Southeast Europe urgently recruiting from developing Asia ahead of summer season

Southeast Europe urgently recruiting from developing Asia ahead of summer season
The umbrellas on Romania's Mangalia beach are ready for the summer season, but the tourism sectors in Romania and other Southeast European countries are short of workers. / bne IntelliNews
By bne IntelliNews April 3, 2024

Southeast Europe has long suffered from a high level of outward migration as young people in particular look for better opportunities in Western countries. But as its economies expand, the region has now become a destination for economic migrants, mainly from developing Asia. 

This reflects the glaring shortage of workers caused by a combination of mass emigration and the growth of labour-intensive industries such as construction, light manufacturing and especially tourism. International recruitment drives are underway to recruit workers to fill these vacant positions in sectors from agriculture to hospitality, from as far away as Bangladesh, India and Nepal.

At the same time, governments in the region are trying to enable businesses to attract foreign workers while at the same time manage any political impact from the arrival of large numbers of economic migrants. 

Slovenia looks to the Philippines 

Slovenia, as the richest country in Southeast Europe, has been an attractive destination from migrants, especially from fellow former Yugoslav countries. It is one of the few countries in the emerging Europe region to see a population increase recently, attributed by the statistics office to inward migration. 

The EU member is in the process of opening a consulate in the Philippines, as it looks to tap the Filipino labour market to tackle worker shortages at home. Meanwhile, it was reported at the end of March that a new agency dedicated to the employment of Filipino workers has started operations in Slovenia, with plans to employ over a thousand Filipinos every year. 

The Philippines has a population of 115mn people – compared to Slovenia’s 2.1mn – of which approximately 11mn are estimated to work overseas. 

The efforts to attract Filipino workers are part of a change in the profile of international workers in Slovenia, which, as state secretary Tina Heferle pointed out in February, has traditionally recruited from its near neighbours. 

"Slovenia’s previous experience in the field of integration dates back to the early 1990s, when Slovenia received the refugees from the former Yugoslav republics after the fall apart of the former country. This was followed by several employment schemes for foreign workers from the region," said Heferle, as quoted in a government statement. 

Slovenia is considerably richer than the other former Yugoslav countries, but they still share a common history and similar culture. 

In recent years, especially since the 2015 migration crisis and the eruption of the war in the Ukraine, Slovenia has been receiving newcomers with a different cultural and linguistic background, which has prompted Ljubljana to take measures such as its 2023 strategy for integration of foreigners. 

Growing tourism sectors 

Fellow former Yugoslav EU member Croatia is also in urgent need of additional workers, especially for its booming tourism sector. 

Parts of the country have been so affected by outward migration that one small town started offering houses and building plots for just HRK1 (€0.13). That came after its population approximately halved over the last century, Legrad mayor Ivan Sabolic told bne IntelliNews in an interview in 2021. 

Currently, Croatia attracts workers both from its near neighbours and from South Asia. According to reports by Poslovni Puls, a significant portion of the new registrations at the Croatian Pension Insurance Institute (HZMO) are from non-EU countries, a 46% increase compared to 2022. While a more than 30% of foreign workers still come from neighbouring Bosnia & Herzegovina and Serbia, there's a discernible rise in labourers coming from more distant countries. 

Analysts from RBA quoted by Poslovni Dnevnik attributed this growth to several factors including increased economic activity, demand for labour and Croatia's geopolitical position, especially since its entry into the Schengen area. They noted a robust uptick in the influx of foreign workers over recent years, facilitated by relaxed labour import regulations. 

Prior to 2021, Croatia had quotas governing the employment of non-EU nationals across specific sectors. However, in response to mounting labour shortages, the government scrapped most of the quotas, resulting in a significant influx of foreign labourers. 

The Croatian Association of Employers (HUP) predicts a substantial rise to nearly 500,000 foreign workers, or a quarter of the workforce, within seven years. However, challenges such as insufficient employer reporting, language barriers and instances of mistreatment have emerged. As in Slovenia, the government is taking action for example with plans to introduce a law on foreign workers and launch language learning programmes. 

Demand in the Western Balkans

However, it is not only the EU members in the region that are attracting workers from other parts of the world. 

Albania’s tourism sector has experienced robust growth since the pandemic, and the head of the Albanian Tourist Union recently told Euronews that areas with high tourist traffic require around 300,000 workers, which companies are struggling to find. 

Worker shortages in Albania are already pushing up labour costs, with wage increases of up to 70% or more reported in some sectors. Consequently, prices for goods and services have risen in Albania, with warnings of inevitable hikes in housing and bread prices. Construction costs have surged by 40%, while furniture prices have increased by 15% due to higher labour expenses. Shortages also extend to the agriculture sector, with diverse segments including the medicinal herb industry now facing labour shortages. 

