Severe labor shortage affects Kazakhstan’s SMEs

A joint report by Mastercard and KPMG claims that small and medium-sized enterprises (SMEs) in Kazakhstan have become one of the country’s main sources of employment. Nevertheless, they are facing a severe labor shortage.
According to the report, workforce shortage is one of the most pressing challenges for SMEs. It means that nearly half of businesses report staffing deficits acute. Experts cite the limited supply of qualified specialists and their high cost among the main reasons of the problem.
As the report explains, SME executives complain about the difficulty of finding qualified employees, especially production managers. It often happens that interviewed candidates do not meet requirements. Another problem is that staff lack the motivation for development, even though salaries are high and working conditions are good. It needs an increased number of skilled employees to scale up the business. Meanwhile, limited financial resources and labor shortages constrain it.
Nevertheless, 90% of surveyed business leaders complain about high salary expectations from potential employees, which smaller firms struggle to meet. Also, nearly 70% of respondents consider SMEs as less prestigious places to work.
Concerning labor productivity, in micro and small businesses it remains more than twice as low as in medium and large enterprises. Data show that a worker generated an average of about $10,100 in a small business in 2025, compared with $34,300 in medium-sized firms. This year the gap continues to widen.
Generally, major constraints for SMEs are limited access to financing and the high cost of borrowing.
An unstable tax and regulatory environment, as well as broader macroeconomic volatility are additional factors hindering SME development.
Nevertheless, SMEs are a key source of employment in Kazakhstan, in spite of these challenges. As an example, employment in the sector has demonstrated a growth of the workforce from 40% to 50% over the past five years. At present, SMEs employ nearly 4.7 million people out of 9.3 million employed nationwide. That means that roughly one in two workers is employed in this segment.
As the report shows, an average annual rate of SME employment growth is 6%. Meanwhile, the decline of employment in other sectors is about 3% per year.
The report notes that the concentration of employment in SMEs makes the labor market vulnerable to tax and regulatory changes. Also, negative shocks in the sector could directly cause rising unemployment.
According to the data previously reported by The Times of Central Asia, about 40% of Kazakhstan’s GDP currently account for SMEs. This figure is still below benchmark countries such as Turkey (41%), the United States (44%), and Uzbekistan (52%).

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