IN WHICH DIRECTION IS

The Problem Isn’t That People Are Leaving. The Problem Is That They Have No Reason To Return

Major changes have hit the Serbian labour market, which can be seen in the shortage of personnel for both complex and simple jobs. Although different approaches to solving this problem exist, they aren’t supported by a clear overview of the situation and systematic considerations about how the workforce of the future should look.

The Vienna Institute for International Comparative Studies recently announced that the economies of Central and Southeast Europe are recovering faster than expected, while at the same time a labour shortage trend is beginning to be felt again. It is evident both in the area of highly educated workers and when it comes to workers who have completed a lower level of education. Will we resolve the accentuated shortage of labour in Serbia through automation or importing lacking workers? Will we only entice cheap labour from underdeveloped countries or will we become an attractive destination for digital nomads? Is it possible to achieve circular migration in Serbia? These are some of the questions that have been relevant in Serbia for a long time, and which will only come to the attention of the public as demographic aging advances and people continue to leave the country.

JELENA BULATOVIĆ

EXECUTIVE DIRECTOR OF THE SERBIAN ASSOCIATION OF MANAGERS, SAM

WE MUST DECIDE WHAT KIND OF MIGRATION WE WANT

AUTOMATION WILL INCREASINGLY BE ON THE RISE, NOT ONLY AS PART OF PROGRESS AND ADVANCEMENT, BUT RATHER AS A RESULT OF THE NEED TO RESOLVE THE SHORTAGES IN SOME OCCUPATIONS. IT IS THUS NO EXAGGERATION TO SAY THAT WE WILL HAVE ROBOTS IN THE FIELDS IN THE NEAR FUTURE.

The Serbian labour market is suffering from the consequences of global trends. The brain drain is a global phenomenon that’s being faced by most countries around the world. From this region, young people want to go to the EU; from some European countries, young people want to go to the U.S. etc. Moreover, Serbia has unfavourable demographic trends, and demography impacts on the labour market and the economy, and vice versa. We have a low birth rate, high mortality and a high level of emigration, all of which impact negatively on the labour market.

We already have occupations that are in short supply, not only when it comes to highly qualified personnel in the field of IT, such as data scientists and data analysts, but also when it comes to jobs like traders, warehousemen, forklift drivers, as well as workers for various occupations in construction and agriculture. The cost of labour for these occupations is on the rise on the market, while the economy is turning to some other solutions when it comes to staff shortages, such as automation and the importing of labour, which are already evident on the market.

We are witnessing, for example, that we already have foreign workers in the construction sector, while automation will also increasingly be on the rise, not only as part of progress and advancement, but rather as a result of the need to resolve the shortages in some occupations. It is not a complete hyperbole to suggest that, for instance, if we don’t have enough workers for some jobs, say in agriculture, that we will have robots working in the fields in the near future.

Serbia must choose as a society the direction it wants to go when it comes to circular migrations. And that direction will determine whether we will import cheap labour or high-quality workers and digital nomads. We already have initiatives that encourage and ease the return of our diaspora to the country, and as a country we shouldn’t prevent young people who want to go abroad to study. Instead of that, we should create such a society that compels them, after a certain period of time there, to want to return to the country. I’ve always found the example of Switzerland interesting, where they identified the brain drain problem 20 years ago and worked intensively to reverse the trend. Their model has shown that investing in innovative professions leads to faster economic development, the growth of competitiveness and improved living standards, and this ensures that the country has become more attractive for young and old to stay in or return to the country, while attracting other, high-quality workers from other countries. Switzerland tops the list of countries when it comes to innovation and global competitiveness, and I think it represents an excellent example of actively dealing with the brain drain topic. I would like us, as a country, to head in that direction and feel the positive effects of circular migrations. SWITZERLAND TOPS THE LIST OF COUNTRIES WHEN IT COMES TO INNOVATION AND GLOBAL COMPETITIVENESS, REPRESENTING AN EXCELLENT EXAMPLE OF ACTIVELY DEALING WITH THE BRAIN DRAIN TOPIC

MARINA RAKIĆ

HR DIRECTOR, MK GROUP

WE FIGHT FOR OUR TALENTED PEOPLE

A LARGE NUMBER OF EMPLOYERS IN SERBIA ARE ALREADY IMPORTING LABOUR TO FILL LOWER POSITIONS. AT THE SAME TIME, AUTOMATION PROCESSES ARE BEING IMPLEMENTED THAT DON’T NECESSARILY IMPLY A REDUCTION IN THE WORKFORCE, BUT RATHER ALSO THE RE-EDUCATING OF THE EXISTING WORKFORCE FOR NEW JOBS.

