Analytics, Business, Labour-market, Latvia, USA

Recognizing that labor shortage challenges are severely affecting the business environment, AmCham conducted an anonymous online survey from February 11 until April 10 about Latvia’s labor market. The goal of the survey was to collect members’ opinion on labor market challenges and their experience in attracting and retaining talent. 46 or 38% responses were collected from company executives or HR directors.

The survey reveals how company executives perceive current employment issues, what they are doing to attract and retain talent and what should be done to promote Latvia as a career destination.

As the result of the survey entrepreneurs highlighted two priority areas: Promoting Latvia as an international career destination and Developing skills to reduce labor market mismatch.

According to the survey, 84% of respondents admit having encountered difficulties in filling vacant positions in the past 12 months. Although the majority of respondents say there is a clear shortage of high-skilled positions (53%), many think there is shortage of both skilled and unskilled labor (42%). International talent is perceived as a valuable resource by 87% respondents. Latvia's ability to attract and retain high-skilled international talent was ranked as mediocre with average score 5 in a scale 1-10.

Among main causes of difficulty for filling vacancies respondents mentioned the following:

• Low response rate to the job positions (39%);
• Lack of qualification (31%);
• Lack of specific skills & available talent pool (19%);
• Wage expectations (11%).

Asked about factors that would help fill the rapidly growing demand for labor, respondents stressed:

• Developing and retraining existing workforce (56%);
• Communicating clearly about economic and social gains of working in Latvia (56%);
• Attracting Latvian return migrants (46%);
• Recruiting international talent (44%);
• Minimizing red tape for relocation to Latvia (41%);
• Developing automation and digital solutions to reduce the number of open vacancies (31%).

Among the factors that would enhance Latvia's ability to attract high-skilled internationally talents, respondents mentioned the availability of public information in English, overall quality of life, safe and secure environment and favorable tax regime. The lack of proactive, state-driven policies to attract international talent, red tape, insufficient state support and lack of incentives for international students as well as negative attitudes regarding international labor in the Latvian society were mentioned among the main obstacles that hinder the attraction of international talent.

The survey confirms that creating an environment that would welcome investment and highly educated and qualified labor has become critical. No one can do this alone, thus a stronger partnership between the public and private sectors should be encouraged.  In order to attract both investment and talent, a strong strategy along with effective communication and a comprehensive web platform about the priority sectors, relocation and vacancies would be the next critical step in making Latvia a more attractive destination for international high-skilled employees. To address a fast-changing work environment on-going learning will play an increasingly important role. AmCham members believe that investments in innovation, education and more precise forecast of the future skills could help ensure a closer fit between supply and demand on the labor market.

In the nearest future, AmCham will come up with specific hands-on recommendations for creating a comprehensive talent strategy and development of skills that will enhance Latvia’s productivity and competitiveness.

To view the executive summary of labor survey 
To view full results of labor survey 

                                                                                                                                       AmCham speaks on behalf of more than 150 leading U.S. and international companies in Latvia. AmCham is committed to fostering trade, investment, partnership and friendship between the U.S and Latvia and it serves as a business, knowledge, networking and policy forum for its members and partners. AmCham’s actions are grounded in four core values: integrity, responsibility, cooperation and excellence.