Albania, How the Crisis Affected Employment

However, the economy in Albania needs an additional 45 thousand employees this year, mainly in Facebook, centrist call, construction and tourism. Agriculture and the agroprocessing industry will cut the number of employees, as they cannot fully transfer high costs to prices. Tourism and fason are risking further expansion by the lack of employees as they head for Asian markets. Lack of skills in the unemployed is hindering the filling of the gap.

The labour market, for years, has become an obstacle to further expansion in some sectors, but the Comid 19 pandemic, which quickly severed labour relations in most branches of the economy, left a gap that has not yet been filled.

At the end of 2021 there were over 10,000 employees less than the same period in 2019, but the war in Ukraine and the rise in the cost of raw materials in all production and services has changed employment prospects this year.

The tourism sector, construction and textile and shoe factories, the centrist call, predicts to expand the number of employees this year at double rate, while the agriculture sector and the food processing industry will reduce employees, or, at best, maintain current quotas.

The war in Ukraine further damaged the supply chains that had begun to manifest problems since the pandemic. First class prices have nearly doubled in a year.

The rise of invasions higher than prices is curbing expansion in agriculture and food industry, both together employ more than half of the country's workforce. Employment prospects have waned after the war in Ukraine, however, some sectors have a gap amounting to about 45 thousand employees. While there are over 160 thousand unemployed in the country, 70% are long-term, discouraged and unable to respond to the market's need.

Tourism, employee needs, about 20% more this year

The tourism sector and services in general seek to expand employment by around 20-30% this year. Increasing the number of visitors on the one hand, and increasing accommodation facilities on the other are increasing demand for new employees.

Rhetman Kasa, head of the Tourist Union in Tirana, said that despite the problems that war has created in Ukraine in the tourism sector and services there is a 20-30% gap that must be met with employees. The largest demand for additional employees is in coastal areas, where tourism organised under contracts and preliminary bids has increased in recent years.

The areas of Durres, Vlora, Velipoja, Shengjin and Saranda need to add staffs this season, but meanwhile, finding new employees is facing difficulties from immigration left high. The service sector, which contributed about 30% of total employment, offers jobs with seasons and salaries in this sector, is lower than the country's average salary.

Although wages rose faster in recent years, the average wage in the accommodation sector again, at the end of 2021, was 23% lower than the average salary in the country.

The average gross salary in the tourism sector amounted to 45,988 leks at the end of the year, while the country's average gross monthly salary reached 59,565.

In the last quarter of 2020, the average salary in the tourism sector marked higher annual growth by about 12%, narrowing the gap with the country's average rate by 2 percentage points in two years.

The service sector, especially accommodation and restaurants, led to increased wages and employment in recent years, but needs still remain very high. Fatos Cherenesti, who owns the FAFA Group, among the biggest hotel groups in the country, said finding employees has turned into one of the major problems in the sector.

The absences of employees from the local market have made Mr. Cherenishh and many others in the sector head to the Asian market. We've been trying to make salary increases, since we need to keep the trained staff that allows us standard service. However, despite salary increases, the environment remains challenging, as new facilities are opened and the need for staff is ongoing.

The biggest problem this year has been employees and since we're not finding the country, we've been linked to 2-3 agencies getting from other countries. We hope that the first 40 foreign employees from the countries of Asia will arrive soon, as agreed with the” Cherenesti said.

Tourism has been under constant pressure, and most of the major structures claim they have had to raise wages, keep staff at work, or get new employees for their specific needs.

Despite the new reality created by the war in Ukraine, the accommodation facilities expect more visitors this year. After nearly two years of strict movement restrictions from the Covid-19 pandemic, travel interest will increase this year, even though living costs are putting pressure on entertainment-related expenses.

Large hotel facilities in the country have been sold since last summer. But the sector's profits are threatened by the rise in the cost of raw materials this year, while tourism package prices have been negotiated with last year's prices.

Agriculture, employment decline this season

Agricultural farms in the country's most productive areas reported a decline in employment rates this season, due to reduction in agricultural planting and the bankruptcy of animal farms. The sector, which engages around 44% of total employees in the country, has for years shown problems for lack of employees leaving rural areas by young people.

This year, production areas in the country where workers with salaries are concentrated will reduce the number of employees. In the greenhouse areas of Berat, Fier, Lusnja and Divjaca, last season, the crops of about 30% have been reduced. Marglen Ziu, who owns nearly a greenhouse hectare in the Quatali area in Berat, said the greenhouse surface this season is 30% lower.

Prices of chemical waste, fuel and other input increased above 60%, while most farmers had inherited losses from the second planting season in 2021. Out of a season of high losses, at a time that the prices of inputs were rising, many farmers have abandoned planting.

