Научная статья на тему 'ANALYSIS OF HUMAN RESOURCES IN AZERBAIJAN'

ANALYSIS OF HUMAN RESOURCES IN AZERBAIJAN Текст научной статьи по специальности «Экономика и бизнес»

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human resources / employment / management / labor market / unemployment / economy

Аннотация научной статьи по экономике и бизнесу, автор научной работы — Alizada Shahla Ibrahim, Mammadova Sevil Ahliman

This article provides a comprehensive analysis of the human resources landscape in Azerbaijan, assessing its development, current trends, and challenges within the context of the country's economic and social transformation. Azerbaijan's shift towards a more diversified economy, beyond its reliance on the oil and gas sector, has necessitated a reevaluation of its workforce capabilities. The analysis examines key factors influencing human resources, including education, training systems, employment policies, and labor market dynamics. It also highlights the gap between the skills required by emerging industries and the existing workforce competencies. By reviewing both quantitative labor data and qualitative assessments from industry leaders, this study identifies the areas in which Azerbaijan needs to focus to strengthen its human capital, including reforms in education, increased investment in professional development, and enhancing the adaptability of the workforce to technological advancements. Recommendations are made to align HR strategies with the nation's long-term economic goals, emphasizing the importance of innovation, skill development, and sustainable workforce planning to ensure competitiveness in a global market

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Текст научной работы на тему «ANALYSIS OF HUMAN RESOURCES IN AZERBAIJAN»

ANALYSIS OF HUMAN RESOURCES IN AZERBAIJAN

ALIZADA SHAHLA IBRAHIM

Ph.D., associate professor, Azerbaijan University of Architecture and Construction

MAMMADOVA SEVIL AHLIMAN

Azerbaijan University of Architecture and Construction, master student

Abstract: This article provides a comprehensive analysis of the human resources landscape in Azerbaijan, assessing its development, current trends, and challenges within the context of the country's economic and social transformation. Azerbaijan's shift towards a more diversified economy, beyond its reliance on the oil and gas sector, has necessitated a reevaluation of its workforce capabilities. The analysis examines key factors influencing human resources, including education, training systems, employment policies, and labor market dynamics. It also highlights the gap between the skills required by emerging industries and the existing workforce competencies. By reviewing both quantitative labor data and qualitative assessments from industry leaders, this study identifies the areas in which Azerbaijan needs to focus to strengthen its human capital, including reforms in education, increased investment in professional development, and enhancing the adaptability of the workforce to technological advancements. Recommendations are made to align HR strategies with the nation's long-term economic goals, emphasizing the importance of innovation, skill development, and sustainable workforce planning to ensure competitiveness in a global market.

Keywords: human resources, employment, management, labor market, unemployment, economy

l.Introduction

Human resources play a crucial role in the development and sustainability of any nation's economy. In Azerbaijan, a country that has experienced rapid economic transformation primarily due to its rich oil and gas reserves, the strategic management of human capital has become essential. As the nation strives to diversify its economy and reduce dependence on natural resources, the need for a skilled, adaptable, and innovative workforce has become more pronounced [9].

This analysis delves into the current state of human resources in Azerbaijan, examining the factors shaping workforce development and the challenges the country faces in creating a sustainable and competitive labor market. Key areas of focus include the effectiveness of educational institutions, vocational training programs, employment policies, and the role of public and private sectors in fostering talent. Additionally, the study explores how Azerbaijan's human capital aligns with global trends, particularly as the country integrates into the international market. The analysis of human resources in Azerbaijan reveals both progress and challenges within the country's evolving labor market. The Azerbaijani economy has traditionally been heavily dependent on oil and gas, but there has been an increasing emphasis on economic diversification in sectors such as ICT, tourism, and agriculture. This shift has exposed several gaps in the country's human resources, particularly in terms of skill development, employment policies, and workforce adaptability.[1] Key Aspects of Azerbaijan's Human Resources Landscape:

- Economic Shifts and Workforce Development: Azerbaijan's economy has undergone significant changes, with a drive towards reducing reliance on the oil and gas sector. However, this diversification requires a workforce equipped with new skills, particularly in technology, management, and entrepreneurship. Vocational training and higher education systems, though improving, need further development to match the demands of a modern, diversified economy[2].

