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"Farewell" Albania!/ Foreign employees also leave

2024-02-18 08:26:00, Sociale CNA

"Farewell" Albania!/ Foreign employees also leave

The initiative to recruit employees from Asia, after the mass departures of the local labor force in emigration is not working. There are many managers of manufacturing companies and service providers who claim that they are withdrawn from hiring foreigners, for fear of their departure, since in many cases, Albania is used as a springboard country for employment towards EU countries -'s.

"The measure for hiring foreign employees is not a long-term solution, since most of them use Albania as a springboard to go to other European countries. Other problems are the high cost, but also their work culture, which is different from our country", said Drini Zusi, general coordinator of "Az Group", in the "Business Plus Monitor" podcast.

But it is not only the fear of leaving the workplace that is causing the reluctance or reluctance of many Albanian companies, which urgently need employees, to recruit Asians.

The high cost of keeping them, starting with monthly net payments, accommodation for sleeping and food that reaches at least 600 USD, does not justify the labor yield provided by workers from Bangladesh or Nepal.

One of the local furniture manufacturing companies, months ago, was planning to hire 20 employees from Bangladesh. Dritan Cacaj, from "Trin Mobileri", said that he has already withdrawn from the decision to hire them, for fear of leaving.

"The hiring of foreign nationals from Indian countries and then leaving the workplace to move to a foreign country that pays more is among the main problems of the dysfunction of this measure. In this situation, we are forced to continue increasing the wages of local workers, as their employment remains a priority", he says.

The acute problem of finding qualified employees is felt in many sectors of the economy and has also been extended to the transport of goods and passengers. Finding truck or transport drivers is an impossible mission, not only in Albania, but also in the region and Europe.

The international goods transport company "Balkan Trans Albania" is also in these difficulties, which planned to fill the vacuum of human resources, mainly for truck drivers, with new recruitments from Egypt.

But even Rodolf Xhillari, CEO of the company, told "Monitor" that he withdrew from the decision to hire 10 Egyptians, since the workers of this country prefer to be employed in EU countries, where they are paid more, than in Albania. . Uncertainty about the long-term stay of foreigners in accordance with the labor contracts that must be of two-year duration is another reason why the company refused to hire foreigners.

"In the goods transport sector, 5-6 years ago, companies managed to recruit qualified workforce, but today finding this contingent remains difficult. There are qualified employees, but they are old. The labor market currently offers qualified truck drivers over the age of 65.

This category occupies 70% of the market offer. Companies in the transportation sector find it extremely difficult to keep up with these employees who you cannot send to complete long truck travel routes. So the yield of their work is 50% less than that of younger employees", he says.

The company "Doni Fruits", which has the activity of collecting and exporting fruits and vegetables in Lushnja, has withdrawn from the employment of 30 women from Nepal.

Even the chairman of the Association of Bread, Pastry and Dough Producers, Gëzim Peshkopia, earlier claimed for "Monitor" that local companies have withdrawn from the decision on hiring from India and the Philippines.

The reasons for not accepting them, according to him, were the high cost for net wages of 800 euros per month and 300 euros for accommodation, as well as the problem of the Asian labor market to provide qualified employees for the preparation of dough and cakes.

Why is the scheme not working?

Erald Pashaj, Executive Director at "EPPC Albania & Kosova", one of the largest consulting companies for human resources, estimates that the dysfunction of the scheme came from the irregularities encountered in the implementation on both sides, as from the state agencies that provide employees of foreigners, but also Albanian recruiters.

"Since the global economy does not recognize the model of employment of citizens from countries in poverty and without rules, who are employed in poor countries with 'grey' rules such as Albania, the scheme will not work", he asserts .

According to INSTAT data, the number of foreigners with a residence permit in Albania was 18,151 people, of whom 62.5% were men and 37.5% were women. While the number of foreigners with employment permits reaches 7,930 employees in 2022. Foreigners with work permits account for 43% of the total number of citizens with residence permits.

Mr. Pashaj said that these data show that the labor force from abroad is negligible for the labor market in Albania, and it is expected that it will continue to remain so even during the year 2024.

Compared to 2021, the number of citizens with work permits, according to data from INSTAT, has increased by 11%. For citizens with a residence permit in Albania, their number in 2022 was 22% higher in relation to the most employed.

According to Pashaj, the main place is occupied by those with Italian citizenship (who are not engaged in unskilled work, but mainly in self-employed businesses), Turkish, Kosovo, Egypt, Philippines, North Macedonia, Bangladesh, Syria, etc.

