A Stopover or the end of the road - How attractive is the Western Balkans to Foreign Workers?

Over the past few years, the Western Balkan countries have faced a significant outflow of the working-age population, and in the absence of local labor, many companies are turning to importing workers from abroad. Although research shows that the region is becoming increasingly expensive for foreign workers, their numbers continue to grow year by year. Experts from Belgrade, Tirana, Skopje, and Pristina discuss with Kosovo Online the conditions under which these workers operate, the countries they most frequently come from, and whether the region represents an opportunity or just a stopover for them.

According to the latest research by the American consulting firm Mercers, the most expensive city in the region for foreign workers is Tirana, which has moved from 153rd place last year to 100th place this year.

Belgrade ranked 159th this year on the list of the most expensive cities for foreign workers. Last year, it was in 175th place, indicating a significant increase in the cost of living in the Serbian capital. For this list, Mercers analyzed the prices of apartment rentals, eggs, olive oil, services in hair salons, fuel prices, and the cost of coffee in restaurants.

One of the cheapest cities in the region for foreign workers is Skopje, which has moved up two positions from 200th place this year.

Mercer's report states that rising housing costs and "volatile inflation trends" are pressuring companies to adjust the compensation packages they offer to workers from other countries. This means that companies need to invest more to offset living costs and maintain competitive salaries for their international employees, reports Bloomberg.

Experts from the region we spoke to say that despite everything, the surrounding countries are recording an increase in the number of foreign workers year after year. According to Cedanka Andric, president of the United Branch Trade Unions "Independence" (UGS Nezavisnost), Belgrade doubled that number in 2023.

"According to data from the Ministry of Labor, 50,000 work permits were issued last year, compared to 25,000 the previous year. So, that number has doubled. From what we have seen, the largest number of foreign workers who received permits were from Russia, around 20,000. Following them are Chinese workers – about 10,000, Turkish workers – around 5,000, and then workers from Bangladesh and India, which are smaller numbers, around 1,500 people each," she told Kosovo Online.

The reasons they chose Serbia vary.

"A number of them, for example from Russia, came because of the war in Ukraine – either to bypass Western sanctions on business or because they opposed the regime in Russia and decided to come here. Some are 'IT nomads' who can work from anywhere, and obviously, Serbia suits them. On the other hand, Chinese workers exclusively work in Chinese companies, which have now expanded their businesses here. Turkish workers are engaged in some short-term projects. Among them are both highly qualified and manual laborers," she emphasizes.

When it comes to workers with lower qualifications, they are mainly people from India, Bangladesh, and Pakistan.

"They are mostly engaged in construction projects here, but there are more and more of them in services, in hospitality, so it is quite diverse," she explains.

When asked if Belgrade is expensive for foreign workers, she explains that it depends on the type of work they do.

"That Belgrade has become more expensive can be confirmed by domestic workers and all of us who live in Belgrade. It all depends on how you came. Are you an engineer in a factory with a good salary who can afford an expensive apartment in Belgrade, or are you a construction worker housed in some collective center, often in inadequate conditions. So, it all depends on how qualified you are and how serious the company you came with is," says Andric.

The duration of foreign workers' stay in Serbia also depends on their qualifications and earnings.

"Foreigners who work in better-paid, more qualified jobs often bring their families, their children attend school here, and they can afford Belgrade, which is getting more expensive not year by year but month by month," explains the president of UGS Nezavisnost.

On the other hand, workers with low wages cannot afford an apartment in Belgrade and live in collective accommodation and stay for much shorter periods.

"They work for three or six months, then the next shift comes, and they rotate, unlike those in factories that are opening or engineers who come. They stay for four or five years and bring family members. So it all depends on their financial status and their position here," says Andric.

A similar situation exists in Tirana, which is considered the most expensive city in the region for foreign workers. Klevis Hisa, director of the State Employment and Skills Agency, says that the number of foreign workers in Albania has increased over the last two years because, in addition to living costs, wages are also rising.

"According to the latest statistical data from 2024, about 12,000 foreigners work in Albania. About 70 percent of them come from European countries, the USA, and Canada. We have practically seen an increase in this number. More foreign employees come from Italy, which is the largest number of registered foreigners in Albania. Then they come from Turkey, Kosovo, the Philippines, and India, while other countries have fewer registered foreign workers," he says.

He explains that the jobs are mainly in management but also include low-skilled workers in the textile, clothing, construction, hospitality, and tourism industries.

"The salaries of foreign professionals are equal to those of Albanian employees. They start from the minimum wage for unskilled workers and go up to the highest wages. We also have self-employed foreigners who are registered in Albania," explains Hisa.

He adds that working conditions depend on the agreement between the employer and the employee, so there are various cases.

