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Zagreb, April 2007

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Publisher:Croatian Employment Service, Zagreb, Radnička cesta 1Phone: 00385 1 61 26 000Fax: 00385 1 61 26 038E-mail – Editorial Staff: marica.baric@hzz.hrWebsite: http://www.hzz.hr

On Behalf of the Publisher:Ankica Paun JarallahActing Director General of the Croatian Employment Service

Editor:Marica Barić

English Translation:Abis d.o.o., Zagreb

Graphic Design and Print:Znanje d.d., Zagreb

Circulation: 200 copies

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Content

Main Responsibilities of the Croatian Employment Service

Organization and Employees

Financing of the Croatian Employment Service

IT Support to the Functioning of the CES

International Relations

Organization and Activities of the CES:

Economy and Labour Force

Unemployment

Labour Force Demand and Employment

Vocational Guidance and Selection

Annual Employment Incentive Plan 2006

Benefits from Unemployment Status

Projects Supported by the International Community

51

53

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GEOGRAPHICAL DISTRIBUTION OF REGIONAL AND LOCAL OFFICES OF THE CROATIAN EMPLOYMENT SERVICE BY COUNTIES

County Regional Office Local Office

I.Zagreb CountyCity of Zagreb

Zagreb

SesveteDugo SeloIvanić-GradJastrebarskoSamobor

Velika GoricaVrbovecSveti Ivan ZelinaZaprešić

II. Krapina-Zagorje County KrapinaDonja StubicaKlanjecZabok

ZlatarPregrada

III. Sisak-Moslavina CountySisak

PetrinjaDvorGlinaGvozd

Hrvatska KostajnicaSunjaTopusko

Kutina Novska

IV. Karlovac County KarlovacDuga ResaOgulinOzalj

SlunjVojnić

V. Varaždin County Varaždin CesticaIvanec

LudbregNovi Marof

VI. Koprivnica-Križevci County Križevci Ðurđevac Koprivnica

VII. Bjelovar- Bilogora County Bjelovar ČazmaDaruvar

GarešnicaGrubišno Polje

VIII. Primorje-Gorski Kotar County Rijeka

Cres-LošinjCrikvenicaČabarDelnice

KrkOpatijaRabVrbovsko

IX. Lika-Senj County GospićDonji LapacNovaljaOtočac

SenjKorenica

X. Virovitica-Podravina County Virovitica OrahovicaSlatina Pitomača

XI. Požega-Slavonia County Požega Pakrac

XII. Brod-Posavina County Slavonski Brod Nova Gradiška Okučani

XIII. Zadar County Zadar BenkovacBiogradGračac

ObrovacPag

XIV. Osijek-Baranja County OsijekBeli ManastirDonji MiholjacÐakovo

NašiceValpovo

XV. Šibenik-Knin County Šibenik Drniš Knin

XVI. Vukovar-Srijem CountyVukovarVinkovci

IlokŽupanja

XVII. Split-Dalmatia County Split

SupetarHvarImotskiMakarskaOmišSinj

TrogirVisVrgoracKaštelaSolinTrilj

XVIII. Istria County PulaUmagBuzetLabin

PazinPorečRovinj

XIX. Dubrovnik-Neretva County Dubrovnik Korčula-LastovoMetković Ploče

XX. Međimurje County Čakovec Mursko Središće Prelog

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Map of Regional and Local Offices of the Croatian Employment Service by Counties

Croatian Employment Service

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Economy and Labour Force

Basic Economic Trends

In 2006, Croatia’s gross domestic product (GDP) increased by 4.8 per cent in real terms in comparison with 2005. The GDP growth oscillated throughout the year. The biggest growth was recorded at the beginning of the year (6.0 per cent in the first quarter), it significantly slowed down in the second quarter (to 3.6 per cent), only to intensify once again in the second part of the year producing an increase of 4.7 per cent in the third and 4.8 per cent in the fourth quarter. The realized cumulative annual GDP growth in 2006 increased in relative terms by 0.5 percentage points in comparison with the year before, when the growth rate equaled 4.3 per cent.

The GDP growth is a result of positive trends in most segments of the Croatian economy, i.e. industrial production, construction, transport and tourism, and a relatively low consumer price growth rate. Such an economic growth has induced positive changes in the labour market so that, in the past few years, a continuous increase in employment as well as a decline in registered unemployment and unemployment rate have been recorded.

Basic Economic Indicators for 2005 and 2006, Growth Rates (per cent)

2005 2006

Gross Domestic Product 4.3 4.8

Physical Volume of Industrial Production 5.1 4.5

Physical Volume of Construction Works -0.8 9.3

Real Retail Trade Turnover 2.8 2.1

Tourist Overnights 7.6 3.1

Exports – Total (HRK) 8.5 15.6

Imports – Total (HRK) 10.4 13.3

Consumer Price Indices 3.3 3.2

Real Net Salary 1.5 1.9

Total Number of Employed Persons 0.8 3.3

Total Number of Unemployed Persons -0.4 -5.5

Registered Unemployment Rate 17.9 16.6

Survey-based Unemployment Rate, HY1 13.1 11.8

Source: Central Bureau of Statistics

In 2006, a relatively high growth of 4.5 per cent was recorded in the field of industrial production, although somewhat slower (by 0.6 percentage points) compared to 2005. Industrial production encompasses three fields from the National Classification of Economic Activities: manufacturing industry, electricity, gas and

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water supply, and mining and excavation. The increase in the total production is primarily a result of the increase (of 4.5 per cent) recorded in the manufacturing industry, since it accounts for the largest share in the total production, but also of the increase in other two fields, namely mining and excavation (10.3 per cent) and energy supply (1.6 per cent).

After last year’s slowdown in the field of construction activities caused by the reduction of State investments in transport infrastructure, these activities were intensified in 2006. Relatively high growth rates were realized throughout the year when compared to the year before. Consequently, the realized cumulative annual growth of 9.3 per cent in the field of construction works contributed greatly to the total economic growth.

The total retail trade turnover realized by legal entities engaged in the mentioned activity increased in 2006 by 4.8 per cent in nominal terms in comparison with 2005, while the increase of retail trade turnover in real terms amounted to 2.1 per cent.

The positive trend in tourism was continued, moving significantly slower compared to the year before. More precisely, the number of arrivals increased by 3.9 per cent and the number of tourist overnights increased by 3.1 per cent in comparison with 2005. At the same time, a significantly faster growth was recorded in the number of domestic arrivals and overnights (12.9 and 10.1 per cent respectively) compared to arrivals and overnights by foreign tourists (2.3 per cent). However, foreign tourists still accounted for the largest share in both the number of arrivals (83.4 per cent) and the number of overnights (88.7 per cent).

According to the temporary data, total annual exports in foreign trade exchange increased by 15.6 per cent in 2006, whereas total imports increased by 13.3 per cent in the same period. Due to a relatively higher growth rate of exports in comparison with imports, the coverage of imports by exports increased from 47.3 per cent in 2005 to 48.3 per cent in 2006.

The annual nominal growth of average net salary equaled 5.2 per cent in 2006 (0.7 percentage points less than in 2005), while the real net salary growth rate was realized at a 1.9 per cent annual growth rate, down by 1.8 percentage points compared to 2005.

The annual inflation rate, measured on the basis of the consumer price index, equaled 3.2 per cent in 2006, down by 0.1 percentage points in comparison with the year before.

Labour Force in Croatia

Registered Employment and Unemployment, 2006 Annual Average

According to the data from the Central Bureau of Statistics based on administrative sources, in 2006 the level of total active population in Croatia increased (by 30,180 or 1.7 per cent) as a result of the increase in the number of employed persons (by 47,302 or 3.3 per cent) and a simultaneous decline in the number of unemployed persons (by 17,122 or 5.5 per cent).

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Active Population Based on Administrative Sources (Annual Average for 2005 and 2006)

2005 2006 Index

Active Population 1,729,312 1,759,492 101.7

Employed Persons 1,420,574 1,467,876 103.3

- Employed in legal entities 1,113,208 1,160,321 104.2

- Employed in craft businesses and free professions 258,332 262,690 101.7

- Insured farmers 49,034 44,865 91.5

Unemployed Persons 308,738 291,616 94.5

Registered Unemployment Rate 17.9 16.6

Izvor: Državni zavod za statistiku RH

The annual registered unemployment average amounted to 1,467,876 in 2006, which is an increase of 47,302

persons or 3.3 per cent in comparison with 2005. The majority of employed persons were employed in legal

entities – 1,160,321 or 79.0 per cent (by 4.2 per cent more than in 2005), then in craft businesses and free

professions – 262,690 or 17.9 per cent (by 1.7 per cent more than in 2005), whereas there were 44,865 or 3.1

per cent insured farmers (by 8.5 per cent less than in 2005).

According to the National Classification of Economic Activities, the largest number of employed persons was

recorded in the manufacturing industry (291,886 or 19.9 per cent), trade and repair of motor vehicles and

household items (251,155 or 17.1 per cent). In comparison with the year before, the number of employed

persons increased almost in all fields of economic activity (except in the household and energy supply fields).

The greatest increase was recorded in trade (by 10,328 persons or 4.3 per cent), construction (by 10,085

persons or 8.4 per cent), real estate and business services (by 9,079 persons or 10.1 per cent), hotel and

restaurant business (by 5.237 persons or 6.5 per cent), and the manufacturing industry (by 5.229 persons or

1.8 per cent), see Appendix 1, p. 13.

In terms of economic sectors (agricultural, non-agricultural and service), the structure of employed persons in

2006 showed that 63.2 per cent employed persons worked in service activities, 31.2 per cent in non-agricultural

and 5.4 per cent in agricultural activities. In comparison with 2005, an increase in the share of service (of 0.4

percentage points) and non-agricultural activities (of 0.1 percentage points) was recorded, whereas the share of

agricultural activities declined (by 0.5 percentage points).

The average annual level of registered unemployment decreased in 2006 by 17,122 persons or 5.5 per cent, i.e.

from 308,738 registered persons in 2005 to 291,616 in 2006.

Unemployment Rate Based on Administrative Sources

Under the influence of the reduced number of unemployed persons and the simultaneous significant increase in

the number of employed persons, the average annual registered unemployment rate in the Republic of Croatia

fell from 17.9 per cent in 2005 to 16.6 per cent in 2006 (according to the Central Bureau of Statistics).

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There are significant differences in the unemployment rate at the regional level, i.e. by counties. In December of 2006, the average unemployment rate at the State level amounted to 16.0 per cent. The unemployment rate was lower than the average State-level rate in eight, and higher in thirteen counties.

The lowest unemployment rate was recorded in the Istria County (7.0 per cent) and the City of Zagreb (7.2 per cent), followed by the counties of Primorje-Gorski Kotar (12.0 per cent), Varaždin (12.9 per cent), Krapina-Zagorje (13.9 per cent) etc. The highest unemployment rate was recorded in the counties of Vukovar-Srijem (30.6 per cent), Virovitica-Podravina (29.1 per cent) and Sisak-Moslavina (29.1 per cent). Compared to the year before, the unemployment rate declined in all counties, primarily in the counties of Šibenik-Knin (2.9 percentage points), Dubrovnik-Neretva (2.3 percentage points), Zadar (1.6 percentage points), Primorje-Gorski Kotar (1.4 percentage points) and Split-Dalmatia (1.4 percentage points).

In order to calculate the unemployment rate by counties, the data on insured persons registered with the Croatian Pension Insurance Institute (as registered employed persons) and the data on unemployed persons registered with the Croatian Employment Service were used.

Employment and Unemployment According to the Labour Force Survey in HY1 2006

The Labour Force Survey is carried out by the Central Bureau of Statistics in accordance with the methodological rules and principles of the International Labour Organization (ILO) and the Statistical Office of the European Communities (Eurostat). This source of data is therefore internationally comparable. The survey is carried out on a monthly basis, whereas the results are announced on a half-yearly basis.

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According to the Labour Force Survey, in the first half of 2006 Croatia’s active population amounted to 1,755,000, which is by 47,000 or 2.6 per cent less than in the same period the year before. As a result, the activity rate, i.e. the share of labour force in working-age population, also fell from 49.9 to 48.3 per cent.

Active Population (Labour Force) According to the Labour Force Survey,(Half-Yearly Results for 2005 and 2006)

2005/I 2005/II 2006/IIndex

2006I/2005I

Active Population 1,802,000 1,802,000 1,755,000 97.4

Employed Persons 1,566,000 1,580,000 1,548,000 98.9

Unemployed Persons 236,000 222,000 206,000 87.3

Survey-based Unemployment Rate 13.1 12.3 11.8 -

Survey-based Unemployment Rate

The reduction in total active population was a result of the simultaneous reduction in employed and unemployed population. More precisely, the number of employed persons decreased by 18,000 or 1.1 per cent (from 1,566,000 to 1,548,000), whereas the number of unemployed persons decreased by 30,000 persons (from 236,000 to 206,000), having a significantly higher relative rate of decline of 12.7 per cent. The unemployment rate equaled 42.6 per cent according to the ILO criteria (15+) and 54.2 per cent according to the Eurostat criteria (15-64).

Unemployment Rate According to the Labour Force Survey

Despite of the simultaneous reduction in employment and unemployment, i.e. total active population, the relatively higher rate of decline in unemployment resulted in a decline in the unemployment rate, from 13.1 per cent in HY1 2005 to 11.8 per cent in the same period of 2006 (by 1.3 percentage points).

In terms of gender, the unemployment rate declined both in the case of women (from 13.9 to 13.5 per cent) and men (from 12.4 to 10.3 per cent) in the observed period.

Comparison of Data Based on Administrative Sources and the Labour Force Survey

Administrative statistical sources are based on the data about registered employed and unemployed persons from the statistical records of relevant institutions in the labour market. They measure the activity of the population according to their formal status, while the Labour Force Survey measures the economic activity of the population according to the real status, in accordance with the methodological rules and principles of the International Labour Organization.

