eKapija researched the labor market in Bosnia and Herzegovina – Do we have something to celebrate May Day?

“Employers in FBiH will soon be able to conclude employment contracts with students as well”, “Every day more than 35 workers from BiH go to Slovenia and Germany”, “Due to the outflow of labor in the EU, Serbia imported 1,400 workers from Turkey, Nepal, Bangladesh, India”, “More than 8,000 pensioners work in Srpska, the oldest is 95 years old”, “The domestic workforce is leaving – BiH will have to import 150,000 workers” – these are just some of the headlines that could be read in the media recently. Is this a realistic picture of the labor market in BiH, is it that due to the increasing emigration of the able-bodied population, the domestic economy really cannot find enough staff on home soil, so the labor force is increasingly “imported”, for which professions is there the least work and what should the future staff in Bosnia and Herzegovina who are just thinking about their professional commitment hope for, are the questions that eKapija dealt with in the past weeks, all in connection with the upcoming International Labor Day and the question of whether we really have anything to celebrate.

Unemployment is decreasing – the numbers say

Looking at the numbers, unemployment in Bosnia and Herzegovina is decreasing. For example, at the end of February of this year, a total of 58,894 persons were registered on the unemployment register of the Employment Agency of the Republika Srpska.

– This is 5,140 or 8% less compared to the same period in 2023 when 64,034 persons were registered, Vedrana Milinković, head of the information and public relations department of the Employment Agency of the RS, told eKapija.

In the Federation of Bosnia and Herzegovina, they are also noticing positive trends in the labor market, as Haris Čuljević, the spokesperson of the Federal Employment Agency, told us.

– In 2021, the average number of unemployed was 311,679, while in 2023, that number was 277,159. On the last day of 2023, there were 542,116 registered employees in the Federation of Bosnia and Herzegovina, which is 6,451 more than the average from 2022 – said Čuljević.

But more and more foreign workers
Regarding the frequent statements in the media about how the missing labor force is replaced by foreign workers, eKapija also checked what the official figures are, that is, exactly how many workers we have imported over the past few years.

And here, this is how things are – in the period from 2015 to 2020, the number of work permits issued to foreigners amounted to 2,500 to 3,000 per year. At least that’s what the figures we received from the BiH Agency for Labor and Employment say. However, from 2020 onwards, that number has almost doubled from 2,586, the number of work permits issued that year, or 2,000 more – to 4,586.

You can see the exact movement of the number of permits on the photo of the table provided to us by the BiH Labor and Employment Agency.

(Photo: Printscreen/Agency for Labor and Employment of Bosnia and Herzegovina)

There are some estimates, at least that’s what the media reported, that Bosnia and Herzegovina lacks 30,000 workers, and that this problem is even more pronounced in the height of the tourist season. Allegedly, according to these estimates, Bosnia and Herzegovina will  have to import 150,000 workers from abroad in the next five years . This, by the way, is not an unusual situation in the environment either. The media announced the other day that Croatia will also have 200,000 foreign workers during the season. But these are mostly seasonal jobs.

How young people can decide

However, when it comes to permanent jobs and professional commitment, many young people hope to stay in the country, despite everything unfavorable they hear in the media. Although the media often wrote about how exactly our construction workers go to the West, and we import other people’s, those who are just opting for secondary education in that branch often chose in their answers what kind of jobs they would like to do and what they would pay for.
As stated  in the published text from the Job Fair in Banja Luka , many primary school students would opt for the Civil Engineering School, some would like to spend some time after that studying or working for a short time abroad, and then return home. But the salary they expect after that goes up to 3,000 KM, if they stay in BiH, or 3,000 EUR if they work in the West.

Although there is a deficit in this particular branch, judging by the number of those we imported for such jobs, the competent services we spoke with say that there are some other branches in which, so to speak, a job is guaranteed.

– The highest estimated needs for new employment this year were expressed for occupations in the processing industry (42%), followed by trade (17%), construction (13%), catering (11%), etc. This is a trend that was present in previous years as well – Haris Čuljević told us the data for FBiH.

There is no work for lawyers, economists and language teachers

In FBiH, by the way, according to information from the Federal Employment Agency, it is most difficult for law graduates, economists, social workers, pedagogues, language professors to find a job – as far as higher education is concerned. And the surplus occupations with secondary education are high school graduates, economic technicians, mechanical technicians, nurses and salespeople.

