Measures to overcome major problems of state regulation of the labour market in Kazakhstan

Table of contents: The Kazakh-American Free University Academic Journal №8 - 2016

Bogorodskaya Oxana, Kazakh-American free university, Kazakhstan
Alipova Alima, Ust-Kamenogorsk branch of Plekhanov Russian University of Economics, Kazakhstan

A competent state policy is the key to the formation of a sustainable and balanced labor market, flexible and effective employment of the country's human resources, social protection and security. In his article "Social Modernization of Kazakhstan: Twenty Steps to the Society of Universal Labor", the President of Kazakhstan outlined the issues to be considered to develop the sector of employment: developing a technique to define a group of self-employed people adequate to the real situation and prospects for employment and to improving the methodology for determining the level of unemployment based on the new technique to determine self-employed population [1, p. 1-6].

To do so, we need to solve the following problems:

- create a unified system of monitoring the labor market and human resources employment;

- update the legal framework determining relations in the labor market and in the sector of employment.

Due to the different economic nature and specific features of the labor market operation and employment assurance, the effective achievement of this goal requires solving different problems in the labor market and employment presented in Table 1.

At the same time the realization of the main priorities and directions of the state policy in the labor market takes place in stages, the initial stage of the labor market operation being directly linked with the development of macro-economic processes [2, p. 1-5].

The main priorities of state policy in the labor market are:

1) development of a balanced, dynamic labor market;

2) reduction of the level and average duration of unemployment;

3) promotion of a rational, flexible and effective employment of human resources;

4) provision of social security in the labor market, adequate to the conditions of the economic growth and basic needs of people under protection.

These priorities are designed for the long-term perspective and suggest a phased implementation, being a constant reference point of public policy.

Table 1. Major challenges of the state regulation in the labor market operation and employment assurance

Thus, the state policy in the labor market at the initial stage should be realized in the following directions:

- Development of a transparent legal framework regulating the labor market and the employment sector;

- Development of a flexible professional and territorial mobility of human resources, organized recruitment;

- Creation of a national information system for monitoring the operation of the national labor market;

- Development and implementation of national and regional (industrial) employment programs in accordance with the Model of industrialization for 2010 – 2015, the Scheme of rational allocation of production capacity till 2020, implementation of large-scale projects.

Consequently, the main directions of the policy implementation are: securing the growth of employment and its balanced maintenance in accordance with the demand for labor due to structural economic reforms, development of the favorable environment stimulating advancement of entrepreneurship, improvement of the quality of human resources.

At the next step the government must create the conditions for productive and decent work, so that people had the right and opportunity to realize and develop their professional and creative abilities.

In addition, the state should pursue an active structural policy to support all industries aimed at innovative development and to create an "information society". This policy must be accompanied by:

- active employment of economically inactive people;

- formation of the national human resource management system;

- creation of a framework conditions for entering into the international labor markets;

- integration into the global labor market due to the development of competitive advantages of the country;

- extensive investment into human resources, allowing to maintain and improve their skills throughout their lives;

- creation of the conditions in the labor market that reduce inefficiencies and under-utilization of human resources;

- carrying out labor market reforms based on the principles of "flexicurity", empowering people in flexible employment and social protection.

Over the last decade, the activation of the market processes has led to the intensive development of the labor market, the emergence of specific types of reproductive relations. Development of new forms of economic activity, increased mobility of the population completely transformed the situation in the labor market. All this has led to a sharp increase in social mobility of workers and resulted in an overall imbalance in the labor market. In this regard, there appeared a need to regulate these processes at the national level by means of active and passive measures.

There are regularly developed employment programs based on the strategic plans of the state development and taking into account new development trends. These programs include measures to reduce unemployment rate, support business development, creation of a flexible system of training and retraining of the unemployed population, improving the organization of public works, the creation of additional jobs through development of investment programs. These employment programs are funded from the local budgets on a tender basis, but the procedure of funding requires improvement in order to encourage businesses and organizations offering their services in the labor market with the assistance of employment [3, p. 810].

