December 18, 2018 — When German tech firm Helmholz Systems opened a satellite office in Croatia four years ago, it assumed there'd be several headaches.

A lack of competent and qualified job candidates wasn't on the list, according to Zadarski.hr.

The company posted three jobs on a well-known job advertising site in 2018. It hired only one person.

The owner of the company, according to employees, opened the office in Zadar after spending the summer in Sukošan, a port within the county. He liked the environs and heard Croatia produced good engineers and workers. 

The 30-year-old parent company already had about one hundred employees in Germany. It seemed a good fit.

The firm opened operations in Croatia — a Zadar-based subsidiary focusing on component manufacturing (software and hardware) for industrial process automation and networking.

Its products include programs that, for example, allow someone from Germany to operate a machine located in a Brazilian factory. Firms as large as Coca-Cola and Audi use Helmholz's tech.

Ivan Ignac, a 33-year-old engineer from Dakovo, came to Zadar along with his girlfriend in 2011. Two years later, he became the first employee of the development office of Helmholz Systems' fledgeling operations in Croatia.

Soon, he was head of the Zadar office. Ignac could not even dream of having a problem with finding employees.

There are currently seven people employed in the company's Croatian headquarters. He has been intensively looking for new workers, young engineers and experts; no one is applying. 

"Very few companies in Croatia, especially in Zadar, have the range of products we do," Ignac said in an interview. "So we have a weaker response to job ads."

New hires first go to training in Germany. They then return to Zadar and receive a permanent contract, under the terms agreed with the Germans, according to Ignac. Several of Helmholz's employees are locals.

"I think that they have already worked in other places, most often in Zagreb, and now they want to continue with a more peaceful life," Ignac said. He added that some who wanted to work for them did not want to move to Zadar.

"True, the city still has some infrastructure problems, but I see it improving," he said.

The company's tech niche immediately limits the number of qualified applicants in an already-shrinking market. But Ignac said few even bother calling to ask if a job is available.

"People can send us a job applications regardless of whether or not a position is open," he said. "Our interest in a quality workforce is ongoing."

The office manager explained the usual succession of headaches when a position is posted online. Ten people may apply, but only about half of them know something about the field. 

Of these five, one usually does not appear for an interview. The remaining four confirm the appointment but in the meantime, one or two find employment elsewhere. 

In the end, there are two or three people with whom Ignac conducts a job interview.

Ignac explained that a university degree isn't the primary qualification, but the knowledge that the candidate possesses. 

First, he or she must know how to read the products' documentation, have experience with electronic components, programming code, be able to "debug" the products and add new features.

Helmholz's parent company wants to expand its operations in Croatia. Ignac says their medium-term goals are to grow by up to 20 people. With that sort of team, the Croatian office can develop a whole product alone without the participation of colleagues from Germany. Long-term goals include a fully-developed production, which would employ a minimum of 50 workers. 

The only problem with all these goals? The lack of skilled labour.

Follow TCN's coverage of Croatia's demographic problems on our dedicated page.

Croatia has experienced a demographic catastrophe but, although the Croatian emigration wave will continue, the intensity of emigration is already becoming weaker. Far more people than previously thought have left the country since it has entered the EU, and the average age of new Croatian emigrants is considerably lower than in previous waves, according to the latest analysis published by the Institute for Public Finances, reports Jutarnji List on December 18, 2018.

A group of experts - Ivana Draženović, Marina Kunovac and Dominik Pripužić - analysed and compared Croatian and foreign data on the latest Croatian emigration wave, which started after Croatia become a member of the EU, and concluded that the real number of emigrants could be 2.6 times higher than the official statistics.

While official Croatian statistics for the period from 2013 to 2016 reports 102,000 emigrants, foreign sources say that the number of emigrants was significantly higher and reached 230,000 Croats. Majority of Croats moved to Germany, more than 71 per cent, as well as to Austria and Ireland, a country which practically did not even appear on the list of countries to which Croatians were moving until just a few years ago.

Apart from freedom of movement within the EU, the main reasons for emigration are the perception of emigrants about better living conditions in other EU member states, as well as a higher degree of economic development.

Although Croatia is not the only one among members of the European Union in having high emigration rates, it is worrying that many say they will never return and have moved abroad with their families. Less developed parts of the country are being emptied, while emigration from the more developed parts of Croatia is less pronounced.

