Topic of the session: Labor Market Performance: Between the Expectations of Employers and Job Seekers (Employees)
First meeting of WG 2
Thefirst preparatory meeting of the second cycle of NCEU-MKfor WG 2 took place on November 28, 2019 in the Ministry of Labor and Social Policy. Attending the meeting were: Jovana Trenchevska, Mileva Gjurovska, National Coordinator of NCEU-MK, and Nikola Jazadziski and Slavica Markovska, project assistants. The purpose of the meeting was to inform the State Secretary, Trenchevska, about the new approach that will be applied in the second cycle and to set a date for the First Session of WG 2. It was immediately agreed that 23.01.2020 could be an appropriate date for the first session.
Several topics were considered for the first session, while taking into account the guidelines of the Explanatory Screening as a separate phase of the pre-accession negotiations in Chapter 19. In a previous discussion, experts pointed out the importance of women’s rights, especially maternal rights, as part of the Labor Law that is under review. Another topic was pension reforms.However, Trenchevska pointed out that although the MLSP is involved in a project that works on pension system reforms, this might not be the most favourable moment to discuss this topic because there are no clearly defined guidelines and policies for reforms in this area and the analysis available to the ministry is not the most current one. Further, the conversation also included a topic related to social protection, which has not been done so far within the NCEU-MK. It was suggested that this issue(Decentralisation of Social Protection)should be considered for the second session of WG2 planned for June 2020.
The discussionlasted for more than two hours.It was thus agreed thatthe question of active employment measures seemed most appropriate for the January session of WG2.This was decided because of the importance of the subject in the national context, but also foritsimportance in the negotiating chapter. It was stressed that there is a need to understand the effects of active employment measures and assessment of performance of the labor market as well as state of the human capital in the country.
Having in mind that the second cycle of NCEU-MK focuses also on the youth, it was proposed that within the Session,WG 2 will leave a special space for youth specifically related questions and the youth’s inclusion in the labor market. The present at the meeting also identified the main actors to attend the Session (ESA representatives, Employers’ Organisations and representatives of companies’ human resources departments, MLSP representatives, Employers’ Organisation, Chamber of Commerce, Innovation Fund and the Ministry of Finance). This meeting showed that a topic related to the Work Programs is a good choice because this area has finalised policies and appropriate practices and now is time to build mechanisms for their implementation.
Second meeting of the Program Council of WG 2, held on 23.12.2019 in Trend Cafe.
Present: Mileva Gjurovska (NCEU-MK coordinator, Makedonka Radulovic-expert, Jadranka Mrshik Р WG-2 coordinator, Risto Ivanov-expert, Hristo Ivanovski – Public Relations Officer and Slavica Markovska – project administrator.
The general conclusion of this meeting was that a substantive debate had taken place and that the meeting was a mini-session. First, the attendees were informed of the set date for the First Session of Working Group 2, January 23, 2020. Following, there was a brief introduction of the principles of NCEU-MK, and the roles of the members of the Program Council. Special emphasis was placed on the importance of the Recommendations, ie the need that they be succinct and unambiguous, and that their implementation should be monitored after the session.
The coordinator of NCEU-MK went over the conclusions from the previous meeting held with the State Secretary of the MLSP, Jovana Trenchevska, where the broad topic was decided, adding that at this meeting it is necessary to define a specific topic related to the Employment Programs. The discussion which ensueddemonstrated that the subject of Employment Programs is very wide and covers various programs and measures. It was emphasised that there is a need to focus on young people and evaluate the measures taken for their economic activation. The so-called The Youth Guarantee project was mentioned. This is a new EU policy implemented in RS Macedonia from 2018,which is a pilot project active in several municipalities. Radulovic stressed that the project is in its early stages and that the effects cannot be discussed now. Expert Risto Ivanov, who worked as a consultant in the preparations for the creation of work programs, stressed that Macedonia has made significant progress in terms of active employment measures, not only in relation to the countries in the region, but also compared to European countries. Jadranka Mrshik pointed to the problem with the emigration of young people and the inability to find a quality workforce. This problem is present in all countries in the region, but also in EU member states. The difference is that Western countries are attractive for a foreign skilled labor, which does not apply to our country. It was pointed out that the development of such topic requires an expert on labor market performance and the animation of relevant stakeholders who will contribute to the work of the session and to hiding the recommendations. The discussion continued with the question of whether the operation of NCEU-MK will change, given the changes in the accession methodology. The Coordinator’s response was that the methodology has not yet been precisely defined and that it will be considered once it is officially published.
