The labor market in Bulgaria is at a certain standstill, even defined as “stagnation” by specialists. This conclusion is based on the statistics which show that in the last 3 years unemployment has been stable in the range of 4 – 5.5%, and currently it is rather at the upper end of this number.
The demand for labor also does not suffer any changes. The annual surveys of the need for more employees, carried out by the Employment Agency, show that in recent years the percentage of employers who do not plan to hire new employees has remained around 80%.
Most often, the factors that change and influence the labor market are shocks in individual sectors and seasonality, JobTiger – a platform for job search and offer – emphasizes.
Until now, we almost regularly observe several months of growth, then leveling off through a decline and back up again,” shares Hristiyan Petkov, operational manager of the platform.
As usual, the second quarter of the year sees an increased demand for personnel in the Hospitality and Restaurant and Trade and Sales sectors. After which, during the summer season, there is a drop in both demand and supply. With the start of the school year, there is again an increased supply and a drop again after the winter holidays, according to observations by JobTiger.
Structural problems
And although things seem seemingly calm, structural problems in the labor market worry specialists.
Structural unemployment is deepening, and it is very difficult and slow to overcome. This is a comprehensive policy that starts from education and already in the 8th grade,” says Zornitsa Slavova, senior economist at the Institute for Market Economics (IMI).
This conclusion is supported by the data from the Association of Industrial Capital in Bulgaria (AIKB), which show that 40% of graduates are employed in jobs that require secondary or even lower education.
As well as the study of the Employment Agency, which reveals an acute need for personnel with professional education. The labor market needs 14,775 machine operators, 8,653 tailors, 8,602 cooks, 8,297 construction workers. In just one year, the demand for specialists with professional education has grown by 41%.
Professional education
The reason for the lack of personnel in the “Industry” sector, according to Slavova, is the loss of attractiveness of professional education.
In the last decade, vocational education, which provides just such personnel, has lost a lot of its image,” she says.
64% of employers experience difficulties in finding specialists in the professional fields, AZ data show. 16% of them believe that this is precisely due to the lack of applicants for the relevant job position.
37% attribute this to a lack of qualifications. One of the reasons for the lack of qualified personnel, according to Slavova, is the problem with the introduction of dual education.
“Dual education is the way to develop practical skills in students so that they are prepared for the labor market,” she shares.
It would help the youth to touch a real working environment and learn modern technology. The material base is associated with large investments that cannot be separated and secured in public schools.
According to Slavova, another option for attracting more students to professional fields is the expansion of training. Currently, there are over 600 directions, and if you study to become a turner, you can only develop as such.
If there is scope for wider training, it would enable flexibility and greater competitiveness in the labor market,” she believes.
And despite the great needs of the “Industry” sector, most people are looking for their development in call centers, customer service, in the IT sector, trade and marketing, according to data from nPloy – an online platform for searching and offering work.
The labor market by region
The territorial picture of job demand and supply also points to structural problems in the labor market. There, large regional and industrial centers clearly stand out, while in smaller settlements and underdeveloped areas there is a high rate of unemployment and reduced demand for labor.
30% of the wanted workers are in the regions of Burgas, Varna and Sofia-city. At the other extreme – Vidin, Montana and Yambol – are the districts with the most modest needs for workers. As the difference between the first and the second is at least 3 times, according to the data from the AZ survey.
According to Zornitsa Slavova, it is important to pay attention to small settlements. They offer from IPI fiscal decentralization of municipalitiesto help them attract investors.
What would fiscal decentralization mean? In its eventual introduction, each of the municipalities would receive 1/5 of the income tax back to the municipality itself, which would provide it with an additional resource.
At the moment, according to Slavova, municipalities are at a disadvantage when it comes to attracting investors, as they must provide a road to the plant, as well as connect it to the electricity and water supply network.
What should we expect?
We cannot look at the labor market as something separate, as it is influenced by many factors from the international scene, such as COVID-19, the war in Ukraine and the Middle East, global economic instability, technological development, etc.
Maria Petrova, Head of Business Development and Sales at nPloy, remains optimistic about the future.
Despite the challenges we face, there are expected to be job opportunities in more and more sectors,” she shared.
According to her, the most important thing for job seekers is to adapt to changes in the labor market.
It is important for people to be flexible and to adapt to changes in the working environment, in order to always remain relevant and to be successful in the labor market,” adds Petrova.
Zornitsa Slavova from IPI does not expect an increase in unemployment in the next one year. Her concerns are focused on structural unemployment. However, he believes that vocational high schools are making key steps towards change.
We see quite positive signals in recent years – in the attempts of vocational high schools to respond to the needs of the labor market and their attempts to increase their attractiveness,” she shares.