For example, from Egypt until the end of 2022, there were 395 people with work permits. The labor force from abroad is still negligible for the labor market in Albania, and it is expected that it will be so throughout the year 2024.

"Farewell" Albania!/ Foreign employees also leave

About 4.1 thousand new permits in the first half of 2023

About 4,092 foreign citizens were provided with unique work permits for the months of January-June 2023 according to the data obtained in the decision approved by the government "On the approval of the Extended National Migration Profile for the years 2019-2022".

After the implementation of the law "For foreigners", "unique permit" is the permit issued by the authorities of the Republic of Albania, which allows the foreign citizen to stay legally in the territory of the Republic of Albania for work purposes.

According to the data of the National Agency for Employment and Skills, which refers to the decision for the year 2022, 7,434 permits were given to employees from the 4,357 that were for 2021 (70% increase).

As for the unique permits issued in the period January-June 2023, there are 3,499 for employees (which occupy 86% of the total number of unique permits), 170 (4%) for self-employed and 158 (3.8%) for volunteers.

3,098 unique permits were for men and 994 for women. Regarding the economic activity for which permits have been issued, accommodation and food service make up the largest part with 14%, followed by the textile processing industry (11.2%) and the food processing industry with 11.1%.

For 2022, the county with the largest flow of foreign nationals equipped with work permits and certificates was Tirana, with about 44% of work permits. According to nationality, the highest number of work permits is occupied by Turks, followed by Italians, followed by Kosovars, followed by Chinese.

"Farewell" Albania!/ Foreign employees also leave

The fashionistas, worried about the fall of the euro, leave the Filipinas from the factories

Initially, the trend for hiring foreigners in Albania began to be implemented by wealthy families. Among the first employees who were hired by them, years ago, as cleaners or babysitters, were Filipinas.

Experts from recruiting companies, but also businesses and individuals who have hired Filipinos, estimate that female employees have shown many times more productive skills and stable work discipline compared to foreign employees from other Asian countries.

For these reasons, one of the contractors of the fashion company "Albania Tricot" in the city of Shkodra, which produced intimate clothing of the Italian brand "Cotonella", hired 35 women from the Philippines last year. The company also invested in building a silo where foreign employees were housed.

Due to the crisis from the fall of the euro and the increase in the cost of maintaining the workforce after the increase in the minimum wage from September 2023, the "Albania Tricot" factory and its subcontractors moved to Uzbekistan.

With the closure of the activity in Albania, the local contracting company of the producer of intimate clothing of the brand "Cotonella" cut 150 employees, including foreign employees. "Monitor" contacted the staff of the subcontractor of the "Albania Tricot" company, who claimed that 25 female employees from the Philippines were employed by an Italian fashion clothing tailor in Tirana.

The contract for their employment lasts until February 28, 2024. After the end of the contract, the female workers from the Philippines are forced to leave for their country.

Due to the decrease in profits from the devaluation of the exchange rate of foreign currencies, the fashion sector as a whole is unable to maintain jobs, both for locals and for foreign workers, according to the chairman of the Pro Export Albania Association, Edvin Princess.

"The scheme for the employment of foreign employees, mainly women in some countries has been very efficient, productive and with lower or equal costs to Albanian employees, before the period when the sector did not have these problems.

Today there is talk of surviving this great wave of economic crisis, as such, businesses do not see and do not think about the flow of other employees, but how to keep the economic activity working and moving, preserving the current jobs ".

Regarding the increase in the recruitment of foreigners in this sector, Mr. Prençe said that there are no more new flows, since even those companies that continue the activity, do not feel the need for new employees.

"Uncertainty about the near future makes them think twice before applying for these employees (since they are two-year contracts and the responsibility of moving them from distant places)", he emphasizes.

In the first 6 months of 2023, according to the data of the Pro Export Albania Association, clothing and footwear fashion enterprises employed 450 women from Nepal and the Philippines.

The leaders of the association said that only 5% of the employees left, as they did not meet the expectations of Albanian businesses for work performance. The cost of their employment, including only monthly payments, amounted to USD 450 per month.

"Farewell" Albania!/ Foreign employees also leave

Foreign workers, high cost and low productivity

Other companies continue with the construction of warehouses for the accommodation of foreign employees. The medical plant export company "Filipi CO", according to its manager, Filip Gjoka, hired 9 workers from India about 4 months ago. Mr. Gjoka claims that he expects to hire 15 more employees.

