Overview of Lithuania
Population: 2,692,798 people in 2024
Gross Domestic Product (GDP): USD 86 billion (2024 est.)
Economic Overview
As one of the members of the European Union (EU) since 2004, Lithuania has witnessed noticeable growth and rapid modernization of its economy as it became a member of the Organisation for Economic Co-operation and Development (OECD) in 2018. The nation witnessed a rapid recovery from the financial crisis of 2009 and it also had a diversified industrial sector and a well-performing banking sector. It was the only State in Europe that did not witness a noticeable decrease in the GDP in the first quarter of 2020.
Lithuania handled the CovidD-19 pandemic well because of which there was only a 0.8% decline in GDP in 2020. High exports, private consumption, and lower dependence on the tourism sector also helped Lithuania to keep its GDP stable in comparison with other countries. According to the International Monetary Fund (IMF), the GDP of Lithuania is expected to increase by 3.2% by 2022, although European Commission’s estimates are more conservative (3% and 2.5%, respectively) because of the unforeseeable world situation.
Market Size
The Lithuanian consumers are still price-sensitive, despite stable GDP growth, as the purchasing power is not as high as in most European Union (EU) countries. Lithuania’s market for consumer products is fragmented. Consumer preferences are divided according to salary, age, and social group. Most consumers prefer to purchase a product with a brand name and good quality, with price as an indicator of quality. Generally, consumers in Lithuania consider foreign goods to be a symbol of high quality. The growing economy of Lithuania has increased consumer confidence and household spending. Consumers are now opting for new health trends and gourmet food along with other discretionary items, and they expect better customer service. As a sign of economic improvement, there has been a noticeable dip in price promotion campaigns.
Main Industries
In Lithuania, the agriculture sector accounts for 3.2% of the total GDP and employs 7-8% of the working population (World Bank, 2020). Wheat, wine, barley, potatoes, meat, wood and sugar beets are the primary products in this sector. More than one-third of Lithuania’s land is covered by arable land and crops (around 2 million hectares). To nullify the impact of the pandemic, the government introduced programs such as the Agricultural Loan Guarantee Fund that permits loans to give wages and leasing deposits and saw a rise up to 100% of compensation of interest. According to Eurostat’s data, in 2020 there was a growth of 4% in the total agricultural output.
The industrial sector contributes 25.3% of GDP and provides employment to almost 26% of the whole population. Electronics, household appliances, machine tools, metal processing, chemical products, light industry, construction material, food processing, clothing, and furniture are the primary industrial sectors. The nation is also working to develop oil refineries and shipyards. According to the World Bank, the manufacturing sector of Lithuania will account for 16% of the nation’s GDP. The service sector accounts for 61.4% of the GDP and provides employment to more than two-thirds of the population. The major contributors to the GDP are the information technology and communications sectors. Tourism has also improved and is now one of the fastest-growing sectors of the nation's economy.
Internet Speed and Connectivity
Lithuania ranks 30th in the world for mobile speed and 32nd for fixed broadband speed. In Lithuania the average download speed is 132.67 Mbps and the upload speed is 119.65 mbps (fixed broadband) and the average download speed is 64.59 Mbps and upload speed is 13.58 Mbps (Mobile). Skuad can assist you in finding the most suited employees for your company. Talk to a Skuad expert to learn more.
Talent in Lithuania
Top Skills in Lithuania
Lithuania gets the benefit from the title of the geographical center of Europe. It is swiftly proving the stereotype of a growing market wrong and standing as a significant high-value export player in the world. The major industries hiring in Lithuania include:
- Petroleum refining
- Food processing
- Energy supplies
- Chemicals
- Furniture
- Wood products
- Textile and clothing
Lithuania’s IT Sector is booming consistently, which resulted in Lithuania having a workforce ready to be hired in the same sector. Lithuania offers human resources that can be employed in jobs like Sales & Business Development, Project Management (Tech), Marketing, PR & Media, Data & Analytics, Software Engineering, and Design.