Compared to the previous waves of emigration, the average age of new Croatian emigrants has decreased considerably. While in the period from 2001 to 2013, the average Croatian emigrant was 41.5 years old, in 2016 the average age was 33.6, according to the analysis.

“The phenomenon of emigration is likely to have a strong impact on the Croatian economy in the medium term,” warned the authors of the study.

Nonetheless, Ivan Čipin, a demographer from the Zagreb School of Economics, believes the picture is not so bleak. He claims that the main emigration wave from Croatia is already behind us. People will still move from the country, but it will not be as intensive as the previous years, said Čipin, who does not expect emigration from Croatia to accelerate in the upcoming period, assuming no major economic shocks. However, he warned that the opening of the Austrian labour market for Croatian citizens in 2020 could absorb another part of the Croatian labour force.

One of the reasons why emigration should not accelerate over the next few years is the lack of workers in Croatia, which is why wages are increasing. Moreover, the entire sectors of the Croatian economy cannot find enough workers and are increasingly dependent on foreign workers, despite the number of nearly 148,000 unemployed persons registered at the Croatian Employment Service.

No wonder that the Ministry of Labour and Pension System foresees bringing in more than 63,000 workers from abroad next year. That is the record number of foreign workers, which is higher than, for example, the total population of Pula.

The planned import of foreign workers has met with the resistance from the trade unions. “We are not xenophobes, but we do not see the logic that so many citizens are leaving Croatia in search of a better life, while we import the workforce from abroad. The government even wants to import workers for jobs which can be done by unemployed people from Croatia,” said Krešimir Sever, president of the Independent Croatian Trade Unions (NHS).

On the other hand, employers warn that without foreign workers they will not be able to develop their business further. In addition to the tourism and hospitality industry, the lack of workers can be felt in the construction industry as well as in many other sectors. Croatia is thus faced with a twofold challenge: on the one hand, its workers are moving to other countries, mostly to more developed EU member states, while on the other hand, workers have to be imported from abroad.

More news on the Croatian emigration wave can be found in our Politics section.

Translated from Jutarnji List (reported by Adriano Milovan).

ZAGREB, December 8, 2018 - Croatia could be left without 800,000 inhabitants by 2050, and its economy will need a million new workers during that period, the conference "Migration and Identity: Culture, Economy, State" has been told in Zagreb, the Croatian Chamber of Commerce (HGK) said on Friday. Therefore, immigration is key for the Croatian economic development.

Between criticisms about the price of labour being driven down on the one hand and the preservation of cultural identity on the other, Croatia must adopt smart immigration policies and overcome its prejudices in order to survive, the conference heard.

"The Croatian economy does not stand a chance without immigration, because the emigration of people is a much bigger economic loss than their remittances could ever compensate for," Davorko Vidović, adviser to the HGK president on labour policy and employment, said at a panel on migration and the labour market.

Krešimir Ivanda of the Zagreb School of Economics presented the Croatian labour market from the point of view of immigrants, citing structural problems such as a disproportion between labour market needs and education, very late employment and early retirement, and emigration.

"A remarkable shortage of labour due to negative demographic trends is yet to be expected. According to projections for 2051, counties will lose 30 percent of working-age population on average per year, if the labour activity rate remains at its present level. Although we are a country of emigration, we have also always been a country of immigration. Some sectors, such as construction, tourism and the manufacturing industry, have depended on immigrant labour for the last decade or so," Ivanda said.

"Immigrants behave like local people with regard to economic activity, which is not good, because their activity should be much higher," he added.

Željko Bogdan of the Zagreb School of Economics said that the Croatian diaspora could help the Croatian economy with their remittances because they have a positive impact on domestic demand and growth. He, however, added that the inflow of foreign currency could adversely affect the price competitiveness of exports.

His colleague Antea Barišić said that remittances have a countercyclical effect. Citing World Bank data, she said that remittances accounted for 4.5 percent of GDP in 2017. She noted that these were only remittances made via current accounts, while their actual amount was believed to be between 30 and 50 percent higher.

"Emigration has a social and political effect. According to the neoclassical model, the winners are workers in the country of emigration and capitalists in the country of immigration," Barišić said, adding that as a result of emigration GDP declines generally but per-capita GDP rises.

For more on the Croatia’s emigration crisis, click here.