There is not enough work in FBiH even for nurses with high school education (Photo: MichaelVaulin/shutterstock.com)There is not enough work in FBiH for nurses with high school either

Precisely for this reason, and in order to make a good professional decision, Haris Čuljević recommends that parents and children graduating from primary or secondary school inform themselves about trends in the labor market, i.e. according to estimates, which occupations will be in demand in the coming period. On this occasion, Čuljević presented for eKapija the results of the survey of employers conducted by FZZZ at the end of 2023 with the aim of better understanding the state of the labor market and forecasts for 2024.

– According to this survey of employers, the most sought-after occupations of III and IV degrees of secondary education in 2024 are: salesman, waiter, locksmith, welder, truck driver, cook, seamstress, carpenter, mason, carpenter, mechanical technician. There was also a great demand for auxiliary workers in production and workers for simple jobs – stated Čuljević.

As for occupations with university education, according to employers’ forecasts, the greatest demand will be for workers from the IT sector (electrical engineers, system engineers, programmers – IT developers, etc.), followed by economists, masters of pharmacy, and mechanical and civil engineers.

– In the last few years, due to the technological and progress of work processes, the profession that has taken shape and become more and more in demand on the labor market is CNC operator, i.e. CNC machine operator, as well as software developer – he added. As for Srpska, things are like this.

Woodworkers wait for  work for up to 7 years

– Analyzing the number of registered persons according to the length of the waiting period for employment, we see that KV workers are waiting the longest for work, who are also the most registered (metal workers with an average waiting period of about 5 years, textile workers and wood processors with an average waiting period of about 7 years), followed by persons with a secondary vocational education (miners, high school graduates, mechanics and machinists, whose average length of waiting on the record is over 5 years) – said Vedrana Milinković, from the RS Employment Agency.

Those who, on the contrary, are most in demand, as our interlocutor pointed out in her answer, are personnel in the field of information and communication technologies, the field of traffic and transport, the processing industry, construction, as well as in the fields of wholesale and retail and real estate business.

Information technology is the safest choice in the professional choice of young people (Photo: Pixabay / Engin_Akyurt)Information technology is the safest choice in the professional choice of young people

Our interlocutor also agrees that when making a professional decision, young people should be informed at the Institute about the offer and demand for certain occupations and titles and to opt for those that are in demand and that enable them to find employment more quickly. She says that following the state of the labor market, certain changes in the way of doing business can be clearly seen, and this most often refers to the digitization of various business functions.

– The largest number of new jobs were created in the field of information and communication technologies and craft occupations, mainly in industrial and service activities, as well as in the field of construction – says Vedrana Milinković.

There will be more work and higher wages

By the way, the survey organized by the Federal Employment Agency at the end of 2023 covered 1,248 employers from the FBiH who have five or more employees (excluding employers from public administration, healthcare and education).

– Of all those surveyed, the majority were micro enterprises (41%), followed by small (47%), medium (10%) and large firms (2%), which is in line with the structure of the economy. Out of a total of 1,248 respondents, 781 employers (63%) expressed the need to hire 4,760 new workers in 2024, mainly due to the expected increase in business volume. This is 15% less compared to last year’s survey and indicates that a slowdown in new employment is expected in the coming year – said Haris Čuljević for eKapija.

What is optimistic about the conducted survey is that 73% of respondents answered that they estimate or plan the growth of the volume of work (production, sales and services), as well as the growth of the financial result. Consequently, this should lead to a better overall business environment, and to begin with, to higher earnings for employees, which is planned by 75% of surveyed employers, mostly in the amount of up to 10%.

However, will the salary increase be enough to prevent the outflow of our workers abroad? It was recently announced that  more than 35 workers from Bi H go to Slovenia and Germany every day.

– BiH is one of the leading European emigrant countries and is among the 11 emigrant countries in the world. The rate of emigration from Bosnia and Herzegovina is about 50 percent (percentage of the total population), and the number of residence permits issued to citizens of Bosnia and Herzegovina in the EU for the first time has been constantly increasing since 2014 as a result of the liberalization of the labor market in EU countries – it was stated in the Draft Report on the Implementation of the Policy on Cooperation with emigration, which,  as reported by the media , was published by the Ministry of Human Rights and Refugees of Bosnia and Herzegovina.

The total value of “exported” human capital, as reported then, in the period 2014-2018. is estimated at almost 4.5 billion KM.

The workforce is the most important issue in the country – says the profession
Precisely preventing the departure of employees, and improving the conditions for employment of foreigners and various other issues in the field of the labor market were the topics of the conference that was held a few days ago in Sarajevo – “Education, employment and the economy” – Market of work in Bosnia and Herzegovina – current situation, challenges, perspectives and solutions from the point of view of businessmen. As reported, the meeting was organized by the Council of Foreign Investors in BiH and the Agency for Labor and Employment of BiH.