The search for a high-quality workforce has always been topical. The aim of every employer is to find the best candidates on the market, to motivate and retain them. Over the past 20 years, however, a real struggle for talent has been playing out on the global market, and for several reasons. The liberalisation of the world market has led to greater movements of people seeking attractive jobs. Digitalisation has led to the disappearance of some jobs, but also to the emergence of new positions that didn’t even exist until recently. Furthermore, we have seen an acceleration of business processes and faster cycles of change, which in turn leads to more frequent transformations within organisations. From the perspective of human resources, the departure of people to attractive markets has made it more difficult to find people for a large number of positions, while digitalisation has led to people with completely new knowhow and skills being sought. With competition greater than ever before, people’s costs are also rising year-onyear. Serbia, like all other countries, is not excluded from this global process.

When it comes to the further direction, companies must primarily invest more in their own workforce and follow trends that make them an attractive employer. At MK Group, we strive to secure not only adequate earnings, but also education, training THE BEST WAY FOR ANY EMPLOYER TO HANDLE and other benefits for employees, as well as to work continu- THESE CHALLENGES IS TO INVEST IN PEOPLE, IN ously to build an organisational culture that supports innovation and growth. Modern business operations require companies to encourage THE BROADEST SENSE, AND IN A CULTURE THAT SUPPORTS GROWTH AND DEVELOPMENT people to develop, but also to provide them with opportunities to learn continuously and gain new experiences. I will mention that MK Group has, among other things, just implemented its one-year Digital Academy project, and we will continue with this practise in the years ahead. This project has been conceived with the aim of developing talent and improving the knowhow and experience of employees. During the nine months that the Digital Academy lasted, seven of the most talented experts from the MK Group system had an opportunity, through nine modules, to acquaint themselves with the most modern technology in agriculture, to operate drones, but also to improve their agronomic knowledge and managerial skills through training in project management, business processes and financial management.

Viewed on the whole, large migrations of populations are inevitable, which is why a large number of employers in Serbia are already importing labour for lower positions. Although we are just at the beginning, there is every chance that this process will continue and accelerate. In parallel with that, automation processes are being implemented that don’t necessarily imply a reduction in the workforce, but rather also the re-educating of the existing workforce for new jobs. That’s actually why it’s important to have understanding and to build your own personnel and talented workers.

MIHAIL ARANDARENKO

PH.D., PROFESSOR, FACULTY OF ECONOMICS, UNIVERSITY OF BELGRADE

CIRCULAR MIGRATIONS ARE OUR REALITY

PEOPLE ARE INCREASINGLY LEAVING SERBIA, BUT THEY ARE SPENDING MUCH LESS TIME ABROAD. TEMPORARY WORK ABROAD IS A FAR GREATER CAUSE OF LABOUR SHORTAGES THAN PERMANENT EMIGRATIONS FROM THE COUNTRY. OUR TEMPORARY AND CIRCULAR EMIGRANTS MOSTLY GENERATE THEIR EARNINGS OUTSIDE SERBIA, THEN SPEND THEM IN THE COUNTRY. THAT HAS ITS POSITIVE AND NEGATIVE ASPECTS, BUT IT IS ALREADY OUR REALITY.

Demand for labour has long been increasing under the influence of economic growth and investments, primarily in construction, industry and IT services. On the other hand, the supply of labour is decreasing, mostly due to a rapid decline in the working age population as a result of the large Baby Boom generation retiring, but also as a result of increased labour migration. As such, the biggest labour market problem in this decade won’t be unemployment, as it was in the past, but rather an increase in the quality of jobs.

