Article
Kyiv Post, 27 Ìàðòà 2009
Downsized Dreams
Ukraine’s tiny middle class is getting tinier because of layoffs.
«You are the weakest link. Goodbye!»
This customary eviction line from the popular «mean» TV quiz show «The Weakest Link» is now affecting a generation of career professionals in real life.
This economic crisis is not only claiming the jobs of unskilled workers. It's also taking out the livelihoods of well-educated and highly-skilled personnel in finance, marketing, administration and other white-collar jobs.
These are the same professionals who have enjoyed an amazing run of success during Ukraine's recent boom years. They epitomized the strivings of a nation trying to become middle class, not one stratified into the rich and everyone else.
But now many are out of work. And many more fear they will be soon.
Such out-of-work professionals make up a quarter of the million officially registered unemployed job seekers at the State Employment Service. That's 100,000 more than at the same time last year. These figures, however, are believed to underreport the problem as many professionals look for jobs on their own without the help of state.
The size and definition of Ukraine’s middle class are elusive. Recent studies suggest that less than a third of citizens earned enough in 2007 to be considered middle class, making between $400 and $1,000 monthly.
Many of them don't complain too loudly, realizing that times are harder for unskilled workers. Yet, in replacing restaurants with homemade lunches and parking their cars to commute by metro, dreams are being downsized all the same.
Hard lifestyle choices are now being made in countless homes.
After six years of studying and working in London, Ukrainian Olena Tsymbalyuk, 28, chased down her dream job in Kyiv. She landed a position with one of the leading private equity funds. Hired as an investment manager without a track record, she was elated, passionate and committed.
«I would tell my mom and friends not to ring me during the day as I did not have time to talk to them. I was so ambitious to succeed and could not think of anything else,» she recalled. But when the markets started bursting in autumn, Tsymbalyuk sensed the danger coming.
«The fear was mounting, and I expected every Monday that I would be the next ‘weakest link' to go.» Recalling panic attacks in metro on the way home, she said that «expecting a death was much worse than a death itself.»
The layoff notice came in January. By then, the market was already saturated with more experienced people. Thousands of bankers, investment analysts and real estate brokers also suddenly found themselves jobless.
«During the first wave of layoffs [in autumn], companies were getting rid of ‘ballast' — less effective workers or those with indistinct responsibilities,» said Natalia Gileta, head of the financial branch at ANCOR Group (human resources firm). «After some transformation, they are now planning job cuts to match their business output.»
In a poll of 80 companies, ANCOR established that more than half of them had already downsized and 33 percent were planning to do so in 2009.
The total official number of unemployed reached a million people in March — nearly double from a year ago. The rate of increase among professionals has risen proportionately more than for blue-collar workers, who are traditionally hit hardest in a recession.
Most companies choose not to trumpet their cost-cutting in news releases. Some make cuts small enough to stay under the public radar.
The Association of Ukrainian Banks said most banks conceal layoffs. A few, however, admitted trimming. One of the largest Ukrainian banks, Austrian-owned Reiffeisen Bank Aval, announced it had to cut 10 percent of its staff — 1,800 bank workers — in response to the financial meltdown.
Tsymbalyuk, however, does not dramatize the situation anymore. Now a lady of leisure, she is strengthening ties with family — plenty of time for phone chats with mom again — and friends.
«It's not a crisis, it is a sort of purification and sobering up,» she said with confidence. Armed with a foreign education and the ability to speak English and other languages, she is thinking of going back to London. «People like me are not looking for a dream job now,» she said. «We need something to pay the bills and we'll get it.»
Labor experts say that experienced personnel do not linger on the market for long. They relocate, train for new positions or take jobs a step below their qualifications.
Eduard Dotsenko, 31, had to sacrifice his lifestyle in Kyiv for a job in Pereyaslav-Khmelnytsky, a city of 30,000 people that is an hour-and-a-half drive from the capital. A technical equipment buyer, he was laid off from the German chain of DIY retailer OBI in November.
With a car loan to repay, he decided that «a bird in the hand is better than two in the bush» and moved away. In charge of purchasing at Kostal Ukraine, the German manufacturer of advanced electronics, he kept the status quo. «Of course, I'd like to be in Kyiv as I left my social network behind. But in the current situation, I am very happy about the arrangement. I even thank the crisis a little because I re-evaluated a lot of things in my life and became wiser.»
Apart from the career move, he is excited about fresh air, no traffic jams and inexpensive cafes. «People change only when they are pushed to the edge,» he pondered. «We all have to shred some of our ambitions and re-evaluate our lives.»
Receiving a 1,000 more resumes a month compared to the same time last year, ANCOR specialists think that unemployment has not hit its peak yet. They also expect companies to slash salaries, social benefits, trainings and bonuses.
«Of course, the situation on the labor market has changed radically,» said Gileta from ANCOR. «But specialists are still required in retail, business development, client relations, IT and agriculture, among other spheres. Most important is not to sit still. If someone wanted to get additional education, now is the good time for it.»
Partner Lenna Koszarny from Horizon Capital, one of the leading investment funds, also said that it is time to «take the experience and skills to other sectors, i.e., work for strategic investors rather than financial investors, for example, developing the financial department of a manufacturer.»
Some, however, will have to pull in their horns more than others. For every 1,000 vacancies announced on employment website SuperJob.ua, there are 10,000 applicants on average since last September, according to ANCOR research.