Updated July 3, 2008

   Russia’s Ministry of Public Health and Social Development (MHSD) plans to introduce amendments to Labor code to cut staff shortage and increase labor productivity – "unnecessary" social guarantees can be taken off, and it is not eliminated that the tariff system of social insurance will be changed as well. So, it is planned to minimize the shortage of high skilled staff the country faces, as by 2020 it can grow to 20 million people.

   As told MHSD deputy head Alexander Saphonov, in the nearest future the ministry planned to initiate the range of amendments to Labor Code aimed to take off extra limitations imposed on business. He explained that "now Labor Code obligates an employer to give his employees excessive social guarantees annually". Some of them can disappear. According to him, an example of such "excesses" is "extra long vacation". And though Mr. Saphonov refused to expose details of future changes in labor legislation, it is quite obvious that such regulations as paid vacation to get education can be cut. Within round-table IV Congress of national business Norilsk Nickel deputy director general Olga Golodets gave such an example – the enterprise had been forced to pay vacation to get absolutely non-core – choreographic – education.

   Change in Labor Code is one of the measures to fight with personnel shortage and low labor productivity. "There is shortage at the labor market. One should push an employer to implement new technologies and increase labor productivity", is sure deputy minister. According to the ministry idea, employers’ expenditures reduction should enable them to reequip workplaces, train employees, and make the labor more productive.

   Labor market participants face the shortage sharper. According to the data of the short-term surveys laboratory of the Institute for the Economy in Transition for June, 2008, more and more enterprises indicate skilled staff shortage as the reason that impedes increase of products output. In 2008 it was 40%, in 2007 – 35%, in 2006 – 32%.

   Both the state and the business are concerned with the problem of labor productivity growth. President Dmitry Medvedev adviser Arkadiy Dvorkovich declared, "labor efficiency increase is the priority of the economic policy". Delovaya Rossiya head Boris Titov considers that labor efficiency should be increased at least three times. According to MHSD calculations, labor productivity level in the Russian Federation falls from the developed countries behind 4,5-10 times. As it follows from the World Bank report published on July, 2, within last years Russia has been falling from other countries with transition economy behind by the aggregate increase of labor productivity.

   However, in MHSD are ready to fight with low productivity and staff shortage by means of enterprises’ expenditures reduction and stimulation of their growth as well – by means of the stick and the carrot policy. Alexander Saphonov reminded about the increase of the minimum salary amount (from January, 1, 2009 it totals RUR 4 330), as well as salaries increase in the state sector by 30% from December, 2008. According to him, it should become a signal for the business where salaries will increase respectively as well. Moreover, the state has claims to employers. In particular, the ministry is dissatisfied with the tariff system of social insurance and will review it towards an increase in the nearest future. Tariffs are planned to introduce depending on damage done by production to the environment and depending on labor protection system on an enterprise.

   According to Mr. Saphonov forecast, by 2020 in Russia will be the 20 million shortage of high skilled specialists, if no measures undertaken. But if plan of actions is realized, skilled staff shortage will be almost minimized. However, as he forecasts, even with the most optimistic scenario low skilled workers there still will be enough.