Despite Crisis, 2021 Saw Fewest Dismissals So Far; Nine in Ten Jobs Insecure

With the present share of insecure and short-term work Croatia has been holding the European record for years. In the first seven months of 2021 permanent work contracts were signed by slightly less than 9,500 previously employed persons while 83,000 signed fixed-term contracts, the daily says.

Labour market fluctuations are common but mass-scale hiring based on fixed-term employment contracts, followed by dismissals, has been a constant in Croatia for the past 20 years or so.

In 2019 and 2020 around 120,000 workers were hired on a fixed-term basis annually, and some of them probably signed such contracts with the same employer more than one time. Around 100,000 annually re-registered with the employment service, where they waited for another opportunity.

The seasonal character of Croatia’s economy is determined by employment in tourism and the related services but fixed-term employment is present also in all other sectors. The prevalence of short-term employment has only been partially alleviated by high government incentives to businesses that sign fixed-term employment contracts with persons under 30.

Since 2015 the state has offered five-year exemption from the payment of wage contributions to businesses that give young people permanent work contracts. These incentives are currently paid for around 150,000 young people, of whom only about 20,000 were given permanent work contracts right away.

Even though this is a strong financial intervention, it has lowered the previous share of fixed-term contracts in the total number of new contracts from 95 to 90%, which bears evidence of the complexity of the problem of short-term hiring.

The number of workers who were declared redundant in the first seven months of 2021 is similar to the same period of 2019 but it is much lower than in 2020. Apart from workers who were declared redundant, another 900 workers were fired because their employers ceased operating, which is a significantly lower number than in the past two years, the daily says.

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