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General Albania's population decline, high youth emigration and seasonal work abroad are rapidly draining the country of young people, as businesses in all sectors have declared an emergency for employees. The situation is most critical in the tourism sector, the fashion industry, and construction, which are ignoring skills, as they simply cannot find people.
Attempts to replace them with foreigners are proving to be costly and ineffective, as our country is used by newcomers as a springboard to escape to Europe. The future is not optimistic and the economy cannot climb the higher value chains.
The working age population of 15-64 years shrank by over 32 thousand people last year alone, with an annual decrease of 1.7%, the deepest in 30 years. The results of the Balkan Barometer 2022 show that 42% of respondents in Albania plan to emigrate, Monitor reports.
The expansion of the tourism sector, the higher volumes in construction, the increase in demand after the pandemic, and the war in Ukraine for production in Albania have put the businesses of these sectors in emergency for employees.
Deficits in the labor market have become a concern in the last five years in all sectors of the economy without exception, as the country's population and, especially, the young labor force is shrinking rapidly from high rates of immigration and declining births, but lately, the shortages are seriously hindering the exploitation of the potentials for the expansion of the economy.
Attempts to cover this need with employees from abroad, especially from Asia and Africa, are proving costly and not very efficient to meet the urgent need that businesses have at this moment, especially those in the clothing(fashion) industry, construction and tourism sectors.
According to official data from the annual review of the population from 2011, when the last census was taken until the beginning of this year, 7.5% of the country's population, or 213,748 people, have emigrated, where more than 32 thousand people have left just last year.
The phenomenon is deepening further this year, since only for the first three months a total of 2,900 applications for asylum were registered in EU countries, almost three times more than in the same period of 2021. More detailed data show that over 78% of them are people under 34 years old.
The rapid decline in births from more than 85,000 in 1990 to about 27,000 in 2021 casts a bleak outlook on labor force performance in the coming decade. Data from INSTAT show that the working age population of 15-64 years shrank by over 32 thousand people last year alone, with an annual decrease of 1.7%, the deepest in 30 years.
The results of the Balkan Barometer 2022 that was published these days show that 42% of respondents in Albania plan to emigrate, this was the highest percentage in the region, after Kosovo.
In the first quarter of 2022, employment increased in annual terms by 8.0% in the industry sector, 1.7% in the services sector, and by 2.8% in the agriculture sector, but the increase would also be greater if some sectors had enough employees.
The clothing industry tends to hire workers from Asia, there is no security and the costs are high
Gjovalin Shtjefni, who owns and manages the "Rubin" garment factory in the city of Shkodra, has recently hired 15 women from the Philippines, in addition to the Albanian women, in an effort to fill the gap that has been preventing him from expanding the business for a long time.
Mr. Shtjefni is satisfied with the work ethic and correctness of women from the Philippines compared to the local women already employed in the factory, but bringing them to Albania has cost him a lot. Fees and documents to bring an employee from Asia exceed 1 thousand euros per person. Mr. Shtjefni said that he will try to hire foreigners again, as according to him, regardless of the costs, it is necessary to keep the activity afloat.
Florian Zekja from the Union of Craftsmen said that the industry is going through a very difficult situation in terms of employees. Before the high demand appeared after the pandemic, the textile factories had about minus 20 thousand employees, but with the current demands, the needs are for doubling the employment in this sector.
The textile and footwear industry had declared about 56,000 employees in 2019, before the pandemic, but the Fashion Union claims that, if there were enough employees, the demand is enough to employ up to 100,000 people.
Textile industry exports grew rapidly this year by over 23% in the first quarter. The factories faced the first difficulties with employees in 2016, when there was no more interest from young people to engage in this sector, as the country was involved in a wave of emigration where about 60 thousand people fled to asylum.
Some factories in the districts were emptied and in the last 7 years systematic emigration, now also with families, has weakened the workforce in this sector. Attempts to meet the demand with foreign labor failed. Some employees who were brought from Bangladesh before the pandemic used Albania as a springboard to Europe.
Meanwhile, fashion businesses, since they mostly work with custom materials and low-profit rates, cannot use salaries as a means to stimulate employees. Last year, wages in the industry sector increased by an average of 5.3%. The gross salary in the industry last year reached 38,445 leks from 35,887 leks in the same period of the previous year. The entire 5.3% increase occurred in the first quarter of 2022.
The departure of workers from factories is happening so quickly that businesses do not have time to adapt. Many factories are entering the closed loop and trying to select, between high demand, value-added products.
Innovation is also being seen as a key solution. Albanian factories have started to buy the latest production machinery technology. Textile units are investing in automatic laser cutting machines. Such a machine costs from 150 to 500 thousand euros, but the benefits derived from its use are great. Such a machine replaces at least four employees, said Zekja, who claimed that factories have increased purchases of these devices.
The usual cutting machines are being replaced by "Computer stitching" machines. Mrs. Eva Laro, who runs the "ProDyn" shoe production factory, one of the largest in the country, said that last year she invested in the purchase of these machines. A computerized sewing machine is used to control various work processes.
