Croatia is confronting notable challenges in its labor market arising from a declining and aging population, alongside rapid technological progress. Over the past decade, the country has witnessed a loss of nearly 400,000 residents, with forecasts indicating an additional 19 percent decrease over the next 30 years. By 2050, it is expected that people over the age of 65 will make up 30 percent of the population. Furthermore, by 2035, Croatia will require over 300,000 workers to fulfill the requirements of a swiftly changing labor market, increasingly centered on green and digital job sectors.
Skilled labor shortages are a significant impediment to business investment and the green transition, affecting vital sectors such as tourism, construction, industry, and services like ICT, healthcare, social, and long-term care. To counter these challenges, the Croatian Government has enacted several crucial initiatives. Key measures include labor market reforms under the Recovery and Resilience Plan, the Demographic Revitalization Strategy, adjustments to the Aliens Act, and employment programs aimed at vulnerable demographics, as well as grants for acquiring skills in green and digital industries.
To bolster these interventions, the European Commission Representation in Croatia and the World Bank Croatia Office recently organized a conference titled “Tackling Croatia’s Workforce and Skills Shortages.” This event examined causes and proposed policies to address workforce and skill shortages, drawing from EU experiences and the World Bank’s extensive research. The conference also showcased the Union of Skills initiative aimed at enhancing education and training to develop skills suitable for quality jobs and competitiveness in the European economy.
Ivan Vidiš, State Secretary at the Ministry of Labor, Pension System, Family and Social Policy, emphasized the ministry's focus on including underrepresented groups in the labor market and improving conditions for workers. He stated, "The Ministry of Labor, Pension System, Family and Social Policy has identified key areas of action."
Zrinka Ujević, Head of the European Commission’s Representation in Croatia, noted, "People are the strength of the Croatian economy." Anna Akhalkatsi, World Bank Division Director for the European Union, added that policies could harness the "untapped potential of the domestic labor force."
To tackle labor market issues, the Croatian authorities have a range of solutions. These include increasing labor market participation through targeted services for youth, elderly, low-skilled individuals, women, and migrants. Initiatives could encompass outreach, training programs, child care access, and gender-sensitive labor policies. Additionally, improving skills development for evolving industry needs, updating curricula, strengthening partnerships, and boosting lifelong learning programs are crucial.
The conference brought together policymakers, local government representatives, international organizations, private sector, and civil society participants to deliberate on labor market challenges.
The World Bank has partnered with Croatia for over 30 years, contributing to various projects and offering knowledge and assistance to support institutional development and policymaking in numerous sectors.