Exclusive Challenges in providing staff for iron & steel companies during the war

Despite the difficult situation in the country and the crisis in the global steel market, Ukrainian companies are gradually raising salaries

The full-scale military aggression has created many problems for Ukraine’s iron & steel companies, ranging from logistical difficulties and shortages of raw materials to physical destruction of assets. The war has also brought no less significant problems for the industry’s most valuable asset, people, ranging from financial hardship to physical threats to the lives and safety of workers.

Challenging environment for the iron & steel industry

Many factors other than the war have a negative impact on the iron & steel sector in Ukraine. At the same time, the industry’s owners are finding opportunities to provide large-scale comprehensive support to the Ukrainian Defense Forces, internally displaced persons, humanitarian aid in the areas of operation, assistance to the families of killed and wounded defenders, and restoration of destroyed housing for their employees. Our industry is one of the undisputed leaders in this area.

The most acute challenges now and after the war relate directly to the problems of providing the industry with personnel:

1. Mobilization of a significant number of employees subject to military service for defense purposes. Our companies, which comply with all legal requirements for military registration, have already mobilized from 16% to more than 20% of their total workforce, and there is no one to replace them in full either now or in the future.
2. Significant growth in prices for consumer goods and utilities, which necessitates wage increases with an acute shortage of funding sources. In addition, employees ofiron & steel companies have always received a traditional social package that includes healthcare benefits for both employees and their families, bonuses, and other compensation and incentive payments in accordance with collective bargaining agreements. Unfortunately, the critical financial condition of the industry does not allow it to fulfill all peacetime obligations in a timely manner and in full.
3. Geographical location of iron & steel companies. The vast majority of them are located in regions close to the areas of active hostilities, which causes internal migration of some citizens to safer regions of Ukraine. At the beginning of the full-scale invasion, a significant number of workers in the industry, mostly women with children, left to seek temporary refuge abroad.

Ways to solve problems

These are extremely challenging times for HR professionals. They have to confront challenges that no one in Ukraine has ever addressed before with such actions:

– wide involvement of women, internally displaced persons, people with disabilities, and employees aged 60+;
– reintegration of war veterans into civilian life and work;
– launching large-scale retraining and psychosocial support programs for employees.

All of this helps to mitigate the problem of acute staff shortages to some extent, but does not solve it completely.

The iron & steel industry is a complex process that requires appropriate qualifications and long-term training. Jobs with difficult, hazardous and dangerous working conditions also require special health screening. We can’t just hire anyone off the street and put them to work at our enterprises right away.

As for salary increases, despite all the difficulties, employers in the industry are trying to gradually raise them, not lower than the inflation rate. Some other social guarantees remain suspended for the time being. General trends differ somewhat at individual enterprises, both for the better and, unfortunately, sometimes for the worse.

The average salary at iron & steel companies increased by 14.4% to UAH 27.3 thousand in 2024.

Prospects for improving the situation and the contribution of the FMU

Given the current military situation, unfortunately, there are no objective prerequisites for a significant improvement in the industry’s staffing.

As of today, we are involved in all working groups that develop or finalize the most important specialized draft laws: The Labor Code, On Occupational Safety and Health at Work, On Social Dialogue, On Collective Labor Disputes, On the National Qualifications System, On Vocational Education, On Improving the National Qualifications System in line with the Current Labor Market Needs, On Compulsory Accumulative Pension Provision, On the Professional Pension System, etc.

We hope that the Government and the country’s leadership understand the importance of the industry and its contribution to Ukraine’s economy and are ready for further constructive dialogue in the European vein. For example, an active discussion is currently underway in Brussels between the European Commission and representatives of the steel industry, which is focused on systemic support and a strategy for the industry’s development in the coming years.