For this reason, fewer seasonal workers will be engaged in the agriculture sector. Employment in the agriculture sector is not measured by local institutions, but in total, an estimated 450 thousand people are estimated in 2020, or 10,000 less than in 2019.

The average high age of farmers and the lack of offspring willing to continue farming pose a threat to the workforce in the near future.

Currently, the cost of the workforce in Albania is 10 times lower than the EU average, while agricultural wages are below the national average. The costs of the labor force can be considered cheap, yet not capable of replacing the productivity of machinery.

Displacement towards cities and young people, migration and low productivity of the sector have made work in agriculture unreachable for young people. In the fourth quarter of 2021, the average salary in agriculture was about $350,000, or 36.8% lower than the average salary in the economy. In the third quarter 2019, that difference was 25%.

Agriculture is gradually losing its workforce, as shown in INSTAT (e.g. surveys. The three-month working force's survey conducted by INSTAT for the third quarter 2020, compared to the third quarter 2019), that the annual employment growth rate in agriculture was minus -3.7%.

INSTAT gave up publishing the quarterly employment results in agriculture. Even though agriculture is the largest sector in the country's economy, as in GDP, employment, the sector is exempt from statistical surveys.

Albania is the only country in the region and Europe, which does not measure the change of costs in agriculture, does not measure profit rates, employment performance with salaries and etc. In this way, the sector develops without orientation and budgetary support cannot be authorised for real needs.

Source Layer: INSTAT

Mason, urgent need of 20 thousand employees

The Facebook sector is massively refusing demand for orders from European clients, due to lack of labor force. Pandemia Covid-19 and now the war in Ukraine has prompted increased orders for Albania.

But while the demand for jobs for many factories has increased by over 100%, the supply with new workforce is almost zero. Florian Zekia, from the Union of the Faces, claims factories across the country need at least 20 thousand additional workers.

Textile and shoe factories employ about 600,000 workers with salaries nationwide, or 10% of paid employees. Unemployed youth do not prefer to engage in factories, even though wages are growing.

Despite positive developments, the average official salary in the processing industry sector in 2020 reached 79 thousand dollars, or about 70% of the official average wage. The challenge posed by works at factories and the sector's competition from migration has led to zero demand to work in factories.

The labour force specialising in these 30 years is towards aging, as factories are trying to maintain production levels in control, investing in technology, closing the cycle and targeting high-value customers.

The Facebook sector officially employed some 56 thousand workers before the pandemic crisis in 2019, but the Union of Fascians claims that thousands of other workers are urgently needed to cope with the increase in orders.

Job demand has marked rapid growth, but many factories have rejected orders because of the lack of employees who are being targeted to replace with Asians or employees from Bangladesh.

Many factories have been linked to employment agencies to recruit workers from Asia, but are facing difficulties in this regard. Many Asian countries, of which Albania seeks employees, such as Bangladesh and Sri Lanka, do not have embassies in Albania. The bureaucratic procedures are numerous and require time as the need for employees is presented urgently.

Pandemia had a direct impact on all sectors because, as a result of long infections and quarantines, employees lost contact with jobs. But with a return to normality, the entire globe is facing an unusual demand for goods, while many employees have refused to return to work after the pandemic.

Eva Laro, who owns ProDin, one of the biggest shoemaking factories in the country, said the biggest challenges are workers, where there is a continuing decline of young people interested in work.

To meet the need for employees, ProDin is undertaking an important project, which is to increase the quality/sect of the list of people who turn out to be unemployed, but who really want to hire and are capable of working (even though without specific technical skills, as they can be trained by the factory training center) she said.

Source Layer: I NSTAT (work force complaint)

Call center predicts employment growth

Call center, the biggest employment providers for educated young people, anticipate expanding further this year. Lawrence Goga, who heads the company “Facile.it”, said that even after the war in Ukraine, the need for work is greater than the job market bid.

He said that, under the conditions of shortages, large companies will try to absorb nearly all employment requirements through higher wages on average and other benefits. Small companies, according to him, will find it very difficult to survive. This year, the call center sector needs at least 1,000 additional employees according to market estimates.

For 2-3 years, companies have been facing difficulties finding new employees. Besides immigration, the deterrence factor is unfair competition from the prosperity of illegal platforms Forex.

The sector does not find workers primarily for two main reasons: immigration and lack of Italian knowledge and language among young people today. Since 90% of the centre call offers services to the Italian market now is seen as the generation born after the 1990s do not recognise Italian as the generation born in communism and taught Italian from television.

On the other hand, in 2020-2021, there was a boom in opening Forx platforms in the country. Their illegal functioning distorted labour market parameters. These companies offer salaries many times higher than the market, and for this reason, many employees in a center call left to hire in Forex.

