Labour shortage is increasingly becoming a problem in Western Balkans and EU Candidate Countries. Like anywhere in the Western world there are shortages in certain sectors caused by a number of reasons. Many of the reasons are comparable to the countries in Western Europe, but in the case of the Western Balkans and EU Candidate Countries there is also the issue of migration.
The main challenges of the labour market in the Western Balkans and EU Candidate Countries are: Insufficiently educated workforce; significant lack of skills; and high emigration rates of young and qualified workers. This cocktail is leaving the home-countries without the essential workforce needed to further develop the countries and region.
From 16-18 April 2025 more than 40 trade union leaders from 11 different EU and EU candidate countries participated in a two-day seminar in the capital of Bosnia and Hercegovina, Sarajevo. The title of the seminar was “The future of work in the Western Balkans and EU Candidate Countries: How to tackle the workforce and skill shortage?”. The initiative was organized by WOW-Europe and the Independent Trade Union Federation of Workers in Financial Organizations (SSRFOFBiH) in cooperation with the European Centre for Workers’ Questions (EZA) and funded by the European Union. The seminar took place within the framework of the EZA special project for workers’ organisations in candidate countries.
Education is the starting point of everything. It is key. “The economy is created in kindergartens, leaders especially are created in kindergartens!” Mr. Nedim Krajišnik, Director of the Center for Educational Initiatives Step by Step (Bosnia and Herzegovina) stated. “Without education there is no society, no economy, no leaders and no quality”, he continued. But the way children are educated follows a one-size-fits-all approach. There is little room for play, everyone is treated the same and young people are not motivated to learn. The fact is that the “world needs all kinds of minds. Everyone should be valued for the contributions he or she can make”, Mr. Nedim Krajišnik concluded.
What we are experiencing in the Western Balkans is a “demographic crisis”, Mr. Lazar Ivanović, Economist at the Center for Advanced Economic Studies - CEVES (Serbia) continued. Most countries are experiencing a migration deficit. Bosnia and Herzegovina is the worst pupil in the class in that respect. This has tremendous consequences for society as a whole as well as the region. The pension-system, for example, is really under pressure. This is the result of a number of factors, such as ‘mass emigration of working-age population and declining birth rates’ Ivanović said. There are a number of ways to tackle this, of which investment in skills, technology, innovation represent the most long-term solution. For the region, the Open Balkan Initiative (a “mini-Schengen” enabling free movement of people, goods, services, and capital initiated by Albania, North Macedonia, and Serbia) seemed very promising, but the implementation has not been very successful so far.
In many ways related to the Open Balkan Initiative is the project “Better employment conditions for seasonal workers in South-East Europe”, initiated by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). “It is difficult to regulate this sector as much of the work is temporary and arranged on short notice”, Ms. Amira Omanović, Programme Component Manager, Open Regional Fund for South East Europe – Modernisation of Municipal Services, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) stated. “The current Serbian labour law does not provide a straightforward procedure for the registration of seasonal workers. Many of them work cross-border. The introduction of and electronic registration system has simplified the process of registration. But to achieve these ‘relatively’ simple things it is important to include all stakeholders, which is a big task”. That is why the “Reform of the Seasonal Workers Registration in Serbia” was launched. By sharing the Serbian experiences in the region, the hope is to trigger a domino-effect, with other countries eventually following – each at their own pace.
“Shortage of skilled workers is indeed a big challenge and vocational training could well be the answer”, according to Mr. Semir Hadžalić, Assistant Director at Sector for Legal and General Affairs at the State Lottery of Bosnia and Herzegovina. “Vocational training has the potential to become an important factor in economic development and reducing youth unemployment. To achieve this, continuous reforms, investments and better cooperation between the education system and the economy are needed.” The current key industries in South-East Europe are construction and manufacturing, IT, and tourism and hospitality. And all of them face shortages. Either because of lack of qualified workers or because the people are moving to the EU. This has tremendous economic effects. “Possible solutions are better education, higher salaries and improving working conditions, encouraging diaspora’s return, importing labour force, and encouraging entrepreneurship. There is a weak link between education and the labour market”, Hadžalić stated. “Without a systemic partnership between education, employers and institutions - vocational education remains on the margins, and the labour market suffers the consequences. The solution lies in strengthening the dual education model, stimulating companies, and changing social perception – so that the vocational professions are seen as offering quality, safety, and dignity” Hadžalić concluded.
