At the beginning of the first quarter of 2021, the population of Latvia was approximately 2 million (1 893 700), of which around half, or 1 million people (961 100 in the fourth quarter of 2020), were economically active. At the beginning of 2020, 1 192 333 people or 62.5% of the total population were Latvian, 471 206 or 24.7% were Russian, and the remaining 12.8% were from other ethnic groups. Economic activity is mainly concentrated in Riga and the surrounding areas, where around half (53%) of the country’s population lives. Many of the people living in the surrounding areas work in Riga.
With the rapid global spread of Covid-19 and the decline in economic activity, changes were observed in the labour market in the first half of 2020 – the employment rate decreased and unemployment increased, followed by a slight stabilisation in the second half of 2020. The unemployment rate was 6.2% at the beginning of 2020, but by July it climbed to 8.6% (the highest level in the recent years), and at the end of the first quarter of 2021 it stood at 8.2%. It is expected that the overall situation in the labour market in 2021 will remain unchanged from the previous year because the measures introduced at the end of 2020 and at the beginning of 2021 to curb the spread of Covid-19 have significantly restricted economic activity and, consequently, economic growth will continue at a relatively slow pace, and any potential improvements in the labour market may occur in the second half of the year, while the support measures will continue contributing to the stabilisation of the situation.
The level of economic activity in Latvia still varies greatly from region to region, with most jobs concentrated in Riga and the surrounding areas, while the number of jobs in other regions is much lower. At the end of March 2021, the registered unemployment rate was the lowest in Riga (6.1%) and the Riga region (6.2%), while the highest rate was recorded in the Latgale region (16.5%). In other regions, the difference in unemployment levels was less pronounced. The registered unemployment rate stood at 8.1% in the Vidzeme region, 8% in the Zemgale region and 8.7% in the Kurzeme region. Therefore, after the crisis, Riga and the surrounding areas are likely to experience the biggest workforce shortages and will also attract jobseekers from other regions.
According to the Labour Force Survey of the Central Statistical Bureau (CSB), 885 500 people, or 63.8% of the population aged 15 to 74, were employed in Latvia during the fourth quarter of 2020. Over a year, the employment rate fell by 1.6 percentage points, while the number of employed persons decreased by 27 600.
The information provided by employers as to the education requirements of employees for newly created jobs in 2021 suggests that employees with vocational/secondary vocational education will be in highest demand, followed by employees with higher professional education (with qualification), while general secondary education will be sufficient to fill vacated jobs.
On the labour market, there is a demand for flexible and competent workers ready to perform duties associated with several posts at the same time and who, in addition to the specific occupational skills required, also have some general skills, for example, knowledge of foreign languages. Interaction and communication skills, as well as knowledge of the official State language, are the most frequently mentioned key skills, in addition to the specific knowledge/skills required by the employer. Knowledge of the Russian language is the third most relevant additional skill. Planning/time management skills rank fourth on the list of relevant additional skills. User-level computer skills, knowledge of the English language, organisational/managerial skills and a driving licence are required or at least desirable for about half of the available vacancies. The need for language skills has decreased during the year in respect of all languages, except for English, which has become more appreciated. User-level computer skills and a driving licence are also required more frequently.
Both in the medium and long term, the demand will mostly increase for employees working in highly skilled professions. The fastest decline in demand for labour will be in low-skilled occupations. This will affect all sectors. Considering the demographic trends, the supply of adequately skilled workers could significantly decrease in future; hence, the importance of secondary vocational education will continue to increase. If the current structure of the higher education offer is retained, the workforce shortage in the higher education group will mostly affect the pool of professionals educated in engineering, natural sciences and ICT (STEM). By 2027, the deficit of adequately skilled workers may exceed 14 000, mostly in areas such as architecture and civil engineering, computer sciences, physical and engineering sciences. Furthermore, due to ageing of the society and higher demand for medical services in both the internal and external markets, a noticeable shortage of healthcare and social care professionals will continue to plague the labour market.
A growing number of entrepreneurs complain of labour shortages. For vacancies that have proven hard to fill, mostly specific professionals are required: civil engineering and IT experts, welders and cutters, as well as drivers of lorries and cars.