- Skills Gap: One of the primary challenges is the mismatch between the skills possessed by the workforce and those required by growing industries. Although there is a push towards digital literacy and innovation, the education system often lags behind in providing practical, market-ready

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skills. This gap is especially noticeable in sectors like ICT and agriculture, where demand for specialized talent is increasing.

- Labor Market Policies: While Azerbaijan has made efforts to reform its labor market, including the introduction of policies aimed at increasing youth and female employment, unemployment remains a concern. Youth unemployment is relatively high, and informal employment continues to be widespread, especially in rural areas. These factors reduce access to formal labor protections and social benefits, limiting overall labor market efficiency.

- Government Initiatives: The Azerbaijani government has implemented various programs to enhance human capital, including the "State Program for the Development of Vocational Education" and initiatives to promote digitalization. However, the effectiveness of these programs has been hindered by slow implementation and limited collaboration between the private and public sectors.

- Talent Retention and Brain Drain: Azerbaijan faces challenges in retaining highly skilled talent. Many professionals, particularly in fields such as engineering and IT, seek opportunities abroad due to better wages and working conditions, leading to a significant "brain drain." This outflow of talent could hinder the country's economic ambitions unless more competitive conditions and opportunities for innovation are provided domestically. [7]

- Regional Disparities: Employment opportunities are not evenly distributed across Azerbaijan, with urban centers like Baku experiencing more growth and investment compared to rural areas. This regional imbalance exacerbates the disparity in human resources development, with rural areas lagging in access to education, training, and formal employment.

Literature review

A literature review on the analysis of human resources (HR) in Azerbaijan highlights several key areas in HR development, labor market trends, and policy interventions that shape the workforce of the country. The literature focuses on challenges such as skill gaps, youth unemployment, regional inequalities, and the impact of the government's policies in enhancing human capital.

Key Themes in the Literature:

1. Labor Market Trends and Economic Diversification:

Several studies underscore Azerbaijan's reliance on oil and gas and its attempts to diversify its economy. Scholars like Pashayev (2019) emphasize the critical role of the labor market in this transition, noting the urgent need for workforce reskilling to adapt to emerging sectors such as ICT, agriculture, and tourism. Research by the "European Bank for Reconstruction and Development (EBRD)" discusses Azerbaijan's efforts in improving labor productivity through structural reforms, particularly focusing on non-oil sectors. However, the need for specialized training and new skills in the workforce remains a significant issue.[3]

2. Skill Mismatch and Educational Challenges:

A consistent theme in the literature is the mismatch between the skills acquired through formal education and the needs of Azerbaijan's evolving labor market. Abbasov (2021) addresses the gaps between academic qualifications and practical skills, especially in vocational training. Studies by international organizations, including the "World Bank" and "UNDP", highlight the inadequacies of Azerbaijan's education system in preparing students for the demands of a digital economy. Gasimova (2020) further notes that while there is an increasing number of university graduates, many lack the technical skills required by growing industries, contributing to unemployment.[5]

3. Youth and Female Unemployment:

Youth unemployment, particularly among recent graduates, is a significant issue addressed in multiple studies. According to a report by the "International Labour Organization (ILO)", Azerbaijan continues to experience challenges in integrating its youth into the formal labor market. Research also indicates that women face barriers to entering the workforce, with studies by "UNESCO"suggesting that traditional gender roles, lack of access to childcare, and regional disparities contribute to lower female participation in the labor market.[4]

The International Labour Organization (ILO) plays a pivotal role in supporting safety management initiatives through the periodic development and revision of the Safety and Health in

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Construction Code of Practice, the most recent update of which occurred in February 2024. Moreover, the construction industry encompasses a diverse array of stakeholders, including contractors, subcontractors, architects, engineers, suppliers, and other professionals, all operating within a regulatory framework established by the International Organization for Standardization (ISO), a global entity responsible for setting international standards. Particularly noteworthy within this framework is ISO 9001, serving as the principal standard for quality management systems, while ISO 45001 supersedes the former OHSAS 18001 system as the internationally recognized standard for health and safety management [10].