Discussions on the topic covered issues that hinder the relationship between employers and young jobseekers. Drawing from his experience, expert Ivanov pointed out that when announcing vacancies, employers should better define the positions (give more details), which would assist potential workers to form real expectations about the position/job. When jobs are not well defined and designed, there is a mismatch between the expectations of both parties. In reality, the relationship between new employees and employers is defined at the moment when they start filling out a form for the job. Conversely, many employers themselves do not even know what the corpus of job tasks is for the job they offer. This limits the possibility of finding adequate workers, and the even more problematic issue of retaining them in the workplace. It is also necessary to change employers’ perceptionthat employeesareexpendable, someone whom they can easily fire if difficult circumstances arise, in order to cut expenses.
Following, the discussion addressedthe subject of employment opportunities for young people. It was pointed out that young people mainly prefer to work in public administration or focus on work in the IT sector. This contributes to the shortage of workers in other sectors, ie the shortage of professions. There is also a lack of awareness among relevant stakeholders regardingthe cost of education and the losses created by the non-use of human resources, regardless of whether they are unemployed or have left the country. Consequently there was a discussion about the approach of young people towards the valorisation of work. The motive for employment with an unlimited contract prevails, but without a developed awareness that work means responsibility and that the salary should be earned.
It was concluded that the labor market is an interchangeable category, and this is facilitated by the creation of flexible jobs, such as: homework, part-time work, focus on the IT sector and all the accompanying aspects of this work. If in the past it was a prestige and a success to work in a bank, now we have a situation where young people with completed education for woking in the banking sector decide to retrain and work in the IT sector, where they can gain higher incomes. This indicates a loose relationship between the basic profession and the specific occupation.
Ivanov then referred to the measures for self-employment, opening one’s own company, which mainly encompass entrepreneurship trainings, ie development of a business idea. If the business idea is evaluated positively, it is elaborated in detail together with a business consultant, without which financial support for opening a company cannot be obtained.
Qualification and retraining programs face problems that highlight the problem of employee mobility. It is necessary to build a system according to which the new employees will remain in the company after acquiring qualifications.
Regarding the proposal to include education in the debate, which is considered an extremely important topic and closely related to the labor market, it was concluded that the topic of education is very broad and requires a special session all of its own.
At the end of this meeting, the topic was precisely defined: “Labor market performance: between the expectations of employers and job seekers (employees)“. Attendees agreed to meet again with the new expert and SEA representatives to define the draft recommendations.
Third meeting of the Program Council of WG2 on 20.01.2020
Present: Mileva Gjurovska (NCEU-MK coordinator), Jadranka Mshik (WG2 Coordinator), Jovan Pejkovski (expert), Nikica Mojsovska-Blazevska (expert), Makedonka Radulovic (expert), Hristo Ivanovski (public relations) Nikola Jadzinski and Slavica Markovska project assistants.
Prior to the meeting, the NCEU-MK Coordinator made a synthesis of the analyses sent by the experts and the revised recommendations. In preparation to the meeting, proposals were sent to the members of the Program Council and each of the members came up with a list of recommendations. The meeting immediately began with a review of the recommendations. Each recommendation was read and discussed. Given the large number of recommendations, it was concluded that some of the recommendations are rather general and therefore they can considered more of conclusions to the topicand not recommendationsper se. This discussion emphasised the importance of the recommendations and the mechanism of their creation. It was reiterated that the recommendations should be concrete and applicable in practice, ie usable in the reforms in the field to which they refer.
Furthermore, all new members of WG 2received a briefing of what to expect in the first session of the second cycle of Working Group 2, how the sessions are conducted and what their tasks entail. They agreed on how to focus during the session and on which topics they will pay more attention, according to their expertise.
The first session of the Second Cycle of Working Group 2 – Social Policy and Employment
Title: Labor Market Performance: Between Employers ‘and Employers’ Expectations (Employees).