The following graph shows the comparison of the structure of active population based on administrative sources and the Labour Force Survey for two comparable periods, i.e. HY1 of 2005 and 2006.

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1.566

1.394

1.548

1.451

0

200

400

600

800

1.000

1.200

1.400

1.600

1.800

2.000

Labour Force Survey

AdministrativeSources

Labour Force Survey

AdministrativeSources

2005/I 2006/I

Comparable Indicators of the Structure of Active Population

Employed Unemployed

236 206301319

1,566

1,394

1,548

1,451

236 206 301319

The results of the Labour Force Survey regularly show a significantly larger number of employed and smaller number of unemployed persons in comparison to the administrative sources.

An especially significant difference is seen in terms of the unemployment rate, which was 17.2 per cent in the first half of 2006 according to the administrative sources, and 11.8 per cent according to the Labour Force Survey. The average number of unemployed persons according to the survey was by 95,000 persons less than the number found in the administrative records of the Croatian Employment Service. The causes are as follows: from the total number of registered unemployed persons, 127,000 or 42.2 per cent did not meet the international unemployment criteria since they were inactive (they did not look for work or they could not accept an offered one) or were considered employed since they said in the survey that they worked. It should also be noted that, according to the survey, 32,000 or 15.5 per cent of the unemployed were not registered with the Croatian Employment Service.

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Appendix 1

Number of Employed Persons by Activities (in accordance with the National Classification of Activities) for the period from January to December 2006 and Comparison with the Same Period of 2005

ActivityTOTAL Legal Entities Craft Business and

Free Professions

Number per cent2006/2005

IndexNumber

2006/2005 Index

Number2006/2005

Index

Agriculture, hunting and forestry

30, 239 2.1 100.6 26,149 98.2 4,090 119.4

Fishing 4,477 0.3 100.4 1,527 100.1 2,950 100.6

Individual farming 44,865 3.1 91.5 - - - -

Agricultural Activities 79,581 5.4 95.3 27,676 98.3 7,040 110.7

Mining and excavation 8,844 0.6 103.8 8,489 103.2 355 121.9

Manufacturing industry 291,886 19.9 101.8 248,397 102.1 43,489 100.5

Electricity, gas and water supply 27,214 1.9 99.8 27,214 99.8 0 -

Construction 130,375 8.9 108.4 93,297 109.7 37,078 105.1

Non-agricultural Activities 458,319 31.2 103.5 377,397 103.7 80,922 102.7

Trade, repair of motor ve-hicles and household items 251,155 17.1 104.3 201,973 106.0 49,182 97.7

Hotels and restaurants 85,981 5.9 106.5 45,000 111.0 40,981 101.9

Transport, storage and communications 98,388 6.7 101.9 81,155 102.2 17,233 100.8

Financial intermediation 34,888 2.4 106.1 33,300 106.2 1,588 105.2

Real estate, renting and business services 98,560 6.7 110.1 76,132 112.1 22,428 104.1

Public administration, defense, compulsory social insurance

105,293 7.2 100.2 105,067 100.0 226 2200.8

Education 94,615 6.4 102.9 94,169 102.9 446 108.0

Healthcare and social welfare 88,838 6.1 102.2 76,287 102.1 12,551 102.5

Other community, social and personal service activities 59,384 4.0 104.3 42,165 105.2 17,219 102.2

Household activities 10,013 0.7 94.0 0 - 10,013 94.0

Extraterritorial organizations and bodies 0 0 - 0 - 0 -

Service Activities 927,113 63.2 103.9 755,248 104.7 171,865 100.6

Unclassified 2,863 0.2 123.6 0 - 2,863 123.6

TOTAL 1,467,876 100.0 103.3 1,160,321 104.2 262,690 101.7

Source: Central Bureau of Statistics, Zagreb, Statements No. 9.2.6, 2006 and 2007

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During 2006, the number of unemployed persons in the records of the Croatian Employment Service

followed the usual seasonal pattern. At the beginning of the year unemployment was high with a slow

downward trend. It was falling significantly until the middle of summer, only to increase significantly from the

end of the summer season until the end of the year. Therefore, the largest number of unemployed persons

was recorded in January (314,166), and the smallest in June (270,753).

In December 2006, the number of unemployed persons in the records of the Croatian Employment Service

was 293,153, 4.8 per cent less than in the same month the year before. Generally speaking, the number of

unemployed persons in 2006 was smaller than in 2005, as that can be seen from the following graph.

The number of unemployed persons at the end of 2006 was smaller than the number of unemployed persons

at the end of the previous year due to the fact that in 2006 the number of newly registered persons (233,163)

in the unemployed persons register was smaller than the number of those deleted from the register (of which

149,460 persons were removed on account of finding employment and 98,401 for other reasons).

Unemployment Structure and Trends By Gender, Age and Educational Background

The average number of unemployed persons declined from 308,738 in 2005 to 291,616 in 2006, a decrease

of 5.5 per cent in comparison with the year before. The percentage decrease in unemployment was greater in

the case of men (8.9 per cent), than in the case of women (3.2 per cent). Therefore, the share of men in the total

number of unemployed persons also declined, whereas the share of women rose from 58.6 to 60.0 per cent.

Unemployment

Number of Unemployed Persons in 2005 and 2006

2006

2005

260

270

280

290

300

310

320

330

340

I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII.

Month

Num

ber

of P

eopl

e (t

hous

ands

)

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Average Number of Unemployed Persons by Gender in 2005 and 2006

Total Men Women

2005 308,738 127,942 180,796

Structure 100.0 41.4 58.6

2006 291,616 116,519 175,097

Structure 100.0 40.0 60.0

2006/2005 Index 94.5 91.1 96.8

In terms of age, the average number of unemployed persons decreased in all age groups except in the oldest that includes persons of 50 and over in the case of which unemployment rose by 5.4 per cent. Consequently, their share in the total number of unemployed persons also rose, reaching almost one quarter (24.5 per cent). The most significant decrease was recorded in the age group from 35-39 (11.8 per cent), and the one from 20-24 years of age (10.2 per cent).

Average Number of Unemployed Persons by Age in 2005 and 2006

Age2005 2006 Indeks

2006/2005Number per cent Number per cent

15 - 19 17,220 5.6 16,023 5.5 93.0

20 - 24 45,140 14.6 40,558 13.9 89.8

25 - 29 39,309 12.7 36,649 12.6 93.2

30 - 34 32,988 10.7 30,297 10.4 91.8

35 - 39 33,719 10.9 29,753 10.2 88.2

40 - 44 33,983 11.0 31,457 10.8 92.6

45 - 49 38,489 12.5 35,326 12.1 91.8

50 and over 67,890 22.0 71,553 24.5 105.4

TOTAL 308,738 100.0 291,616 100.0 94.5

As far as the structure of unemployed persons by educational background is concerned, the average number

of unemployed persons declined across all educational levels except for the average number of unemployed

persons with a non-university degree. The reason lies in the significantly greater number of the newly registered

unemployed persons with the above-mentioned educaltional level than last year. The average number of

unemployed persons with completed three-year secondary school fell by 11.3 per cent, due to a significantly

smaller number of newly registered persons.

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Average Number of Unemployed Persons by Educational Level and Gender in 2005 and 2006

Total

No schooling and

uncompleted basic school

Basic school

1 to 3-year vocational secondary

school

4 (or more)-year vocational secondary school and grammer

school

Non-university degree

University level and

postgraduate degrees

2005 308,738 19.679 71.240 120.930 75.867 9.001 12.021

Structure 100.0 6.4 23.1 39.2 24.6 2.9 3.9

2006 291,616 19,311 69,775 107,293 74,234 9,195 11,808

Structure 100.0 6.6 23.9 36.8 25.5 3.2 4.0

2006/2005 Index 94.5 98.1 97.9 88.7 97.8 102.2 98.2

Women 2005 180,796 10,594 42,793 62,026 52,065 5,794 7,524

Structure 100.0 5.9 23.7 34.3 28.8 3.2 4.2

Women 2006 175,097 10,503 42,907 56,622 51,469 6,095 7,501

Structure 100.0 6.0 24.5 32.3 29.4 3.5 4.3

2006/2005 Index 96.8 99.1 100.3 91.3 98.9 105.2 99.7

Unemployment Trends and Structure by Activity Related to Previous Employment

If we exclude from the total number of unemployed persons those persons who had previously been employed,

their structure can be observed by the activity they had been engaged in during previous employment. The

number of such persons recorded at the end of 2006 was 227,567, down by 4.5 per cent compared to the end

of the previous year. So, the total number of unemployed persons that had been previously employed declined

over the observed period.

Significant differences in the number of unemployed persons who had been previously employed appear if we

classify those persons according to the activity they had been engaged in during previous employment. In that

way, for example, the greatest percentage increase in the number of unemployed persons was recorded among

persons who had been previously engaged in groups of activities related to real estate, renting and business

services (11.3 per cent). From larger groups in the case of which the number of unemployed persons declined,

we should mention the group of unemployed persons who had previously worked in the manufacturing industry,

since that is the largest one. The number of unemployed persons in this group fell by 8.2 per cent. A reduction was

also recorded in the construction industry (8.7 per cent) as well as in the case of unemployed persons who had

previously worked in trade (4.8 per cent). As we can see, unemployment fell in the case of activities accounting

for the largest share with respect to the total number of unemployed persons. The only exception is hotel and

restaurant industry in which a slight increase in unemployment was recorded.

The mentioned changes in the number of unemployed persons according to the activity they had been engaged in

during previous employment did not however produce a significant change in the structure of the total number of

unemployed persons. The share of unemployed persons who had been previously employed in the manufacturing

industry fell a little, however it remained over one quarter, while the share of unemployed persons who had previously

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worked in trade remained over one fifth. Finally, it is interesting that the third largest share included the group of

unemployed persons who had been previously employed in hotel and restaurant industry, which is obviously a

consequence of the fact that the analysis was made at the end of the year, i.e. outside the tourist season.

Unemployed Persons According to Activity Related to Previous Employment (Dec. 31, 2005 and 2006)

Activity2005 2006 2006/2005

IndexNumber Share Number Share

Agriculture, hunting and forestry 12,001 5.0 10,542 4.6 87.8

Fishing 513 0.2 540 0.2 105.3

Mining and excavation 653 0.3 627 0.3 96.0

Manufacturing industry 61,196 25.7 56,152 24.7 91.8

Electricity, gas and water supply 915 0.4 927 0.4 101.3

Construction industry 20,483 8.6 18,705 8.2 91.3

Wholesale and retail trade; repair of motor vehicles and personal and household items 49,008 20.6 46,646 20.5 95.2

Hotels and restaurants 30,529 12.8 31,183 13.7 102.1

Transportation, storage and communications 9,498 4.0 8,985 3.9 94.6

Financial intermediation 2,238 0.9 2,134 0.9 95.4

Real estate, renting and business services 11,619 4.9 12,933 5.7 111.3

Public administration, defense, compulsory social insurance 4,834 2.0 4,485 2.0 92.8

Education 4,696 2.0 4,456 2.0 94.9

Healthcare and social welfare 4,561 1.9 4,380 1.9 96.0

Other community, social and personal service activities 13,160 5.5 12,479 5.5 94.8

Household activities 12,104 5.1 12,208 5.4 100.9

Extraterritorial organizations and bodies 205 0.1 185 0.1 90.2

Extraterritorial organizations and bodies 238,213 100.0 227,567 100.0 95.5

Unemployment Structure and Trends by Counties

As it has been previously mentioned, the average number of unemployed persons fell by 5.5 per cent in

2006 in comparison with the number of unemployed persons in 2005. Although we can see obvious decline

in unemployment in all counties, the unemployment analysis showed that there were significant differences

in the level of decrease of unemployment among counties. The most significant percentage decrease of

average unemployment was recorded in the counties of Šibenik-Knin (11.4 per cent), Varaždin (10.3 per

cent) and Primorje-Gorski Kotar (7.7 per cent). The change in the number of unemployed persons was the

smallest in the case of the counties of Istria (0.9 per cent) and Lika-Senj (0.4 per cent).

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The Split-Dalmatia County had the largest number of unemployed persons in 2006, followed by the City of Zagreb and the Osijek-Baranja County. Except for the change in the top of the table, the structure of unemployment by counties did not significantly change.

Average Number of Unemployed Persons by Counties in 2005 and 2006

County2005 2006 2006/2005

IndexNumber Share Number Share

Zagreb 13,662 4.4 13,045 4.5 95.5

Krapina-Zagorje 6,155 2.0 5,692 2.0 92.5

Sisak-Moslavina 18,644 6.0 17,718 6.1 95.0

Karlovac 13,600 4.4 12,968 4.4 95.4

Varaždin 10,271 3.3 9,218 3.2 89.7

Koprivnica-Križevci 8,069 2.6 7,534 2.6 93.4

Bjelovar-Bilogora 11,922 3.9 11,834 4.1 99.3

Primorje-Gorski Kotar 17,575 5.7 16,220 5.6 92.3

Primorje-Gorski Kotar 3,650 1.2 3,637 1.2 99.6

Virovitica-Podravina 9,822 3.2 9,484 3.3 96.6

Virovitica-Podravina 5,458 1.8 5,332 1.8 97.7

Brod-Posavina 15,911 5.2 15,339 5.3 96.4

Zadar 11,288 3.7 10,716 3.7 94.9

Osijek-Baranja 32,120 10.4 30,176 10.3 93.9

Šibenik-Knin 9,936 3.2 8,806 3.0 88.6

Vukovar-Srijem 19,610 6.4 18,477 6.3 94.2

Split-Dalmatia 39,317 12.7 37,475 12.9 95.3

Istria 6,374 2.1 6,317 2.2 99.1

Dubrovnik-Neretva 7,855 2.5 7,473 2.6 95.1

Međimurje 7,221 2.3 6,786 2.3 94.0

City of Zagreb 40,278 13.0 37,369 12.8 92.8

TOTAL 308,738 100.0 291,616 100.0 94.5

In terms of gender, the greatest share of women in the total number of unemployed persons at the end of 2006 was recorded in the counties of Istria (65.5 per cent), Primorje-Gorski Kotar (64.1 per cent) and Međimurje (63.8 per cent). In the first two counties mentioned, this number reflects the significant volume of seasonal employment of women. The smallest share of women was recorded in the counties of Bjelovar-Bilogora (55.1 per cent), Varaždin (57.5 per cent) and Vukovar-Srijem (57.5 per cent). The largest number of young unemployed persons was recorded in the counties of Međimurje (29.6 per cent), Koprivnica-Križevci (27.3 per cent) and Varaždin (26.3 per cent). Finally, the greatest number of highly qualified unemployed

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persons (with secondary, non-university or university degree) was recorded in the counties of Dubrovnik-Neretva (81.6 per cent), Split-Dalmatia (79.7 per cent) and Primorje-Gorski Kotar (77.4 per cent)..

