Croatia is a country located in Southeast Europe bordering the Adriatic Sea. It has a population of around 4 million people and a labor force of around 1.9 million. As a member of the European Union, Croatia has access to the EU labor market and sees a significant amount of emigration of Croatian citizens to other EU countries for work. At the same time, Croatia relies on immigrant labor in certain sectors of its economy like tourism, construction and agriculture. Understanding the dynamics around the Croatian labor market and workforce is important for supporting economic growth and development in the country.
Overview of the Croatian Labor Market
Some key facts about the Croatian labor market:
- Total labor force in 2020 was around 1.9 million people
- Unemployment rate in 2020 was around 7%
- Around 15% of the labor force works in agriculture, 27% in industry and 58% in services
- Manufacturing, wholesale/retail, tourism, and construction are major employers
- Significant gender gap exists with women having higher unemployment rates
- Youth unemployment rate is high at around 23%
- Around 12% of the Croatian workforce is foreign-born
These figures indicate some ongoing labor market challenges for Croatia associated with high unemployment for women and youth, reliance on industries sensitive to economic cycles like tourism and construction, and a skills mismatch between available workers and needed skills.
Emigration of Croatian Workers
A major factor shaping the Croatian labor market is emigration to other EU countries. Since Croatia joined the EU in 2013, a significant number of Croatians have left to work in wealthier EU nations like Germany, Austria, Ireland and Sweden. Some estimates indicate over 200,000 Croats emigrated between 2013-2018. This emigration is driven by:
- Higher wages in destinations like Germany where average monthly wage is around €3,400 compared to around €1,000 in Croatia
- High youth unemployment rates over 20% motivate younger workers to seek opportunities abroad
- Perception of less corruption and better living standards in Western Europe
- Proximity and cultural familiarity makes it easy to emigrate to Germany and Austria
This emigration has reduced the available labor supply within Croatia. It has also created concerns over brain drain where many educated and skilled Croats opt to leave the country.
Reliance on Immigrant Workers
To compensate for emigration and labor shortages, Croatia relies on immigrant workers from nearby countries in certain industries:
- Tourism – Immigrants from Bosnia, Serbia staff hotels and restaurants
- Construction – Workers from Albania, Kosovo, Serbia, Bosnia
- Agriculture – Seasonal workers during harvests from Bosnia and Serbia
- Manufacturing – Workers from Bosnia, Serbia in factories and plants
Roughly 12% of Croatia’s workforce is foreign-born, one of the highest rates in Europe. While this immigrant labor fills important gaps, it is also sometimes associated with worker exploitation, labor law violations and integration challenges.
SWOT Analysis of Croatian Labor Market
Here is a SWOT analysis summarizing the strengths, weaknesses, opportunities and threats associated with the Croatian labor market currently:
| Strengths | Weaknesses | Opportunities | Threats |
|---|---|---|---|
|
|
|
|
This analysis shows some of the paradoxes in the Croatian labor market – access to a huge EU labor pool but still high domestic unemployment, reliance on immigrant workers yet struggling with brain drain of emigrating Croats. It also highlights areas of focus for improving the quality and availability of Croatian labor.
Recommendations for Improving Croatian Manpower
Based on the analysis above, here are some recommendations for improving the quality and availability of Croatian manpower:
Invest in Vocational Education and Training
Croatia should invest more in vocational education and training programs oriented towards growing industries like tourism, manufacturing, and construction. This will create a pipeline of skilled technical workers available domestically rather than relying only on labor migrants.
Subsidize Wages for Youth Employment
Wage subsidies and training programs specifically targeted towards unemployed Croatian youth can provide them needed experience and disincentivize emigration. This can reduce high youth unemployment.
Support Women’s Workforce Participation
Policies like subsidized childcare, parental leave for fathers, and recruiting women into technical professions can improve women’s workforce participation and reduce the gender employment gap.
Create Return Incentives for Emigrants
Financial incentives like tax breaks, housing assistance, and entrepreneurship grants can encourage emigrated Croatians to return home and apply their skills and experience in the domestic economy.
Streamline Hiring of Foreign Workers
Simplifying the work permit and hiring procedures for labor migrants can ensure immigrant workers are hired legally and protected from exploitation while filling important labor gaps.
Expand Childcare and Elder Care
Affordable childcare and elder care services funded by the government can free up Croatians, especially women, from caregiving duties at home and enable higher workforce participation.
Life Long Learning Initiatives
Programs that enable Croatian workers to continuously re-train and upgrade their skills through online courses, apprenticeships, and skills certificates can reduce mismatches between worker skills and labor market needs.
Conclusion
Croatia faces some paradoxical labor market conditions with high domestic unemployment yet dependence on foreign labor migrants across important industries like tourism, construction and manufacturing. Investing more in the education and training of Croatian youth and women, incentivizing the return of emigrated Croatians, and streamlining the hiring of immigrant laborers can help better align labor supply and demand. The recommendations outlined above can significantly improve the quantity, quality and productivity of the Croatian workforce. With the right policies and investments, Croatia can build a talented and globally competitive manpower base to support its future economic growth and prosperity.