The number of agencies for temporary employment and mediation in the employment of foreign workers has increased by several hundred since the annual quota for the employment of foreign nationals was abolished at the start of 2021, and most of the agencies have made a significant profit in several years.

Until now, we have not seen such a quick recovery from the crisis, which was precisely what opened up the labour market to foreign workers, said economist Damir Novotny, speaking about the large increase in the number of foreign workers.

According to the latest data from the Ministry of the Interior (MUP), from 1 January to 30 November 2023, a total of 160,464 residence and work permits were issued, most of which in construction (63,632), followed by tourism and catering (43,951), industry (22,249), traffic and connections (10,456), and trade (4,647).

From January to November 2023, the Croatian Employment Service (HZZ) processed 160,445 applications for residence and work permits for foreign workers, and 190,696 applications were submitted.

For comparison, until 2022, the number of residence and work permits issued to foreign workers was under 100,000, and only in 2022, the number rose to 124,121 issued permits.

Of the total number of issued residence and work permits, 104,432 permits were issued for new employment, 37,402 were extensions, and 18,630 were for seasonal workers, of which the majority were in the tourism and catering industry – 16,675.

Number of employment and recruitment agencies rising

According to data from the Ministry of the Interior, workers continue to arrive from neighbouring countries, and last year in the period from 1 January to 30 November, 36,012 permits were issued for workers from Bosnia and Herzegovina, 22,980 from Serbia, 13,412 from North Macedonia, 9,922 from Kosovo, and 4,244 for workers from Albania.

The president of the Independent Croatian Trade Unions (NHS), Krešimir Sever, said that the only advantage Croatia had over the rest of the European Union (EU) for traditional foreign workers, such as Bosnian, Herzegovinian and Serbian citizens, is only language.

Earnings are higher in Germany, but proximity and knowledge of the language mean a lot, said Sever.

While Croats and traditional foreign workers leave Croatia, approximately 53,204 residence and work permits were issued for workers from the Middle East, of which 20,900 were issued to workers from Nepal, 14,317 from India and 7,822 from Bangladesh.

The abolition of quotas for the employment of foreign workers, which entered into force on 1 January 2021, created a greater influx of foreign workers.

Proof is in the records of the Ministry of Labour, Pension System, Family and Social Policy, wherein 2018, 109 employment mediation agencies and 187 agencies for temporary employment were registered, and this number is growing every year.

Thus, in 2019, 170 employment mediation agencies were recorded, in 2020 there were 216 of them, and then in the year when the quota for the employment of foreign workers was abolished, the number of agencies rose to 291. Already the following year, there were 424 mediation agencies, and last year 566 employment mediation agencies were registered.

The number of temporary employment agencies has also increased – in 2018 there were 187, the following year 255, and in 2020 the number jumped to 311.

In contrast to employment mediation agencies, the number of temporary employment agencies fell to 292 in 2021, but the following year the number jumped to 448, and in 2023 to 657.

Unregulated profit

The agencies are supervised by the State Inspectorate, which reports that the inspections carried out in 2023 found no violations of the relevant provisions, which stipulate that the activities related to employment mediation are to be performed without compensation and impartially in relation to job seekers and employers.

Although the agencies are supervised by the inspectorate, the profit itself is not regulated, and Novotny says that there is a lot of cooperation between Croatian and foreign agencies.

Sever says that it is not uncommon for workers to get into debt in their home countries in order to get to Croatia in the first place, and the money they earn in Croatia is sent to their home countries to pay off the debt.

We contacted several agencies, but none of them wanted to discuss the topics of bringing foreign workers or fees. Even foreign workers were not in the mood to talk about their experiences with agencies.