A lack of workers drives automation
The departure of workers from factories is happening so quickly that businesses do not have time to adapt. Many factories are entering the closed loop and trying to select, between high-demand, value-added products. Innovation is also being seen as a key solution. Albanian factories have started to buy the latest production machinery technology. Textile units are investing in automatic laser cutting machines.
Hotels and restaurants are lowering the claims for skills, there are no employees at all
The businesses of bars, restaurants and hotels were in difficulty for employees even before the pandemic, not only because there are no qualified employees, but there are no employees at all, said Enri Jahja, Chairman of the Association of Bars and Restaurants. He explained that, there is a need, starting from sanitary workers to chefs or hotel managers.
"The situation is very critical as day by day the number of employees in the staff decreases, prices increase and also, the demands of the staff for higher salaries. This is one of the worst situations in the sector these days", said Mr. Jahja.
For structures on the coast, the number of tourists is expected to increase. There has been an influx of tourists in Durrës since May, and this is positive for the tourism sector, but also for bars and restaurants. Large hotel establishments are hiring cooks from Turkey and cleaners from the Philippines. Businesses admit that the costs are several times higher than for an employee from Albania. In addition to wages, which are a minimum of 500 euros for foreigners, they are also provided with food and accommodation.
These expenses are almost twice the expenses for an Albanian employee. The accommodation and bar sector employed before the pandemic more than 40 thousand employees against salary, according to data from the State Statistics Institute of Albania, but now, with the increase in the number of tourists at a time when emigration is shrinking the number of employees, the sector has declared an emergency for workers of all levels.
Bars and restaurants, even though they are quite popular businesses, have historically suffered for skilled employees, as the employees in these units always came from other professions and the culture of work and service is at a low level. But this year, businesses have been alert simply because people are nowhere to be found.
The average salary in this sector, according to official statements, reached 47 thousand leks in the first 3 months of 2021 with an annual increase of about 9%. But now, when the costs of all raw materials and supplies have risen, businesses don't have many resources to raise employee wages.
Fatos Çerenishti, who owns FAFA Group, one of the largest hotel groups in the country, said that finding employees has become one of the major problems in the sector. Due to the lack of employees from the local market, Mr. Çerenishti and many others in the sector have turned to the Asian market. "We have tried to raise wages, as we need to keep the trained staff that enables us to provide standard service.
However, despite the increase in wages, the environment remains challenging, as new structures are opened and the need for staff is constant. The situation is the same in the area of Shengjin, Velipoja, and in the South, where hotel structures are under the pressure of shrinking the number of employees and increasing tourists.
Tourism turns its eyes to Asia for employees
Fatos Çerenishti and many others in the sector have turned to the Asian market. Large hotel establishments are hiring cooks from Turkey and cleaners from the Philippines.
Agrotourism undertakes the training but does not find employees
The concern that is being raised in general by various industries about the lack of labor seems to be affecting agritourism as well. Flori Uka, from "Uka Farm", asserts that there is a need for employees in various links, but it is not easy to find them.
"What I find problematic is the difficulty in finding workers. We need to move towards finding employees who are local but need to be trained to be more creative. I speak here, for example, about chefs. We must have modernized managers who add creativity to the activity, preserving the agritourism typology. We have plans for expansion, but we are held back by the workers. It is becoming more and more difficult", he underlines.
Even Arjola (Brahimi) Xhebro claims that finding employees is difficult in the Nivica area. "This is a very good and developing area, but it is a challenge to find manpower because the residents of the area are not very interested in working in the service. Whether we need a gardener, maintenance worker, kitchen helper, or cleaner, it's hard to find. They can come one day and not the next, and the payment is not small, but they simply don't see it as an alternative," she says.
Altin Prenga, from "Mrizi i Zanave", says that maybe the lack of labor force will have a good end, which will lead to the proper assessment of man. "It is the only good news, I would say since there was no other solution to change the Albanian mentality on human resources. The drastic flight will make the evaluation of the labor force and in this whole situation, maybe we will face and find, for the first time, what we call the middle class", he emphasizes.
The food industry in difficulty, they are not finding a solution
Adi Haxhiymeri, who owns the "Bloja" flour factory, with "Prima" products, said that the lack of employees is turning into a serious problem for his activity. "Workers constantly leave work and often without notifying us. They go abroad", said Haxhiymeri.
He said that he still does not have a solution on how to fix this situation. "We have not solved it. We continue to push it with solutions of the moment, but in the long term we will consider replacing it with foreigners as some others are doing", said Haxhiymeri.
Dairy processing plants, which are not trying to expand with employees due to the lack of raw materials and high costs from the increase in the price of energy, are facing the departure of existing employees. In 2020, employment in the agro-processing sector was about 13 thousand people, or 2.6% of the total, while in the fishing sector and in the fish processing industry, over 9,000 people were employed in the same year.