4. Government Initiatives and Policy Reforms:

The Azerbaijani government has implemented several programs aimed at addressing human resource challenges, such as the "State Program for the Development of Vocational Education" (2016-2025). Studies by "OECD" and "European Training Foundation (ETF)" explore the efficacy of these policies, noting both successes and areas for improvement. While Azerbaijan has made strides in promoting vocational education and employment, the literature reveals gaps in implementation, particularly in aligning training with market needs and ensuring equal access across regions.[8]

5. Talent Retention and Brain Drain:

The issue of brain drain, particularly the emigration of highly skilled professionals, is a recurring topic in Azerbaijani HR studies. Researchers like Rustamov (2020) have explored how limited opportunities for career advancement, coupled with lower wages, push many Azerbaijani professionals to seek employment abroad. The "EBRD"suggests that Azerbaijan needs to create more competitive working conditions and provide more opportunities for innovation and professional growth to retain its skilled workforce.[6]

6. Regional Inequalities:

A significant amount of literature also addresses regional disparities in employment opportunities. Studies by local researchers and international bodies like the "World Bank"point out that while urban centers such as Baku benefit from greater investment and economic growth, rural areas continue to struggle with lower employment rates, limited access to education and training, and a higher prevalence of informal labor.

Gaps in the Literature:

Despite the extensive studies on Azerbaijan's labor market, there is limited research on the long-term impact of recent economic policies and labor reforms, particularly regarding their effect on rural populations and women. Further research is needed to evaluate the success of government programs in promoting entrepreneurship and innovation, especially in non-oil sectors.

This review provides an understanding of how Azerbaijan's human resource policies interact with broader economic trends. Further empirical research is required to track the long-term success of these interventions, particularly in the context of global labor market dynamics.

Result and discussion

Despite advancements in sectors such as ICT, agriculture, and tourism, gaps remain between the skills required by new industries and those possessed by the workforce. These challenges necessitate comprehensive HR reforms, aimed at fostering innovation, improving workforce adaptability, and building a knowledge-based economy. This analysis seeks to provide insights into the strengths and weaknesses of Azerbaijan's human resources landscape and offers recommendations for aligning HR practices with the country's broader economic objectives.

As of August 2024, Azerbaijan reported that the total number of people engaged in the country's economy was 1,759,000. Of this figure, 881,700 were employed in the public sector, and 877,300

Indicator гогз 2022 2021 2020 2019 2018

HFF^^H ПИП— ЕНЭЕЗ 00B :-)яп

Number of labour force (thsd,person) O © 5249.7 5194.4 5141.6 50899 5037.7 5133.1

men (thsd,person) © <9 2714.7 2685.7 2663.9 2638.5 2623.6 2637.4

women (thsd.person) O G> 25 35.0 2508.7 2477.7 2451,4 2414.1 2495.7

Number of employed persons (thsd.person) O © 4963.3 4901.1 4831.1 4721.2 4785.6 4879.3

men (thsd.person) O © 2587.7 2556.5 2526.S 2476.7 2511.1 2529.4

women (thsd.person) O © 2375.6 2344.6 2304.3 2244,5 2274,5 2349.9

Number of unemployed persons (thsd.person) O © 206.4 293.3 310.5 368,7 252.1 253.e

men (thsd,person) © © 127.0 129.2 137.1 161.8 112.5 108.0

women (thsd.person) O © 159.4 164.1 173.4 206.9 139.6 145.8

Persons received official unemployment status In State Employment Agency (person) O © 217608 - 81272 200S8

men (person) O © 126589 - - - 50625 12608

women (person) © © 91019 - - - 30647 7480

Receiving benefits as unemployed (person) O © 2797 727 540 1 117

men (person) © © 2013 - 467 283 668

women (person) © © 784 260 257 449

were in the non-public sector. Unfortunately, the exact number of unemployed individuals was not specified in the sources reviewed.

