The Croatian economy faces an acute shortage of workers [nedostatak radnika] that especially affects the construction industry in Croatia [građevinska industrija u hrvatskoj] together with food manufacturing facilities and hospitality [ugostiteljstvo]. The shortage creates major barriers for both organizations and national economic development. Companies need to identify critical causes and develop sustainable solutions to handle this critical challenge successfully.
What is good for Croatia is that labor participation has increased by 8% points in recent years. The population aged 25-64 could decrease by around 400,000 people in the next 20 years, which is very large for Croatia. Some projections say that due to the increase in life expectancy and the decline in the birth rate, the EU will need around 100 million new foreign workers [strani radnici] by 2050,” said the governor.
“The Croatian Employers’ Association has predicted that more than half a million foreign workers should be working in Croatia by 2030, reports HRT”
The aging population and net emigration cause workforce reduction in the country because of declining numbers of workers. The changing demographics have reduced the number of working people which affects different sectors.
The construction industry together with food production and hospitality faces a severe Shortage of Workers[nedostatak radnika] across their sectors. The year 2023 revealed labor shortages stood as the most critical employment challenge for companies in these specific industries.
The education system together with adult learning programs create skill and educational deficiencies that delay worker reskilling and upskilling and intensify the gap between job requirements and available skills.
Operational Disruptions:
Lack of sufficient staff leads companies to experience manufacturing target shortfalls with degraded service quality.
Increased Labor Costs:
Business operating expenses grow due to the rising costs of labor when there is a shortage of workers [manjak radnika].
Economic Growth Constraints:
The restricted labor pool operates as an economic growth limitation which reduces national market competitiveness worldwide.
Insight: This sector faces high shortages due to factors like an aging workforce, seasonal fluctuations, and increased infrastructure projects.
Insight: The tourism boom in Croatia has driven up demand in hospitality, leading to significant staffing challenges.
Insight: While less severe than construction, manufacturing still contends with a mismatch between available skills and job requirements.
The graph above clearly demonstrates that the construction industry in Croatia [građevinska industrija u hrvatskoj] is currently experiencing the most acute labor shortages [nedostatak radne snage], with nearly 27% of positions remaining unfilled. This is followed by the hospitality sector, which, buoyed by the tourism boom, is facing an 18% vacancy rate. Meanwhile, the manufacturing sector, though less impacted, still shows a significant gap at 12%.
Understanding these industry-specific challenges is crucial for businesses. For instance, companies in construction might need to adopt aggressive recruitment strategies or consider alternative talent pools, such as skilled foreign workers [strani radnici], to meet demand. Similarly, hospitality businesses can benefit from targeted recruitment campaigns to manage seasonal demand fluctuations.
Due to labor shortages, Croatia has increased its employment of foreign workers [zapošljavanje stranih radnika]. During the April 2024 period, work permit [radna dozvola] allocations reached 73,000 for non-European Economic Area nationals with this figure presenting a 33% rise from 2023 data.
Education and training enhancement through investments in adult education programs will build local workforce capacity which includes necessary skills allowing foreign worker dependency to lessen in the future.
Policy changes that promote human capital movement and quicken foreign worker hiring procedures help decrease workforce restrictions created by labor deficits.
The following procedure must be followed by businesses who plan to recruit skilled workers from India:
Businesses should team up with experienced recruitment agencies that focus on international placements to source suitable candidates.
Connect With Us & Build Your Skilled WorkforceAcknowledge the Croatian work permit laws by understanding their requirements before executing employee recruitment.
Know About Work Permit Process For Foreign WorkersCultural Integration Programs: Foreign workers’ [strani radnici] adaptation to Croatian workplaces and culture should be supported through the implementation of cultural integration programs that include orientation sessions.
Croatian businesses must implement two fundamental approaches to handle their current labor shortage [nedostatak radne snage] by attracting qualified foreign staff [kvalificirani strani radnici] alongside supporting homegrown talent development strategies.
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