Serbia isn’t leading the way on technological development, nor are our labour costs at a level that would mean that automation could seriously jeopardise employment over the medium term. On the other hand, current labour shortages in sectors that are recording expansion, such as construction and some services, are already a reality, but that will continue to predominantly relate to temporary migrant workers with modest qualifications and no lasting aspirations to migrate.

Digital nomads are another story. They are an attractive phenomenon that draws attention, but their number is not, and cannot be, large. Apart from that, they are by definition an unstable and fickle grouping. Many countries have already introduced benefits similar to ours, competition is strong among attractive European cities, so attracting digital nomads can’t be built into some more serious strategy for the development of human resources.

On the other hand, circular labour migrations are already the predominant reason why our people head abroad. That wasn’t the case until around 2015. When we look at data on the total number of emigrants from Serbia in the main recipient countries, they are mostly stable countries that are not growing or are growing slowly. On the other hand, the number of emigrants leaving Serbia over the course of a single year was increasing steadily and rapidly until the outbreak of the pandemic, almost tripling over the past decade. In other words, people are increasingly leaving Serbia, but they are spending much less time abroad. Temporary work abroad is a far greater cause of labour shortages than permanent emigrations from the country. For example, in 2019, more than 60,000 of our citizens received residence permits in the EU for the first time, while at the same time around 50,000 of them – not necessarily the same individuals – returned to the country. Thus, net emigration to the EU was perhaps only 5,000-10,000, but the number of those working outside Serbia for most of the year probably exceeded 40,000. Our temporary and circular emigrants mostly generate their earnings outside Serbia, then spend them in the country. That has its positive and negative aspects, but it is already our reality. CURRENT LABOUR SHORTAGES IN SECTORS THAT ARE RECORDING EXPANSION, SUCH AS CONSTRUCTION AND SOME SERVICES, ARE ALREADY A REALITY, BUT THAT WILL CONTINUE TO PREDOMINANTLY RELATE TO TEMPORARY MIGRANT WORKERS WITH MODEST QUALIFICATIONS AND NO LASTING ASPIRATIONS TO MIGRATE.

MILOŠ TURINSKI

PR MANAGER, INFOSTUD

UNEMPLOYMENT IS A THING OF THE PAST

THE LABOUR MARKET HAS SHORTAGES IN TWO DIRECTIONS. THE FIRST IS CERTAINLY THE IT FIELD, WHILE THE SECOND ENCOMPASSES SEMI-SKILLED OCCUPATIONS WHERE THE WORKERS REQUIRED FOR MANY POSITIONS ARE VIRTUALLY NON-EXISTENT. AND THIS HAS LED TO THE IMPORTING OF LABOUR, PRIMARILY FROM ASIA AND AFRICA. THIS SITUATION IS CURRENTLY MOST NOTICEABLE WHEN IT COMES TO DELIVERY SERVICES.

Over the past 10 years, under the influence of digitalisation, Serbia’s labour market has changed rapidly. Various situations and trends, but also new generations, impacted on the emergence of new occupations, but also the slow “die out” of old occupations. The situation with the pandemic has accelerated the digitalisation process even further, thus imposing mandatory qualifications that candidates are expected to possess, such as basic digital literacy.

On the other hand, the labour market that used to have a high level of unemployment now has shortages in two directions. The first is certainly the IT field, which has had a problem with personnel shortages for years, particularly mid-level and senior personnel, while the second direction encompasses semi-skilled occupations, such as crafts, where the workers required for many positions are virtually non-existent. Here we are mostly talking about construction and hospitality professions, but also jobs like car mechanics, plumbers, hairdressers and even warehouse workers.

Such a situation has started leading employers to import labour, primarily from Asia and Africa, in order to meet their staffing needs. This situation is currently most noticeable when it comes to delivery services. In parallel with this, the IT industry is also turning to foreign countries in response to its inability to identify high-quality personnel (most commonly senior staff), so in recent years there has been ever more discussion of digital nomads as a potential solution. According to research conducted by the Digital Serbia Initiative, although Belgrade tops the list of European cities where digital nomads stay, it is necessary to work on creating better conditions to entice as many digital nomads as possible.