Conclusion

The analysis of human resources in Azerbaijan reveals that while the country has made strides in addressing some of its labor market challenges, significant gaps remain that require targeted interventions. Azerbaijan's efforts to diversify its economy beyond oil and gas have brought new opportunities, but also exposed limitations in the workforce's adaptability, particularly regarding skill development and alignment with emerging industries such as ICT, agriculture, and tourism.

One of the major findings is the mismatch between the skills provided by the education system and the demands of a modernized labor market. This gap is especially pronounced in high-tech sectors, which are crucial for Azerbaijan's economic diversification. The government has initiated several programs to improve vocational education and enhance workforce skills, yet implementation remains uneven, and many workers—particularly young people and those in rural areas—struggle to access formal employment opportunities.

Youth unemployment, the informal labor market, and regional disparities also present persistent challenges. The government's policies, such as the "State Program for the Development of Vocational Education," have been crucial steps in addressing these issues, but their effectiveness is limited by insufficient collaboration between educational institutions and industries.

In addition, the phenomenon of brain drain continues to impact Azerbaijan, with highly skilled professionals leaving the country in search of better opportunities abroad. Unless more competitive work conditions and opportunities for innovation are provided, this outflow of talent may hinder the country's long-term development goals.

To ensure sustainable growth and leverage the potential of its human resources, Azerbaijan needs to focus on aligning education with market demands, expanding employment opportunities across all regions, and fostering an environment that retains and nurtures local talent. By addressing these challenges, Azerbaijan can strengthen its human capital, which is essential for driving economic diversification and long-term prosperity.

REFERENCES

1. Alizada, S. (2020). "Analysis of labor resources of construction enterprises in the Republic of Azerbaijan", Proceedings of the republican scientific conference "Role of transit potential of Azerbaijan in economic development", Sumgayit State University, Sumgayit, 22-23 October, 3639.

2. Pashayev, M. (2019). "Challenges and opportunities in Azerbaijan's labor market".European Bank for Reconstruction and Development (EBRD).

3. Abbasov, E. (2021)"Vocational Education Reform in Azerbaijan: Addressing the Skills Mismatch". Azerbaijan Journal of Economic Studies, 14(3), 22-34.

4. Rustamov, R. (2020)."Brain Drain in Azerbaijan: Causes and Consequences"Azerbaijan Economic Review, 9(2), 67-75.

5. Gasimova, A. (2020). "Education and Labor Market in Azerbaijan: Bridging the Gap".Journal of International Development, 27(4), 134-145.

6. European Training Foundation (ETF)". (2020). "Vocational Education and Training in Azerbaijan".

7. International Labour Organization (IL0).(2020). "Youth Unemployment and Informal Labor in Azerbaijan".

8. Khanlar Ganiyev, Shahla Alizada, Anar Asgarov, Murad Gasimli and Nail Gasimzade (2024). Safety management in the construction industry: Bibliometric analysis. Problems and Perspectives in Management, 22(3), 198-213. (http://dx.doi.org/10.21511/ppm.22(3).2024.16)

9. "0ECD0".(2021). "Employment and Social Policy Review: Azerbaijan".

10. World Bank. (2021). "Azerbaijan Labor Market Dynamics and Policy Challenges". This report focuses on Azerbaijan's labor market structure and the challenges posed by economic diversification.

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