TIRANA, Jan. 21 – A new migration wave that has swept Albania in the past five years and rising desire among young men and women to leave the country has already had its first effects on the some of the country’s main industries relying on cheap labor costs with employers complaining that finding qualified staff has emerged as one of the top challenges and a key threat to their survival in a small emerging market such as Albania.
The garment and footwear and the call center industries, two of Albania’s top private sector employers relying on cheap labor costs and whose products and services are mainly destined for the Italian market, are already facing serious challenges with finding new workers to replace ones that leave the country or to expand their businesses.
The two industries employ around 100,000 people, with the garment and footwear mainly employing unqualified but skilled women who are involved in cut-trim-make production of raw material coming from Italy in a low value-added industry that is already facing tough times due to Europe’s single currency having lost around 7 percent against the Albanian lek, significantly cutting profits for an industry that heavily exports to Eurozone countries, mostly Italy.
Employers complain there is unwillingness to work even among unqualified workers, who often prefer remaining jobless, rather than receive net wages of around €200 and have their social security and health insurance contributions paid, guaranteeing them access to health services and future retirement benefits. The situation is now affecting companies even in areas such as Durres, the country’s second largest region, not to mention thinly populated northern Albanian areas, highly affected by migration that has drained local labor force.
The call center industry is also in the same boat. Mainly involved in promotional campaigns and customer services for the Italian market, the industry employs around 20,000 young men and women and has served as a buffer against rising youth unemployment in the past decade and skills mismatch between labor market needs and what Albanian universities produce.
The industry that offers around double compared to the often ‘minimum wage’ payments of around €200 at the garment and footwear sector has been facing difficulty to expand during the past couple of years following Italian legal changes making the supply of services for Italy-based companies from non-EU countries such as Albania much tighter starting April 2017.
Call center employers say the departure of qualified workers and difficulties in finding decent replacements is negatively affecting their negotiations over higher value-added contracts requiring skilled employees.
The situation is no better in the emerging travel and tourism industry where lack of qualified labor force is one of the key barriers for its further development.
Employers complain the high seasonality of the sector that peaks in summer makes keeping qualified workers difficult for the remaining period of the year and high staff turnover is a problem they have to face each year.
The key agriculture sector, officially employing some 460,000 people who live in rural areas and own land and are counted as self-employed, but much fewer in reality, is also facing tough times in hiring workers as more businessman and farmers turn to larger farms and new products such as berries, mushrooms, often destined for exported.
Finding qualified staff is also emerging as a problem for sectors offering mid and high wages as moving abroad is high on the agenda even for university graduates and young men and women in their 20 and 30s.
While ungrounded asylum-seeking has curbed following a 2014-17 exodus when only few thousands Albanians were granted international protection, more and more have turned to learning German and legally move to Europe’s leading economy, in a phenomenon that has not spared skilled professionals such as doctors and nurses leaving the country.
‘Improving quality of services equal to $500 wages’
In its latest Transition report, London-based European Bank for Reconstruction and Development suggest that improving the business environment and the quality of public services and other local amenities may significantly reduce people’s desire to leave Albania.
“Indeed, improving the quality of public goods can have a large impact on intentions to emigrate, comparable to the effect of raising wages by more than US$ 500 a month in a country such as Albania,” says the EBRD.
Average wages in Albania are at between $400 to $500, but the minimum wage is at only around $200, one of the region’s lowest.
The International Monetary Fund has also recently warned Albania needs stronger and more determined efforts to make current slowly recovering growth more inclusive by improving business climate and strengthening rule of law in order to reduce the appeal of emigration among the country’s residents.
An earlier 2017 ‘Skills needs in Albania’ survey with more than 2,500 businesses nationwide showed that unsuitable qualification and poor work culture were the most recurrent concerns for employers in the country.
Rapidly ageing population and high migration rates pose key threats to Albania’s labor productivity which already remains Europe’s poorest performing, warns the World Bank.
Albania’s population, although still one of Europe’s youngest, has been rapidly ageing in the past quarter of a century, with massive migration playing a key role.
Albania has around 1.2 million migrants abroad, almost 40 percent of its resident population, making it one of the countries with the highest per capita migration around the world.
Rising cost of living and poor income at home is what mainly drives Albanians and other EU aspirant Western Balkan citizens away from home in search of a better life.
GDP per capita in Albania and other EU aspirant Western Balkan countries is estimated at only a third of the EU average at a time when consumer prices are at only a third below the EU-28 average, according to Eurostat, the EU’s statistical office.
