Positive Trend in the Croatian Labor Market in 2025: Wage and Employment Growth Despite Challenges

The latest research by Manpower Croatia, ‘Trends in Wage and Employment Movements H1 2025’, which is a semi-annual report for this year, reveals positive trends in the labor market despite challenging economic conditions. The results indicate that most employers plan to increase wages and continue hiring in the first half of 2025, while the economic recovery continues.

Wages are rising and improvements in working conditions are on the way

According to the research, as many as 76.35 percent of employers plan to increase wages in the first half of 2025. The most commonly planned increase ranges between six and ten percent (35 percent of employers), while 11 percent are considering increases of 11 to 20 percent. The main reasons for wage growth are employee retention (65.73 percent) and adjustment to inflation (61.03 percent).

In addition to wage increases, about one-third of employers plan to enhance additional benefits such as bonuses and transportation subsidies, while 63.06 percent do not foresee significant changes in that segment.

Wage Growth by Sector

In the manufacturing sector, nearly 16 percent of employers do not plan to change wages, while in wholesale and retail trade, 30.23 percent of employers do not plan wage changes. In the information technology (IT) sector, 20.81 percent of employers do not plan wage changes, and the majority (67 percent) do not plan any other major changes regarding additional employee benefits. In some service sectors, a significant share of employers is expected to increase wages. For instance, in tourism and hospitality, as many as 84.22 percent of employers will somewhat increase wages, and in construction, 87.5 percent of employers share this opinion. Significant growth is also expected in the telecommunications, electronics, and electrical engineering sectors, where 71.43 percent of employers will increase wages. Additionally, more than 60 percent of employers in banking, finance, insurance, as well as in transportation and logistics plan to increase wages. On the other hand, in the healthcare and pharmaceutical sector, just over 70 percent of employers do not plan to increase wages.

High Demand for Labor

According to Manpower’s research, most employers (61 percent) in the first half of 2025 will hire more workers than they will lay off, resulting in a positive net employment forecast of +59.92 percent. The highest demand for workers is expressed in the construction, manufacturing, and tourism sectors.

Although most employers will find new employees from the domestic workforce, 32 percent of employers plan to hire foreign workers, with the majority of them (67 percent) turning to third countries outside the EU and EEA.

Employee Turnover and Recruitment Challenges

Manpower experts emphasize that although the average employee turnover rate in 2024 was 15.33 percent, employers still face challenges in attracting and retaining the workforce. The main reasons for employee departures are better wages at competitors, lack of opportunities for professional development, and workplace overload. The biggest problems in finding workers have been recorded in sales, logistics, and construction.

Positive Trends in the Croatian Labor Market

– The conclusion of the research is that the Croatian labor market in 2025 will show stability and positive trends, despite certain challenges. The expected wage growth, reduction in unemployment, and increased demand for workers indicate a continuation of favorable economic movements. However, employers still need to address issues of turnover and a lack of qualified workforce, which will require additional measures and strategies to attract talent, said Tamás Fehér, Operations Director and Member of the Management Board for the markets of Croatia, Hungary, Slovenia, Serbia, Bulgaria, and BIH.