Due to the specifics of the tourist season, we still have a major problem finding quality labor.

According to data from the Ministry of the Interior, in 2022, by May 31, a total of 51,516 residence and work permits were issued to foreign workers in Croatia. Compared to 2021, when 26,143 residence and work permits were issued in the same period, this year there has been a noticeable increase in issued residence and work permits of as much as 97 percent. Although working conditions and wages in tourism are rising year after year, it is estimated that at this moment more than 30 thousand tourism workers are still lacking. The labor shortage is becoming increasingly evident in that sector as well because, due to the pandemic, some workers retrained and, according to professional estimates, more than ten thousand people left the tourism industry.

Dubrovnik chronically lacks labor. What led to such a situation? Did global circumstances only encourage the flight from tourism with the aim of finding a better and safer job? Looking from the workers' position, wages in tourism had been low for years, and workers were most often exploited. The market did its part, so many decided to try their luck working abroad. Today many say that this situation could have been prevented or the need for importing labor minimized by increasing wages for locals. Why would a person from Dubrovnik work for five thousand kuna, and from that set aside money for a rented apartment and food, while a foreigner has the same salary and, in addition, is provided with accommodation and food? We discussed these issues with people in managerial positions in Dubrovnik hospitality establishments, and from an economic point of view the situation was commented on by analyst Branimir Perković.

THERE ARE NO LOCAL WORKERS AT ALL

The manager of a restaurant in the business zone said that their hospitality establishment has 80 percent locals and 20 percent foreign nationals out of the total number of employees. They filled the shortage of workers from Dubrovnik with seasonal workers who arrived from North Macedonia and Nepal, whom the manager hired through an employment mediation agency. In the restaurant there is no salary below seven thousand, and he says that this year they increased compensation due to inflation.

– I would hire local workers, but they simply do not exist. 'Our' man was always valued and there was not as much exploitation as the impression suggests. A worker has to give something if he wants to have a high salary. With us the job is relaxed and not at a high level as, for example, in the historic core. It happens that I teach workers how to open a bottle of wine or send them to English lessons, and all of that should be known if someone wants to be a waiter – believes this restaurant manager who himself, when he was younger, worked for years as a waiter in the historic core where he really mastered the job. According to him, at that time it was not possible to work without prior knowledge, while today workers are not asked anything, they are only told when to start working.

– Someone cannot come to me and say 'Good day, I would be a chef, give me a salary of 15 thousand kuna.' A worker has to build himself up. We have people who started working for five thousand kuna and now their salary has grown by several thousand because they gained knowledge and experience. It simply takes time to 'build' people – he said.

Experience has taught him how difficult it is to achieve a sustainable relationship with foreigners, especially those from distant countries, because they leave after the season.

– In Dubrovnik, those who are worth something usually stay, and no owner will let them go but will pay them well. I value a person who does a good job. People often come to us asking for huge salaries, but when responsibility is required, then it is not there – he says.

He recalls how before no one even knew about work permits.

YOUNG PEOPLE TODAY DO NOT WANT TO WORK TOO MUCH

– People from Slavonia, Zagreb and other continental parts used to come to us, and along with them a large number of students also worked. I was like that too because as a young man I wanted to earn my own money. It seems that young people today do not want that. Apartments for rent have ruined us, so parents tell their children not to work because they are engaged in renting. Also, a large number of hospitality workers started transporting passengers for platforms like Uber where earnings are easy and good. That has 'killed' tourism for us, and those two things should have been side income. Everything is going toward us being served by waiters from India – he believes.

He explained to us what the cost of hiring a foreigner is. A work permit costs 700 kuna per person, on top of that there is the cost of the mediation agency which takes a commission of around one thousand kuna per worker, and some take up to three thousand due to high demand. In addition to these expenses, workers are usually paid shared accommodation.

– I had negative experiences with some agencies that mediate employment. Altogether it is one big struggle. On the other hand, the state also burdens us with high taxes and expenses such as contributions on higher salaries. Sometimes I lose the will because I have no one with whom to build a permanent business and carry out all the ideas – explained the manager of a Dubrovnik restaurant.