Construction, collapsing because of the lack of workers
Currently, the construction sector is suffering from a pronounced lack of workers and specialists. The phenomenon has deepened since the opening of the economy from the pandemic, where many workers work seasonally in Croatia, Italy, and Germany. Currently, a tile specialist requires payment 2 to 3 times more than before, while the daily payments of employees range from 2,000 to 2,500 lek from 1,500 leks before, the chairman of the Association of Builders, Arben Dervishi, said earlier.
Operators in the construction sector need additional employees, due to new projects that are expected to start this year, but the labor market has shortages, especially with professionals. The companies, who chose to remain anonymous, said the sector is expanding due to increased building permits and high demand for renovations and refurbishments.
The construction sector employed about 51 thousand people in 2020, contributing to more than 10% of non-agricultural employment. Although a pandemic year, construction was one of the few sectors that increased employment by over 7% in 2020.
Finding workers, in addition to becoming more difficult, is affecting the increase in labor costs. Construction workers are becoming more and more expensive, claim builders, who say they are applying pay rises every six months to encourage retention of workers who are being lured away by immigration every day.
The builders themselves claim that they have mistreated the labor force with low wages, while now, many of them are hiring workers from the region, Bosnia and Kosovo, with much higher wages than the Albanian workers.
The employment outlook in construction is positive this year. In the first quarter, official salaries in the construction sector were 47,000 leks per month, with an annual increase of 10%, but the sector is characterized by a high level of informality. In the construction sector, in addition to suffering from a labor shortage, the average age of current employees is more than 50 years old according to industry data.
Lots of construction, few employees
Operators in the construction sector need additional employees, due to new projects that are expected to start this year, but the labor market has shortages, especially with professionals. The companies, which chose to remain anonymous, said the sector is expanding due to increased building permits and high demand for renovations and refurbishments.
The automotive industry is trying to "supply" itself with Indians and Pakistanis
Albania would become an attractive market for the automation industry like Serbia and North Macedonia, but labor shortages, among others, are becoming a problem. One of the newest companies in the automotive industry market in our country, SEWS Cabind Albania, is constantly expanding according to its business plan.
While earlier the company stated that it did not see problems for the workforce, the rapid departure from the local market of young people, especially after the lifting of the pandemic restrictions, has started to worry this business as well.
Mario Scarfalto, manager of SEWS Cabind Albania, says that another wave of departures may be during the Summer period when there is seasonal employment and the whole situation may put pressure on the local labor market.
According to him, various companies are considering hiring foreigners as a possible alternative to continue with investment and expansion plans. "Honestly, this is now one of the most pressing issues we have right now. We are seeing that with the opening of the borders, the lifting of the restrictions on COVID, many people are leaving Albania for Italy, Germany, and other European countries. This creates a lack of workforce in companies that have decided to expand their business in Albania and within Albania.
In addition to normal emigration, from June to August, as we have seen before, there will also be seasonal emigration. Many people may leave Tirana and the North of the country to work in the tourist season, which will increase the difficulties for the manufacturing companies here," said Scarfalto.
"We and many other companies are considering the possibility of hiring people from outside Albania, for example recruiting employees from India, Pakistan, and the Philippines. This can create a risk for Albanian employees, since if the productivity and cost of foreign employees will be more profitable, then more and more companies may decide to make this solution," he said.
The labor force is running out, there are no solutions
Businesses in all sectors claim that the lack of employees is a serious problem, for the solution of which they have neither the experience nor the means. The Albanian economy has never faced this phenomenon before. The government considers emigration as a normal phenomenon and, on the other hand, has not made the procedures for bringing in foreign workers easier and in an organized manner. Some businesses that had considered replacing Albanian employees with foreigners as a means are now seeing that it is impossible.
Enri Jahaj from the Association of Bars and Restaurants said that groups coming from Asia and Africa with work contracts in Albania are using Albania as a springboard to emigrate to Europe. At the end of 2020, the number of foreigners with a residence permit in Albania was 13,609 inhabitants, marking an increase of 0.8%, compared to 2019. These do not even constitute 0.5% of the labor force in Albania.
During the last ten years, the working-age population has included about two-thirds of the country's entire population. 63.6% of the working-age population, about 1.3 million individuals, are included in the labor force, while the remaining part is the economically inactive population.
In 2015, for the first time since the inclusion of our country in the free market economy, the working-age population reached the figure of 2 million. The year 2018 marked the inhibition of the upward trend of an average of 0.4% per year, which characterized this indicator from 2009.
The decline of the population under 34 years old is also marking the total decline of the labor force in the country. According to the new population projections for 2019 - 2031, for three subdivisions of the youth age group, for the years 2018-2021, according to the collected data and projections of the State Institute of the Statistics of Albania, it is clearly seen that the flows of the ages 15-19 and 20-24 years old show a noticeable decrease in the following.
At the beginning of 2022, official population data shows that in the 15-29 age group there was a decrease of 27,707 single people in one year.
Last year, for the first time, our country recorded an increase of a negative nature, where deaths were more than births, making the population loss irreparable.