The session was held on January 23, 2020 at the MPs’ Club, starting at the usual time from 09:30 to 13:00. The Secretariat of NCEU-MK sent invitations to representatives of relevant institutions, members of non-governmental organisations, trade unions, chambers, embassies, international organisations, international experts working in Macedonia, human resources managers and representatives of large companies, and 45 representatives – relevant stakeholders participated at the session. This session was characterised by the large number of speakers due to the nature of the topic, but also due to the strategy to provide quality participants in the working group.
In her address, Prof. Dr Mileva Gjurovska, National Coordinator of NCEU-MK and President of EMMK informed about the start of the Second Biennial Cycle of NCEU-MK where there there will be four sessions. She emphasised the goals of NCEU-MK, which are aimed at involving the professional public in the accession dialogue for EU membership, emphasising the expert support from the Slovak Republic. She reminded that NCEU-MK is the first civic platform that operates in five chapters of the pre-accession negotiations and stressed the complexity of Chapter 19, Social Policy and Employment, due to its close connection with many different segments of society (economy, law, politics). Regarding the topic, it was emphasised that it is part of the first pillar of the new European Social Policy and having the same significance as the importance of addressing climate change. Regarding the choice of the topic, Dr Gjurovska pointed out that it covers the three important segments of the labor market: employers, workers and institutions. Changes, she underlined, should be understood as the development of a new “psychological agreement” through which consensus will be reached between the expectations of workers and employers, and the recommendations that will emerge from this session through the presentation of experts, and the discussion that will follow, will contribute to the creation of concrete measures that will bring our country closer to European practices in this field.
- Government policies and measures to harmonise supply and demand in the labor market
The session was co-chaired by Jovana Trenchevska, State Secretary at the MLSP, who in her introductory discourse gave a brief overview of the situation of the Macedonian labor market, and some of the most characteristic reforms, policies and programs implemented by the Government during this period. According to Trenchevska, the tendencies in Chapter 19 have a positive direction. Namely, the number of employed-active population is increasing; the unemployment rate, which is at a historic low of 17.1%, is declining; the employment rate of people aged 15 to 64 increases and is 54.8%. These results have been achieved with the numerous reforms, programs and measures implemented by the Government. The positive changes were influenced by the improvement of the business environment, ie: reduction of labor costs and support of the state in subsidising new jobs; implementation of measures to reduce the administrative burden on companies; facilitating and reducing access to financial resources to support small and medium enterprises; encouraging entrepreneurship; support in self-employment; stimulating innovation in order to increase competitiveness.
It was pointed out that various measures have been taken to increase employment in order to harmonise the needs of companies with the supply of labor. Among the measures is the revised Action Plan for Youth Employment 2020, the main goal of which is to harmonise the skills of young people with the demand in the labor market and the pilot program “Youth Guarantee” which started in March 2018 in three municipalities while from 2019 it has been implementedall throughout the country. According to the achieved results (41.7%), this project is estimated to be successful if it includes 10,000 young people annually. Trenchevska also presented the latest measure for youthallowance, with which young people up to 23 years of age, who are employed or will be employed in production through the Employment Agency, will be paid a salary supplement of 3,000 denars.
- Necessity of changes in employers’ access to human resources
The title of this section is a conclusion that emerges from the speeches of most of the speakers, but also from the discussion of the members of the working group. Thus, Jovan Pejkovskipointed out the discrepancy between the expectations of employers and the expectations of workers. The rift stems from the way both sides communicate with the institutions that create the policies. The question is whether the policies correspond to the expectations of the workers, ie whether they satisfy the aspirations for a better paid job and the aspirations for a dignified job? The answer to these questions is complex and it is related to the state of the global labor market and global labor productivity.
According to Risto Ivanov, employers influence the work policies of the state by stimulating measures for training of staff with state financial support. However, they are showing little interest to organise trainings independently, by themselves, in order to prepare workers for the vacancies they have. This is especially true in the case of micro and small enterprises. According to Ivanov, it is crucial to change the approach from: supply and delivery of measures to improve the supply of workers (qualifications, skills, information) towards services to meet the demand for labor (the needs of employers). As a form of getting out of the predicament to balance the labour market the session draw the following conclusions:
- To support the growth and innovation development of domestic companies (foreign direct investment is limited in scope and effect);
- To consider the enactment of more effective measures to reduce the grey economy and apply more consistent tax policy;
- An obligation for mandatory adjustment of salaries with the increase of the cost of living;
- New social agreement so as not to exacerbate differences and dissatisfaction among workers.
