Since the beginning of 2021 when quotas for hiring foreigners in Croatia were abolished, the number of temporary employment agencies and intermediaries for the employment of foreign workers has increased to several hundred, reports HINA. 

"So far, we haven't seen such a rapid recovery from the crisis, and it has further opened up the labour market to foreign workers," says economist Damir Novotny, speaking to HINA about the significant increase in the number of foreign workers.

According to data from the Ministry of the Interior (MUP), from January 1st to November 30th, 2023, a total of 160,464 residence and work permits were issued, the majority of which were in the construction industry - 63,632, tourism and hospitality - 43,951, industry - 22,249, transportation and communication - 10,456, and trade - 4,647.

Inevitable increase of foreign workers in Croatia 

The Croatian Employment Service (HZZ) processed 160,445 applications for residence and work permits for foreign workers from January to November 2023, while 190,696 applications were submitted.

For comparison, until 2022, the number of residence and work permits for foreign workers remained below one hundred thousand, only reaching 124,121 issued permits in 2022. Of the total number of issued residence and work permits, 104,432 were issued for new employment, 37,402 for permit extensions, and 18,630 for seasonal workers, with the majority in the tourism and hospitality sector - 16,675.

"This kind of increase is inevitable," said Novotny, adding, "Our economy needs people, and our people are leaving for other countries and only return when they retire." According to the State Bureau of Statistics, Croatia has over 43 percent of its population over 50 years old. "The birth rate is declining, and one way for the economy to function is by importing workers," says Novotny.

Majority of workers from neighbouring countries 

According to MUP data, workers from neighbouring countries continue to arrive, with 36,012 work permits issued for workers from Bosnia and Herzegovina, 22,980 from Serbia, 13,412 from North Macedonia, 9,922 from Kosovo, and 4,244 from Albania in the period from January 1st to November 30th, 2023.

Krešimir Sever, President of the Independent Croatian Trade Union, says that the only advantage Croatia has over the rest of the European Union (EU) for traditional foreign workers, such as Bosnians, Herzegovinians, and Serbs, is just the language. "Earnings are higher in Germany, but proximity and language familiarity mean a lot," said Sever.

While Croatians and traditional foreign workers leave Croatia, approximately 53,204 permits for residence and work were issued to workers from the Middle East, including 20,900 from Nepal, 14,317 from India, and 7,822 from Bangladesh. The abolition of quotas for hiring foreign workers, which came into effect on January 1st, 2021, has created space for a greater influx of foreign workers.

This is evidenced by the records of the Ministry of Labour, Pension System, Family, and Social Policy, where in 2018, 109 employment mediation agencies and 187 temporary employment agencies were registered, and that number increases every year. In 2019, there were 170 employment mediation agencies registered, 216 in 2020, and then in the year when quotas for hiring foreign workers were abolished, the number of agencies surged to 291. The following year, there were 424 mediation agencies, and last year, 566 employment mediation agencies were registered.

The number of temporary employment agencies also increased - in 2018, there were 187, 255 the following year, and 311 in 2020. Unlike employment mediation agencies, the number of temporary employment agencies decreased to 292 in 2021, but the following year, the number jumped to 448, and in 2023, it reached 657.

Loopholes in the law 

There were several amendments to the Labour Law between 2018 and 2023, most of which concerned foreign workers and the adoption of European directives. Novotny says that the Labour Law is full of loopholes and extremely unclear, and the Foreigners Law needs further refinement.

"According to the Labour Law, employment mediation agencies and employment mediation agencies do not have a specified percentage of commission on earnings like, for example, real estate agencies whose ceiling is three to 3.5 percent," said Novotny. Therefore, they can charge a much higher commission.

Employment mediation agencies and employment mediation agencies have experienced an absolute boom in the market, and if we look at their annual revenues available they increase year by year.