There are a number of macro, meso-and micro-level factors (incl. personality traits) – that influence people’s decision to migrate. However, in the Western Balkans, “economic motivations” are the main reason, said Ms. Ksenija Ivanović, PhD candidate and project manager for HEU ''Global Strategy for Skills, Migration and Development’’ (GS4S) Radboud University. “The GS4S research examines the role of skills shortages in migration aspirations and destination preferences in the following three countries: Albania, Bosnia and Herzegovina, and Serbia”. Migration aspirations are very high in the three examined countries with Germany being the most popular destination country. One should acknowledge that labour shortages act as incentives for migration in both the destination country as the country of origin. Demand creates opportunity. “It is important to understand why and where skills shortages occur”, said Ivanović. “And that migration does not necessarily have to be permanent”, she concluded.
“The Western Balkan is faced with some serious challenges. Workforce emigration is just one of them. Productivity another. When we look at the various countries it becomes clear that the countries import more than they export. This has tremendous effects on the economies”, according to Mr. Goran Đukanović, Chief Compliance Officer at the “Prva Banka Crne Gore”. One such effect is the high unemployment rate. For all age groups. It is notable that Bosnia and Herzegovina and North Macedonia stand out. This also becomes clear when looking at the migration figures. These numbers have been extremely high for Bosnia and Hercegovina over the past decades. Structural changes are essential in order for things to improve. The approach to the institutional and demographic crisis as well as the structure of education should change, Đukanović concluded.
When focusing on Bosnia and Herzegovina the challenges are very worrisome. Some disenchanting numbers. Between 2015 and 2023, more than 1.5 million people left the Western Balkans. 500.000 of these people came from Bosnia and Hercegovina. 70% of young people in Bosnia and Herzegovina are considering leaving. More than 5.000 doctors left Bosnia and Herzegovina between 2013 and 2020. “Apart from the obvious reasons for emigration there is the issue of political instability. Instability and corruption encourage emigration”, Ms. Minka Rešidbegović, President of the Independent Trade Union Federation of Workers in Financial Organizations – SSRFOFBiH declared. The departure of young people further leads to a decrease in the birth rate, an aging population, and the depopulation of rural areas. “The Balkans are predicted to continue losing labour force unless significant economic reforms occur. Addressing the problem of labour emigration requires coordination between governments, employers, and educational institutions”, Rešidbegović finalized.
The two-day conference made very clear that there are many challenges on many levels when it comes to workforce shortage. The Western Balkan face some specific conditions that make it difficult to tackle the trend of workforce shortage and migration. On the economic and political level, the countries face many challenges that require coordination. Steps are being made, but improvements take time. Estonia and Poland, countries that were in a similar position a number of years ago, may serve as good examples. People are slowly returning to their countries of origin. It took many years though, but surely this will happen to the Western Balkan countries too.
Recommendations
It should be continuously emphasized that addressing the problem of labour migration requires coordination between governments, employers, and educational institutions.
Collaboration between all stakeholders (government, universities and companies etc.) should be improved and can help train and employ young talents.
Investment in early-stage development and formal education for workers should be improved and scaled up.
Reform of everything related to the labour market will have to take place quickly. The Open Balkan faces implementation gaps. The symptoms are addressed, but not the root causes.
Data gaps and weak coordination both on national level as well as on regional level hamper effective response. Regional initiatives show promise, but fall short.
There should be a better alignment of talents and jobs in the Western Balkans (and between regions).
Positive occupational trajectories and increased quality of employment. Work-life balance and training opportunities matter.
Active Labour Market Policies should encourage life-long learning and re-/up-skilling, paying attention to the needs of different groups.
Strategies for skills development and life-long-learning in priority sectors should be in line with broader development policies and agendas.
In addition to policies aimed at improving the quality of employment or training opportunities, for example, it is essential to identify where skills shortages exist and introduce more targeted efforts.
Emigration is to some extent inevitable, but also not necessarily permanent or negative. While we strive to improve the living conditions in the Western Balkans, policy efforts should foster a connection between those abroad and the society in the Western Balkans, strategically approaching migration as a tool for skills development.