Croatia is currently facing significant labour and skill shortages, exacerbated by a declining population and rapid technological advancements. Recent reports indicate a notable decrease in labour demand, raising concerns about the country’s ability to meet future workforce needs.
Key Takeaways
- Labour demand in Croatia fell by 2.9% year-on-year in March 2025.
- The country is projected to need over 300,000 additional workers by 2035.
- Key sectors affected include tourism, construction, and information technology.
- Strategies to improve workforce participation are being discussed, including better integration of underrepresented groups.
Declining Labour Demand
According to the Institute of Economics Zagreb (EIZ), Croatia’s labour demand has seen a significant decline, with a 2.9% drop in March 2025 compared to the same month last year. This follows a more severe 10.9% decrease in February. The Online Vacancy Index (OVI), which tracks job openings, reported a 5.9% decline in the first quarter of 2025, marking the largest quarterly decrease in four years.
Despite these figures, there was a slight month-on-month increase of 3.8% in March, likely driven by seasonal employment in the tourism sector. The most sought-after positions remain in hospitality and warehousing, indicating a persistent demand for low-skilled labour.
Population Challenges
Croatia’s demographic trends are alarming. Over the past decade, the country has lost nearly 400,000 residents, and projections suggest a further 19% decline in population by 2050. By that time, individuals aged over 65 could represent 30% of the population. This demographic shift poses a significant challenge to the labour market, as the country will need to adapt to an ageing workforce.
Future Workforce Needs
Experts predict that Croatia will require over 300,000 new workers by 2035 to meet the demands of a changing economy, particularly in green and digital sectors. The World Bank has highlighted that a shortage of qualified workers is a major barrier to private sector investment and the transition to a greener economy.
Strategies for Improvement
To address these challenges, a multi-faceted approach is necessary:
- Increase Participation: Encourage underrepresented groups, including young people, women, and migrants, to enter the workforce.
- Enhance Education and Training: Align educational curricula with industry needs, focusing on green and digital skills.
- Support for Women: Improve access to childcare and long-term care services to facilitate women’s participation in the workforce.
- Migrant Integration: Develop a comprehensive migration strategy to better integrate foreign workers into the labour market.
Government Initiatives
The Croatian government is taking steps to reverse negative labour market trends. With support from the European Social Fund, initiatives such as skills vouchers have been introduced, allowing nearly 40,000 citizens to gain new skills. This program aims to boost workforce productivity and is part of a broader strategy to enhance employment opportunities.
Additionally, the National Recovery and Resilience Plan (NPOO) focuses on acquiring skills in green and digital industries, while the Posao Plus program has provided support to around 3,000 long-term unemployed individuals in the past year.
Conclusion
As Croatia navigates these labour and skill shortages, it is crucial for policymakers to implement effective strategies that not only address immediate workforce needs but also prepare the country for future economic challenges. By fostering a more inclusive and skilled workforce, Croatia can enhance its competitiveness and ensure sustainable growth in the years to come.
