Survey: Staff will not be reduced in three quarters of Estonian SMEs this year

09.03.2021 - 13:00

Last year, the number of employees in three quarters of Estonian small and medium-sized enterprises (SMEs) remained the same, and entrepreneurs also predict the same for this year, according to the Baltic Business Outlook (BBO) survey organised by SEB.

Unlike previous years, Estonian SMEs intend to be more active in recruiting than in reducing jobs
Lithuania is the leader in the Baltics in terms of both creating and cutting jobs

In addition to the 74 per cent of Estonian SMEs, where the number of employees did not change, 18 per cent of the respondents cut the staff and 8 per cent recruited even more employees.

In Latvia, the staff numbers remained the same in 73 per cent and in Lithuania, in 67 per cent of the SMEs surveyed. In overall comparison between the Baltic states, Lithuania recruited the most (10 per cent of the SMEs surveyed); yet, also the number of enterprises who reduced their staff was the biggest over there (23 per cent).

This year, Estonian SMEs intend to be the most active in recruiting as well as in cutting jobs – 17 per cent of entrepreneurs plan to hire more and 7 per cent have the opposite plans. The number of staff will not change in approximately three quarters of enterprises, as has been the practice during the last years.

This year, Lithuanian SMEs (21 per cent of the respondents) intend to hire more actively than those in Estonia; however, 11 per cent plan to manage with a smaller number of employees. The respective figures in Latvia are 13 and 9 per cent.

‘There are surprisingly many enterprises who cut the staff during the previous year. In Estonia, the unemployment rate increased last year, yet it was quite limited and as at January 2021, we had 20,000 more people registered as unemployed than a year before. According to SEB’s forecast, the growth of unemployment will decrease in Q2 and employment will gradually recover in the second half of the year,’ Tatjana Vakulenko, the Head of the Segment of SMEs at SEB Pank said.

‘As in the last year as a whole, the events that happened in the labour market were also controversial. For example, in the construction and trading sector, the staff decreased in 20 per cent of the SMEs surveyed; yet, in many other industries, the number of employees increased: in construction, in 14 per cent of the SMEs surveyed. Similar trends were visible also in the industrial sector, therefore, there were companies in several sectors, who still managed to expand their activities despite the challenging situation. ‘When the wave of corona came, the economy was hit hard by pessimism, by gradually new hope emerged and companies started hiring again.’

According to Statistics Estonia, last year, employment decreased by areas of activity and in absolute figures more in accommodation and catering (–19) and transport and warehousing (–9). A percentage-wise decline was sharp also in energy (– 21 per cent) and entertainment (–17).

SEB’s survey was conducted in December 2020. The total number of respondents in the Baltics was 3071, and 1,030 in Estonia. Out of the enterprises that participated in the survey 86 per cent had less than 10 employees.

Additional info:

Evelin Allas
Communications Manager
SEB

Phone +372 665 5649
Mobile +372 511 1718
Address: Tornimäe 2, 15010 Tallinn
Email: evelin.allas@seb.ee