Producers of bread and pastries in Albania say they may have to start recruiting workers from abroad amid an acute shortage of workers within the country, reported in September 2023. The chairman of the Association of Bread, Confectionery and Pastry Producers, Gëzim Peshkopia, said the main cause of the problem is the high level of emigration from Albania. In response, bakers and cake producers are considering hiring foreign workers from Asia and from countries in the region. 

Serbia, meanwhile, has also seen a high level of outward migration, but as the biggest economy in the Western Balkans it aims to attract workers from fellow Open Balkan members, Albania and North Macedonia. 

The three members of Open Balkan agreed to create a common labour market, meaning nationals of the three countries can work elsewhere in the bloc without needing visas or permits. There are hopes this will make the region more attractive for foreign investors, who can recruit workers from any of the member countries. 

In July 2023, the Serbian parliament enacted amendments to the Foreigners Act and Employment of Foreigners Act, aiming to streamline the process for foreigners entering Serbia and obtaining residence and work permits. With existing tax incentives tailored for digital nomads, these new regulations ease administrative hurdles, rendering Serbia a more appealing destination for mobile workers.

Population decline

Overseas recruitment by Balkan companies comes in the context of the long-term population decline across almost all of emerging Europe that the UN forecasts will result in the populations of many countries dropping to levels not seen since the early 20th century.

UN data shows that the total population of the post-socialist countries in Central, Southeast and Eastern Europe, the South Caucasus and Central Asia will drop from 418mn in 2021 to an expected 362mn by the end of the century, according to the median projection in the World Population Prospects 2022 report.

By 2021, three Southeast European countries are set to see the steepest population decline compared to 2021. Albania’s population will slump by almost two thirds (61%), while Bulgaria’s population will drop by 57% and Serbia’s by 55%.

This is due to a combination of the sharp falls in life expectancy and birth rates after the collapse of communism plus mass emigration.

It remains unclear to what extent immigration may make up for this. The richer countries in Central and Southeast Europe, notably Slovenia and Czechia, are experiencing inward migration that is balancing natural population decline.

Rights abuses

But with the arrival of tens of thousands of foreign workers come growing risks of exploitation. 

There are multiple accounts of workers lured to the region only to find out they are working tough jobs for lower pay than promised. 

Among the cases are the alleged forced labour of a group of approximately 400 Vietnamese migrant workers, who were reported to be victims of trafficking in Serbia, according to UN experts. They found that eight entities, including Vietnamese recruitment firms and Chinese construction companies operating in Serbia, were linked to significant violations of human rights concerning Vietnamese migrant workers.

Another investigation conducted by the Balkan Investigative Reporting Network looked into issues faced by Chinese labourers employed at a Chinese-operated copper mine in Serbia. Allegedly, these workers endured severe violations of their rights, including constraints on their mobility, demanding 12-hour shifts and the confiscation of their passports.

Experts suggest the problems could be worse than officially reported. “The number of formally identified victims remains low … in comparison with the number of potential victims referred to the CPTV. This suggests that there is possibly a number of cases of trafficking for labour exploitation which remain undetected,” said a 2022 Council of Europe draft study

Moving on 

There are multiple reports of workers arriving in Southeast Europe, then moving on illegally to more attractive West European destinations. 

Demand for Nepali workers is strong across several Southeast European nations, including Romania, Serbia and Bosnia, where Nepalese workers are eager to find employment opportunities, says a comment by international recruiter Emasco Nepal on LinkedIn. However, a concerning pattern has emerged where upon arrival in these countries, many workers opt to leave their original employers and engage in illegal migration to Western Europe, the agency adds. 

Some of the factors behind this include lack of awareness about the severe consequences of illegal migration; exorbitant recruitment fees that prompt them to seek better-paying opportunities; significant income gaps between East and West European countries; and misleading content on social media platforms that exaggerates the ease and benefits of migrating illegally from Eastern to Western Europe. 

Romania, for example, has become an increasingly popular destination for migrant workers, with work permits granted to non-EU citizens tripling between 2013 and 2022, according to a report by Friedrich-Ebert-Stiftung Romania, to reach 31,000 in 2022. The majority of non-EU migrant workers do not settle in Romania for the long term.

There is speculation that the partial entry of both Bulgaria and Romania to the Schengen visa-free area at the end of March could lead to an increased number of workers taking up positions in the two countries with the aim of moving on to other parts of the EU as swiftly as possible. Wages in the two countries, and even more so in the Western Balkans, remain well below the EU average.