State regulation of the labor market is aimed at the proper structural, regional and investment policies, and most importantly at adapting workers to modern requirements of the labor market [4, p. 28].

Labour market regulation should be carried out in the following areas:

- creation of state agencies that control and regulate the level of employment and unemployment;

- development of a system aimed to improve labor mobility;

- promotion of flexible forms of employment that enable employers to influence the quantity and quality of labor force, based on the state economy and industry needs;

- training of qualified, professionally educated and easily adaptable to the new conditions young specialists;

- improving the efficiency of women's work;

- pre-retirement employment regulation;

- control of the inflow of foreign labor force (toughening its import and use, its gradual complete termination);

- regulation of wages (setting increase and reduction limits taking into account price and inflation rates);

- prevention and settlement of labor disputes;

- promotion of work motivation;

- indirect subsidies for employers to create additional jobs for the unemployed and the employment of disadvantaged people;

- development of a social partnership system.

A more effective enforcement of employment will result from the development of priority sectors stimulating the country’s economic growth (light and food industries, chemical, coal, oil and gas, oil refining industry, mechanical engineering, agriculture).

To increase the level of employment it is necessary to develop small and medium-sized business, therefore it is advisable to attract foreign investments and technical assistance to support the development of this sphere. At present, there are programs that have been developed to support lending to small and medium-sized businesses, also, there are training and advanced training programs for such enterprises [5, c.86-88].

Currently, it is possible to implement a number of measures of social and economic policy that will ensure the reduction of tension in the labor market. These measures include a protectionist policy that defends domestic producers and consumers from foreign competitors, acting by means of customs, monetary or credit policy, an active foreign policy that promotes the export of Kazakhstani goods and the development of small, family businesses, contributing to lower unemployment.

Besides the reviewed directions of the unemployment containment policy it would be effective to implement the following measures:

- development of a regulatory layoffs system in those regions which are marked by a high tension in the labor market;

- development of employment programs for freed-up workers;

- encouragement of the development of flexible forms of employment;

- encouragement of unpromising categories of employees for the withdrawal from the labor market;

- regulation of the potential labor force (young people, teenagers, housewives) entering into the labor market aimed at receiving vocational training;

- limitation of employment of non-citizens of the Republic of Kazakhstan and stateless people;

- implementation of programs in reducing the unemployment rate, developed on the basis of foreign target-specific loans;

- development of the entertainment industry, creation of recreation areas, which will provide employment during construction.

The increase in unemployment among young people requires special attention and it is appropriate to borrow the experience of foreign countries, such as the introduction of youth vocational training programs, which takes place in England, according to which young people receive necessary assistance for education in the form of scholarships or free training (grants and loans).

The most acceptable direction in Kazakhstan's practice to promote the employment of young people is training young people for professions contributing to the development of the economy. This requires the development of an employment program for graduates of all types of educational institutions, which implies improving legal, social and organizational conditions for the employment of young people. The degree of success of the country depends on the degree to which new specialists will be able to find jobs in their specialty and apply gained knowledge and skills. Kazakhstan annually conducts nation-wide actions to address youth employment issues, one of which is "New resources of Kazakhstan", and "Modern education" public fund developed a new project - "The Republic of Kazakhstan Youth Employment Support Program".

The state should take into account how many specialists it needs to train to control this process: if there isn’t a sufficient number of specialists in certain professions, it is necessary to organize retraining programs. Foreign experience shows that this method of labor market regulation is effective enough as it makes it possible to respond to structural changes in the economy and contribute to the elimination of these changes.

Creation of a labor market data bank will allow receiving timely information about vacancies, processes and changes occurring in the labor market.

One of the factors of increase in the efficiency of local employment services, which administer government programs aimed at the integration of the unemployed and temporarily inactive population in the official labor market is the improvement of methods of work with the client and information management. The experience of developed countries shows that it is necessary to work individually with every person, to develop for him/her an individual path of communicating with the employment agency and select the most effective program for each applicant.