Structure of Unemployed Persons by Counties (as of Dec. 31, 2006)

County TotalWomen Persons up to 24

years of age Qualified persons

Number Share Number Share Number Share

Zagreb 12,870 8,094 62.9 2,672 20.8 9,185 71.4

Krapina-Zagorje 5,480 3,330 60.8 1,282 23.4 3,637 66.4

Sisak-Moslavina 17,050 9,905 58.1 3,636 21.3 9,648 56.6

Karlovac 12,851 7,935 61.7 2,170 16.9 7,313 56.9

Varaždin 8,800 5,062 57.5 2,313 26.3 5,952 67.6

Koprivnica-Križevci 7,417 4,280 57.7 2,026 27.3 4,187 56.5

Bjelovar-Bilogora 11,886 6,549 55.1 3,024 25.4 7,256 61.0

Primorje-Gorski Kotar 16,899 10,832 64.1 3,059 18.1 13,084 77.4

Primorje-Gorski Kotar 3,832 2,156 56.3 695 18.1 2,575 67.2

Virovitica-Podravina 9,421 5,482 58.2 2,398 25.5 5,530 58.7

Virovitica-Podravina 5,477 3,240 59.2 1,406 25.7 3,745 68.4

Brod-Posavina 15,311 9,580 62.6 3,466 22.6 9,970 65.1

Zadar 11,898 7,384 62.1 1,589 13.4 8,200 68.9

Osijek-Baranja 29,767 18,077 60.7 6,936 23.3 20,461 68.7

Šibenik-Knin 9,122 5,288 58.0 1,648 18.1 6,263 68.7

Vukovar-Srijem 18,280 10,520 57.5 4,318 23.6 12,449 68.1

Split-Dalmatia 38,836 24,329 62.6 7,609 19.6 30,934 79.7

Istria 7,232 4,737 65.5 1,063 14.7 4,924 68.1

Dubrovnik-Neretva 8,400 5,079 60.5 1,291 15.4 6,855 81.6

Međimurje 6,563 4,188 63.8 1,942 29.6 3,721 56.7

City of Zagreb 35,761 21,602 60.4 7,937 22.2 27,527 77.0

TOTAL 293,153 177,649 60.6 62,480 21.3 203,416 69.4

Unemployment Structure and Trends Related to Croatian War Veterans

At the end of 2006, the Croatian Employment Service records included 23,964 unemployed Croatian war veterans, a decrease of 9.0 per cent in comparison with the end of the previous year. From that number, more than 43.0 per cent were skilled and highly skilled workers or persons with three-year secondary school. The share of unemployment benefit recipients in the total number of unemployed war veterans amounted to as little as 0.2 per cent. In terms of their age structure, more than 40 per cent of unemployed Croatian war veterans were between 40 and 49.

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Unemployment Structure and Trends by Duration and Particular Features

Registered unemployed persons can be classified according to the duration of their unemployment. At the end of 2006, among the registered unemployed persons there were 43.5 per cent persons who had been waiting for employment up to 1 year (short-term unemployment), whereas 56.5 per cent of unemployed persons had been waiting for employment for more than 1 year. 33.5 per cent on the other hand had been waiting for more than 3 years. Compared to 2005, the share of short-term unemployed persons increased, whereas the share of long-term unemployed persons decreased (by 1.5 percentage points).

Unemployed Persons by Duration of Unemployment (Dec. 31, 2005 and 2006)

Duration of Unemployment

2005 2006 2006/2005 IndexNumber Share Number Share

Up to 3 months 56,680 18.4 57,535 19.6 101.5

From 3-6 months 35,500 11.5 38,791 13.2 109.3

From 6-9 months 18,252 5.9 15,446 5.3 84.6

From 9-12 months 19,005 6.2 15,729 5.4 82.8

From 1-2 years 49,554 16.1 40,486 13.8 81.7

From 2-3 years 29,771 9.7 27,066 9.2 90.9

More than 3 years 99,089 32.2 98,100 33.5 99.0

TOTAL 307,851 100.0 293,153 100.0 95.2

As far as duration of unemployment by gender is concerned, the share of unemployed persons who had been waiting for employment for up to 1 year in the total number of unemployed men was 53.8 per cent, and in the total number of unemployed women 58.2 per cent. Therefore, the share of long-term unemployed persons in the total number of unemployed persons was somewhat greater in the case of women than in the case of men.

Unemployed Persons by Duration of Unemployment and Gender(as of Dec. 31, 2006)

Duration of Unemployment Total Men Share Women Share

Up to 3 months 57,535 24,868 21.5 32,667 18.4

From 3-6 months 38,791 16,083 13.9 22,708 12.8

From 6-9 months 15,446 6,150 5.3 9,296 5.2

From 9-12 months 15,729 6,219 5.4 9,510 5.4

From 1-2 years 40,486 15,339 13.3 25,147 14.2

From 2-3 years 27,066 9,908 8.6 17,158 9.7

More than 3 years 98,100 36,937 32.0 61,163 34.4

TOTAL 293,153 115,504 100.0 177,649 100.0

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It can be noticed that the duration of unemployment falls with the increase of educational level. The share of long-term unemployed persons (over 1 year) in the total number of the unemployed with no education or uncompleted primary school was 75.7 per cent, whereas the same share was significantly smaller in the case of the total number of unemployed persons with primary school education, equaling 64.9 per cent. The share of long-term unemployed persons was even smaller in the case of persons with secondary school education (55.8 and 48.7 per cent) and in the case of persons with non-university or university degreee (46.5 and 40.6 per cent). It can therefore be concluded that the level of education has a significant influence on the duration of unemployment.

Unemployed Persons by Duration of Unemployment and Educational Level(as of Dec. 31, 2006)

Duration of Unemployment

Total

No schooling and

uncompleted basic school

Basic school

1 to 3-year vocational secondary

school

4 (or more) - year

vocational secondary school and grammer

school

Non-university

degree

Non-university

degree

Up to 3 months 56,680 1,736 10,692 22,247 16,518 2,163 3,324

From 3-6 months 35,500 912 5,996 14,633 10,978 1,219 1,762

From 6-9 months 18,252 656 3,846 7,064 4,938 684 1,064

From 9-12 months 19,005 818 4,392 6,979 5,250 657 909

From 1-2 years 49,554 2,616 10,619 20,125 12,997 1,414 1,783

From 2-3 years 29,771 2,241 8,278 10,741 6,887 776 848

More than 3 years 99,089 10,522 28,087 35.891 19,760 2,276 2,553

TOTAL 307,851 19,501 71,910 117,680 77,328 9,189 12,243

Structure of Unemployed Persons by Duration of Unemployment and Educational Level(as of Dec. 31, 2006)

Duration of Unemployment

Total

No schooling and

uncompleted basic school

Basic school

1 to 3-year vocational secondary

school

4 (or more) - year

vocational secondary school and grammer

school

Non-university

degree

Non-university

degree

Up to 3 months 19.6 10.0 16.0 20.1 22.6 24.8 29.4

From 3-6 months 13.2 6.2 9.3 13.8 17.2 14.7 15.7

From 6-9 months 5.3 3.6 4.5 5.3 5.8 7.2 7.5

From 9-12 months 5.4 4.6 5.3 5.0 5.7 6.9 6.8

From 1-2 years 13.8 11.1 13.8 13.6 14.7 14.6 13.6

From 2-3 years 9.2 10.0 9.6 9.7 8.6 7.8 6.8

More than 3 years 33.5 54.5 41.4 32.4 25.5 24.1 20.2

TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Short-term Unemployment 43.5 24.3 35.1 44.2 51.3 53.5 59.4

Long-term Unemployment 56.5 75.7 64.9 55.8 48.7 46.5 40.6

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Labour Force Demand and Employment

Registered Job Vacancies

During 2006, the volume of registered demand for workers at the Croatian Employment Service increased significantly (by 19,948 or 18.0 per cent). Employers registered a total of 130,517 job vacancies with the Service.

According to the National Classification of Economic Activities, the greatest number of registered job vacancies came from the manufacturing (28,993 or 22.2 per cent), wholesale and retail trade (23,715 or 18.2 per cent), hotel and restaurant (18,343 or 14.1 per cent), construction (15,100 or 11.6 per cent), and real estate industries (13,324 or 10.2 per cent). In comparison with the year before, the greatest increase in the demand for workers was recorded in the manufacturing industry (by 6,096), real estate, renting and business services (5,682), as well as trade (4,084). The number of wanted workers significantly decreased only in the field of education (by 2,779), agriculture, hunting and forestry (by 1,100) and financial intermediation (by 338), see Appendix 2, p.25.

According to the regional organization, the greatest number of vacancies was registered in the City of Zagreb (22,344 or 17.1 per cent) and the smallest in the Lika-Senj County (1,285 or 0.9 per cent). Compared to the year before, the volume of registered demand for workers increased in eighteen counties, and decreased in three, i.e. the counties of Požega-Slavonia (by 680 persons), Lika-Senj (by 341 persons) and Osijek-Baranja (by 214). The greatest increase was recorded in the City of Zagreb (by 5,372 persons) and the counties of Primorje-Gorski Kotar (by 3,558 persons), Vukovar-Srijem (by 1,655 persons) and Zagreb (by 1,538 persons), see Appendix 3, p.26.

During 2006, employers mostly looked for workers engaged in elementary occupations such as cleaners, couri-ers, transport workers, workers without occupation and similar (31,770 or 24.3 per cent), up by 29.7 per cent in comparison with the year before. Furthermore, employers looked for workers engaged in service and trade occupations (30,952 or 23.7 per cent), as well as for workers engaged in craft business and individual production (25,536 or 19.6 per cent), up by 25.5 and 26.2 per cent respectively in comparison with 2005.

Registered Job Vacancies by Groups of Occupations (in accordance with the National Classification of Occupations) in 2005 and 2006

Group of Occupations 2005 per cent 2006 per cent Index

(1) Legislators, senior officials and managers 125 0.1 178 0.1 142.4

(2) Professionals 12,968 11.7 10,758 8.2 83.0

(3) Technicians and associate professionals 11,588 10.5 12,986 10 112.1

(4) Clerks 7,761 7.0 8,388 6.4 108.1

(5) Service workers and shop and market sales workers 24,666 22.3 30,952 23.7 125.5

(6) Skilled agricultural and fishery workers 546 0.5 750 0.6 137.4

(7) Craft and related trades workers 20,231 18.3 25,536 19.6 126.2

(8) Plant and machine operators and assemblers 8,182 7.4 9,199 7.1 112.4

(9) Elementary occupations 24,502 22.2 31,770 24.3 129.7

Total 110,569 100.0 130,517 100.0 118.0

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Employment of Persons from the Croatian Employment Service Register

During 2006, a total of 149,460 persons from the records of the Croatian Employment Service were employed, up

by 8,570 persons or 6.1 per cent compared to 2005. From the total number of employed persons, 84,016 persons

were women, with a share in the total employment of 56.2 per cent, compared to 54.8 per cent in 2005.

• Educational Level and Groups of Occupations – the greatest part of registered employment refers to persons with secondary school education, including persons who have finished three-year vocational secondary school or school for skilled and highly skilled workers (60,388 or 40.4 per cent) and persons who have finished either vocational or general four-year secondary school (43,666 or 29.2 per cent), followed by persons who have finished primary school (15.8 per cent), university or academy (7.5 per cent), non-university education (5.3 per cent), and persons with no education or with uncompleted primary school education (1.8 per cent). In comparison with the year before, registered employment increased in all educational groups, primarily in the group of persons with uncompleted primary school education (26.5 per cent) and those with non-university degree (18.3 per cent).

Employed Persons from the Croatian Employment Service Records in 2005 and 2006 by Educational Level

Godina Year TOTAL

No schooling and

uncompleted basic school

Basic school

1 to 3-year vocational secondary

school

4 (or more)-year vocational secondary school and grammer

school

Non-university

degree

University level and

postgraduate degrees

2005 140,890 2,167 21,366 60,181 40,140 6,703 10,333

Structure 100.0 1.5 15.2 42.7 28.5 4.8 7.3

2006 149,460 2,741 23,546 60,388 43,666 7,929 11,190

Structure 100.0 1.8 15.8 40.4 29.2 5.3 7.5

2006/2005 Index 112.1 126.5 110.2 100.3 108.8 118.3 108.3

What follows is the account of shares of groups of occupations (in accordance with the National Classification of Occupations) in the total registered employment:

• Service workers and shop and market sales workers (37,320 or 25.0 per cent),• Elementary occupations (34,123 or 22.8 per cent),• Craft and related trades workers (21.187 or 14.2 per cent),• Technicians and associate professionals (18,990 or 12.7 per cent),• Clerks (16,857 or 11.3 per cent),• Plant and machine operators and assemblers (9,966 or 6.7 per cent),• Professionals (9,788 or 6.5 per cent),• Skilled agricultural and fishery workers (1,100 or 0.7 per cent),• Legislators, senior officials and managers (98 or 0.07 per cent),• Armed forces (31 or 0.02 per cent).