The cost of hosting an employee from India, including net monthly salary, accommodation and food comes to 600 USD per month.

"The cost of hiring foreigners is more expensive compared to hiring locals, but the 25% higher work yield justifies their retention", emphasizes Mr. Chest.

In Albania, the problem and low productivity of employees remains a concern for businesses. For medicinal plant export companies, it is considered one of the hindering factors for increasing the processing capacity.

The lack of investment in automated machinery is also considered an obstacle to increasing the scale of plant processing.

"One local worker manages to clean and process 100 to 120 kg of medicinal plants. An Indian worker processes 25% more, i.e. up to 150 kg per day. China ranks first in the world for high productivity of plant processing workers. A Chinese employee processes 250 kg of medicinal plants per day", emphasizes the chairman of the Association of Medicinal and Aromatic Plants Exporters.

According to Erald Pashaj, from "EPPC Albania & Kosova", the productivity of employees from Asian countries can be acceptable in cases where companies hire hundreds of employees. Albanian businesses, which employ 10 or 20 employees with a net salary of 400 USD per month, according to him, show that the productivity and qualification of foreigners is low.

"The scheme of hiring foreign employees in the countries of the region is working best only in Croatia, as salaries are offered on average for local employees. The average salary of local employees in Croatia is 500 euros per month.

Also, if foreign employees are contracted massively, for example, if 1,000 employees are contracted, employment costs decrease, but this does not happen when companies contract 10 or 20 employees, as is happening in Albania", said Mr. Pashaj.

"Farewell" Albania!/ Foreign employees also leave

Albania is losing the competitiveness of the free labor force

The free work arm in Albania in the past years was one of the competitive advantages for the employment of locals in foreign companies in the fashion and call center sector in Albania. As in many sectors of the economy, call center businesses in Albania are looking to hire English speakers from Tunisia, Morocco or the Philippines.

But if this measure is implemented, for the sector as a whole, it will be like a double-edged sword. On the one hand, it will fill the hole of human resources from emigration, and on the other, it will lose the competitive advantage.

"In Albania it is becoming more and more difficult to find Italian speakers, this increases wages and therefore, the price given to customers is no longer interesting for them, as it was until a few years ago. "Albania is not able to be competitive because of the time zone, which adds overtime costs for American customers," said Diego Pisa earlier.

In the Philippines, wages are rising, due to the outsourcing of call center services from India and the equipment support industry from China. Salaries are increasing by an average of 9% per year and in the near future Albania will no longer be a competitive country.

In 2023, the minimum monthly wage in the Philippines was US$186.9 from US$182.9 per month last year.

While some Italian fashion factories, which operated in Albania, due to the crisis caused by the devaluation of the euro and the increase in the cost of maintaining the workforce, after the increase of the minimum wage to 40 thousand lek, are being transferred to Uzbekistan, Egypt or Tunisia.

"Farewell" Albania!/ Foreign employees also leave

Wages in Nepal and Egypt low, but more skilled labor in agriculture

In Nepal, the minimum monthly wage for 2023, according to official statistics was 130 USD per month. Due to the low level of wages, the vast majority of the population has chosen to emigrate in order to secure income.

However, Nepal's economy is dominated by agriculture and 90% of the people are engaged in agriculture. This experience of employees from Nepal does not match the needs of Albanian factories, which will face additional costs requiring their training.

Even in Egypt, according to official statistics, by 2020 agriculture was the largest sector contributing to employment, with up to 21% of employed Egyptians working in this sector. Construction, wholesale and retail trade, together with processing industries are ranked next with 14%, 13.4% and 12.5% ??respectively.

The share of employment in scientific, technical and energy activities was very low in total employment. Scientific and technical activities and the electricity sectors had the smallest weight in total employment. In Egypt, the minimum wage for 2023 was 113 USD per month.

Even the experience of employees from Egypt does not match the needs of Albanian businesses, mainly for the transport or furniture production sector.

Bangladesh is a labor intensive country and its workers have been a significant contributor to the economy through their remittances. In 2020, the country received about USD 23 billion in remittances from its workers abroad, about 34% more than in 2019. Most Bangladeshi migrant workers are employed in the Middle East and EU countries.

In Bangladesh, the minimum wage for 2023 was 72 USD per month./ Monitor.al

"Farewell" Albania!/ Foreign employees also leave

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