TIRANA, Oct. 11 – Italian legal changes making the supply of inbound and outbound services for Italy-based companies from non-EU countries such as Albania much tighter starting April 2017, have had their first negative impacts on youth unemployment.
The booming call center industry received a severe blow in late 2016 when the Italian Parliament approved legal changes affecting a rapidly growing industry in Albania in a bid to stop the rising transfer of call center services to low cost countries non-EU members such as Albania and protect some 80,000 call center jobs at home by offering subsidies to local companies.
Employing some 25,000 people, the call center industry had emerged as a catalyst for youth unemployment and the mismatch between skills earned at universities and labour market needs.
The industry boomed in about six years, thanks to rising demand for support services by Italian companies, leading to big Albanian and Italian-run companies employing up to 3,000 call center operators.
Due to good language skills and flexibility of working part-time or full time and relatively good wages for the Albanian market, call centers attracted both students and newly graduates provided they spoke fluent Italian and were convincing in the offers they introduced.
The Italian legal changes which became effective in April 2017, led to the first closure of some call centers while big mobile companies committed to gradually repatriate 95 percent of their direct activity and 80 percent of their outsourcing services to Italy.
At least 30 call center companies operating in Albania and employing about 3,000 people have suspended their activity in the country following some late 2016 legal changes in Italy that became effective starting April 1.
Most companies continue to operate and have diversified their services, also shifting to English-language support services and speculative services such as online trading platforms or currency exchange investments. However, prospects for a rapidly growing industry have currently been curbed and diversification of services and languages is seen as the only way to save thousands of jobs that could be cut.
The late 2016 legal changes gave Italian consumers the option of speaking to a call-centre worker at home rather than someone overseas, especially non-EU countries. The changes envisage huge fines ranging from €50,000 to €150,000 for call centers whose operators don’t inform customers about the country they are calling from or when answering to customer enquiries, something which had been avoided. The legal changes also make it more difficult for Italian companies to change their location or contract non-EU third parties who have to provide guarantees about data protection.
Data published by state-run statistical institute INSTAT, shows youth unemployment slightly increased in the second quarter of this year following consecutive declines in the previous five quarters.
“The professional activities and administrative services” group also contracted by 2.3 percent in the second quarter of this ‘year as a result of the call center effect, registering the first negative contribution to the GDP since early 2011 just before the industry began to rapidly grow.
In its labour force survey for the second quarter of this year, INSTAT reports the number of jobless young men and women aged between 15 to 29 years old slightly grew to 78,419, up by a modest 639 people compared to the previous quarter, but was down by 9,164 youngsters compared to the same period last year.
The figure is however an estimate from INSTAT’s quarterly survey with about 8,000 households nationwide which placed youth unemployment at 26.4 percent in the second quarter of 2017, down from about 30 percent during the same period last year and a record 34 percent in early 2015.
Meanwhile, other data shows only about 17,500 young men and women aged between 16 to 29 years old have registered with the country’s employment offices, accounting for about 19 percent of the total registered jobseekers of about 92,000 at the end of the June 2016.
Experts estimate the general unemployment rate, officially at 13.9 percent to be far bigger as people in rural areas possessing land are automatically counted as self-employed.
Agriculture, a sector employing about half of the country’s population but accounting for only 20 percent of the GDP, is one of the country’s most inefficient, hampered by fragmentation of farm land into small plots and poor financing and technology employed.
While the call center business dominated by Italian companies mainly attracts university students and newly graduates who are unable to find a job in the occupation they have graduated in, the faà§on industry, a traditional employer producing garment and footwear mainly for export, is attracting a considerable number of youngsters who have finished only the compulsory education or secondary education but failed to attend university. The garment and footwear sector, employing some 100,000 people, also relies on low cost and mainly produces for Italy.
Albania had some 191,500 jobless people at the end of the first half of this year, down from 227,800 at the end of 2014, just before an asylum exodus that saw more than 100,000 Albanians leave the country, mainly to Germany.