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• Work Experience – out of the total number of employed persons, 118,362 (79.2 per cent) had prior work experience, whereas 31,098 persons (20.8 per cent) were employed for the first time. In comparison with the year before, the share of employed persons without prior working experience increased by 0.3 percentage points, whereas the share of employed persons with prior work experience decreased.

• Duration of Employment - 127,022 persons (85.0 per cent) were temporarily employed, whereas 22,438 persons (15.0 per cent) were permanently employed. Compared to 2005, the share of permanent employment increased, and the share of temporary employment decreased (by 0.6 percentage points).

• Activity - it is a common thing that the register of unemployed persons with prior working experience primarily includes persons from the manufacturing industry, trade, hotel and restaurant business, and that these four areas of activity are also the ones in which most persons are consequently employed. In 2006, the number of employed persons was as follows:

• Wholesale and retail trade: 33,200 persons or 21.5 per cent,• Manufacturing industry: 27,904 persons or 18.7 per cent,• Hotel and restaurant industry: 22,228 persons or 14.9 per cent,• Construction industry: 14,305 persons or 9.6 per cent.

Compared to the year before, registered employment increased in all areas of activity. The largest growth of employed persons in absolute terms was recorded in real estate and renting activities (3,986 persons or 40.7 per cent), wholesale and retail trade (1,862 persons or 6.1 per cent) and the manufacturing industry (1,706 persons or 6.5 per cent), while a decrease in employment was recorded in agriculture, hunting and forestry (by 993 persons or 12.6 per cent), household activities (by 240 persons or 9.7 per cent) and financial intermediation (by 195 persons or 12.3 per cent).

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Appendix 2

Registered Job Vacancies and Employed Persons from the Croatian Employment Service Register by Sectors of Activity (in accordance with the National Classification of Economic Activities) in 2006

Sector of Activity

Registered Vacancies Persons

Number per cent

2006/2005 Index Number per

cent2006/2005

Index

Agriculture, hunting and forestry 4,105 3.1 78.9 6,451 4.3 87.4

Fishing 213 0.1 173.2 289 0.2 109.5

Excavation 295 0.2 143.9 372 0.3 99.7

Mining and Excavation 28,993 22.2 126.6 27,904 18.7 106.5

Electricity, gas and water supply 462 0.4 122.9 646 0.4 101.4

Construction 15,100 11.6 126.0 14,305 9.6 100.7

Wholesale and retail trade: repair of motor vehicles and motorcycles, and personal and household items

23,715 18.2 120.8 32,200 21.5 106.1

Hotels and restaurants 18,343 14.1 116.2 22,228 14,9 103.2

Transportation, storage and

communications4,170 3.2 116.2 5,351 3.6 100.7

Financial intermediation 1,254 1.0 78.8 1,386 0.9 87.7

Real estate, renting and business services 13,324 10.2 174.4 13,777 9.2 140.7

Public administration, defense, compulsory social insurance 3,246 2.5 128.0 2,564 1.7 113.8

Education 7,320 5.6 72.5 8,492 5.7 111.2

Healthcare and social welfare 5,159 4.0 110.0 4,413 3.0 108.3

Other community, social and personal service activities 4,777 3.6 114.9 6,774 4.5 99.8

Household activities 37 0 77.1 2,225 1.5 90.3

Extraterritorial organizations and bodies 4 0 36.4 83,0 0 138.3

TOTAL 130,517 100.0 118.0 149,460 100.0 106.1

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Appendix 3

Registered Job Vacancies and Employed Persons from the Croatian Employment Service Records by Counties in 2006

County

Registered Vacancies Employed Persons from the CES Records

Number per cent

2006/2005 Index Number per

cent2006/2005

Index

Zagreb 6,367 4.9 131.8 6,650 4.4 101.8

Krapina-Zagorje 3,666 2.8 116.9 3,388 2.3 104.8

Sisak-Moslavina 5,091 3.9 101.9 7,536 5.0 105.9

Karlovac 3,390 2.6 115.1 5,132 3.4 102.8

Varaždin 7,152 5.5 122.4 6,681 4.5 100.7

Koprivnica-Križevci 5,163 4.0 119.4 3,966 2.7 111.8

Bjelovar-Bilogora 3,344 2.6 137.4 6,202 4.1 114.8

Primorje-Gorski Kotar 10,956 8.4 148.1 10,112 6.8 133.9

Primorje-Gorski Kotar 1,285 1.0 79.0 1,812 1.2 103.1

Virovitica-Podravina 2,856 2.2 128.0 5,099 3.4 118.3

Virovitica-Podravina 1,974 1.5 74.4 3,196 2.1 100.0

Brod-Posavina 2,832 2.2 115.1 5,905 4.0 103.0

Zadar 4,988 3.8 103.0 4,406 2.9 91.4

Osijek-Baranja 8,927 6.8 97.7 14,441 9.7 104.1

Šibenik-Knin 4,105 3.1 101.8 4,564 3.1 106.2

Vukovar-Srijem 5,952 4.6 138.5 9,397 6.3 110.2

Split-Dalmatia 9,252 7.1 112.5 17,691 11.8 107.0

Istria 9,785 7.5 114.8 6,077 4.1 96.7

Dubrovnik-Neretva 6,019 4.6 113.3 4,917 3.3 107.1

Međimurje 5,069 3.9 116.6 3,912 2.6 99.6

City of Zagreb 22,344 17.1 131.7 18,376 12.3 101.9

TOTAL 130,517 100.0 118.0 149,460 100.0 106.1

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Employment Rate by Educational Level and Occupation

The annual employment rate shows how many persons from the total number of unemployed persons who had looked for employment during the year actually found employment. In 2006 the employment rate equaled 27.6 per cent, which means that more than a quarter of persons who had looked for employment during the year actually found it.

Significant differences were recorded in the employment rate among groups of unemployed persons distinguished by educational level. In the case of persons with no education or with uncompleted primary school, the employment rate was 10.3 per cent, whereas it equaled 20.5 per cent in the case of persons who have completed primary school. In the case of persons who have completed a three-year vocational secondary school or school for skilled and highly skilled workers, the employment rate was 29.4 per cent, whereas in the case of persons with four-year secondary school education (vocational or general) it was 29.6 per cent. In the case of persons who have completed non-university education, the employment rate equaled 40.6 per cent, and in the case of persons who have completed university, academy, masters or doctoral studies the employment rate was 41.1 per cent. Therefore, the higher the educational level, the higher the employment rate.

Levels of Education:

A – no schooling, uncompleted basic school

B – basic school

C – 1 to 3-year vocational secondary school

D – 4 (or more)-year vocational secondary school and grammer school

E – non-university degree

F – university level and postgraduate degrees

Within the same educational groups there are quite large differences in the employment rate between persons of different occupations. The table shows twenty occupations with the highest and twenty with the lowest rate of employment within the most frequent groups at the secondary school level.

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Employment Rate by Occupation at the Secondary School Level

Occupation per cent Occupation per cent

Cook 48.9 Painter and finishing worker 18.3

Cook 48.7 Administrator / typist 18.2

Waiter 48.5 Manufacturer of leather products 18.1

Confectionery maker 45.4 Classic secondary school graduate 17.3

Engine fitter 45.1 Gardener 17.1

Electrical engineering technician 44.5 Tailor for mass-production of clothes 16.6

Salesperson 43.8 Chemical worker 15.9

Vehicle technician 43.2 Tailor 15.8

Construction machine operator 42.0 Typist 15.7

Sanitary technician 41.1 Assistant shoemaker 15.4

Ecology technician 41.0 Farmer / gardener 15.0

Chemical process technician 40.8 Textile goods salesman 14.7

Geology technician 40.7 Building security guard 14.4

Baker 40.6 Rubber manufacturer 14.2

Forest technician 40.5 Traveling salesman 13.9

Forest technician 40.4 Stenographer 12.7

IT technician 39.9 House and woodwork painter 12.6

Engine fitter 39.2 Typist 12.3

Pharmaceutical technician 39.2 Transport worker 11.7

Joiner 38.7 Administrative assistant 8.2

The following table shows ten occupations with the highest and ten with the lowest rate of employment at the level of non-university, university and postgraduate degree.

Employment Rate by Occupation at the Non-university, University and Postgraduate Degree Level

Occupation per cent Occupation per cent

M Sc in Pharmacy 71.8 Chemical Technology Engineer 27.8

Teacher 69.8 Traffic & Transport Engineer – Road 27.8

Biology and Chemistry Professor 61.4 Textile and Clothing Designer 26.8

Croatian Language and Literature Professor 59.6 Commercial Economist 26.7

Geography Professor 58.6 French Language Professor 26.7

General Education Professor 55.0 B Sc in Political Sciences 24.4

Preschool Education Professor 54.8 Textile & Chemical Technology Engineer 22.9

Graphic Technology Engineer 53.2 Marine Engineer 20.8

Construction 53.2 B Sc in Social Sciences 20.4

Construction 52.7 Navigation Expert 17.6

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Seasonal Employment in Tourism

Intermediation in seasonal employment in the tourism industry is one of the more significant activities of the CES. Continuing the practice pursued over the previous years, at the beginning of 2006 the CES organized regular regional meetings with the representatives of larger hotel and tourism companies for the purpose of reaching concrete agreements concerning the planning and meeting the demand for seasonal workers. The meetings were held in the counties of the Croatian coastal region, namely the counties of Istria, Primorje-Gorski Kotar, Zadar, Šibenik-Knin, Split-Dalmatia and Dubrovnik-Neretva, which were getting ready for the then upcoming tourist season.

According to the forecasts by employers from the field of tourism, the planned number of needed seasonal workers in 2006 was 16,848.

During the tourist season, a total of 15,347 workers were employed, mostly salespersons (1,870 persons or 12.2 per cent from the total number of unemployed persons), waiters (1,717 persons or 11.2 per cent), room maids (1,598 persons or 10.4 per cent), cooks (1,289 persons or 8.4 per cent), kitchen (980 persons or 6.4 per cent) and cleaning staff (968 persons or 6.3 per cent).

At county level, most seasonal workers in 2006 were employed in the counties of Split-Dalmatia (2,784 persons or 18.1 per cent), Dubrovnik-Neretva (1,700 persons or 11.1 per cent), Istria (1,661 persons or 10.8 per cent), Primorje-Gorski Kotar (1,616 or 10.5 per cent), Šibenik-Knin (1,255 or 8.2 per cent) and Zadar (807 or 5.3 per cent).

After the planning and selection of seasonal workers from the unemployed domicile population, the representatives of the companies conducted, in cooperation with CES Regional offices from the interior counties (Osijek, Bjelovar, Sisak, Vinkovci, etc.), informative interviews with candidates interested in seasonal employment and selected the most appropriate ones. Therefore, the largest number of such employment opportunities had been agreed beforehand, and the workers were referred to the agreed job positions as the need occurred.

Through the interregional mediation activities undertaken by CES Regional Offices from Croatia’s interior regions, the greatest number of seasonal workers was employed from the counties of Osijek-Baranja (1,136 persons), Vukovar-Srijem (830 persons), Bjelovar-Bilogora (632 persons), Sisak-Moslavina (520 persons) and Brod-Posavina (474 persons).

Interregional Mediation

By introducing an information system which allows the integration of employment mediation activities, the data on unemployed persons and jobseekers became available at the level of the entire CES. The mentioned data include information concerning unemployed person’s or jobseeker’s willingness to move for employment purposes, i.e. whether the person is willing to migrate daily or accept employment in other regions of the Republic of Croatia.

Interregional mediation is based on the employers’ notifications of job vacancy received in the place of the offered employment. If relevant Regional Office is not in the position to satisfy the request for worker(s), the request is then forwarded to the Central Office, the Placement and ALMP Department.

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In 2006, through interregional mediation activities, the Central Office received 969 requests from employers

looking for workers that could not be satisfied by the Local Offices at the regional level where they had first

been received, representing an increase by 274 requests compared to 2005.

Most requests were submitted in the Primorje-Gorski Kotar County (110 or 11.3 per cent), followed by the

counties of Krapina-Zagorje (95 or 9.8 per cent), Zagreb (80 or 8.3 per cent), Vukovar-Srijem (73 or 7.5 per

cent) and Istria (69 or 7.1 per cent).

From the total number of received requests, 54.6 per cent referred to permanent employment opportunities,

and 45.4 to temporary employment opportunities. On the basis of these requests, employment opportunities

were offered to 3,358 workers, which is by 1,642 (or 48.9 per cent) more compared to the year before. Most

of the interregional mediation requests came from the counties of Zagreb (23.0 per cent), Primorje-Gorski

Kotar (17.3 per cent), Istria (7.3 per cent) and Varaždin (5.8 per cent).

Employment of Unemployed Persons Abroad and their Return from Abroad

In 2006, the Croatian Employment Service mediated in employment of seasonal workers, medical technicians,

‘guest workers’ and students participating in summer practical training in the Federal Republic of Germany,

as well as in the employment of sailors on ships owned by international companies.

Through the mediation activities carried out by the CES, a total of 5,273 Croatian citizens were employed

abroad, which is by 390 more workers compared to the year before.

Number of Workers Employed Abroad in 2005 and 2006

Total Total Seasonal workers

Medical technicians

Guest workers Students Sailors on

foreign ships

2005 4,883 4,615 11 111 32 114

2006 5,273 5,013 12 103 31 114

2006/2005 Index 108.0 108.6 109.1 92.8 96.9 100.0

Employment is mainly seasonal in character. Most seasonal workers were employed in agricultural (3,668

persons or 73.2 per cent), and 1,345 (26.8 per cent) were employed in other activities (hotel and restaurant

business, entertainment).

