🟣 SMART HR is interested in the insights of economists, labor market portals, the Employment Service, and HR specialists.
📌 Starting with better knowledge is probably the best thing to do, that the number of employed people in Lithuania is the highest in the last few years and although officially registered unemployment In Lithuania, it increased by 0.3 percentage points in December and reached 9 percent. Compared to the situation a year ago (i.e. 2024-01-01), the country's registered unemployment is lower by 0.1 percentage points (it was 9.1 percent). We can consider the situation stable, and the forecasts for the coming months will remain similar. Lithuanian economists present various forecasts regarding the labor market in 2025. The Bank of Lithuania forecasts that the unemployment rate in 2025 will reach 7.1 percent, and the average wage will grow by 8.7 percent. Meanwhile Luminor Bank expectsthat wage growth will slow to 6-8 percent, and the unemployment rate will remain low.
📌 Also, since this year, the minimum wage has increased by about 12 percent (1038 EUR gross) and according to economists' forecasts, this will increase the average wage by about a tenth in the near future. According to cvbankas.lt, data for the fourth quarter of 2024, candidates' financial expectations have grown and are expected to grow this year as well. Although in meetings with HR representatives and employers we hear complaints that salaries for employees are already "breaking the ceiling", I have no doubt that companies will find new opportunities to increase work efficiency while avoiding mass layoffs of groups of employees, because as many of us remember, in 2024. the news about employee layoffs due to restructuring changes caused uneasy thoughts.
📌 From another angle, the layoffs have also highlighted a new trend that employees are experiencing layoffs more calmly, because according to economists' forecasts, Lithuania is becoming increasingly competitive and economically stronger, and our era as a cheap labor force is over. Today, we are significantly ahead of a significant number of European countries, and according to economist N. Mačiulis, the change in real wages in Lithuania compared to other European countries was the largest since 2000. and increased by as much as 217%. So far, according to him, everything is fine, at a time when inflation remains close to zero, this is a very large impulse for the growth of purchasing power, which is also particularly well reflected in the growth of retail trade.
Summarizing the economic forecasts for the Lithuanian labor market in 2025, the following main aspects and recommendations can be distinguished:
📌 Technological advancement and automation: The increasing use of artificial intelligence and automation Integration is changing the nature of work, so employees need to constantly improve their technological skills. Companies will look for specialists who are able not only to analyze data, but also to create innovative engineering solutions to optimize business processes.
📌Labor shortage in certain sectors: While the overall employment rate remains high, there is a shortage of qualified specialists in some sectors, such as construction and information technology, engineering, so these areas will remain priorities with the greatest need for employees, and the challenges experienced in attracting candidates will encourage employers to look for talent abroad and invest in employee training.
📌 Demographic changes: Given the aging population and the development of artificial intelligence, companies will eventually have to foresee measures and set goals when planning employee turnover and to promote the inclusion of older people in the labor market.
📌Foreigner employment quotas: New procedure comes into effect from 1 January 2025, which established a recruitment quota of 24,830 for foreigners intending to work in Lithuania with a temporary residence permit on a work basis. This quota covers all professions and job functions in all company sectors.
📌 Employee well-being and mental health: The growing focus on employee well-being requires employers to create a supportive work environment, provide psychological support, and promote work-life balance. This is becoming an important factor in retaining talented employees and increasing their productivity.
To successfully overcome these challenges, both employers and employees need to adapt to changing conditions, invest in continuous learning, and promote innovation in the workplace.