It should be noted that the planned measures to eliminate the problems of the state regulation of the labor market require a concerned creative approach to their implementation on the part of business leaders and local authorities.

The main activities of the state regulation of the labor market for the med- term perspective to 2020 are as follows:

1) development of a system of professional orientation beginning with the elementary stage of education;

2) development of a mechanism forecasting needs of industries in qualified personnel;

3) informing the public with regard to employment issues, the situation in the labor market, broad popularization of popular specialties by raising their prestige through the media;

4) coordination of planning and creation of permanent and temporary jobs;

5) reducing negative consequences of the global crisis on the social and economic situation in Kazakhstan and provision of the necessary basis for the economic growth;

6) development of the entrepreneurial activity;

7) improvement of the mechanism of attraction of foreign labor force (to stimulate hiring of Kazakhstani citizens);

8) increase in the productive employment of self-employed population, formalization of their status;

9) strengthening of the targeted measures of social support, reduction of dependency and stimulation of labor activity;

10) development of a clear strategy for internal migration, based on long-term forecasting and planning, creation of incentives for the resettlement of migrants, taking into account the priorities of spatial and territorial development of the country, as well as economic and labor expediency.

Here is the list of state policy events in the labor market for the long-term perspective to 2050:

- creation of highly productive jobs in the priority sectors;

- improvement of forecasting of staffing needs in the economy;

- ensuring of the labor productivity growth;

- increasing labor mobility;

- legalization of informal employment;

- attracting the best foreign experts in order to compensate for the shortage of qualified personnel;

- inclusiveness of the labor market;

- modeling and adaptation of national labor market with consideration of changing conditions, training of the universal specialists, who easily change professions under condition of production modernization.

In conclusion, it should be noted that adoption and implementation of the proposed measures of the state regulation of the labor market of the Republic of Kazakhstan will result in development of a highly dynamic balanced labor market, providing a complete, rational, efficient, highly motivated employment of human resources of Kazakhstan. This will improve the validity of both state programs, and programs developed at the regional level. A New employment model will be linked to the rational employment of human resources at the national level, reflecting the state policy in the field of industrialization of the country and the tran sition to an innovative path of development.


1. Poslanie Presidenta Respubliki Kazak-hstan N.A. Nazarbayeva Narodu Kazak-hstana: Sotsialno-ekonomicheskaya mo-dernizatsiya – osnovnye napravleniya razvitiya Kazakhstana [Address of The President of The Republic of Kazakhstan N.A. Nazarbayev to People of Kazakhstan: Social And Economic Modernization - Main Direction of Development of Kazakhstan] // Kazakhstanskaya Pravda. - 2012. - № 236. - p. 1-6.

2. Kontseptsiya Gosudarstvennoi Politiki na Rynke Truda i v Sfere Zanyatosti Chelovecheskikh Resursov Respubliki Kazakhstan (2010-2019) [The concept of public policy in the labor market and human resources employment of the Republic of Kazakhstan (2010-2019)] // Kazakhstanskaya Pravda. - 2009. - № 196. - p. 1-5

3. Kostakov, V.G. Problemy Zanyatosti i Formirovaniya Rynka Truda [The problems of employment and of labor market] // Economics and Mathematical Methods. - 2010. - №.26. - p. 802-818.

4. Varshavskaya, E. Flexicurity, ili kak obespechit sochetaniye gibkosti I zashchishchennosti na rynke truda [Flexicurity, or How to Provide a Combination of Flexibility and Security in the Labor Market] // Man and labor. - 2013. - №10. - p. 26-29.

5. Yessilov, S.S. Razvitiye Malogo Biz-nesa – Put Povysheniya Zanyatosti Na-seleniya [Small Business Development as a Way of Increasing Employment]// Bulletin of the Eurasian Institute of Humanities. – 2012. - № 4. - p. 86-88.

Table of contents: The Kazakh-American Free University Academic Journal №8 - 2016

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