Throughout the year, employers from the Federal Republic of Germany report their need for seasonal workers

to the Croatian Employment Service. A significant number of such workers have already worked for the same

employers during the previous years, but since German law allows only a four-month temporary working

visa they always returned home after the expiry of that period. If the German employers are satisfied with

the work performed by particular workers, they send the workers new employment agreements through the

Central Employment Intermediation Office in Bonn each year.

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These agreements (together with the description of work, salary amount and other terms of employment

offered and required by the employer) are received by CES Central Office. They are made out to a specific

unemployed person (first and last name, date of birth and address). We are referring to the so-called Name-

based Agreements, which are sent by the Central Office to the appropriate Regional Offices as per the place

of permanent residence of the specified unemployed person to be handled. The Regional Offices then call

the specified persons and hand them over the received agreements, after which the workers leave to work

as seasonal workers in the Federal Republic of Germany for the period specified in the agreement. If the

German employer does not specify the person by their very name, but only states certain requirements (such

as gender, special knowledge and age), the Central Office then organizes a selection of sought-after workers

and proposes their employment in consultation with the employer. Such offers by employers are anonymous.

The Croatian Employment Service checked the received ‘name-based agreements’ and returned those that

referred to persons residing outside of Croatia as ‘unrealized’.

In 2006, 5,725 offers were received, of which 5,013 (87.6 per cent) were realized and 712 were returned

marked ‘unrealized’. From the total number of received offers, 5,353 were name-based and 372 anonymous.

The share of name-based offers in the total number equaled 93.5 per cent, down by 4.6 percentage points

compared to the year before. Most of the seasonal workers were employed from the counties of Brod-Posavina,

Vukovar-Srijem and Osijek-Baranja. Most of the seasonal workers (3,067 or 61.2 per cent) were women.

Unemployed medical technicians were referred to work in the Federal Republic of Germany exclusively

through the Croatian Employment Service. In 2006, 12 medical technicians were so employed.

All activities concerned with the mediation in employment of sailors on foreign ships were carried out by the

Regional Offices in Rijeka and Split, onto which the CES transferred its mediation responsibilities in this matter. In

2006, a total of 114 sailors registered with the Croatian Employment Service were employed on foreign ships.

Employment of Croatian citizens abroad is restricted by a working visa that is issued by the foreign country for

a certain period of time.

On the basis of the Agreement on the Procedure of Employing Croatian Citizens in the Federal Republic of

Germany signed on April 20, 2005, the Croatian Employment Service handles the informing, selection and

referral of unemployed persons to work in Germany.

The Agreement between the Croatian Government and the Government of the Federal Republic of Germany

on the employment of workers for the purpose of improving their professional and language knowledge

(Agreement on Temporary Employment) concluded on September 13, 2002 (Official Gazette, International

Agreements 14/2002) envisages the possibility of employing 500 workers from the Republic of Croatia in the

Federal Republic of Germany (for the duration of up to 18 months). 103 workers were employed on the basis

of the said agreement in 2006.

The Central Employment Intermediation Office of the Federal Republic of Germany based in Bonn assigned

Croatia a quota of 30 students per year concerning the participation of regular students in summer practical

training programmes. In 2006, the CES mediated in the case of 31 regular students who went to participate

in summer practical training in the Federal Republic of Germany.

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Return of Workers from Temporary Employment Positions Abroad

During 2006, a total of 3,046 returnees from other countries registered with the Service, of which 1,349 were women. The following table shows the number of newly registered, employed and deleted returnees from the Croatian Employment Service register.

Returnees from Abroad in 2005 and 2006

Year 2005 2006 Index

Newly registered 2,910 3,046 104.7

Employed 1,921 1,977 102.9

Deleted due to other reasons 1,722 1,702 98.8

Unemployed persons at the end of the year(Dec. 31) - total

5,775 5,355 92.7

Unemployed persons at the end of the year(Dec. 31) - women

3,021 2,873 95.1

In 2006, 1,977 registered returnees were employed, and 1,702 persons were deleted from the register for reasons other than finding employment. At the end of the year, the register included 5,335 returnees (7.3 per cent less than at the end of 2005). The share of women (2,873 persons) in the number of returnees was 53.7 per cent. Most of the returnees had worked abroad for up to 1 year, i.e. they were mainly seasonal workers who had worked in Germany for the period of four months.

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Vocational Guidance and Selection

In 2006, the project called Adjustment of the CASCAID Vocational Guidance Programme, a new electronic instrument based on the self-assessment of interests, abilities and skills, was completed. This project was financed under the CARDS Programme and conducted in cooperation with the Ministry of Science, Education and Sports.

The programme called My Choice was introduced on January 1, 2007 in CES Regional and Local Offices. It is envisaged that the said programme also be introduced in primary and secondary schools. The programme is intended for a wide variety of users – students and adults. It is based on the principle of self-help and self-assessment. On the basis of a questionnaire filled out by the user, he or she gets advice concerning the most appropriate choice of occupation. The first version of the programme contains descriptions of 250 occupations prepared by vocational guidance counsellors working with the CES. Besides a detailed description of occupations, it also states the required knowledge, skills and desirable characteristics, working conditions, education, employment opportunities, and other sources of information (addresses, phone numbers, websites) in Croatia. Apart from the above-mentioned, the programme also contains information concerning the education system and services provided by the Croatian Employment Service. The counsellors have been trained in how to use the programme. The preparations for the printing of leaflets and manuals with descriptions of occupations have also been completed.

Throughout 2006, the CES applied the quality standards concerning vocational guidance services defined in the 2005 project financed by the European Commission under the CARDS Programme. An evaluation of services from the users’ point of view and further improvement of the standards are planned on the basis of one-year period of application.

Furthermore, the project of the European Training Foundation (ETF) called Review of Career Guidance Policies in the Western Balkans related to the evaluation of the present condition of vocational guidance system in Croatia was also completed. The implementation of the project was coordinated by the CES, Department of Vocational Guidance. On the basis of the OECD questionnaire and field visits, the ETF delivered an opinion to the Government of the Republic of Croatia containing recommendations for further improvement of the system. The CES was recognized as the key stakeholder in the field of systematic and organized provision of vocational guidance services in Croatia. Consequently, the representatives of the CES participated in international conferences and regional meetings the purpose of which was the implementation of agreed European guidelines in the field of vocational (career) guidance.

The representatives of the CES also participated in the ETF’s project related to the preparation of the national qualification framework. They also continuously participated in the programmes directed at improving education, i.e. CARDS 2002: Vocational Education and Training, especially in the drawing up of the draft act on vocational education. They also participated in the implementation of the CARDS 2003 Programme, as well as in the drafting of the Adult Education Law. Furthermore, the CES cooperated with the International Association for Educational and Vocational Guidance for the purpose of improving the quality of work and application of the recommended operational guidelines.

For the purpose of improving the skills of vocational guidance counsellors, various professional advancement

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activities were organized to enable the application of various psycho-diagnostic tools and methods for conducting a selection interview. Vocational guidance counsellors were active at the psychology conference, as well as other scientific and professional gatherings, especially in the field of human resources development.

The work on the improvement and replacement of psycho-diagnostic tools and the standardization of psychological tools was continued in cooperation with the Slap Publishing House and the Center for Psycho-diagnostic Tools of the Faculty of Philosophy in Zagreb.

Vocational Informing, Counseling and Selection – Activities Carried out in CES Regional Offices

Surveys on Vocational Intentions

Once a year the Croatian Employment Service carries out a Survey on Vocational Intentions of Pupuils and Secondary School Students, identifying in doing so the vocational intentions of pupils and students, the priority groups of students and their needs for informing and counseling services. In 2006, the CES interviewed a total of 59,862 students, of which the greatest number of students came from primary schools (37,710), and the rest from secondary schools (22,152).

Vocational Informing

CES Central and Regional Offices published in 2006 over 113,000 various written informative materials: brochures, leaflets and similar.

Over 40,080 persons used direct (verbal) vocational informing services provided by the CES, including pupils and secondary school students, unemployed persons and jobseekers, as well as associate experts. From that number, 22,887 persons were informed in groups (there were 962 group informing events), whereas 17,200 persons were individually informed. The total number of directly informed persons included mainly students (69 per cent), then unemployed persons and jobseekers (29 per cent), and associate experts (2 per cent).

Vocational Counselling

Vocational counselling encompasses prior identification of relevant characteristics of an individual through the use of

psycho-diagnostic tools, i.e. carrying out tests the purpose of which is to check the personality, interests, motivation

as well as physical and mental condition of the individual.

19,070 candidates, who had undergone testing of psychophysical condition, were individually counselled in 2006.

75 per cent of them were pupils and secondary school students, and 25 per cent were unemployed persons and

jobseekers. The greatest number of students, a total of 57 per cent, was counselled concerning their indecision

regarding the choice of school; 39 per cent were counselled in connection with medical, psychophysical and social

difficulties, and the rest (4 per cent) were counselled in connection with various other reasons (identification of

intellectual talent, counselling for the purpose of obtaining a scholarship etc.). The reasons for using counselling

services in the case of unemployed persons and jobseekers were mainly related to the drawing up of the so-called

‘business plan’ and referral to vocational training (about 55 per cent), as well as to disability and other factors of more

difficult employability (about 45 per cent).

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For the purpose of improving the competencies of unemployed persons that would allow them to find employment in an easier way, expert assistants working with the Vocational Guidance Department conduct workshops on “How to Look for Employment – Writing CVs and Cover Letters”, “How to Introduce Oneself to an Employer” and “Self-assessment”. In 2006, a total of 1,107 workshops were organized in which 7,603 persons participated.

Vocational Selection

In 2006, a total of 552 vocational selections were carried out, including 6,172 persons.

The vocational selection procedure includes testing of relevant abilities and personal characteristics of an individual, which are then compared to the competencies needed for performing a certain occupation. The CES carries out vocational selection and provides education/training activities for specific occupations. From the total number of vocational selections carried out, 60 per cent were carried out for the purpose of direct employment, and 40 per cent for the purpose of education. 182 selections for referral to educational activities (involving 2,455 persons) and 470 selections for direct employment (involving 3,717 persons) were carried out. From the total number of selections, 60 per cent were carried out for the public, and 40 for the private sector.

Besides services related to vocational selections, the work with employers also included 902 instances of providing informing and counselling services in regards to human resources.

Education of Unemployed Persons

During 2006, the Croatian Employment Service conducted various educational activities for the unemployed, such as vocational training, retraining and upgrading, as well as other educational activities aimed at enhancing the knowledge and skills of unemployed persons for the purpose of finding employment as well as employed persons for the purpose of keeping their employment.

These activities lasted mainly up to three, to the maximum of six months. They were conducted according to verified programmes that are entered under the list of qualifications in the employment record. Unemployed persons were directed to get training in occupations in short supply saught-after in the labour market, such as welders, bricklayers, carpenters, ceramists, lathe operators, computer operators, firefighters, security guards, nursing staff, bookkeepers, foreign language teachers for tourism, hotel and restaurant purposes, and similar.

A total of 1,819 persons were involved in educational activities for employment purposes in 2006. Out of that number, 675 persons (37 per cent) attended the programmes for the purpose of finding employment with unknown employers organized and financed exclusively by the CES; 985 persons (54 per cent) attended the programmes for the purpose of finding employment with unknown employers financed in the framework of local partnerships (joint financing and organization at the local level – cities, counties and the CES); 30 persons (2 per cent) attended programmes for the purpose of finding employment with known employers in the case of which the CES financed 80 per cent of the cost and the employer 20; and 129 persons (7 per cent) attended programmes financed under projects such as, Local Partnerships for Employment.

Educational activities carried out during 2006 referred to the following groups of occupations: basic use of computers – ECDL (878 persons), basic language knowledge (355 persons), hotel and restaurant business-

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related occupations (214 persons), construction-related occupations (121 persons), tailors (88 persons), business

planning and enterprise (91 persons), firefighters, keepers and security guards (49 persons), personal services (5

persons) and other occupations (18 persons).

Vocational Rehabilitation and Employment of Persons with Disabilities and Hard-to-place Persons

In December 2006, there were 5,892 unemployed persons with disabilities in the Croatian Employment

Service register. In 2006, 1,211 such persons were employed. Persons with disabilities are often employed in

smaller (family) companies i.e. craft businesses and workshops. In accordance with the existing legal regulations,

persons with disabilities participate in all business processes conducted by the Croatian Employment Service.

Under to the Act on Vocational Rehabilitation and Employment of Persons with Disabilities (Official Gazette

No. 143/02, 33/05) and the Order on the Establishment of the Fund for Vocational Rehabilitation and

Employment of Persons with Disabilities of July 17, 2003, the Croatian Employment Service is responsible

for handling the technical and administrative activities of the Fund. On the basis of the Decision on the

Manner of Obtaining the Incentive for Employing Persons with Disabilities, we received in 2006 160 requests

from employers for the reimbursement of funds for compulsory contributions for medical insurance and

employment paid, and 777 persons with disabilities were involved in this type of promotion of employment,

self-employment and keeping employment. For the purpose of better informing employers and unemployed

persons with disabilities, informative leaflets were created containing information about the possibilities of

co-financing of education and employment of persons with disabilities. The Croatian Employment Service’s

website was also expanded to include information about the employment opportunities of the mentioned

group, as well as the existing legal regulations in the field of rehabilitation and employment, and activities of

the CES in the said field.

Apart from the above-mentioned, the representatives of the Department of Vocational Rehabilitation and

Employment of Persons with Disabilities participated in numerous international gatherings and conferences

organized for the purpose of exchanging positive experiences and knowledge in the field of rehabilitation and

employment of persons with disabilities. Also, together with mediation counsellors who work with persons

with disabilities, they participated in workshops, round tables and meetings organized by the associations of

persons with disabilities and organizations that tend to the needs of persons with disabilities at the local and

regional levels.