Vilnius and Kaunas are the center for the majority of the IT companies in Lithuania. Vilnius is the largest IT hub of the nation, therefore app development in Vilnius becomes more and more famous.
When there’s so much talent being offered, it becomes tricky to hire the right set of people for your team. Skuad can help you find, hire, and manage excellent local talent and make expansion in Lithuania a hassle-free task.
Cost of Living
The cost of living in a nation depends on multiple aspects, such as the city the person lives in, the type of industry dominant in that region, state revenue, and taxation policies. Location is the primary factor that decides the cost of living. The following table gives an insight into the cost of living in Lithuania.
Breakdown of the Average Cost of Living in Lithuania
| Category
|
Area of Expense
|
Estimated Monthly Cost (USD)
|
Estimated Monthly Cost (EUR)
|
| Rental
|
Hostels, PGs, Shared flats, and single accommodation
|
350 to 550
|
413.5 to 649.9
|
| Food and beverage
|
Household groceries and domestic workers
|
100 to 150
|
118.2 to 177.2
|
| Transport costs
|
Bus, train, and metro
|
30 to 40
|
35.4 to 47.3
|
| Utilities and miscellaneous
|
Water, electricity, gas, wi-fi, telephone
|
150 to 200
|
177.2 to 236.3
|
Cost of Renting: City-wise
Lithuania’s rent prices are comparatively low with older European Union member states. The price is determined by
- The city
- Location within the city
- The flat’s size and its condition
- The duration of the agreement
In the three biggest cities (Vilnius, Kaunas, and Klaipėda), average rental prices are between USD 250 and 450 (211.79 and 381.22 EURO) per month for a studio apartment.
One- and two-bedroom apartments’ rent can be between USD 400 and USD 550 (338.86 to 465.93 EURO) per month and USD 400 and USD 700 (338.86 to 593 EURO) per month, respectively.
The rental prices can vary significantly in different areas and cities. For example, in Vilnius’ city center, the rent of a newly furnished studio flat can reach USD 600 (508.29 EURO) per month. On the other hand, prices in smaller cities are generally lower in comparison.
| City
|
Cost of Renting in USD
|
Cost of Renting in EUR
|
| Vilnius
|
531.7 to 886.1
|
450 to 750
|
| Kaunas
|
236.3 to 590.7
|
200 to 500
|
| Klaipėda
|
472.6 to 827
|
400 to 700
|
| Šiauliai
|
590.7 to 827
|
500 to 700
|
| Panevėžys
|
236.3 to 354.4
|
200 to 300
|
Hiring Cost
The hiring cost is a vital factor to take into consideration while hiring employees. It is determined by various factors including the living cost and total expenditure that take place in a city. When you choose to hire someone in a particular city, several important factors affect the cost of hiring, such as
- Onboarding costs
- Training
- The money incurred in taking interviews, conducting the screening process, and completing the hiring process
- Opportunity costs
Skuad’s EOR solutions for Lithuania can help expand your business while adhering to the tax legislation, labor laws, and contracts.
Salary Structure for Various Roles in Lithuania
The following table reflects the average annual salary drawn by employees of various sectors in USD and EUR.
| Sector of Economy
|
Salary per Month (EUR)
|
Salary per Month (USD)
|
| Information and communication
|
2,674.9
|
3157.55
|
| Financial and insurance activity
|
2,431.7
|
2870.46
|
| Professional and scientific-technical activities
|
1,886.6
|
2227
|
| Public administration and protection
|
1,853.2
|
2187.6
|
| Health care and social work
|
1,829.2
|
2159.3
|
| Supply of electricity, gas, and air conditioning
|
1,772.9
|
2092.8
|
| Mineral extraction
|
1,751.9
|
2068
|
| Education
|
1,531.9
|
1808.3
|
| Production
|
1,485.5
|
1753.5
|
| Water supply, sewerage, and waste management
|
1,390.2
|
1641
|
| Wholesale and retail trade
|
1,360.4
|
1605.8
|
| Transportation and storage
|
1,338.6
|
1580
|
| Operations with real estate
|
1,294.9
|
1528.5
|
| Agriculture, forestry, and fisheries
|
1,228
|
1449.6
|
| Administrative and support services
|
1,212.1
|
1430.8
|
| Art, entertainment, and leisure
|
1,205.5
|
1423
|
| Accommodation and meals
|
878.8
|
1037.4
|
| Construction
|
1,311.8
|
1548.5
|
| Other services
|
1,220.7
|
1440.9
|
Learn more about Lithuania’s salary structures by talking to Skuad experts.
