HGK: Foreign Worker is 20 Percent More Expensive than Domestic

Due to additional costs such as searching for workers, permits, translators, training, and professional education, a foreign construction worker is about 20 percent more expensive than a domestic one, according to indicative research conducted by the Croatian Chamber of Economy (HGK) on the employment of foreign labor among its members.

The research covered larger construction companies that had employed workers from other countries, totaling 12. The number of foreign workers in these companies ranged from 20 to 350 people. The results of the research and a review of the current situation in construction regarding labor were presented by HGK Vice President for Construction and Transport Mirjana Čagalj at the Croatian Construction Forum, organized on Friday by the Croatian Association of Civil Engineers.

Foreign workers employed in construction come from neighboring countries: Bosnia and Herzegovina, Serbia, Kosovo, North Macedonia, and Albania, but also from somewhat more distant countries such as Ukraine, Morocco, Egypt, and Turkey. Recently, there has been an increasing number of workers arriving from distant countries such as Uzbekistan, Nepal, India, Bangladesh, and the Philippines.

According to comments from employers in construction, the best experiences are with workers from Bosnia and Herzegovina and partly from North Macedonia and Serbia, as there is no language barrier with these workers, and they possess the necessary skills.

Regarding retention in Croatian companies, the largest number of workers retained are from Bosnia and Herzegovina, followed by those from North Macedonia, Serbia, Ukraine, and Bangladesh. Workers from distant countries tend to stay in Croatia for a shorter period than workers from the region. It is common for a certain number of these workers to leave their jobs in Croatian construction companies very easily and quickly, without explanation, as stated in the HGK announcement.

The next challenge they face is the process of obtaining work permits for foreign labor. Problems are greater in larger cities, while in smaller communities, permits are obtained more quickly. Waiting for permits can take from three to four weeks up to four months. Waiting for visas also takes about two months. The extension of already issued work permits can sometimes take longer, and it occasionally happens that the extension arrives after the work permit has expired, meaning the worker is no longer in Croatia.

– Although it is a common belief that foreign workers are cheaper, which is why domestic entrepreneurs import workers, this is not the case. The search for workers, the cost of permits, translators, training, and professional education create a significant cost that cannot be ignored. Due to all these additional costs, a foreign worker is about 20 percent more expensive than a domestic one – emphasizes Čagalj.

The problem in attracting construction workers to Croatia is also the inadequate salaries of employees. Namely, the average monthly net salaries paid in construction significantly lag behind the average.

The impact of foreign workers can also be observed through productivity per employee, which has been increasing in recent years, but is still significantly lower than it was in 2008.

The number of employees in the construction sector in the second quarter of 2023 was 115,000, which is more than seven percent of the total number of employees in Croatia. In 2016, the number of employees in construction fell to about 86,000, while there were about 21,000 unemployed in the construction sector on the HZZ list. More than 60,000 jobs were lost in the construction sector. It can be concluded that during that period, a large number of domestic workers went to work abroad, the HGK concludes.