But since some Forx platforms in our country were involved in the investigation, this is expected to positively affect call center services. During this year, the volume of online purchase contracts has increased, which recognised growth in COVID-19's pandemic.

Client assistance services are developing strongly because the drive towards digitalisation is shifting volumes to self - care. This is a trend that will lead to lowering volumes, regardless of sectors.

On the other hand, pandemic has removed citizens from the physical channels, significantly increasing online purchases in all sectors. Online trade and management is a service of higher value than call center services to the client. According to official INSTAT data, these units employed about 80,000 employees in 2020, or about 1.5% of those employed with wages in the same year.

Source Layer: I NSTAT (work force complaint)

Food industry, down by employees

The country's agriushior industry forecasts a decrease in the number of employees this year, or at best, staying in the stalemate because, the business climate in these units has deteriorated significantly, by increasing the cost of raw materials, mainly fuel, gas and electricity, as well as competition from import.

The chairman of the Chamber of Commerce and Industry in Tirana, Nikolin Jaka, said it is hard to keep the number of current employees, while Alban Zuse, who owns a meat processing plant, predicts staff reduction. The rapid increase in raw materials, particularly in energy by 300% and fuel, has plagued industry expansion projects.

In 2020, employment in the agroprocessing sector was about 13 thousand people, or 2.6% of the total, while in the fishing sector and in the fish processing industry were employed, in the same year, over 9,000 people. Mr. Jaka said production costs have been multiplied by the rising prices of raw materials, while they cannot be reflected in final prices, due to competition from imports.

The situation is alarming in milk processing factories, which are suffering the absence of raw materials supplies (milk) from the domestic market, due to the decline in livestock. The price of milk from suppliers to factories has increased by 20-30% this year, while energy pay bills have increased by 300%, because most of them are supplied by the free market and are completely exposed by the free market.

The factories claim that increased costs cannot be completely transferred to prices, as our products are competed by imports, which arrive at Albanian markets at competitive prices, as their countries of origin subsidised all the links of agriculture from production to processing.

The agricultural industry is one of the most important sectors of the Albanian economy, displaying annual growth of production value. In 2020, the largest number of processing companies was in the breadmaking sector (55.9%), milk and milk products (12.7%) and vegetable oil production (7.7%).

Agrarian companies are mainly concentrated in Tirana (31%), Fier (12%) and Durres (10%). The highest number of employees in the agricultural industry was in Tirana (34.8%), followed by Durres (14.6%) and Elbasan (9.5%).

The increase in production volume is largely due to frozen meat and frozen meat products, flour, bread, and pasta, milk, and milk products.

At the same time, there is a drop in the production of alcoholic beverages. While the value of production has increased, mainly in milk and milk products sectors, in the canned fish sector, in the ambalozed water sector and nonalcohol beverages. At the same time, there is a drop in candy production.

The largest weight of investments during 2015, U.S. 2020, has been recorded in the production of flour from cereals, bread production, ambaldated water, and nonalcohol beverages, processed fish products, milk products, and milk products.

Construction needs additional employees, but market lacks

Operators in the construction sector need additional employees, due to new projects expected to begin this year, but the labour market is lacking, especially with professionals. Companies who preferred to preserve the anonymity claimed that the sector is expanding by increasing permits for construction and high demand for reconstruction and access.

The construction sector employed around 51 thousand people in 2020, contributing to more than 10% of non-manic employment. Although the pandemic year, construction was among the few sectors that increased employment by over 7% during 2020.

Finding workers in addition to getting harder is affecting the increase in the cost of work. Construction workers are becoming more and more expensive, the builders claim they are applying salary increases every six months to stimulate the maintenance of employees who are being lured daily by immigration.

The builders themselves claim to have mistreated the low-wage workforce, while now many of them are getting employees from the region, Bosnia and Kosovo, with much higher salaries than Albanian workers.

The prospect of employment in construction is positive this year. Data released by INSTAT for construction permits in the country showed that the area given for construction permits in the capital for all of the year 2021 reached 1.65 million square metres, marking at least the highest level since 2010, when data is reported.

Compared to the previous year, the area given for permission has increased by 47%, while in 2020 a restraining of given permits was observed because of restrictions created by the pandemic. According to 2019, when the new record of the last decade was marked, the area of permits has increased by 17%.

As of 2015, the year they were given less permission, the area is 7. Four-fold. After 2015, the municipality was shown “delivered” with the builders. The area given in Tirana for 2021 is 71% of the total provided for all of Albania.

On the total surface of building permits, over 70% of it is for residences, also influenced by reconstruction after the earthquake. Most of the permits given last year start working this year. / TCh/