Employers facing a choice: Hire a foreigner or shut down the business

The number of foreign workers in Serbia continues to grow – in 2024, over 52,000 work permits have been issued, mostly to citizens of China, Turkey, Russia, India, and Nepal, according to data from the National Employment Service.

A new law, a digitised procedure, and an acute shortage of domestic labour – as Serbian workers increasingly leave for EU countries – have further opened the door to foreign workers. Although recent amendments to the Law on Employment of Foreigners have made it easier to hire foreign nationals, employers still face a series of challenges, from language barriers to the risk of workers leaving the company.

Jelena Jevtović from the Serbian Employers’ Union told Insajder that employers realistically have little choice – “either they hire someone from abroad, or their businesses will shut down.”

According to the National Employment Service, more than 52,000 work permits were issued last year to foreign nationals, primarily from China, Turkey, Russia, India, and Nepal. This rise is accompanied by changes to the Law on Employment of Foreigners, which has been in effect since February 2024, including the introduction of a single work and residence permit issued by the Ministry of Interior.

Legislative changes – combined with investment in construction, the emigration of domestic workers, and high demand for workers in the hospitality industry – have significantly eased the employment of foreign labour in Serbia. At the same time, the Ministry of Labour has recently denied reports of an agreement with Ghana on the import of labour, stressing that the Serbian government has not concluded any such bilateral agreements or signed mobility memoranda with that country.

Jelena Jevtović of the Serbian Employers’ Union told Insajder that Serbia has worker mobility agreements with many countries and pointed to Slovenia – where many Serbian citizens go to work – as a positive example. However, she noted a similar trend in Serbia, which is also seeing an influx of foreign workers.

“As far as employers are concerned, they’re all facing a serious labour shortage, mainly because our education system is not aligned with the needs of the economy. No serious analyses or projections are being made to determine the direction the country will take in the next three, five, seven, eight, or ten years. Everything is done ad hoc, and as the saying goes, it’s all about putting out fires,” Jevtović emphasised. She noted that reform initiatives for the education system have been submitted for years.

“Just a week or two ago, we received an invitation from the Ministry of Education to appoint our representatives in specific areas to begin working in that direction, which could be a starting step,” she added.

List of shortage occupations

When it comes to employing foreigners in Serbia, there’s no doubt why it’s happening.

“As far as the employment of foreigners is concerned, employers really don’t have much choice – either they hire someone from abroad, or their businesses will close,” Jevtović stated.

She mentioned that a list of shortage occupations is being planned to facilitate the implementation of the Law on Employment of Foreigners.

“That list will include a certain number of occupations or specific job profiles, allowing employers to hire foreigners with that educational background without the labour market test. The labour market test means that when someone wants to hire a foreigner, they must contact the National Employment Service and obtain confirmation that no Serbian citizen is available for that job. Only then can the process begin. If the foreigner’s occupation is on the list I mentioned – which is still being finalised – the employer won’t need to contact the National Service, as that occupation will automatically be considered in shortage, and the employer can proceed with the hire,” Jevtović explained.

When it comes to employing foreign nationals, the Open Balkan initiative should also be mentioned, but, as she says, she hasn’t heard that it has really taken off or that a significant number of people have entered the domestic labour market through that option.

Insajder’s interlocutor also discussed which educational profiles are most commonly employed by Serbian employers, what the procedure looks like, and what the biggest obstacles are when hiring a foreign worker.

“Most workers are hired in the construction sector. I’ll leave IT companies aside for now, given that they were mostly set up by Russian nationals, so the number of IT professionals is no longer as high as it was, say, four or five years ago. In any case, the construction sector hires everyone from completely unskilled workers to engineers of all kinds. Then there is high demand for tradespeople – carpenters, bricklayers, tinsmiths, car mechanics, and all types of manual trades,” Jevtović pointed out, adding that there is also significant demand for workers in transport and logistics (both local and international), as well as in tourism and hospitality.

“Housekeepers, receptionists, drivers, and support staff in tourism are in demand. In the hospitality sector, we lack waiters, chefs, and all those skilled trades. This is partly because such jobs aren’t particularly promoted among younger generations and, on the other hand, because many of our people are going abroad, having simply calculated that they can earn much more for the skills and trades they possess,” she explained.

