The article discusses the challenges in Georgia at the current stage of labor market formation. In particular, employment opportunities caused by low levels of economic development, sharp imbalances between supply and demand, low labor mobility, low labor costs, high percentage of people with higher education and youth in the unemployed market, high share of informal employment. The paper analyses the imbalance between labor demand and supply in the labor market as main causes of unemployment and as one of the main impediments to business development. There is an imbalance between labor skills with professional opportunities and the demand on labor market. The problems of compatibility between the education and employment systems in the country has been identified. It is established that a weak link between these two systems and the lack of an agreed policy contribute to the deterioration of education, the random distribution of labor in the labor market, which does not correspond to the professional qualifications of the individual and prevents the creation of innovative work directions. Study results show that the underdevelopment of labor market infrastructure in Georgia has hampered the economic development of the country and has created many socio-economic problems in the form of unemployment, poverty and illegal migration.