When it comes to circular migration, research conducted earlier this year by UNDP and Infostud, via a survey and analysis of job advertisements, yielded the devastating statistic that as many as 83% of respondents are considering moving abroad, though the positive aspect of this story is that only 23% of them are actively working on doing so. On the other hand, something that we can still see as a positive aspect is that young people stressed that they would only go abroad to study, after which they would return to apply all the knowledge they’ve acquired on our market. Most of those who would leave the country permanently are people who are already active on the Serbian labour market and have amassed more than 10 years of work experience. A DEVASTATING STATISTIC IS THAT AS MANY AS 83% OF RESPONDENTS IN A JOINT UNDPINFOSTUD SURVEY ARE CONSIDERING MOVING ABROAD, THOUGH THE POSITIVE ASPECT OF THIS STORY IS THAT ONLY 23% OF THEM ARE ACTIVELY WORKING ON DOING SO

SARITA BRADASH

RESEARCHER AT THE CENTRE FOR DEMOCRACY FOUNDATION, CDF

NOBODY IS CHASING A BAD LIFE

FOR WHOM COULD SERBIA BE AN ATTRACTIVE DESTINATION WHEN IT HAS THE LOWEST EARNINGS IN EUROPE, WHICH DON’T EVEN ALLOW THE MAJORITY OF EMPLOYED CITIZENS IN THIS COUNTRY TO MAKE ENDS MEET WITHOUT STRUGGLING?

From the aspect of basic labour market indicators (rates of employment, unemployment, activity and inactivity), we are certainly recording improvements. However, one should bear in mind that the increase in employment rates is largely a result of a reduction in the working age population. Compared to 2014, there are 361,600 fewer workers. On the other hand, the improvement of indicators is mirrored by a decrease in the quality of employment: the share of employees with permanent contracts is decreasing; the share of precarious employment (self-employed and helpers of household members) is extremely high; hundreds of thousands of people work in the informal sector, while most employees don’t earn sufficient funds to ensure a decent standard of living.

When it comes to ways to resolve the labour shortage problem, we should consider that there has been no relevant research in Serbia on occupations that are lacking, nor are forecasts of future needs conducted. However, I don’t believe that automation could be an option – not only because of the structure of the economy (where low and medium-low technology activities dominate), but rather also because of the low level of business sector investment in research. According to Eurostat data, such investments amounted to just €23 per capita in 2019, which is 50 times less than investments in Sweden, 15 times less than in Slovenia, seven times less than in Hungary and half the level of investment in Bulgaria. With regard to the “import” of labour, the question that should be answered is ‘for whom does Serbia represent an attractive destination when it has the lowest earnings in Europe – earnings that don’t even allow the majority of employed citizens of this country to make ends meet without struggling?’.

Let’s recall that the authorities of this country haven’t even succeeded in finding a solution for their own freelancers, so I don’t see how they would be more successful with nomads. The fact that you earn more than you spend isn’t the only decisive factor in deciding where you will do business. Quality of life, functioning institutions and the rule of law are just some of the factors influencing such a decision, and each of the factors in that equation has a negative sign in Serbia.

When it comes to achieving a state of circular migration, that depends on several factors. If there is no change when it comes to the reasons why tens of thousands of people leave Serbia every year, it will not be possible to entice those same people to return. Let me remind you of some of those reasons: an inability to find an appropriate and well-paid job; corruption; nepotism; a lack of the rule of law; dysfunctional institutions; poor quality education (from preschool onwards); low quality of healthcare protection. DESPITE THE GENERAL IMPROVING OF LABOUR MARKET INDICATORS, THE UNFAVOURABLE POSITION OF WOMEN AND YOUNG PEOPLE IS NOT CHANGING. IF WE COMPARE SERBIA TO EU COUNTRIES, IT IS STILL LANGUISHING AT THE BOTTOM OF THE SCALE FOR THESE INDICATORS