"In some cases, the worker finds and pays for accommodation themselves. There are many more cases where the contract between the parties includes finding a rental apartment or larger space. This happens in companies or industries with a large number of registered foreign employees, so the employer provides accommodation and food while they work here," says Hisa.

He notes that residence permits for foreign workers are issued for six months to a year, but foreigners are staying longer in Albania "as a result of improved working conditions, increased wages, and all the opportunities created for quality employment."

Hisa does not see the research showing that Tirana is the most expensive city in the region for foreign workers as a real problem because, as he says, in most cases, employers provide accommodation, so it does not increase the costs for employees.

"So far, the trend is positive, wages are increasing, and this is reflected in the increase in costs. This is determined by the agreement between the employer and the employee and represents a self-regulating process," says the director of the State Employment and Skills Agency.

Contrary to Albania, which addresses high costs by increasing wages, Kosovo has the cheapest labor force in the region. However, Agim Sahini, president of the Kosovo Business Alliance, highlights the low cost of living as an advantage for foreign workers.

"Kosovo still has the cheapest labor force and there is a constant search for new workers, but wages have started to increase in the private sector, which is good because it discourages workers from leaving Kosovo. Additionally, in Kosovo, one can live better with a decent salary than in some other countries in the Balkans, because not everything has become more expensive. You can still eat as much as you want for two euros and have coffee for less than 50 cents, which you can't find in other countries," Sahini told Kosovo Online.

He points out the poor standard of living as a problem and notes that according to UNDP statistics, poverty is still rising in Kosovo.

"Citizens still want to leave Kosovo because they don't have good salaries or decent jobs, as the government of Kosovo lacks a strategy to combat poverty," he adds.

He mentions that foreign workers come to Kosovo from all over – Albania, Macedonia, Turkey, Bulgaria, and even the European Union.

"Recently, most workers have started coming from India and Bangladesh. They use Kosovo as a transit point, and according to our data, more than 5,000 foreign workers came here last year," he says.

The jobs they do vary, he explains, from construction, service industries, and gastronomy, especially kitchen work, and they generally have the same conditions as local workers, except for one category.

"When it comes to experts coming from abroad, they demand better conditions, better salaries, apartments... so they have better conditions than our workers," says Sahini.

He notes that foreigners mostly come alone, without families.

"If we look at workers coming from India, Bangladesh, the Philippines... more than 50% intend to go to Europe. They come because Kosovo has obtained visa liberalization and with the intention that, after a few years, when they get a Kosovar passport, they will move somewhere else," says Sahini.

Skopje is identified as the cheapest city in the region for foreign workers in Mercer's research, but Slobodan Trendafilov, president of the Federation of Trade Unions of North Macedonia, disagrees.

"The cost of living in Macedonia is really high and even domestic workers cannot survive on their wages. If you come to Skopje, you will earn a minimum wage of 367 euros, while in Tirana the minimum wage is 386 euros. The cost of living in Macedonia increased by 13% last year, indicating that Macedonian citizens have much less income in their family budgets. Unfortunately, the import of foreign labor is becoming more common in Macedonia, but as has been said many times, foreign workers who come to the country from Turkey and Nepal mostly use Macedonia as a stopover and then move on to a European country. Just a week ago, workers from Nepal left Skopje in an unknown direction from the company that brought and employed them," he told Kosovo Online.

He adds that employers in Macedonia believe that foreign workers will work for the minimum wage and be satisfied because, in addition to higher incomes than in their home countries, they are provided with accommodation, transportation, and food. On the other hand, last year 12,500 construction workers and highly qualified personnel left North Macedonia.

"As a union, we are concerned that Macedonian companies believe that the future of compensating for skilled labor in the country lies in importing labor, rather than retaining domestic skilled workers by increasing wages," he says.

He notes that most workers in Skopje come from Turkey and work in the construction sector.

"Most of them are not even registered. Last year we had accidents with fatal outcomes. Overtime work is not recorded or paid according to Macedonian legislation," he says.

After the Turks, workers from Nepal are increasingly coming to North Macedonia, and employers have a special problem with them.

"They stay in Macedonia for one to two weeks, recharge their energy, and then leave for a Western European country, as can be read from the Ministry of Interior's bulletin. They head in an unknown direction, although in this case, everyone knows they are going to Germany," he notes.

He says his union does not believe these workers will meet the labor market needs and replace domestic labor.

"You have to provide them with opportunities to get an education and additional qualifications in Macedonia, provide them with food, you need to provide them with a translator or they need to learn the Macedonian language to perform work tasks and receive orders from employers. We are concerned that despite these negative examples that have happened to employers, they insist they will retain these workers in the country. They can't retain Macedonian workers, let alone workers coming from third countries," he says.