- Features of the labor market in RN Macedonia
The labor market in RN Macedonia is characterised by a large supply of unemployed people and low demand for labor. According to Risto Ivanov, an analysis of the announcements shows that there are 7,500 jobs that are continuously advertised, but cannot be filled. This number of new jobs is significantly higher compared to 2013 when there were 3,500 job vacancies. The policies and measures of the state that mediate between the demand and the supply of workers, mainly meeting the needs of the employers, have a great role in the conditions of the labor market.
The structure of the labor market in 2018 shows that 77% of the total number of employees are in the private sector, among them 69.4% are employed at their own expense. The annual demand for new workers is 18,000, of which 55% are secondary school workers. However, the total supply of workers is 184,623 (registered in AVRSM), of which 94,721 are active applicants and 89,962 other jobseekers. The share of unemployed young people up to 29 years of age is 18.7%.
The characteristics of the labor market are significantly determined by the structure of the economy, where the basic industry with low labor productivity and insignificant added value prevails. This economic model shapes and createsthe demandfor the labor force – said Angel Dimitrov. To overcome this problem, governments need to introduce measures to encourage the development of high-tech sectors, in addition to sustaining existing industries. He cited the absence of career guidance for young people as the next reason for the disparitybetween the supply and demand side of the workforce.
In essence, in shaping the labor market, there is a discrepancy between all actors, ie. decision makers, employers (enterprises) and young people with their particular perceptions of what work should entail.
The State: It is recommended that political party interventions in employment be stopped because it undermines employment criteria that significantly affect economic performance (rising costs, rising debt and high long-term poverty rates).
Employers: To stop the transitional practice of low wages for skilled labor and to work on breaking down the approach to workers – as partners in the work process. Angel Dimitrov also pointed out this aspect, emphasising that employers need to develop an objective approach in terms of real payment of labor. Furthermore, there is a need to increase employers’ investment in education and to raise the professional qualifications of workers according to their needs, and not to wait on the State to do so for them. Pejkovski concluded that the fact that employers are predominantly profit driven is an obvious but also fatal for the whole economy, as employersseem not to understand the full value of the workforce.
Young people: The expectation of young people, and especially of new families, is to live and work in a stable environment and to have career opportunities. In the absence of stable social processes, young people will seek solutions, including the mass emigration from the country.
In order to improve the balancebetween supply and demand on the labor market, the following conclusions were drawn:
- The Employment Agency should have a more active and effective approach in meeting the needs of employers;
- Employers should clearly define the positions/vacancies they advertise for;
- Measures for professional development and retention of employees in the workplace;
- The measures and policies should correspond to the characteristics of the Macedonian economy and not to copy ready-made models from abroad;
- Changing the expectation in terms of employment, ie from employment for salary to an active approach to job choice and contribution to earnings.
- The experiences of R. Slovakia in strengthening labor market performance
According to Daniel Skobla, expert from the Slovak Republic, understanding the labor market needs to begin with an analysis of active labor market policies aimed at increasing employment opportunities and improving compliance between job vacancies and the unemployed. The Slovak labor market is characterised by 18% youth unemployment, especially among young people with low qualifications – 47%, and the participation of young people who are not included in the labor market in education – 12%.
Active labor market policies have six priority pillars: education, youth activity initiative, employment, social inclusion, integration of the marginalised group of Roma people. According to Skobla, the Youth Guarantee is an EU project aimed at providing young people up to 25 years of age with easier access to employment, continuing education, internships, training within four months of losing their jobs or dropping out of formal education. This initiative is aimed at those regions where youth unemployment is higher than 25% and especially supports young people who are not in school, are not employed and/or are not in a training program. There is also a financial incentive for employers to create jobs for certain target groups. Mentoring is planned in the first 3 to 6 months of employment in order to acquire theoretical and practical skills. There are also financial payments for employers who create jobs the first-time employment of young people.
According to Skobla, the Slovak economy is significantly more open and has seen rapid growth in the automotive industry and electronics, significantly depreciating the unemployment rate and attracting foreign workers. Among the measures that should have special effects is the combination of school education with the practical workfor students in companies in order for them to acquire the skills employers require. The Slovak government recently introduced dual VET schemes that offer work-based learning in companies based on an agreement with individual students, with which the companies taking action to attract young people.