At the end of 2006, we started working on the preparation of the National Strategy for Equal Opportunities

of Persons with Disabilities. The holder of the project is the Commission for Persons with Disabilities of the

Government of the Republic of Croatia, whereas representatives of the CES, Department of Vocational

Rehabilitation and Employment of Persons with Disabilities, will be coordinating the task group responsible

for drafting the goals and activities in the field of vocational rehabilitation and employment of persons with

disabilities in the period from 2007 to 2015.

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Annual Employment Incentive Plan 2006

The Government of the Republic of Croatia adopted the Annual Employment Incentive Plan 2006 adjusted to the guidelines of the European Employment Strategy. The Annual Plan includes various measures to promote, i.e. co-finance employment, education and self-employment. The competent ministries participated in the implementation of these measures, namely the Ministry of the Economy, Labour and Entrepreneurship, Ministry of the Family, Veterans’ Affairs and Intergenerational Solidarity, Ministry of the Sea, Tourism, Transport and Development, Ministry of Health and Social Welfare, Ministry of Science, Education and Sports, and the Croatian Employment Service.

The measures the Croatian Employment Service was responsible for were targeted to employment and education of long-term unemployed persons, young persons with no working experience, older persons, persons with lower level of educational background, i.e. persons who stopped their schooling for the purpose of acquiring additional knowledge and skills needed in the labour market. Furthermore, some of the operational measures referred to the promotion of integration and fight against the discrimination of persons with an unfavorable position in the labour market (e.g. persons with disabilities, hard-to-place, unemployed single parents of underage children and similar) through co-financing of employment and participation in public work programmes carried out by local self-government units. Finally, under the Annual Employment Incentive Plan, the Croatian Employment Service also carried out measures related to the preparation for employment and self-employment, as well as to the co-financing of employment of unemployed persons of Roma nationality, in accordance with the National Programme for the Roma and the Action Plan Decade of Roma Inclusion 2005-2015.

Here is a short list of individual measures including target groups, duration of subvention and amounts of support granted to employers included in the realization of the mentioned measured.

Measure No. 1 Co-financing of employment of young persons with no working experience – includes persons of up to 29 years of age without any working experience.

Duration of co-financing: 18 months for persons with no occupation; 12 months for persons with secondary, non-university and university education.

Measure No. 2 – Co-financing of employment of long-term unemployed persons – includes persons who have been listed in the unemployment register for at least 12 from the last 16 months, i.e. at least 6 from the last 8 months in the case of persons under 25 years of age, regardless of the years of service and educational level.

Duration of co-financing: 15 months in the case of persons with no occupation, 12 months in the case of persons with secondary education and 10 months in the case of persons with non-uniersity and university education.

Measure No. 3 – Co-financing of employment of women over 45 and men over 50 years of age – includes persons registered with the Croatian Employment Service for longer than 6 months or persons who had been laid off as a surplus of employees, i.e. who are working the period of notice due to the surplus of employees.

Duration of co-financing: 18 months.

Measure No. 4 – Co-financing of employment of special groups of unemployed persons – includes hard-to-place, unemployed single parents of underage children, unemployed women who had been using their maternity leave benefits for third and each following child prior to termination of employment, unemployed Croatian war veterans, children and spouses of killed and missing Croatian war veterans etc.

Duration of co-financing: 18 months.

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The amount of subvention for Measures No. 1-4 was determined using the bases prescribed under the Order on Bases for the Calculation of Compulsory Insurance Contributions for 2006 (Official Gazette No. 139/2005), as follows:

• For persons with no occupation – HRK 2,085.75;• For persons with vocational occupations and secondary school education – HRK 3,864.25;• For persons with non-university and university education – HRK 5,945.00.

The amount of subvention, determined on the basis of the said bases, differed with respect to the size of the employer as follows:

• 50 per cent - small employers,• 40 per cent - medium-sized employers,• 10 per cent - large employers.

Measure No. 5 – Improvement of knowledge and skills for the purpose of finding employment with known employers and co-financing of education for the purpose of finding employment with unknown employers – was directed at co-financing the improvement of knowledge and skills of unemployed persons from the unemployment records and employed persons for the purpose of keeping employment. It was carried out through general advancement activities (occupational training) and specialized advancement activities (acquisition of additional occupation-oriented knowledge and skills).

Measure No. 6 – Public works – was directed at affirmation of social inclusion and mitigation of social consequences of unemployment through socially beneficial work organized in cooperation of local self-government units and their institutions with non-government organizations.

This programme includes older long-term unemployed persons (women over 45 and men over 50), long-term unemployed young persons who did not pursue schooling after primary school or did not finish their secondary school education and are without occupation, long-term unemployed persons receiving unemployment compensation, users of rights under the Law on Social Welfare, female victims of abuse, victims of people trafficking, asylum seekers, treated addicts, former convicts, and parents of 4 and more underage children.

Measures under the National Programme for the Roma and the Action Plan Decade of Roma Inclusion 2005-2015 - Chapter X called Employment verifies the measures referring to the preparation for employment and self-employment as well as to the co-financing of self-employment of unemployed Roma as an integral part of the Annual Employment Incentive Plan for 2006 as follows:

• Training and employment in all economic activities;• Inclusion of the Roma in employment preparation programmes, assessment of the remaining working ability;• Creating a positive climate among employers for employing the Roma;• Ensuring support for self-employment;• Participation in public work programmes (The Roma for the Roma and The Roma for the Local Community);• Education and development of a network for gathering secondary raw materials for recycling;• Co-financing of employment (in the duration of 24 months).

The goal of these measures was to improve the employability of long-term unemployed Roma, with an emphasis on their social inclusion, and to affirm their social inclusion and mitigate social consequences of unemployment of the Roma through socially beneficial work in the framework of The Roma for the Roma and The Roma for the Local Community Programmes.

Implementation Results

Since the start of the implementation process of the measures from the scope of responsibility of the Croatian Employment Service, i.e. from March 23 until December 31, 2006, 3,870 requests were received. From this

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number, 3,140 requests were approved and 3,127 agreements were signed concerning the allocation of support for employment and education, financing of education of unemployed persons, and co-financing of employment in public work programmes.

4,869 persons from the unemployment register participated in these measures (out of which 2,211 were women or 45.5 per cent). 3,996 were employed, while 873 participated in educational programmes. A total of 93,728,388.61 kuna was allocated for the implementation of the mentioned measures in 2006.

According to the number of requests received, the employers showed greatest interest in the measures related to the co-financing of employment (Measures No. 1-4), i.e. the State support for employment. 3,608 requests were received (or 93.2 per cent of the total number of all requests received), and a total of 3,109 persons from the unemployment register were employed (or 63.9 per cent of all persons covered).

Measure No.1 Co-financing of employment of young persons with no working experience – the planned number of persons that were to be included in 2006 was 1,036, whereas the implementation results show that a total of 1,024 persons were employed, out of which 470 were women (or 45.9 per cent). The share in the total employment under the measures prescribed by the Annual Employment Incentives Plan was 25.6 per cent.

In the process of planning, priority was given to persons with no occupation and persons of vocational occupations searching for employment with small and medium-sized employers. The implementation results show that through the implementation of Measure No. 1 persons who were most frequently employed included persons with secondary, non-university and university education, employed by small and medium-sized employers.

20,218,412.00 kuna (50 per cent for small, 40 per cent for medium-sized and 10 per cent for large employers) were planned for the implementation of this measure however, based on the financial obligations assumed, 26,090,145.87 kuna were actually spent.

Measure No. 2 – Co-financing of employment of long-term unemployed persons – the intention was to include 995 persons under this measure. The results show that 1,238 persons were employed, out of which 792 were women (64.0 per cent). The share in the total employment realized through the implementation of measures prescribed by the Annual Employment Incentive Plan equaled 31.0 per cent.

The initially planned amount for this measure was 16,800,845.00 kuna (50 per cent for small, 40 per cent for medium-sized and 10 per cent for large employers), however a total of 27,459,790.34 kuna was spent in the end.

Measure No. 3 – Co-financing of employment of women over 45 and men over 50 years of age – 620 persons were planned to be covered by this measure in 2006. According to the implementation results, 579 persons were employed, out of which 354 were women (61.1 per cent). The share in the total employment realized through the implementation of measures prescribed by the Annual Employment Incentive Plan was 14.5 per cent.

15,580,746.00 kuna were originally allocated for the purpose of implementing this measure, however a total of 19,777,239.08 kuna was actually paid.

Measure No. 4 – Co-financing of employment of special groups of unemployed persons – employment of 880 persons was planned, whereas the implementation results show that 268 persons were employed, of which 36 were women (13.4 per cent). The share in the total employment was 6.7 per cent.

22,265,875.00 kuna were originally planned for this measure, however a total of 8,570,782.98 kuna was spent in the course of its implementation.

The results of the implementation of measures for co-financing young persons with no working experience and long-term unemployed persons show that employment was realized mainly in the case of persons with secondary school education and with small employers. The measure related to the co-financing of special groups of unemployed persons did not have any significant effects in the first months of the implementation due to the insufficient

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sensibility and social sensitivity in the labour market towards persons who are not competitive and belong, on account of their personal characteristics, to groups of hard-to-place persons. Towards the end of the implementation period, positive movements were noticed in the implementation of this measure, especially in connection with employment of persons with disabilities, Croatian war veterans, parents of 4 and more underage children, while employers showed no interest for other target groups, such as female victims of abuse or recovered addicts.

Measure No. 5.1 – Co-financing of education for the purpose of finding employment with a known employer – a total of 1,126 persons were originally planned to be involved in this measure. The results show that 375 persons were educated (119 or 31.7 per cent women). As far as financial indicators are concerned, 12,262,264.00 kuna were planned, of which 80 per cent for small and medium-sized employers and 20 per cent for large employers, and on the basis of the assumed financial obligations a total of 1,930,845.72 kuna were actually spent.

According to the received requests, the employers showed interest in employing unemployed persons from the CES records to be trained on the basis of in-service training programmes to work in occupations in short supply (not found in the register), such as stone carvers, nursing staff, CNN machine operators, tool pushers, assistant staff in textile production, and similar.

Measure No. 5.2 – Co-financing of education for the purpose of obtaining employment with unknown employers – 107 requests for education were received. 873 unemployed persons were granted participation in educational programmes (383 women or 43.9 per cent). The originally planned figure was 2,700 persons. According to the plan, 44,564,100.00 kuna were initially allocated for this purpose, however a total of 6,800,011.66 kuna was actually spent in the course of the year.

According to the needs of the local markets of each particular county, unemployed persons were included in the training for welders, ship pipe fitters, independent bookkeepers, foreign language learning programmes and programmes for acquiring basic computer knowledge and skills.

Measure No. 6 – Public works – 101 requests were received. 512 persons got employment (57 women or 11.1 per cent), whereas the planned figure was 1,460. 18,255,402.00 kuna were allocated for this purpose, and according to the assumed financial obligations a total of 3,099,572.96 kuna was actually spent.

The mentioned measure produced the desired results in counties with a high unemployment rate: Vukovar-Srijem, Virovitica-Podravina, Bjelovar-Bilogora and Brod-Posavina.

Implementation of Measures from the National Programme for the Roma and the Action Plan Decade of Roma Inclusion 2005-2015

On the basis of measures from the National Programme for the Roma and the Decade of Roma Inclusion Action Plan for 2006, referring to employment and training of the unemployed Roma, from March 23 until December 31, 2006 a total number of 57 requests were received and 56 agreements were signed on the co-financing of employment and training, financing of education for the unemployed Roma, and financing of employment in public work programmes.

The measures included 220 Roma from the unemployment register, of which 206 were employed and 14 were involved in educational programmes for the purpose of finding employment with unknown employers. Most of the Roma were employed in public work programmes, especially the infrastructure projects in the counties of Koprivnica-Križevci, Međimurje and Osijek-Baranja.

An amount of 4,634,170.00 kuna was planned for the implementation of measures related to the co-financing of employment and training of unemployed persons of Roma national minority, whereas 2,544,700.64 kuna were actually spent.

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Redundancy Programme

In accordance with the Labour Code1, redundancy programmes must be drawn up by any employer that plans to terminate at least 20 employment contracts within the period of 90 days for economic, technical or organizational reasons. When drawing up the programme, the employer must consult with the workers’ council and the authorized employment service.

Drawing up of the redundancy programme is a special measure the goal of which is to remove or mitigate the damage arising from the termination of employment contract for the worker. Namely, larger number of layoffs given at the same time or within a short period of time has substantially different social, economic and other consequences compared to individual layoffs. The Croatian Employment Service actively participates in solving the so-arisen problem.

Before the employers start working on drafting the redundancy programmes, CES Regional Offices carry out counselling activities with employers, including informing of employers about their legal obligations, possibilities of employing surplus employees, function of mediation, implementation of active labour market policy, possibilities of self-employment, and other.

Already during the counselling, the CES tries to help the surplus employees or those facing the threat of layoff by mediating during the notice period with the aim of finding them employment, referring such employees to retraining or upgrading, whether for the purpose of obtaining some other position in the same company or for obtaining a position outside the company, and other.

In the implementation of the said activities concerning the handling of the surplus of employees, the CES faces a series of problems, of which the lack of job vacancies is in the first place in the case of both the same and other employers, followed by the psychophysical condition of persons involved in the programmes.

The final goal of the mentioned activities is to help persons facing the threat of layoff to be reemployed as fast as possible, ensure the return of as many workers as possible to the labour market and prevent long-term unemployment.

Redundancy programmes exist in all activities, such as textile, construction, food, hotel and restaurant industries.

The main reasons for occurrence of the surplus of employees are privatization, restructuring, change of production programme, introduction of new technologies, inability to adjust to market demands.

The structure of persons covered by redundancy programmes shows that these persons are persons who are almost entirely unneeded in the labour market, persons of very difficult employability, including women, older persons and persons with disabilities.