Employment Laws in Lithuania
The employer should keep in mind the legal obligations as they start the hiring and recruitment process. According to the Lithuanian laws, employers are required to treat their employees equally in the workplace. Employees are protected against various discrimination based on characteristics such as:
- Nationality
- Race
- Sexual orientation
- Disability
- Gender
- Age
- Social status
- Origin
- Marital and family status
- Religion
- Membership in political/public organizations
- Beliefs, convictions, or views
The employer’s must comply with these laws while recruiting and staffing in Lithuania. To comply with these laws, avoid asking questions related to the above-mentioned characteristics during interviews and meetings with the prospective employees. Some topics related to the above-mentioned characteristics may arise during a casual conversation with the candidates, but the employers should refrain from talking about those topics during the process of hiring. The penalties for breaking these laws can be strong, including expensive legal action and heavy fines, so the employer must always be professional, respectful, and non-discriminatory toward any candidates during the hiring process in Lithuania.
According to Lithuania’s employment laws, the employees cannot work for more than 40 hours a week and 8 hours a day. However, some fields such as specialized communications services, childcare, healthcare and more demand employees to work almost for 24 hours a day. Employees are allowed to work overtime but in that case also they cannot exceed 48 hours per week.
Lithuania has very limited collective bargaining agreements (CBAs) or trade unions, but the employer should still inspect and check if their industry or employees come under one. The employment compliance laws in the nation can change because of these agreements, so it’s important to know about any such changes.
Skuad’s EOR solutions for Lithuania can help expand your business while adhering to the tax legislation, labor laws, and contracts.
How Can Skuad Help You With Hiring in Lithuania?
Lithuania is not a particularly big or wealthy country, so hiring can be a challenging task if you don’t know where to look. Recruitment in Lithuania is a lengthy task that demands in-depth knowledge of the laws, trends, hiring costs, living costs city-wise, and more. Skuad comes onboard as a one-stop solution handling every minute aspect of recruitment. It gives you the freedom and time to focus on your project and expansion plans without any hiring stress. Connect with Skuad experts to know more.
FAQs
1) What is an Employer of Record in Lithuania?
An Employer of Record (EOR) in Lithuania allows companies to hire local employees without establishing a local entity. The EOR manages employment contracts, payroll, taxes, and compliance with Lithuania’s labor laws.
2) What is the EU Employer of Record?
An EU Employer of Record (EOR) helps companies hire employees across European Union countries, ensuring compliance with local employment regulations, payroll, and tax obligations in each country, including Lithuania.
3) What is an Employer of Record for foreign employees?
An Employer of Record (EOR) for foreign employees enables companies to hire internationally without a legal entity in the target country. The EOR takes care of local employment regulations, taxes, and payroll while the company focuses on managing the employees’ work.
4) What is the employer contribution in Lithuania?
In Lithuania, the total employer contribution falls between 1.77% and 3.75% of the employee's salary, or 2.49% to 4.09% for fixed-term contracts. employers contribute 1.45% to 2.71% of an employee's salary for social security. For fixed-term contracts, the rate is 2.17% to 3.43%. Employers must also pay additional contributions of 0.16% to the Guarantee Fund and 0.16% to the Long-term Employment Fund.
5) What is the difference between an Employer of Record and a Professional Employer Organization?
An EOR is the legal employer and assumes full responsibility for employment, payroll, and compliance. A PEO, in contrast, co-manages HR functions with the company but does not assume legal responsibility for employees.
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