Legal risks and workforce crisis through the eyes of Armenian business: Interview with Vahagn Hambartsumyan

Around the world, employers face a range of similar challenges: shortage of skilled workers, rising costs, competition in global markets, and the need to adapt to rapid technological changes. In each country, however, these issues take on their own particular features. Speaking on the program Economics, the head of the Republican Union of Employers of Armenia, Vahagn Hambartsumyan, discussed the difficulties businesses in Armenia encounter.

Legal Challenges

Hambartsumyan emphasized the special importance of issues tied to legal regulation. In his words, the “rules of the game” established by the state are a system of prohibitions and incentives through which business activity is regulated.

“Here we face a very serious problem: legal acts are often adopted with incomprehensible haste. We have repeatedly stated that it is better to postpone reform but ensure high-quality regulation,” he noted.

He also pointed out that Armenia lacks a proper mechanism for assessing the impact of legal acts, and discussions with stakeholders are often formal and superficial.

“In such cases, it would be better not to hold discussions at all than to limit them to token meetings. Of course, there are exceptions, but it is crucial that dialogue with the business community becomes a mandatory condition for developing legal initiatives. Discussing documents only after they have been adopted simply complicates processes,” he stressed.

Business Passivity and the Need for Initiative

At the same time, Hambartsumyan remarked that some problems stem from the stance of the entrepreneurs themselves, who often respond to changes only after the fact, showing little involvement in public discussions or in preparing proposals.

“Initiative in this matter is a weak point of our business. One gets the impression that entrepreneurs are still guided by a Soviet mindset and feel uneasy about the fact that their main goal is to make a profit. Yet the Union consistently raises this issue, because impulses for meaningful reform must come from the bottom up. With all due respect, ministry staff—young specialists in white shirts—often possess mostly theoretical knowledge and do not always understand the real processes in the business environment. As a result, their reforms can contain errors,” he underlined.

Labor Market Problems

“Today, almost all employers complain about a shortage of skilled workers. However, when it comes to what concrete steps are being taken to address this issue, it becomes clear that often nothing is being done apart from complaints. Training specialists who meet business requirements is a challenge not only for Armenia but also for many other countries, including European ones. The difference is that elsewhere these issues are addressed much more quickly.

I have always said, and I will repeat it now: the employer should not wait for a university graduate to come to them—the approach is mistaken. The employer must look for talent already during the training stage. Human capital should not be seen as an expense but as an investment. Employers must be ready to invest in educational institutions, identify promising students, and develop specialists with a horizon of 5–10 years. The problem is that many of our employers say they are not even sure their business will still exist in such a timeframe. But education is always a long-term investment, and without this kind of strategic thinking, progress is impossible.”