We also asked for a comment on employment in a well-known restaurant in Lapad that mostly employs foreign nationals. In their restaurant the situation is the opposite, out of the total number of employees 40 percent are locals and 60 percent are foreigners.

– We have all kinds of workers who come from foreign countries. From a distance everyone can present themselves as the best, but when they arrive then the real situation becomes visible – said the head chef, adding that she gives her maximum in training workers with the aim of making it easier for everyone.

She has been working in this restaurant for eight years and recalls what it was like earlier.

– When I started working there were problems finding quality workers. Back then all kinds of people came and then we had to give higher salaries. Because of all that I think local workers were in some way hurt, so then they asked for huge salaries. We have no problem with the amounts, but it is necessary to do the job for such a high salary and show knowledge – explained the kitchen manager of a restaurant that has around 30 employees. Most foreigners come from North Macedonia, Bosnia and Herzegovina, Serbia, Montenegro and the Philippines.

THERE ARE BOTH GOOD AND BAD WORKERS AS WELL AS EMPLOYERS

– We try to introduce people to the job, but the worst thing for us is when someone leaves in the middle of the season because of some nonsense or someone offers them a job for a few hundred kuna more – she says.

In their restaurant, a person who washes dishes and works eight hours a day is paid one thousand euros, and the other positions are paid even more.

– There are both good and bad employers as well as workers. A person strives for some perfection, but that does not exist – concluded the head chef of a restaurant in Lapad.

Economic analyst Branimir Perković claims that foreign workers definitely have lower salaries.

– According to the information I received from the Croatian Employment Service, the average gross salary of a waiter in Croatia is around seven thousand kuna, and of a chef around 8,700 kuna. Those are the two most sought-after occupations in tourism. On the other hand, according to Croatian Employment Service data, the average salary of foreigners who were issued a work permit, in the occupation waiter/waitress, amounts to barely a little more than five thousand kuna, as does that of chefs – states Perković, who believes these are not negligible differences in salaries.

He adds that the total cost of a worker should nevertheless be considered.

– In addition to salary, time is needed to train a new worker, possible accommodation, work benefits such as food, and of course in the case of foreigners the time and financial cost of paperwork and mediation agencies themselves. My estimate is that when all costs are factored into the 'price' of foreigners, they are not significantly cheaper than local workers – the analyst believes.

FOREIGNERS ARE PAID LESS

Perković presents data speaking about the official unemployment rate in Split-Dalmatia County, which is closest to Dubrovnik-Neretva County and has similar problems regarding finding labor. Namely, in March this year their unemployment rate was 13 percent. Despite that, Perković believes, employers from these two counties cannot 'pull' those workers.

– The fact is that workers are lacking, and the registered unemployment rate in the country is a not so small seven percent, in some counties, such as Split, above ten percent. It is difficult to give an unambiguous answer as to how this came about. Part of it certainly relates to the grey economy, but I do not believe that is the primary reason. That includes undeclared workers and side work. People have apartments, or within the family help with apartments, some also work on agricultural holdings so they are officially unemployed and regularly report to the Croatian Employment Service, but in reality they are not looking for employment or are waiting for some ideal job, and in the end maybe a 'relative' gets them a position in the public sector – stated Perković.

He adds that the share of young people who are unemployed is large.

– They are realistically not forced to accept just any entry-level job, because the rate of young people up to 29 years old who live with their parents is the highest in the EU. Young people do not want to accept just any job because they do not need it, while employers on the other hand expect young people to immediately take over the job as someone who has been working for years. I think there is an unrealistic expectation from employers that young workers can immediately become net profitable for them. No one was born with the knowledge of performing a certain job, and most business skills related to a specific job come from experience, not theory. Employers, especially here in the south, expect young people to achieve full productivity practically on the very first working day, which is not realistic. The situation has changed, the young people with whom employers in Croatia were impatient left for other EU countries and built careers there, and employers in Croatia suddenly found themselves in a situation incomprehensible to them, that no one wants to work under the conditions that had prevailed on the labor market until now – concluded economic analyst Branimir Perković for Dubrovački dnevnik.

Source: dubrovackidnevnik.net.hr