– Acknowledging the fact that the labor market and qualified workforce, i.e. human resources, are one of the key elements for the decision of investors in which country to establish or expand their business, the aim of the held expert discussions was to initiate a public-private dialogue and create a better synergy between relevant ministries, relevant partners, scientific and educational institutions with a business environment and real sector, regarding the labor market and workforce – the Council’s announcement states.

By the way, Sanja Miovčić, executive director of the Council of Foreign Investors of Bosnia and Herzegovina,  stated at this meeting  that the issue of labor force and economy is the most important issue in the country.

– If you ask companies what is the challenge or problem they are facing and what is the biggest obstacle to growth and competitiveness, they say that it is precisely the lack of manpower. Therefore, companies mostly find solutions to these problems themselves – said Miovčić.

On that occasion, she also emphasized that salary is important, but that just increasing salaries today is not enough for people to stay in one company.

Ivan Barbalić, director of the BiH Agency for Labor and Employment, said that there are several processes when looking at the labor market.

– On the one hand, there is a large amount of domestic workers who aspire to go and work abroad, while on the other hand, employers are increasingly insisting and demanding the hiring of foreign workers, and at the same time they believe that our laws and procedures are not competitive and that they cannot be in this, to compete with employers of other countries in the region in quality – said Barbarić.

How to retain domestic workers

However, according to him, the biggest problem is retaining local workers.

– It is up to all of us, from the education sector to the economy, to create opportunities for our market to be competitive so that we can retain the workforce. According to the available data, we still have a deficit of workers in construction, trade, and also highly qualified labor. Nevertheless, the employment rate has been increasing since 2013, and the survey unemployment rate in BiH is around 12.7 percent.

Indira Semanić, senior HR business partner at the company Nelt, also touched on the issue of employee retention:

– We have to worry about how to keep our workforce in the country. And every time we need to do something for our employees, companies encounter obstacles in the administration. This leads to frustration for both workers and employers. That’s why the institutions must show a little more empathy and provide support to employers, as well as harmonize and amend the legislation that leads to these challenges.

When it comes to hiring foreigners, Naida Duvnjak, board member and director of human resources at Aptha Corp, pointed out that it is necessary to influence the authorities to make certain forms of hiring workers more flexible.

– Working with strategic partners from abroad imposes certain standards, therefore we very often need the engagement of highly expert profiles of workers who are not available in the BiH market, or even in regional labor markets. And considering that it is a project engagement, where these experts transfer their knowledge to domestic workers through several months of work, due to the highly bureaucratized process of obtaining work permits, their employment is a big challenge – she said.

Necessary reform of the education system

Siniša Veselinović, Head of the Department for the Domestic Labor Market from the Agency for Labor and Employment of Bosnia and Herzegovina, drew attention to the reform of the education system, which should be adapted to the needs of the market.

– It is devastating that our educational system has 200 hours less professional practice than, for example, in Germany. Professional internships should not be done in schools, but in companies. When it comes to the employment of foreigners, it is necessary to listen to the needs of employers, whereby we will try to amend the Law on Foreigners of Bosnia and Herzegovina and abolish quotas, following the example of neighboring countries, or to liberalize that system in terms of abolishing quotas for deficit occupations – he pointed out. is he.

Action plan

These are just some of the statements that could be heard at the aforementioned meeting. And as a conclusion of the meeting, the position was expressed that it is necessary to implement the following recommendations in order to solve the main problem of the labor market in BiH, i.e. solving the challenge of retaining the domestic workforce, on the one hand, and importing foreign workers, on the other hand:
– introduction of more flexible forms of employment ,
– final reduction of contributions and labor taxes, simplification of procedures and digitization,
– harmonization of regulations of cantons in FBiH, as well as entities and Brčko District in order to avoid discriminatory treatment of employees coming from different political-territorial units, and facilitate business for employers,
– enabling the acquisition of professional and practical knowledge during studies and
– establishing a better system for professional and supplementary training of workers.

It remains to be hoped whether these initiatives will bear fruit, and until then the deficit of qualified labor, due to the departure of BiH citizens to EU countries, will obviously be solved by bringing in foreign workers. As  eKapija also wrote in January  of this year, the Council of Ministers of Bosnia and Herzegovina, on the proposal of the Ministry of Civil Affairs, decided to enable the employment of significantly more foreigners in Bosnia and Herzegovina in 2024 than the year before.

