including steel used to protect energy facilities from Russian air strikes. According to the CEO of ArcelorMittal Kryvyi Rih, the decline in production has also led to a drop in profits and tax revenues.

The Ukrainian authorities are expected to announce measures to help businesses better manage mobilization. Ihor Fomenko, deputy economy minister, said the government is working on changes to the system that currently exempts some employees of enterprises considered strategically important from mobilization.

In industries where men dominate the workforce, «there are risks and problems for business,» said Mykhailo Nepran, first vice president of the Ukrainian Chamber of Commerce and Industry. According to him, business would like to have clarity on the selection criteria used by the army. More transparency is also needed in identifying strategically important enterprises. Currently, the list includes defense companies and critical infrastructure facilities.

«The policy needs to be finalized to at least save enterprises that generate funds for the state budget,» said Anna Derevyanko, head of the European Business Association. According to her, on average, 10% to 15% of EBA member companies’ employees serve in the Armed Forces.

Tax revenues, the FT notes, are crucial in a country where the budget has a 50 percent deficit. Ukraine spends almost all of its domestic revenues on basic running costs for the army, including salaries, uniforms, food and housing, while non-military spending is financed by Western loans and aid.

«It’s about finding the right balance. We need to ensure that the army receives everything it needs, the economy works, and taxes are paid to the budget,» said Andy Hunder, President of the American Chamber of Commerce in Kyiv.

As GMK Center reported earlier, ArcelorMittal Kryvyi Rih increased production of all its main products in April 2024 despite the ongoing attacks on Ukraine’s energy infrastructure and related power supply restrictions.