InvestSlovenia

LABOUR MARKET

Internationally comparable strengths of Slovenia’s labour market:

High female labour force participation rates

Low labour force participation rate of those under 25 due to higher numbers staying on in education

Competitive value-added per labour costs ratio

The labour force participation rate (working-age population as a % of the civilian population) in Slovenia is above the EU average. The breakdown of the labour force shows that Slovenia’s female labour force participation is among the highest in Europe.

Labor Force Participation Rate, 2000

Source: OECD (2001), Statistical Office of the Republic of Slovenia (2001)

Low labour force participation rates in the age group 15 to 24 years indicate an increasing enrolment rate of young people in educational institutions – investment in human capital through upper secondary and tertiary education. Which translates into an important asset for the future promising higher employability and professional mobility for the new generation.

Labor Force Participation Rate for the population aged 25–54, 2000

Source: OECD (2001); Statistical Office of the Republic of Slovenia (2001)

The surveys on the motivation of foreign investors in Slovenia show that it is rather quality and not low costs of labour that motivate foreign investors. As a location for foreign direct investment Slovenia offers a favourable value-added to the labour cost ratio.

Value-added per employee / labour cost per employee ratio, 1999

Note: FIE’s – foreign investment entities

Source: Eurostat (2000)

Productivity in manufacturing industry, 2002

Source: IMD, World Competitiveness Yearbook, IMD: World Competitiveness Yearbook (2003)

This was emphasized also in the OECD study about Slovenian FDI policy and climate. Its conclusion was that on average the Slovenian workforce is performing better than its EU counterparts, and foreign investors can expect to create much higher value-added per euro invested in the labour force.

Percentage Increase in Labor Productivity, 2000

Source: OECD (2001); Institute of Macroeconomic Analysis and Developement (2001)

Percentage Increase in Labor Productivity, forecast for 2002

Source: OECD (2001); Institute of Macroeconomic Analysis and Developement (2001)

The unemployment rate (ILO standard) is lower than the EU average and slightly above the average of OECD countries. The main challenge for the future is to reduce the structural disparities of the labour market, as reflected in a high % of low-skilled job seekers and older unemployed people.

The unionisation rate is at the EU average, while the % of workers under the collective bargaining agreements is very high. Current labour legislation already permits most types of flexible employment used in the EU. The new Employment Relationship Act, which entered into force in 2003, is a significant step towards flexibility of the Slovenian labour market.