Higher quotas for foreigners

With the decision to determine the annual quota of work permits for the employment of foreigners in Bosnia and Herzegovina for the year 2024, the total quota of work permits for the extension and new employment of foreigners amounts to 6,073. Of that number, 4,295 work permits apply to the FBiH, 1,400 to the Republika Srpska, and 378 to the Brčko District of BiH. The year before, the total annual quota of work permits amounted to 3,995 work permits.

In connection with these quotas, Vedrana Milinković from the Employment Agency of the Republic of Srpska pointed out that this agency issues work permits to employers for the purpose of employing foreigners and stateless persons only if there are no persons with the same qualifications requested by the employer in the submitted application.

– Therefore, work permits are issued for occupations that are not on the records of the Institute or for which special knowledge and skills are required. The annual quota of work permits for foreign citizens for the year 2024 in the Republic of Srpska was 1,400 work permits, of which 1,150 new and 250 extended work permits – she pointed out.

According to her, employers were most interested in hiring foreigners in the fields of construction, education, sports, and healthcare.

Most permits for foreigners issued for construction jobs (Photo: Josue Isai Ramos Figueroa/unsplash)Most permits for foreigners issued for construction work

And these are data that, to a large extent, coincide with the official table with total data for BiH, which we received from the Agency for Labor and Employment of BiH. According to this table, the most work permits were issued precisely for jobs in the field of construction (1,368 permits), followed by permits for jobs in the field of wholesale and retail trade, repair of motor vehicles and motorcycles (622 work permits) and other service activities ( 506 permission). In all three areas, by the way, a significant jump in the number of permits was recorded in relation to the previous year.

This is followed by licenses for activities in the field of art, entertainment and recreation (436), and then in the field of real estate business (298). Of course, you can see other details about the areas in which the jobs are filled with foreign staff in the attached photo.

The case of Bosnia and Herzegovina is not alone

Obviously, BiH is not alone in the problem of solving jobs by bringing in foreigners. And in the neighboring countries, in recent years there have been more and more job advertisements in which the Balkan countries are trying to attract foreign workers, hoping to compensate to some extent the decrease in the number of inhabitants due to mass emigration and low birth rates. This was highlighted recently in  the presentation of an analysis published by the European Council on Foreign Relations (ECFR).

– In Bosnia and Herzegovina, for example, more citizens live abroad than in the country, and it is predicted that the number of working-age residents will be halved by 2050 – it was pointed out in this analysis, which can be read on the  ECFR website .

Also, according to that analysis, neighboring Serbia had 6.6 million inhabitants in 2022, more than half a million less than 10 years ago. Then, every fifth citizen of North Macedonia under the age of 29 emigrated in the period from 2002 to 2021, according to this analysis.

Previously, according to this analysis, the Balkan countries received relatively few immigrants, and the labor shortage was filled from neighboring countries. However, as the emigration crisis increases in recent years, foreign workers are coming from further afield, causing major demographic changes and political upheaval.

Montenegro issued 27,700 work permits for foreigners last year, which is almost twice as many as in 2016, and North Macedonia needs at least 10,000 foreign workers a year to cope with the growing labor shortage. In Croatia, the influx of foreign workers has also increased dramatically.

(Photo: Pixabay.com/B_Me)

Improve working conditions and bring back your workers

The authors of this analysis – ECFR deputy director Vesela Černeva and demography and migration expert Alida Vračić – pointed out that governments and unions increasingly relied on workers from abroad without any strategy, instead of strengthening ties with emigrants and creating attractive educational and economic opportunities to motivate their citizens to return.

– Unions should ensure fair wages and safe conditions for all workers, and the labor law should be improved to prevent exploitation and promote equal pay for equal work – the analysis states.

Nevertheless, the influx of foreigners will have to continue, as the authors of this analysis estimate, in order to compensate for the negative demographic projections. Therefore, the governments of the region, as they say, should take advantage of this opportunity and provide immigrants with integration programs and good labor laws in order to develop the economy, which in turn could encourage emigrants to return and help workers stay at home.

– And in order to get support for these necessary policy changes, the authors of this analysis of the situation in the Balkans, as a final conclusion, state that “politicians should change their rhetoric and instead of “brain drain” and immigrants who “steal jobs” talk about their key roles for solving the problem of labor shortages and for increasing productivity, and thus for economic growth.

However, until those initiatives from the conference in Sarajevo bear fruit or these conclusions of the analysis do not reach those who should change something significantly, the situation is as it is – the figures in the previous parts have told you everything.

So that – as it goes – “Let’s raise our foreheads high, we – the heroes of our work, the whole earth will be ours, may our work live! Well, Happy International Labor Day! Are you sure you’re celebrating it?

Danijela Stanimirović-Gavrilov

Source: ba.ekapija.com