Latvian companies face worker skills shortage, turn to training over hiring

A shortage of qualified workers is not a new problem for Latvian businesses, but a recent survey shows the situation remains tense — only 9% of employers say they face no shortage of skills among their staff. Last year's study found that three-quarters of companies cited a lack of skilled labor as one of the main factors limiting their growth prospects.

To address the issue, companies are increasingly relying on developing their current employees rather than seeking new specialists on the market. Seven out of ten businesses run internal training programs or retrain staff. Nearly half source needed competencies through outsourcing, while a quarter partner with universities to prepare the specialists they require.

Elmārs Prikšāns, head of OP Corporate Bank plc's Latvian branch, notes that the tight labor market combined with demographic trends is unlikely to ease in coming years, making continuous skills development essential for long-term competitiveness.

Automation lags behind neighbors

One in five Latvian companies already uses automation or artificial intelligence solutions to offset labor shortages, but this share is significantly lower than in Lithuania and Estonia, where nearly half of businesses do so. Prikšāns stresses that technology does not replace the need for qualified people, as demand grows for specialists capable of managing increasingly complex systems.

Among the Baltic states, the skills shortage is even more pronounced in Lithuania and Estonia, where only 1% and 2% of companies, respectively, report no shortage. Employee training is also more widespread there — used by 90% of companies in Lithuania and 96% in Estonia. Across all three countries, businesses tend to combine several approaches at once to tackle the problem.