Russia has effectively exhausted its labor reserve, according to analysts at Sberbank’s Center for Macroeconomic Research. With virtually no pool of available workers left to tap, they argue, the country’s labor shortage can only be addressed through productivity gains and workforce redistribution. That means companies will have to produce more with the same number of employees – turning to automation, artificial intelligence, new equipment, and more efficient work organization, RBC reported.
“Labor redistribution” refers to moving workers from industries and regions with relatively high staffing levels (or where they generate low added value) into sectors facing acute shortages. Those include manufacturing, construction, transportation, IT, and other areas struggling to fill positions. Some workers will require retraining to make the transition.
Since 2017, Russia’s labor reserve has shrunk from 7.1 mil to 4.4 mln people. The number of employed individuals aged 20 to 29 has fallen by 4.3 mln, while unemployment in June held at a historically low 2.2%.
Economists caution that these measures will not close the gap anytime soon. Automation demands investment and time, and a factory worker cannot be instantly retooled from one region into an engineer or welder in another. To make matters worse, the current trend is moving in the wrong direction: Sberbank estimates that labor productivity declined by 0.5% in 2025, as companies chose to hang onto workers even as output fell.