The data of the State Employment Agency show that most vacancies (54%) in the first quarter of 2021 were registered in the profession groups requiring medium-level qualifications (lorry drivers, concrete workers, retail shop assistants, builders, workers performing finishing works, trailer truck drivers, bricklayers), followed by occupations with low-level qualification (24%) (unskilled workers, construction workers, peat mining workers, seasonal agricultural workers, workshop workers, cleaners, packers (manual work), road construction workers, seasonal workers). Highly qualified professions account for 22% of the total number of registered vacancies (patrolmen (home affairs), project managers, sales experts, programmers, nursery school teachers, nurses (medical nurses), legal advisers, senior experts, inspectors (home affairs), junior inspectors (home affairs), social workers, lawyers).
 Report: ‘Labour market short-term forecast for 2021: Employer survey’.
 Information Report from the Ministry of Economy ‘Medium and long-term labour market forecasts’, 2020.
The labour market situation was strongly impacted by the emergency situation that was declared in Latvia twice in 2020 due to the rapid spread of Covid-19 and the risk of putting excessive strain on the healthcare system, as well as by the related stringent restrictions on various branches of the economy. Uncertainty among employers has increased regarding business opportunities and job demand estimates for 2021. More than half of employers experienced a decline in the demand for their products and services in 2020 due to the Covid-19 pandemic and the related restrictions. Some employers were able to mitigate the adverse effects of Covid-19. On the whole, slightly less than half of businesses faced decreased demand for products and services in 2020. At the same time, 16% saw a rise in the demand in 2020.
The interest in employing migrant workers has dwindled in 2021. Overall, 4% of employers considered hiring foreign labour in 2020.
The extrapolated data for 2021 show 4 519 migrant workers, which is a decrease by more than half from the 2020 estimate (9 825) before the Covid-19 pandemic.
Among the main occupational groups, interest in hiring migrant workers remains the highest for Group 7 – Qualified Workers and Craftsmen and Group 8 – Equipment and Machinery Operators and Product Assemblers, for which an increase was observed. The main regions where migrant workers are planned to be employed are Riga and the surrounding areas. Ukraine and Belarus remain the countries from which migrant workers will continue to be invited.
According to the information provided by the Central Statistical Bureau, there were on average 19 500 vacancies in Latvia in 2020, which is a decrease of 9 600, or 33%, in relation to 2019. The largest decrease was observed in the following sectors: Other services, Agriculture, forestry and fisheries, Wholesale and retail, car and motorcycle repairs, Accommodation and catering services. The sectors with the steepest increase in jobs were Real estate operations, as well as the sectors least affected by Covid (in terms of changes in available vacancies) – Education, Health and social care, Information and communication services.
Jobseekers with qualifications and skills in the ICT area, as well as construction and engineering professionals, metal processing specialists, shipbuilding fitters, medical personnel and jobseekers with knowledge of several foreign (particularly Nordic) languages have good prospects of finding suitable work in Latvia. Pay rises for certain high-class specialists have also been observed during the pandemic.
According to the data of the State Employment Agency, the largest number of registered vacancies at the end of the first quarter of 2021 was in the construction sector – 37%, in the processing industry – 14%, in transport and warehousing – 13%, in administrative and service organisations – 10%.
 Report: ‘Labour market short-term forecast for 2021: Employer survey’.
The State Employment Agency’s employees engaged in filling vacancies have stated that there are many unemployed people without trades or occupations or with low qualifications. Employers, on the other hand, quite often stress that they need qualified employees with higher education, social skills (interaction, communication, presentation, negotiation skills, etc.) computer skills (both general and specific), a good command of Latvian, and knowledge of foreign languages (Russian and English).
An analysis of the vacancies registered with the State Employment Agency shows that, at the beginning of 2021, the highest surplus of unemployed persons was in elementary professions, while qualified workers and craftsmen were in demand. In terms of the last occupation, the number of registered unemployed persons significantly exceeds demand (i.e. the number of registered vacancies) in the following profession groups: retail salespersons and their assistants, workers not classified elsewhere, sales representatives, warehouse workers, receptionists, cleaners of offices, hotels and other premises, waiters.
Labour surplus is expected in respect of people with general secondary education and primary education. Labour surplus in those groups will be largely determined by declining demand for workers with qualifications as elementary professions, and manual work will be increasingly replaced with various technology solutions. It is also expected that the supply of workers with elementary or lower education will increase in the medium term, with half of them potentially having problems finding a suitable job and entering the labour market in 2027.
 Information Report from the Ministry of Economy: ‘Medium and long-term labour market forecasts’, 2020.
State Employment Agency
Central Statistical Bureau
Ministry of Economy