CUP: Policymakers to define measures to address labor shortages

Around 2030, Montenegro will face a serious labor shortage, which is why it is necessary to create appropriate policies and measures as soon as possible in order for the labor market to adapt to these challenges and prevent negative consequences for the economy.

The General Secretary of the Montenegrin Association of Employers (CPU), Raško Konjević, said that the workforce deficit is a hot topic today.

"If we don't do something in the coming period, and in the shortest possible time, I believe that in the long run this topic will become not only a burning problem, but a galloping crisis for employers, which they will not be able to solve independently," Konjević said at the press conference. on the occasion of the presentation of the publication Labor market - workforce deficit and analysis of the employment of foreigners.

The author of the study and a professor at the Faculty of Economics in Podgorica, Maja Baćović, said that the motive for creating this study was the fact that there has been a labor deficit in the labor market of Montenegro, as well as in many European countries, for a long time, PR Center reports.

"This deficit is particularly pronounced in Montenegro during the summer tourist season, but also in some other periods. Montenegro is not the only country facing this problem - a similar situation is present in a large number of European countries. This deficit can be the result of various factors, including cyclical changes, but also structural challenges that affect the labor market, such as the decline of demographic factors, labor inactivity, lack of skills, unfavorable working conditions and marked mobility of workers," Baćović said.

According to her, data for the first quarter of last year in the European Union (EU) show that 28 percent of employers in production and 31 percent of employers in other sectors reported difficulties in finding adequate labor.

"In such a situation, the Montenegrin labor market loses its competitiveness, and one of the key disadvantages is significantly lower average wages compared to the European average. This is the reason why Montenegro is forced to turn to the markets of less developed countries in order to meet the needs of workforce", stated Baćović.

According to her, although there are positive trends in the Montenegrin market in the last 17-18 years, such as the growth of employment and the reduction of the unemployment rate, there are still serious structural problems.

"Although unemployment has decreased, many unemployed people are long-term unemployed due to a mismatch between the demand for labor and the skills that the unemployed possess. For example, 30 percent of the unemployed have been looking for work for more than five years, while 46 percent have been looking for work for more than three years," she said. Baćović.

She explained that the workforce in Montenegro is mainly concentrated in the service sector, where the majority of workers, around 77 percent, are employed.

"Sectors such as catering, trade and construction record the highest growth in employment, but also a labor deficit, which is why Montenegro imports labor from other countries. Our analysis shows that Montenegro already has a real labor deficit, despite certain quantitative surpluses" , specified Baćović.

She said that the demographic projections, which indicate intensive aging of the Montenegrin population and a decrease in the number of working-age residents, are particularly worrying.

"Projections show that this trend will continue until the end of the 21st century, which will further reduce the labor supply. Our study focused on the next 20 years and showed that Montenegro will already face a serious labor deficit around 2030, even with the current 30 unemployed," Baćović said.

This deficit, she added, will increase from year to year, which means that it will be necessary to create appropriate policies and measures in order to adapt the labor market to these challenges.

"Without an adequate labor force, it will not be possible to achieve long-term economic growth. Labor force, regardless of technological progress, has always been and remains one of the key factors of production and economic progress," announced Baćović.

The author of the study and an expert on migration issues, Bojan Bugarin, said that Montenegro will have to solve the problem of labor shortage by bringing in foreign labor.

"According to data from 2010, Croatia issued about 2,5 thousand work permits for foreigners, while last year that number increased to 130 thousand. This shows that not only Croatia, but also other member states of the European Union (EU ), are facing this problem. Therefore, it will be more and more difficult for Montenegro to find workers of the appropriate profile," said Bulgarian.

He reminded that in the past period, we mainly found the missing labor force in the states of the region, such as Serbia, Bosnia and Herzegovina, North Macedonia and Kosovo.

"However, it is now more and more difficult to find labor in these countries, because workers from these countries go to Croatia, Germany and Austria in large numbers. Thus, Montenegrin employers are forced to think more and more about the alternative of bringing workers from Asian and African countries, especially from India", said the Bulgarian.

He pointed out that the process of bringing foreign labor to Montenegro is currently complex and complicated at the administrative and institutional level. According to him, the problem is the uncoordinated actions of the competent authorities, as well as their electronic disconnection, which makes it difficult to monitor and track foreign workers in Montenegro.

"Also, Montenegro does not have enough diplomatic-consular representations in African and Asian countries, which further complicates the procedure of bringing workers from those countries. Employers are often forced to use diplomatic-consular representatives of Serbia, which increases costs and complicates the procedure," said the Bulgarian.

According to him, the costs of bringing ten workers from India, excluding the costs of air transportation, accommodation and food, can amount to between five thousand and ten thousand euros.

"Therefore, the employer faces high costs and additional administrative obstacles. There is a need to facilitate these procedures, especially regarding the extension of work permits and visas. After the worker has already spent a year or two in Montenegro, all subsequent procedures should be simplified, because these workers have already passed the appropriate checks," said Bugarin.

He believes that the Government and the Ministry of Foreign Affairs should consider the option of making it possible to submit an application for the issuance of a D visa directly at the premises of the Ministry of Foreign Affairs, which would significantly facilitate the procedure and reduce costs.

"Also, the introduction of electronic registration of workers through a web portal, which would enable communication between state authorities, would facilitate the entire process and speed up the procedure," said Bulgarian.

The president of CUP, Vasilije Kostić, announced that in the past period, a significant number of employers complained to the association about the lack of manpower, or the lack of adequate manpower.

"Prompted by this, we wanted to present the current situation to the public, as well as to those who create decisions. Namely, we are facing a dramatic moment when it comes to the demographic aging of Montenegro, which brings with it negative consequences for the workforce and the labor market, but and more broadly, for the overall socio-economic development of Montenegro", Kostić said.

According to him, we are no longer talking about the fact that Montenegro will have a workforce deficit, which, as he explained, is now evident due to structural unemployment or a discrepancy between the qualifications of the workforce and the needs of the market.

"We are talking about the exponential growth of the physical labor shortage. The question is no longer just how we will make up for this shortage, but how we will deal with this challenge," Kostić said.

He said that if policy makers do not take care in time to provide the necessary workforce, which is a key resource and the most important factor of production, we cannot talk about meaningful economic or social development.

"Policy makers must think long-term and strategically, because this is already a global problem - a chronic lack of labor. Countries that are developing or underdeveloped will be emitters of labor, while those that are economically potent will become attractive markets for workers. It is high time to deal with this issue seriously and in a strategic way," concluded Kostić.