Socioeconomic assessment of micro, small and medium enterprises in Vinnytska oblast (Ukraine): December 2023 - February 2024

Country: Ukraine Source: REACH Initiative Please refer to the attached file. KEY MESSAGES Entrepreneurs reported that a lack of qualified workers due to the ongoing conflict is one of the most important challenge they currently face. With large parts of the workforce displaced abroad or conscripted into the army, entrepreneurs have been forced to adopt their hiring strategies. This included сhanging working conditions to more flexible ones, changing requirements for recruiting employees (finding staff with a longer work experience or vice versa, recruiting employees immediately after graduation) and making more effort on reserving workers from conscription. Despite macro-indicators indicating signs of economic recovery in 2023 (GDP growth, increased exports, and reduced inflation), the majority of obstacles to business activities reported appeared to be driven by broader economic factors. Almost one-third of rural businesses and half of urban businesses reported a decrease in customers. Additionally, rising production costs, insufficient funds to scale business, inflation, and logistical problems continued to impact business activity. There was a lack of interaction between businesses and local authorities. More than half of surveyed entrepreneurs did not interact with local authorities at all since starting their businesses, and more than three quarters of KI businesses did not have detailed information about state plans for recovery and development in their area, nor have they used any form of government business support in the past year. Also, due to a partial distrust of the authorities and a lack of awareness of the relevance of government policies, entrepreneurs noted that existing recovery and development plans did not correspond or only partially corresponded to their business interests. Shifts in gender dynamics, driven by the mass emigration of women abroad, internal displacement within the country, and the mobilization of men into the army, brought both opportunities and challenges for women s economic participation. Businesses were increasingly seeking to hire women and members of other vulnerable groups to replace positions previously held by men. As a result, about one-third of the entrepreneurs emphasised the need for additonal employee retraining programmes. At the same time, many of the economic challenges faced by micro and small businesses were the same or applied equally regardless of the gender of the business owner.

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