The majority of foreign companies operating in Lithuania no longer consider Lithuania a low labour cost country, according to a new survey from the Investors’ Forum Lithuania.
Lithuania no longer a low labour cost country, say investors
© DELFI / Valdas Kopūstas

“It was indicated as the main competitive advantage of Lithuania by only 48% of respondents [in 2015], while two years ago the number was as high as 74%. Obviously, in order to maintain or increase the amount of FDI we will have to rethink our strategy and focus not on the low cost of labour, but rather on qualification and the talent pool. By the way, 45% of investors believe that the talent pool is Lithuania’s main competitive advantage” said Vytautas Ulozas, Investors’ Forum analyst of the findings of the survey.

The lack of qualified labour is a challenge already today with 57% of investors admitting they currently face the problem, said Ulozas.

“Comprehensive education system reform, improved immigration policies, and a more flexible labour regulations would improve the situation. It takes some years to develop specialists of sufficient qualification, but we need them already today. “Barclays” technology centre alone needs a few hundred IT specialists. Lithuanian companies need them, too – innovative local business struggles trying to find professionals able to program and operate complex smart devices” he said.

The importance of education reform was stressed by “Investors’ Forum” analyst.

The Labour Code was also a serious barrier for investors. Half of the surveyed investors said they occasionally faced problems related to the outdated Labour Code, while almost 47% come across such problems constantly or often.

“The current Labour Code does not meet the demands of the market and has been constantly criticized both by investors and international organizations. Lithuania managed to reach a 13th position in the Economic Freedom Index, however, the labour regulations once again received very poor ratings,” said Rolandas Valiūnas, the chairman of “Investors’ Forum” board.

“We are glad the Government keeps supporting the reform and Parliamentary readings are coming to an end. Hopefully, political leaders will manage to avoid populism and agree on strategic reforms since the failure to adopt the new social model might strongly undermine investors’ confidence in our economy,” he said.

Participants of the ICIL survey unanimously stressed that if the Lithuanian Government was to achieve only one single goal in 2016, it must be successful Labour Code reform. However, due to the upcoming elections of Seimas investors are concerned about the will of the ruling coalition to sustain a strong strategic line: 29% of respondents believe that political stability will diminish in the near future.

Another cause of investors’ concern is the level of business transparency. 79% of respondents expressed a belief it is an area demanding special attention and improvement. They said current efforts to increase transparency are not satisfactory.

During the ICIL research “Investors’ Forum” surveyed top–level managers of 62 foreign capital companies operating in Lithuania. This was the seventh ICIL survey.

|Populiariausi straipsniai ir video

GetJet Airlines set to lay off 370 employees

Lithuania's wet-lease and charter services provider GetJet Airlines has given lay-off notices to 370...

Avalanche of ideas developed in 'Hack the Crisis' hackathon

One of the most important tasks for hackathon organizers was to identify the most pressing issues,...

Lithuania and some other EU countries ask for Mobility Package postponement

Lithuania and "like-minded" EU member states are urging the bloc's bodies to postpone the...

Oro Navigacija sees further 50 pct drop in workload after Russia halts flights

The chief executive officer of Lithuania's state-owned air navigation service provider Oro...

Intersurgical to produce 1 million respirators for medics

Intersurgical, a Lithuanian designer, manufacturer and supplier of a wide range of high quality...

Top news

8th death in Lituania due to coronavirus

On Tuesday it was announced about another death of a patient with the novel coronavirus .

Coronavirus pandemic: 537 cases in Lithuania

On Tuesday, 30th March, 46 new COVID-19 cases were confirmed in Lithuania. In total there were 537...

The Roop gets place in final in next year Eurovision selection

Lithuania will hold a national Eurovision selection next year, and this year's winner The Roop, a...

27 severe coronavirus cases in country

Lithuania currently has 27 severe COVID-19 cases and the coronavirus outbreak has not yet peaked,...

GetJet Airlines set to lay off 370 employees

Lithuania's wet-lease and charter services provider GetJet Airlines has given lay-off notices to 370...

|Maža didelių žinių kaina