Six-Year Project Transforms Ukraine's Labour Market, Supports Entrepreneurship, War-Affected Workers

DANIDA provided DKK 54 million (approximately USD 8.3 million), complemented by USD 1.1 million from Germany's GIZ, to fund this initiative.

A six-year initiative titled “Inclusive Labour Markets for Job Creation in Ukraine” has concluded, marking significant improvements in the country's labour market, entrepreneurship support, and social dialogue. The project, launched in 2018, strengthened Ukrainian labour market institutions and provided vital assistance to businesses and workers affected by the ongoing war and COVID-19 pandemic. Key reforms include overhauling the State Employment Service (SES), promoting entrepreneurship, and supporting internally displaced persons (IDPs) and unemployed individuals.

DANIDA provided DKK 54 million (approximately USD 8.3 million), complemented by USD 1.1 million from Germany's GIZ, to fund this initiative. Despite unprecedented challenges, including Russia's military aggression in 2022, the project achieved tangible progress in improving labour market governance and empowering vulnerable workers.

Labour Market Reforms and Support for Employment

One of the project’s core achievements was the comprehensive reform of the State Employment Service (SES), carried out with guidance from the International Labour Organization (ILO). The reform introduced new services for employment support, including specialized employment counsellors, registrars, and employer counsellors. SES staff also received extensive training in a new case management system, which allowed for more effective support for job seekers and collaboration with other institutions, such as medical rehabilitation centres and social affairs departments.

The project’s implementation of the ILO’s Local Employment Partnership (LEP) model across four Ukrainian regions created local coalitions between labour market institutions, employers, and NGOs, resulting in job creation tailored to local needs. Notable successes include the establishment of new training centres and occupational standards, such as those for upholsterers and cooks, which have been adopted nationally.

Entrepreneurship and Skills Development

The project’s “Start and Improve Your Business” (SIYB) programme proved highly successful, training 4,804 people, exceeding the initial target. The programme has now been officially adopted as Ukraine’s national entrepreneurship development initiative, helping to foster a new generation of entrepreneurs.

Additionally, the project worked to close Ukraine’s skills gap, with ten vocational curricula digitalized and four upgraded through business sector involvement. These efforts have significantly improved the alignment of workforce skills with market demands.

Strengthening Social Dialogue and Labour Relations

The third major focus of the project was enhancing social dialogue between employers, workers, and government bodies. A Green Paper was developed to modernize social dialogue and improve conflict resolution mechanisms. The project also helped establish two new trade unions—one for deminers and another for transport workers.

Further achievements include the provision of occupational safety and health training for members of the Federation of Employers of Ukraine and strategic planning sessions for the National Mediation Service of Ukraine. Additionally, digital training on social dialogue has been made available at the National School of Governance.

Looking Ahead: New Project to Foster Entrepreneurship and Social Dialogue

Building on these successes, the Danish Government has pledged an additional 10 million DKK (approximately 1.5 million USD) to fund a new 18-month project starting in November 2024. This initiative will focus on implementing Local Employment Partnerships in Odesa and Mykolaiv and providing start-up grants and training for socially vulnerable groups, including women, people with disabilities, war veterans, and those with outdated skills.

A key component will be strengthening social dialogue at the regional and sectoral levels, in collaboration with the Ukrainian government and social partners. This continued commitment is expected to further enhance Ukraine’s labour market resilience in the face of ongoing challenges.