Businesses in Georgia report an increasing reliance on foreign labor as the domestic workforce seeks opportunities abroad. This phenomenon is becoming more pronounced as emigration trends continue, particularly affecting the construction and hospitality sectors, which are already grappling with labor shortages. The escalating cost of living in Georgia has contributed to this trend, prompting businesses to look for workers from neighboring countries and Central Asia to fill the vacancies left by departing Georgians.

The demand for labor in the construction industry is outstripping supply, exacerbating the labor shortage over time. The combination of a construction boom and labor emigration has made it necessary for Georgian companies to recruit workers from countries like Turkey, Uzbekistan, and Tajikistan, a trend he considers natural.

The issue of labor shortages became more acute as Georgia started recovering from the economic downturn caused by the pandemic. Businesses in the service sector, particularly, found it challenging to hire staff. Despite the official unemployment rate of 16.4 percent, the perception of unemployment and poor working conditions among Georgian workers contrasted sharply with the complaints of labor shortages from employers.

In response to these shortages, businesses have been forced to increase wages, although this measure has not significantly counteracted the effects of emigration. The emigration trend has broadened, with increasing numbers of young Georgian men finding employment in Eastern Europe, particularly in Poland. At the same time, concerns rise over those undertaking risky journeys to the United States via Mexico.

Georgia's migration trends have been influenced by various factors, including visa-free travel to the EU initiated in 2017 and the geopolitical landscape reshaped by the influx of individuals from Russia, Belarus, and Ukraine following the conflict in Ukraine. Despite a record high of people leaving Georgia in 2022, the net migration remains positive, mainly due to the wartime influx.

TBC Capital has identified the aging population, workforce outflow, and low birth rate as factors contributing to a long-term labor shortage challenge. The think tank expects labor inflow from lower-income neighboring countries to mitigate shortages in construction, agriculture, and accommodation/food service sectors.

The construction industry, in particular, has reported a significant portion of its workforce being foreign nationals, highlighting the struggle to find skilled workers domestically. Despite an increase in average wages in the construction sector, the median wage remains below what is considered a living wage in Georgia, reflecting broader issues of inadequate compensation and poor working conditions in certain industries.

The rising cost of living, exacerbated by inflation, has further diminished the impact of nominal wage increases, leaving many Georgians struggling financially. As political discussions heat up in anticipation of the general elections, emigration and the cost of living have emerged as critical issues. While the Georgian government promotes legal employment opportunities abroad, reports suggest a reluctance to expand access to foreign labor markets, indicating a complex interplay of economic and political considerations surrounding labor migration and employment.