Two thirds of large companies in Latvia are not planning to increase their staff this year
A survey of Chief Financial Officers done by SEB bank in Latvia suggests that almost two thirds (63%) of large companies in Latvia are not planning to increase the number of their employees this year. Instead, in order to grow their business, they intend to invest in increasing productivity of their current staff.
A survey of Chief Financial Officers done by SEB bank in Latvia suggests that almost two thirds (63%) of large companies in Latvia are not planning to increase the number of their employees this year. Instead, in order to grow their business, they intend to invest in increasing productivity of their current staff and invest in technologies, which reduce the necessity for human labour.
Similar trends can be observed in other Baltic countries as well. 52% Lithuanian and 57% Estonian large companies are planning to keep the size of their staff unchanged this year. However, 24% of Latvian CFOs, 30% Estonian and 35% Lithuanian CFOs have indicated ambitions to hire more employees this year. On the other hand, 13% of large companies in all three Baltic countries intend to cut their number of employees.
In comparison with previous years, the share of companies which are planning to grow their staff has reduced in all three Baltic States. Meanwhile, the share of companies looking to cut their staff has dropped only in Latvia.
Ints Krasts, board member of SEB Latvia: "Large companies in Latvia, Lithuania and Estonia from all industries have named workforce-related issues as their challenge number one this year: availability of skilled people and growing labour costs. Hence, it is only logical they are looking for alternative solutions. Firstly, large companies see opportunities to increase productivity of their current workers. Secondly, they will invest in process automation and other technologies, which reduce the necessity for hiring new people, or, thirdly, simply accept lower profit margins."
68% of CFOs in Latvia are convinced there are opportunities to improve productivity in their company without hiring more people. Almost half (47%) of large companies are planning to invest in automation technologies this year. 18% of companies are ready to accept lower profits due to growing labour costs. 14% of CFOs have said their companies will be looking for opportunities to cut costs elsewhere, while 10% are planning to hire cheaper workforce from abroad. Anyhow, 15% of CFOs have answered that workforce-related issues are not a problem for their company.
This is the fifth survey of Baltic Chief Financial Officers. Results reveal whether CFOs expect that next twelve months will bring good or bad news for businesses, identify which are the main concerns and challenges, indicate whether businesses plan to expand or decrease their workforce and give an insight in other topics as well. 190 largest companies with annual turnover over 20 million euros from Latvia, Lithuania and Estonia participated in the survey, which was carried out during September of this year.