 Mass emigration from Croatia has become a crisis. According to the official data of the Central Bureau of Statistics, from 2013 until the end of 2017, about 150,000 citizens left Croatia. However, some regions have seen an increase in the number of inhabitants, such as Istria and Zagreb, while in some the depopulation trend is much less severe than in others, reports Gradonačelnik.hr on November 21, 2018.

The latest information on population trends in towns reveals that some towns have seen a trend of drawing residents from other Croatian towns and abroad. This is due to the economic development and jobs which have been created there, mainly thanks to tourism in the coastal areas. As many as nine out of ten towns with the largest number of new residents are located on the coast, with the only exception being Samobor near Zagreb.

The town which has attracted most residents in the past six years – as many as 1,545 people moved there from 2011 to 2017 – is Dubrovnik, which just confirms its title as the best town in Croatia which it recently also won.

The second best is Kaštela near Split, whose population increased by 1,345, followed by Solin, also near Split, with 1,299 more inhabitants. The fourth best is Vodice near Šibenik (612 more citizens), followed by Umag in Istria (562). Among the top ten are also Krk, Poreč, Novalja, Supetar and, at the tenth position, the only town from inland Croatia, Samobor.

Dubrovnik Mayor Mato Frankovic says these are very encouraging numbers. Kaštela Mayor Denis Ivanović points out that the reason for such good results of his town is the fact that it is located near Split. They also introduced new demographic measures to keep young people living there.

Samobor is the only town from inland Croatia among the top ten towns by the number of newcomers. “Samobor is the only larger town without a local income tax, which encourages the arrival of new inhabitants and families who can find here everything they need for a peaceful, fulfilled life,” says Mayor Krešo Beljak.

Novalja is ranked eighth by the number of newcomers (396), but this figure makes it the second-best town in Croatia by the percentage, immediately behind Vis. The population of Novalja has increased by 10.8% since 2011. Mayor Ante Dabo says that the trend of people moving to Novalja was first seen 20 years ago. He is proud that most new inhabitants are well integrated into the local community, with many of them having their families in Novalja and their children feeling the sense of belonging to the local area.

After Vis and Novalja, the list of top ten towns by percentage includes many other smaller towns on the coast: Supetar, Krk, Nin, Stari Grad, Novigrad, Vodice, Hvar and Komiža.

For more on Croatia’s demographic crisis and the mass emigration from Croatia, click here.

ZAGREB, November 10, 2018 - Attending a special session of the Vukovar-Srijem County Assembly in the eastern town of Ilok on Friday, President Kolinda Grabar-Kitarović said that over the past few years Croatia had lost twenty times more people due to depopulation crisis than it had in the 1991-95 Homeland War.

Addressing the assembly, Grabar-Kitarović called for the prosecution of war crimes, underscoring that it needed to be kept in mind that responsibility for a crime was personal and an individual's guilt must not be the cause for collective stigmatisation. "We have achieved progress in co-existence after reintegration and we have to continue building it, not just at the level of political rights, but primarily by building human relations and ensuring prosperity for everyone," she said.

The president added that these are important issues for the future, which is "threatened by depopulation." Croatia has lost at least twenty times more people due to depopulation than it did in the Homeland War, she said.

The president welcomed measures to amend the Citizenship Act which will facilitate obtaining citizenship for Croatian descendants born abroad, and added that it was necessary to create conditions for immigration from other countries as well.

She commended the Slavonia, Baranja and Srijem project and called for financial decentralisation and strengthening the role of counties in the absorption of EU funds. In a message to young people, she called on them to not give up on their ideals and to be resolute in building successful personal and business lives.

Regional Development and EU Funds Minister Gabrijela Žalac said that there was no more time for regret at the missed opportunities in Croatia's economic revival. She reiterated that so far projects valued at 2.3 billion kuna had been contracted for Vukovar-Srijem County alone, as part of the Slavonia, Baranja and Srijem project.

For more on Croatia's demographic crisis, click here.

Just due to low birth rates, Croatia lost almost 12,000 inhabitants in the first eight months of this year.

ZAGREB, September 14, 2018 - In mid-2017, Croatia had a population of 4,124,531, including 1,990,341 men and 2,134,190 women, according to an estimate by the national statistical office released on Friday.

Among foreigners working in Germany, Croatians are in the sixth position with regards to the amount of money sent to the homeland.

This usually happens only during wars and major emergencies.