During 2006, CES Regional Offices received 48 redundancy programmes, involving 3,394 persons. Compared to 2005, both the number of received programmes (by 11 or 29.7 per cent) and the number of persons

involved (by 519 or 18.1 per cent) increased.

Redundancy Programmes for 2005 and 2006

Year Number of programmes

Number of persons involved

2005 37 2,875

2006 48 3,394

2006/2005 Index 129.7 118.1

1 Labour Code (Official Gazette, No. 38/95 amended, 65/95 amended, 17/01, 82/01, 11/03 and 142/03 amended.)

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Benefits from Unemployment Status

The rights of unemployed persons, according to the provisions of the Act on Job Placement and Unemployment Insurance (Official Gazette No. 32/2002, 86/2002, 114/2003 and 151/2003) include rights to unemployment benefits, pension insurance, financial support and compensation of expenses incurred during education, as well as once-off lump sum and reimbursement for travel and relocation expenses.

Unemployment Benefit

Unemployed persons acquire the right to unemployment benefit if at the moment when their employment is terminated they have worked 9 months in the past 24 months. Women with children under 1 year of age whose employment was terminated are exempt from this condition.

In order to be eligible for unemployment benefit, an unemployed person must report to the authorized employment service and submit a request for benefit within thirty days from the date of termination of employment, sick or maternity leave.

The person whose employment was terminated through his or her own fault or by consent is not eligible for unemployment benefit.

An unemployed person, depending on the total years of service, acquires the right to unemployment benefit for the period of 78 to 390 days. The exception to this rule is a woman who has spent 30 years or a man who has spent 35 years in service, who have the right to unemployment benefit until they are reemployed, i.e. until some of the cases prescribed by the Act resulting in termination of that right arise.

After the period for receiving unemployment benefit ends, the right to the benefit may be extended for a maximum of three months during illness and, in the case of pregnancy, for the duration of the pregnancy until the child’s 1st birthday.

At the request of the unemployed person who has been granted right to unemployment benefit, the same may be paid out as a once-off lump sum. The conditions and the method of payment are determined on the basis of the Decision on Once-off Lump Sum2. The once-off payment of the financial compensation may be granted for opening a craft business i.e. sole business, and for employment in a company in which the unemployed person has a non-majority share.

The amount of compensation is determined on the basis of the average salary realized in full-time employment in the last three months spent working reduced by compulsory contributions. The financial compensation may not be lower than 20 per cent of the amount of the average salary paid in the Republic of Croatia according to the last announced information, or higher than the amount determined on the basis of the Croatian Government’s decision, at the suggestion of the Labour Minister based on the opinions of the Economic and Social Council and the Finance Minister. The lowest amount of compensation was in the range from 887.20 to 937.20 kuna, whereas the highest was 1,000.00 kuna.

Unemployed Croatian war veterans are also eligible for unemployment benefit during unemployment. Under the Law on the Rights of Croatian Homeland War Veterans and their Family Members 3, this right was granted to them in 2001 and 2002. The right to unemployment benefit based on the war veteran status lasted, depending on the total time of service in the defense of Croatian sovereignty, from 104 to 468 days. 2 Official Gazette, No. 92/20033 Official Gazette, No. 94/2001

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During 2006, unemployment benefit was paid to Croatian war veterans who had not used up their right in full. Such financial compensation was paid to 41 beneficiaries in 2006.

82,174 requests for unemployment benefits were submitted in 2006, of which 79,660 were approved. After the expiry of the entitlement to unemployment benefit, 12,940 requests for extension were submitted, of which 12,830 were approved. 235 complaints over the resolution of requests for unemployment benefit were submitted, of which 8 were approved. In 2006, 33 complaints were filed with the Administrative Court of the Republic of Croatia as well.

In 2006, 812 requests for a once-off lump sum were submitted, of which 701 were approved.

Once-over Assistance

An unemployed person whose employment was terminated due to business or personal reasons is eligible for a

fixed amount of unemployment benefit and the entitlement to a once-over assistance in the amount of two, four,

or six highest monthly unemployment benefits if they had spent 20 or more, 25 or more or 30 or more years

working for their last employer.

3,145 requests were submitted in 2006 for the purpose of realizing the afore-mentioned right. 2,931 requests

were approved.

Deleting from the Unemployment Persons Register

The Act on Job Placement and Unemployment Insurance prescribes when an unemployed person is to be

deleted from the register of unemployed persons. In 2006, 18,285 first instance resolutions on deleting persons

from the register of unemployed persons were reached. 166 appeals were submitted over the resolutions

on removal, of which 3 were approved. In addition, 5 complaints were filed with the Administrative Court

of the Republic of Croatia.

Obtaining Benefits from Unemployment Status after Having Worked Abroad

The Act on Job Placement and Unemployment Insurance stipulates that a Croatian citizen who had

worked abroad is eligible for unemployment benefit in accordance with the provisions of the international

agreement.

A Croatian citizen who had worked in a country with which the Republic of Croatia has not signed an

agreement regulating rights during unemployment, i.e. a country in which he or she had not been insured

against unemployment, may realize the right to financial compensation according to the provisions of this

Act if he or she had paid the contribution to the Croatian Employment Service for at least 9 months in the

last 24 months prior to termination of employment in a foreign country.

The Croatian Employment Service applies the agreements on social insurance the Croatian Government has

signed with other countries in determining the rights during unemployment as well.

Agreements on social insurance in force, containing the provisions on unemployment have been signed

with Austria, the Netherlands, the Czech Republic, Bosnia and Herzegovina, Former Yugoslav Republic of

Macedonia, Slovakia, Slovenia, Luxembourg, Serbia and Montenegro, Bulgaria, Italy, Hungary and Belgium.

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Based on Section III of the Constitutional Decision on the Sovereignty and Independence of the Republic of Croatia, the Agreement on Social Insurance during Unemployment signed between the Former Yugoslavia and the Federal Republic of Germany still applies. This agreement regulates the financial and legal protection of workers who had lost employment in Germany and consequently returned to Croatia. This is the only Agreement on the basis of which an unemployed person that had stopped working abroad can, if meeting the requirements prescribed by the Agreement and the Act on Job Placement and Unemployment Insurance, realize the right to financial compensation, regardless of the fact that their employment had been terminated outside of Croatia. The Agreement also regulates the reimbursment of the paid compensation and the Republic of Croatia sends out a request for refund to the Federal Republic of Germany twice a year. 24 such requests were submitted in 2006.Under the agreements on social insurance signed with other countries, only the periods during which the person was insured count when applying for compensation during unemployment, provided that the employment had been terminated in Croatia and that the unemployed person had been, prior to submitting the request, employed in Croatia for a certain period of time i.e. socially insured during unemployment (for example, under the Agreement with the Republic of Slovenia – 9 months in the last 24 months; under the Agreement with Austria – 26 weeks in the last 12 months).Apart from the terms set forth in the agreements, an unemployed person must also meet the requirements set forth in the Act on Job Placement and Unemployment Insurance.

Financial Support and Reimbursement of Education Costs

An unemployed person directed to participate in educational activities by the CES is eligible for the financial support in the amount of the lowest unemployment benefit.

An unemployed person directed to participate in educational activities by the CES is entitled to reimbursement of travel expenses during education in the amount of the actual cost of (public) transportation, actual cost of required books, food and prescribed protective clothes, shoes and other items.

1,689 persons used the right to financial support for educational purposes in 2006.

Once-off Lump Sum and Reimbursement for Travel and Relocation Expenses

An unemployed person in the case of which the CES is not in the position to find employment in their place of residence, and who, by themselves or through mediation services of the Croatian Employment Service, finds employment in some other place, has the right to a once-off lump sum and reimbursement for travel and relocation expenses (from the place of residence to the place of employment) for themselves, their spouses and children. The requirements for this entitlement have been determined on the basis of the Decision on the Once-off Lump Sum and Reimbursement for Travel and Relocation Expenses.4

In 2006, 4,815 persons used the entitlement to reimbursement for travel and relocation expenses, while 85 persons realized their right to a once-off lump sum.

4 Official Gazette, No. 92/2002

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Pension Insurance

Under the Act on Job Placement and Unemployment Insurance, the right to pension insurance is granted to

an unemployed person who has realized the right to unemployment benefit and is at a certain age, missing

up to a maximum of 5 years of service to meet the requirements for age-based retirement.

The right to pension insurance has also an unemployed woman with a child under 1 year of age at the time

of termination of employment. The woman is entitled to it until the child is one year old.

The following table gives an overview of the average number of users of the right to unemployment benefit

and pension insurance in 2005 and 2006.

Unemployed Persons – Users of Benefits,2005 and 2006 Average

YearUnemployment

benefit - Total

Unemployment benefit -

Croatian war veterans

Pension insurance

2005 72,801 71 54

2006 66,407 41 51

2006/2005 Index 91.2 58.1 94.4

Therefore, in 2006 there were on average 66,407 unemployment benefit recipients per month recorded by

the CES, i.e. 22.8 per cent of the total number of unemployed persons (8.8 per cent less than in 2005). From

the total number of unemployment benefit recipients, 41 persons (0.1 per cent) were Croatian war veterans.

At the same time, on average 51 beneficiaries of pension insurance were recorded per month, which is by

3 persons less than in 2005.

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Projects Supported by the International Community

CARDS PROGRAMMES

CARDS 2002 – Local Partnerships for Employment Project

The value of this project was EUR 893,604, and its implementation lasted from October 25, 2004 to June 16, 2006. The purpose of the project was to enhance the match between vocational education and the current and forecasted labour market demands and to significantly reduce unemployment. The objectives of the project were:

• To increase the knowledge about labour market at the county level,• To strengthen human resources development,• To reduce the unemployment rate,• To improve the knowledge of the principles, mechanisms, rules and procedures of the European Social Fund.

The project was carried out in four counties that drew up Regional Operational Programmes, namely the counties of Sisak-Moslavina, Vukovar-Srijem, Zadar and Šibenik-Knin. In the framework of the project, analyses of local labour markets were made on the basis of empirical surveys which were carried out. Human resources development strategies and employment strategies in particular counties were also made. The project included workshops and trainings for local partners and the CES staff on the principles, mechanisms, rules and procedures of the European Social Fund. A web page providing all important information about the project and its implementation as well as all relevant documents and manuals created for the purposes of the project, was created within the CES website (www.hzz.hr).

The project was successfully completed by the establishment of local partnerships for employment in the shape of Regional Labour Market Councils. The Managing Board of the CES adopted the model of such councils as advisory bodies that would follow and monitor the development of regional labour markets and active labour market policy at the county level.

CARDS 2003 – Decentralization and Restructuring of the Croatian Employment Service Project

The value of the project is EUR 500,000. The project was initiated in April 2006 and shall continue for 18 months. The purpose and goals of the project are to strengthen regional and local capacity of the Croatian Employment Service by improving the skills, technological knowledge and experience, which will then have a positive effect on a more direct inclusion of the CES in the local developmental needs and initiatives. The decentralization of the CES is part of the long-term strategy that will be pursued after the business operations of the CES have been standardized and technically supported through the use of IT technology. The main project parts are as follows:

• Analysis of the current working methods and organizational structure of the CES that will enable further decentralization of standardized business operations within the CES,

• Recommendations concerning the improvement of the existing procedures and decentralization of the CES,• Analysis of the training needs in the case of employees in Central and Regional Offices related to the skills

and technological knowledge and experience required to pursue further decentralization (for example:

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skills and technological knowledge and experience related to project management, financing, public relations, analytical services development, monitoring and assessment of services, working methods etc.),

• Education of employees of CES Central and Regional Offices based on the results of the training needs

analysis.

Three workshops for CES employees, mainly representatives from the Central Office and Regional Directors

of Regional Offices, were carried out under the project in 2006, namely Strategic Planning and Drawing up a

Business Plan, Management of Service Cycles in the Labour Market and Operational Performance Management

and Assessment of Employee Performance. Key documents and manuals for further reorganization of the CES

are being prepared.

CARDS 2004 – Local Partnerships for Employment Project

The project started on November 7, 2005, and its implementation will last until the beginning of May

2007. The purpose and goals of the project are to strengthen the ability of local stakeholders to develop

and implement active labour market policy measures using the procedures of the European Social Fund, as

well as supplement the regional operational goals described in Regional Operational Plans with appropriate

measures ensuring human resources development. Continuing on the Local Partnerships for Employment

Project under CARDS 2002, in its second phase this project is being implemented in the following four

counties: Lika-Senj, Karlovac, Požega-Slavonia and Brod-Posavina. Its total value is EUR 1,500,000.

The following results were achieved in 2006:

• Besides four foreign key experts working on the implementation of the project on the county level, four

local consultants were also engaged;

• Labour market analysis by counties and a survey of the condition in the labour market were made; it was

recommended that such a survey be repeated every six months;

• Partnerships for Employment, the so-called Theme Task Forces for Human Resources Development were

established in each of the four counties as a result of combining this project with a project under the

CARDS Programme related to the implementation of Regional Operational programmes carried out by

the Ministry of Sea, Tourism, Transport and Development;

• The Theme Task Forces drew up County Human Resources Development Strategies approved by the

Regional Partnership Councils, and until the end of 2006 three were also approved by the relevant

county councils;

• A series of seminars were held:

• Introductory seminars for employees of CES Regional Offices that will be involved in the implementation

of the project;

• A seminar on the principles and mechanisms of the European Social Fund was organized for the

members of Theme Task Forces;

• In 2006, three three-day seminars were held on the drawing up and management of projects. The

purpose of these seminars was to educate local partners in submitting projects at public tenders.

• The Croatian Labour Market Analysis Manual was prepared.

