December 12, 2023 – The year in which the country adopted the euro as its currency and became part of the Schengen area was marked by the intensive engagement of companies to increase the wages and salaries of employees in Croatia as much as possible.
As Poslovni writes, the members of the Croatian Association of Employers will increase the salaries for employees of their companies by 15 to 20 percent this year, which continues the strong growth from 2022, when salaries grew by 18 percent.
The strong growth in income and standards of employees will continue in the next year as well. Entrepreneurs are working intensively on this trend, but at the same time, it represents the biggest challenge. There has never been such a strong battle for each individual employee in the labour market in Croatia, and for employers, the retention and attraction of workers is made difficult by the outdated Law and the tax burden on work. The Labour Act does not reflect the reality of the market – it addresses, unfortunately, the generations of our parents who worked in completely different economic circumstances.
Today’s employees want mobility, the opportunity for rapid advancement, learning, and adaptation to their needs in terms of work organization. They want greater autonomy and the opportunity to express their specific needs within the work environment. The labour law does not allow them to do this, and it must urgently change, in order to ensure faster employment, adaptation to the needs of employees and, ultimately, their retention in Croatia.
Young people who left Croatia go to countries with flexible labor legislation because such an approach enables a vibrant market, which today’s employees feel is an opportunity for personal growth. A stable and well-paid workplace is the best demographic policy, and a stable workplace of the 21st century is one that gives an opportunity for development and growth to an employee, quickly adapts to new trends and develops in the direction of new industries and technologies.
In the 30 years of its existence, the Croatian Association of Employers has continuously advocated for progress and strengthening of operations and standards. They see Croatia as a country of well-paid and satisfied workers, technologically advanced and a country with a strong economy. A country where young people will stay, but also a country where experts will come to work and start families.
In order to build it as such, the issue of tax treatment of work with an emphasis on the excessively high workload of experts and highly qualified employees must be brought up. The association strongly advocates that the group of people who develop society, push it forward and who are necessary to grow faster and stronger in the industries of the 21st century and ensure progress, should not deal with too low a threshold for applying the highest rate for income tax.
By significantly raising the threshold from the level of medium-high incomes to the level of the highest incomes in the economy, a double effect would be achieved. The incomes of doctors, engineers, scientists, IT experts, and experts from all fields would significantly increase, and a message to the entire society and competitors would be that of a society that nurtures a culture of work and a culture of knowledge. The year ahead is the right time to take a step in that direction, emphasizes the association.