- The position of young people in the labor market
According to Nikica Mojsoska Blazevski, young people are a sensitive category, with regards to the labour market. In RN Macedonia, as in other countries, thenumber of the youthpopulation are in decline vis-a-vis in the total population (20% of the total population in 2018). Despite this fact, there is high unemployment among the youth (45.4%), low employment (17%). A significant part of the youth achieve low quality of employment due to higher participation in informal employment, high inactivity (30.8%), but with higher education in relation to the entire population. For young people, in particular, the process of transition from finishing school to the first stable or satisfactory jobis long(2.5 years), ie a small percentage (46%) of young people are employed in a period of 1 to 3 years after graduation. The reason is the non-compliance of their education with the requirements of the new jobs. Education, as well as the training system, does not provide direct employability for young people or readiness for professional development. There is also a low involvement of adults (2.3%) in a lifelong learning process. There is a low internal efficiency of the education system and the labor market, which is argued by the fact that 50% of the enrolled students complete their education, and only 54% of the graduates are employed. Employers are not very happy with the skills of graduates, graded them with an average grade of 6.4 on a scale of 1-10. The reasons for the poor position of young people are the low level of newly created jobs and the lack of work experience of young people (which employers consider important).
Proposals to improve the situation of young people in the labour market:
- To develop a functional model for greater involvement of young people in work-based learning;
- Improving the flow of information to labor market participants;
- Improving the capacity of career centres for more direct access to youth;
- Government co-financing for employee training with a focus on high-productivity sectors.
- The gender perspective of the labor market
Labor market data show that there is a low employment rate among women (39.2%), as well as a low economic activity of 42.7%. On average, women earn less (9-28.5%), and their share of managerial positions is 12%. Of the newly opened companies, only 15% were founded by women, and 24% of employers were women. According to Makedonka Radulovic, the fact that, although over 90% of women work full-time, only 1% have a salary higher than 40,000 denars is of particular concern. Radulovic listed the following reasons for these state of affairs: the reproductive role of women, home and family care, the traditional understanding of the role of women as housewives and mothers, gender stereotypes in choosing education and profession, discrimination and emigration. Regarding the measures for employment and inclusion of women in the labor market, she noted that the records and evaluation of these services are very general without precisely defining age, the vulnerable category to which they belong and the like. Improving the gender perspective in the labor market is closely linked to discrimination. If the overall system for combating and preventing discrimination (adequate application of legislation) is developed, then there will be a better positioning of women in the labor market. Motherhood and child care should not be an obstacle for a professional career for women – said Radulovic. The solution is to develop and adapt European policies that will align professional and private life (parental leave, flexible maternity leave, homework) and increased coverage of young children in kindergartens. It is also necessary to act through media campaigns to change the image of women, encouraging them for greater professional endeavours.
- Trade union perspective in the labor market
Existing legislation regarding labor policies provides a dignified position for workers if it is properly implemented in practice. However, there is an issue with the signing of collective agreements. Employers refuse to sign them. In addition, there is an urgent need to align wages with rising living costs. In our country there is a tendency to increase the minimum wages, and other wages stagnate over a long period of time that demotivates quality staff. Trendafilov stressed that it is time for a new social agreement and new collective agreements in the private and public sectors.
The Coordinator of WG 2 – Jadranka Mrshikopened the floor for discussion regarding the suggested recommendations. The discussion involved representatives of large companies that emphasised the importance of employers ‘involvement in workers’ training, ie in: continuous professional training; development of lifelong learning; the introduction of practical work during learning; learning how to achieve results in operations; greater connection of education with companies; developing an information system that will distribute information about the needs of specific company staff.
The session was completed by the National Coordinator Prof. Dr. Gjurovska, pointing out the lack of employment criteria, which is the reason for the motivation of young people to leave the country. This is especially true of the public sector – the State, which is the largest employer in the country. The lack of criteria discourages students because employment unfortunately is not achievedthrough professional curricula, but rather through other (party) criteria. The private sector is not spared either. The State can be a good example for all other sectors by overcoming the system of party quotas in employment.
Given the limited time that does not provide inclusion for all participants in the discussion of the topic, prof. Gjurovska suggested that the participants in the Session send all addition amendment to the presented recommendations prepared by WG2 no later than January 30 and that they will be reviewed and included in the final draft of recommendations from this Session.