The E-Stranac platform

Since the amendments to the Law on Employment of Foreigners came into force last year, everything has been digitalised.

“There are no more trips to counters, no running around or carrying paperwork. Instead, there’s the E-Stranac platform where absolutely everything needed is available – starting from the labour market test I already mentioned, to copies of passports, diplomas, and all the documents required for a specific job with a particular employer. Depending on what the employer defines in their internal job classification as the requirements for the position, all documents are uploaded to that portal,” Jevtović explains.

She says that the police, the National Employment Service, and the Central Registry are all interconnected – the police carry out checks, after which a signal is sent to the National Employment Service to formally issue the work permit, now called the “single residence and work permit,” which is collected at the Ministry of the Interior.

“When, for example, as a foreign candidate, I complete all the necessary procedures, hold the qualifications, and meet the employer’s requirements, I receive a single residence and work permit valid for up to three years,” Jevtović says.

From the employer’s perspective, she notes, this can be problematic because under the previous regulation, the employer who invited the foreign worker – and through whom the worker entered the country – had the assurance that the worker would be employed solely by them, with the permit valid for one year. That has now changed.

“Previously, one year was the maximum. If you no longer wanted to work for that employer, you could no longer stay in Serbia, because your residency was directly tied to your job. That’s no longer the case. Foreigners now receive a unified residence and work permit and are not required to stay with the same employer – they only have to notify the National Employment Service that they’ve changed employers. This means there’s no longer any security for the employer who hires a foreigner, even if they’ve invested resources – as employers typically pay for fees, training, and specific qualifications depending on the sector – and there’s no guarantee that the worker will remain employed,” Jevtović stresses.

She also points out issues arising with foreigners from countries under the visa regime, who, after receiving residency approval in Serbia, are able to travel to other countries – and some take advantage of this, as Serbia is not their final destination.

“These situations do happen, which is why I say that as much as hiring foreign workers is useful for employers, it’s also a major challenge. There are language and cultural barriers – the majority of those coming to Serbia have very limited language skills – and so there’s significant investment in this area as well. Some employers hire interpreters, and some even go so far as to hire language teachers for them,” Jevtović says.

When it comes to the structure of foreign workers in relation to the parts of the world they come from, and where most of them originate, she says the situation is quite diverse.

“Mostly Turks and Chinese. Though the Chinese, like the Russians, tend to have their own companies or are employed within them. So, the most numerous are the Chinese, Russians, Turks, and workers from Bangladesh – especially in the transport sector. There are also quite a few Cubans and Indians. As for the rest of Europe, their presence is negligible, practically a statistical error,” says Jevtović.

She notes that experiences with foreign workers are mostly positive.

“Generally, the experiences are good, because we’re talking about citizens of countries where their conditions are much worse than here – both in terms of workers’ rights and wages. Here, they’re often in roles where, alongside their salary, they’re also provided with accommodation and food. Employers simply have to find ways to attract someone to work for them and not switch to a competitor, which is why they usually offer such benefits – just to ensure someone will do the job,” she adds.

“Adaptation is an individual matter, at least based on the conversations we’ve had. Some want to learn the language, some aren’t interested, and most don’t speak English. That language barrier is usually the biggest challenge, and it causes difficulties for employers. As far as the work itself is concerned, they’re satisfied, because these are people who know what they’re doing – and those who don’t are willing to learn, knowing full well they won’t earn the same salary as a qualified tradesperson,” Jevtović points out.

Although, as she says, most foreign workers are generally satisfied with the conditions, there are things they don’t like.

“They do have complaints from a cultural point of view – for example, that there’s not enough on offer in Serbia when it comes to their own culture, such as places to listen to their music or eat in their own traditional restaurants. On the other hand, I haven’t received any reports of employers being dissatisfied with foreign workers – except, as already mentioned, that some work for a while and then leave, either disappearing from Serbia completely or switching to another employer – which is entirely legitimate, just as it would be for any of us,” concludes Jelena Jevtović of the Serbian Employers’ Union in an interview with Insajder.

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