Ukraine: Education, Personnel and Labor Market
Ukraine retains the legacy of a rigorous and scientific-oriented education system of the USSR. It was the second-most important R&D centre for defense and industrial engineering in the USSR. Although the Ukrainian government spends 20% of its budget – some 5% of GDP – on education, it is not enough given that the overall size of GDP is still quite small. Education is compulsory for everyone between ages 6-15. The country has 10 universities and a large number of specialized academies.
Ukraine is noted for its human resources, that investors describe as intelligent and hardworking – not to mention well educated and highly skilled. For example, locals are highly motivated, affording opportunities even in fields such as aerospace, biology and nanotechnology. Labour is cheap, with salaries around one-forth of Central European levels. There is high unemployment, particularly in the west, as well as potentially in numerous mono-industrial towns and due to the financial crisis even more highly qualified personnel are »floating around«.
Nevertheless, business executives warn that it can be difficult to find top level staff. Professionals able to represent global firms tend to want high salaries, and be already in good positions. Thus, for all the skilled labour, many local companies which foreign investors want to buy need great improvement from the technical know-how side.
The following sectors could be particularly interesting for foreign investors at the moment:
> Hotel market: is very underdeveloped, and there is a high demand. In Kiev, 47 hotels are planned to be built for EURO 2012, among them ten 5-star and fourteen four-star.
> Retail trade: according to the German delegation in the Ukraine, as an expansion target, the Ukraine is in 2nd place after India
> Market for energy-efficient technologies: above all through the dependence on Russian gas in the context of rising prices and inefficient use of energy.
> EURO 2012 offers a special opportunity.
Minimum wage is currently UAH 605 per month. 12 (with an optional premium) monthly salaries are paid in Ukraine per year. Income tax for personnel is flat at 15%. The social security contribution, meaning thesocial security payroll tax cap of UAH 7,875, cost for employer constitutes 37.4% of wage, while only 3.5% for the employee, with 0.66 up to 13.8% shared between them as compensation for professional illnesses.
