Croatia faces major challenges as it tackles labour and skill shortages

Zagreb

ZAGREB, 9 April 2025 (Hina) – Croatia is grappling with significant challenges in its labour market, driven by a declining and ageing population, as well as rapid technological progress.

Projections suggest that by 2035, the country will need over 300,000 additional workers to meet the demands of a changing economy, according to speakers at a conference organised by the European Commission Representation in Croatia and the World Bank.

“In the past ten years, Croatia has lost nearly 400,000 residents. Forecasts predict a further 19% decline in population over the next three decades. By 2050, people aged over 65 could make up 30% of the population,” it was noted at the conference “Addressing Labour and Skills Shortages in Croatia.”

“At the same time, Croatia will require over 300,000 new workers by 2035 to respond to the evolving labour market – with a growing emphasis on green and digital jobs,” the speakers added.

Anna Akhalkatsi, World Bank Director for the European Union, stated that Croatia can foster stronger economic growth and greater competitiveness by improving public policies, unlocking the full potential of the domestic workforce, attracting foreign workers with diverse skillsets, and investing in upskilling both current and future workers.

According to the World Bank, a shortage of qualified workers is one of the main barriers to private sector investment and a faster green transition.

This shortfall is particularly pronounced in key sectors such as tourism, construction, and industry, and it also limits the provision of services in areas like information and communication technologies, healthcare, and long-term care.

Boosting Participation in the Labour Market

To tackle workforce shortages and close the skills gap, World Bank experts recommend a multi-dimensional approach, including increasing labour market participation among underrepresented groups – such as young people, the elderly, those with lower qualifications, women, and migrants.

Young people, for instance, should be better informed about opportunities, with more internships and apprenticeships made available. Incentives for employers and grants for self-employment should be complemented by training in entrepreneurship.

Women’s participation in the workforce could be increased by improving access to childcare, expanding long-term care services, supporting female entrepreneurs, and developing gender-sensitive active employment policies.

For better migrant integration, a new migration strategy is needed, along with improved regulation of employment agencies, greater investment in language and cultural courses, and the expansion of one-stop integration centres.

Experts also stressed the importance of developing skills aligned with green and digital industry needs.

This includes expanding full-day schooling, modernising curricula, strengthening partnerships with industry, and improving career guidance. Enhancing reskilling and upskilling programmes and promoting lifelong learning were also identified as key priorities.

Reskilling for the Future: National Programmes and Support

Zrinka Ujević, Head of the European Commission Representation in Croatia, highlighted that labour and skills challenges are a core issue for Europe’s competitiveness.

She underscored the importance of investing in labour markets that are agile and prepared for future challenges. As part of these efforts, the European Commission recently launched the Skills Agenda for Europe, aimed at enhancing education and training at all levels.

Nearly 40,000 Citizens Have Used Skills Vouchers

Ivan Vidiš, State Secretary at the Ministry of Labour, Pension System, Family and Social Policy, noted that with the help of European funding – especially the European Social Fund – Croatia has reversed negative labour market trends, now recording historically low unemployment and record-high employment.

He also spotlighted the innovative voucher system, which enables both employed and unemployed individuals to gain new skills. To date, nearly 40,000 citizens have taken advantage of this programme.

“This initiative is a major step in boosting workforce productivity,” said Vidiš, adding that Croatia is among the few EU countries with such an inclusive model.

He noted that labour market investment is also being supported through the National Recovery and Resilience Plan (NPOO), with a focus on acquiring skills in green and digital industries.

He also referenced the Posao Plus programme for the long-term unemployed, which supported around 3,000 people last year.