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PHARE PROGRAMMES

PHARE 2005 – Active Measures for Employment of Persons under the Threat of Social Exclusion

The project is worth EUR 2,250,000. The overall ojective of this project is to strengthen the economic and social cohesion of the most vulnerable groups in the Croatian society by raising the level of their employability. The project also aims to increase the capacity of different stakeholders in the Croatian labour market for the implementation of active laour market policy measures intended for groups threatened with social exclusion. In doing so, the access of unemployed persons threatened with social exclusion to the labour market will be facilitated by using the active labour market policy measures created according to their needs.

The following results are expected:

• Thorough evaluation of previous employment incentive measures;• Creation of a new palette of measures that will include the old ones deemed efficient after the evaluation,

and new ones;• Higher level of professional readiness of the CES employees to create and implement active labour

market policy measures;• Increased level of employability of groups threatened with social exclusion.

The implementation of the project will be enabled on the basis of two connected components: a Service Contract and a Grant. On the basis of the approved description of jobs, a tender for winning the Service Contract was carried out in 2006. The evaluation of the received bids is currently in process. In the framework of the second component, tender documentation for grant allocation has been prepared.

Development of the Adriatic Labour Market – SVILMA (SVILuppo del Mercato Adriatico)

In December 2006, the SVILMA Project, approved under the INTERREG IIIA (Interreg Adriatic Cross Border) Cooperation Programme, was completed. The objective of the project that started in April 2004 was the development of institutional, economic and social cooperation between the Italian Adriatic regions, namely Veneto, Friuli Venezia Giulia, Emilia Romagna, Marche, Abruzzo, Molise and Puglia, and Bosnia and Herzegovina, Serbia, Montenegro, Albania and Croatia. The holder of the project worth EUR 1,317,500 was Italian Veneto region. The Croatian Employment Service was the Croatian partner.

For the purpose of distance learning and communication between project partners, a satellite-based communication system was set up on the premises of CES Central Office in 2006. During the following months, a series of modules was held on which topics related to the field of employment and labour market were covered. At the end of May, the Croatian Employment Service organized a National Seminar on the subject of Croatian Labour Market and its Adriatic Component. The seminar covered the following issues: European employment policy, situation in the Croatian and Italian labour markets, demographic resources of Croatia, employment of Croatian citizens abroad and the procedure for obtaining work permits in Italy. Lectures were held by experts employed with the Veneto Employment Service, the Ivo Pilar Institute of Social Sciences, Ministry of Foreign Affairs and European Integration, and CES Central and Regional Offices of the CES.

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Employment Incentive Measures Carried out by the European Community

Croatia joined the Employment Incentive Measures Programme run by the Community relatively late, after the Memorandum of Understanding between the Republic of Croatia and the European Community on the participation of Croatia in the Community Employment Incentive Measures had been signed and enforced on March 1, 2006. The representatives of Croatia attended the last two board meetings (in May and December 2006). The programme lasted from 2002, when it was adopted by the European Union Council and the European Parliament, until December 2006. The main purpose of the programme was supporting the European Employment Strategy, and it included a total of 163 separate projects.

Croatia showed interest in participating in yet another programme, PROGRESS. It is a programme for employment and social solidarity the European Union initiated on December 5, 2006, which will replace the Community programmes for employment, social inclusion, gender equality and fight against discrimination. This programme will enter into force on January 1, 2007, and will last until 2013. PROGRESS will include five areas of activity. The Croatian Employment Service is interested in participating in the component called Employment.

Evaluation of Active Labour Market Policy Measures in Croatia – A Bilateral Project

In 2006, the cooperation was initiated between the Austrian Ministry of Economy and Labour, Croatian Ministry of the Economy, Labour and Entrepreneurship (Department of Labour and Labour Market) and the Croatian Employment Service on the project called Evaluation of Active Labour Market Policy Measures in Croatia. The project is financed by the Austrian Ministry of Economy and Labour. The Croatian Employment Service and the L&R Social Research Institute from Vienna participate in the implementation of the project.

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Organization and Activities of the CES

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Main Responsibilities of the Croatian Employment Service

The Croatian Employment Service is a public institution of special significance to the Republic of Croatia, its citizens, business entities and institutions. The following are the main responsibilities of the Service:

• Mediation in employment of jobseekers in the country and abroad;• Financial and legal protection of unemployed persons during unemployment;• Vocational counselling of the unemployed and other persons in making career and occupational choices;• Organization of vocational education, upgrading and retraining activities;• Monitoring and analysis of labour market conditions and informing the public of the same;• Promotion of employment and self-employment through the implementation of active labour market

policy measures.

Who are our users?

Our users are:

• Employers – companies, craft businesses, entrepreneurs, cooperatives and other;• Unemployed persons – persons actively looking for employment, persons who are available for work and

who earn less than the highest amount of unemployment benefit and who use the benefits arising from the unemployed person status;

• Jobseekers – persons registered with the CES actively looking for employment that do not benefit from the rights during unemployment, including employed persons, students and other persons;

• Pupils, students and other – the CES is open to all persons who need information concerning employment and labour market.

What services do we offer to employers?

Here is an overview of the services we offer to employers:

• By providing insight into the most comprehensive database on unemployed persons and jobseekers, we mediate in the selection of candidates that, on the basis of their qualifications, fit the needs of employers best;

• We advertise the demand for employees free of charge (on our website, in bulletins, on information boards in Regional and Local Offices).

• We provide team (psychological, medical and pedagogical) assessment of candidate’s characteristics, taking into consideration the demands of particular occupations and jobs;

• We conduct selection processes (pre-selection, selection) and refer an agreed number of candidates for particular jobs to employers;

• We offer financial support to employment or education through the employment incentive programme;• We provide legal assistance in the field of employment as well as professional and organizational help in

the process of restructuring and handling the surplus of employees;• On the basis of a contractual relationship, we offer the employers the mentioned and other services without

involving a lot of administrative work.

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What do we offer to unemployed persons and jobseekers?

• We offer information about job vacancies from various sources, about labour market demand, economic trends in particular Croatian regions, successful entrepreneurs and other;

• We provide Information Desk services (the place for regular reporting, handling of administrative matters, arranging individual counselling and group informing sessions, obtaining legal advice etc.)

• Individual counselling – assistance in assessment of working, professional and personal potential, assistance in drawing up a business and job search plan, mediation in finding target jobs, feedback on activities carried out and the results achieved;

• We conduct group informing sessions providing information on the situation in the labour market in the concrete region (unemployment structure, sought and occupations in short and excess supply), as well as about the services provided by the Croatian Employment Service that can help in job search, as well as about rights and obligations based on laws and regulations; we also emphasize the importance of personal engagement in job search;

• We organize various workshops the goal of which is the acquisition of knowledge and skills ensuring as successful orientation in the labour market as possible, as well as occasions for exchange of experiences in job search through informal activities and gatherings;

• On the basis of laws and other regulations, we ensure financial and legal protection of unemployed persons (unemployment enefits and other types of support);

• We conduct vocational guidance sessions – assistance in additional (self) assessment of personal abilities and characteristics in choosing an educational or training programme, determining the remaining working ability, and assessment of the working potential for a concrete job.

These are, in short, the main responsibilities and functions of the Croatian Employment Service. A more detailed description of particular responsibilities and functions is given in other sections of this Yearbook.

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Organization and Employees

The Croatian Employment Service was organized on the basis of the Act on Job Placement and Unemployment Insurance5 as a public institution owned by the Republic of Croatia subject to the regulations applicable to institutions.

The Croatian Employment Service performs its activities through the following organizational units:

• Central Office, and• Regional Offices with Local Offices.

The CES is run by its Managing Board consisting of the representatives of trade unions, employers and the Government, appointed by the Government of the Republic of Croatia.

The head of the CES is the Director General who represents the CES.

The defined working policy, methods and techniques of the Croatian Employment Service are carried out in practice by Regional Offices that realize the business goals of the CES through direct contact with unemployed persons, employers and other interested organizations.

Within the Croatian Employment Service, there are 22 Regional Offices with Local Offices, ensuring the presence of the Croatian Employment Service on the entire territory of the Republic of Croatia.

The geographical distribution of Regional and Local Offices has been determined on the basis of Regulations on Internal Organization and Systematization of Jos Based on the Coefficient of Job Complexity within the Croatian Employment Service, and the Decision by the Management Board of the Croatian Employment Service.

The Central Office of the Croatian Employment Service includes: Office of Director General, Employment Placement and Preparation Sector, Legal Affairs, Personnel and General Administration Sector and Economic, Financial and Accounting Affairs and Asset Management Sector. The Office of Director General and each Sector are further divided into departments. Each sector is managed by an Assistant Director.

Regional Offices are differently organized depending on the regions they cover and the volume of business. Regional Offices in Zagreb, Split, Osijek and Rijeka include the Employment Placement and Preparation Department that is further divided into the Placement Division, Active Labour Market Policy Division and Vocational Guidance and Training Division; Analysis and Statistics Department; Information Technology Department; Legal Affairs, Personnel and General Administration Department that is further divided into the Material and Legal Protection Division and Legal Affairs, Personnel and General Administration Division; Finance and Accounting Department; and Local Offices. Regional Offices are managed by Regional Directors.

Other Regional Offices also include the the Employment Placement and Preparation Department further divided into the Active Labour Market Policy Division and Vocational Guidance and Training Division; Analysis and Statistics Department; Information Technology Department; Legal Affairs, Personnel and General Administration Department; Finance and Accounting Department; and Local Offices; and Local Offices. The activities are managed by Regional Directors.

On December 31, 2006 the Croatian Employment Service had a total of 1,197 employees.5 Act on Job Placement and Unemployment Insurance (Official Gazette, No. 32/02)

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The largest number of employees (40.6 per cent of the total number) worked in the Zagreb (175), Split (140),

Rijeka (79) and Osijek (92) Regional Offices.

576 (48.1 per cent) employees have completed university education, 219 (18.3 per cent) have completed

non-university education, whereas 325 (27.2 per cent) employees have finished secondary school. There

are 13 highly skilled or skilled employees (1.1 per cent) and 64 (5.3 per cent) employees are low-skilled or

retrained. The employees with university education account for a relative majority of the CES employees,

and together with the employees with non-university education make an absolute majority (64.1 per cent).

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Financing of the Croatian Employment Service

Sources of Financing

The basic income for financing the activities of the Croatian Employment Service in 2006 was allocated from the State Budget due to the fact that since January 1, 2002 employment contributions are paid into a unique State Treasury Account.

The planned income from the State Budget was 1,018,385,500 kuna, whereas the realized income amounted to 1,013,882,495 kuna, i.e. 99.56 per cent of the planned figure.

The income from the State Budget accounted for 95.58 per cent of the total income and receivables of the Croatian Employment Service. The income was divided as follows: 818,950,786 kuna were allocated for the payment of benefits to unemployed persons covering the pension insurance contribution and other expenses related to financial and legal protection of unemployed persons; 96,273,090 kuna were allocated for the financing of the active labour market policy; 2,295,086 kuna were allocated for the financing of the cost of vocational guidance, informing and rehabilitation; 96,326,078 kuna were allocated for the payment of salaries to the CES employees; and 37,455 kuna were allocated for the co-financing of the European Union programmes.

The realized income received as part of support from international organizations amounted to 1,672,354 kuna, i.e. 15.94 per cent compared to the planned figure. They refer to the financing of the Local Partnerships for Employment and Vocational Education and Training projects under the CARDS 2002 Programme, as well as to the co-financing of financial contribution to the General Budget of the European Union for the participation of the Republic of Croatia in Community employment incentive measures.

In 2006, the income from capital donations amounted to 1,372 kuna.

Apart from the income form the State Budget, own income and receivables in the amount of 45,228,221 kuna were also realized, accounting for 4.27 per cent of total income and receivables and including income from interests on prior employment incentive loans and other income from financial assets in the amount of 5,332,290 kuna, income from real estate lease in the amount of 170,756 kuna, return of prior funds invested in active labour market policy implementation and financial compensations in the amount of 12,409,370 kuna, income from mediation in employment abroad and publishing activities in the amount of 133,302 kuna, financial penalties in accordance with the Act on Job Placement and Unemployment Insurance in the amount of 316,369 kuna, sale of non-financial assets in the amount of 562,076 kuna and receivables from unpaid capital concerning prior loans in the amount of 26,168,858 kuna, and receivables from the sale of shares in the amount of 135,200 kuna.

The total realized income and receivables in 2006 amounted to 1,060,784,442 kuna, i.e. 98.19 per cent of the planned income and receivables.

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Structure of Expenses

Expenses related to the primary activities performed by the Service were paid in accordance with the 2006

Income and Expense Plan and the laws and legal provisions applicable to the operations of the Service.

The total expenses for 2006 amounted to 1,081,815,610 kuna or 1.86 per cent less than planned.

A total of 818,950,786 kuna (75.71 per cent of the total expenses) was spent on financial and legal protection

of unemployed persons. The largest part of the funds spent refers to the payment of financial compensations

to unemployed persons in the amount of 815,747,224 kuna (99.61 per cent of the total funds paid for

financial and legal protection of unemployed persons, i.e. 75.41 per cent of the total expenses). From the

total amount of funds spent on benefits, 531,922 kuna were paid to Croatian war veterans on the basis of the

Law on the Rights of Croatian Homeland War Veterans and their Family Members. 209,693 kuna (0.03 per

cent from the expenses allocated for financial and legal protection) were spent on contributions for pension

insurance for unemployed persons, and another 2,993,869 kuna (0.37 per cent of expenses for financial and

legal protection) were spent for other financial and legal protection expenses.

The planned cost of financial and legal protection of unemployed persons covered by the State Budget

amounted to 819,000,000 kuna in 2006.

A total of 96,273,089 kuna (8.9 per cent of the total expenses) was spent on active labour market policy

measures from the 2006 Annual Employment Incentive Plan, of which 93,728,389 kuna were spent on

the measures from the 2005-2008 National Action Plan and 2,544,700 kuna were spent on the measures

from the Action Plan Decade of Roma Inclusion 2005-2015. The funds for the measures from the Annual

Employment Incentive Plan were secured from the State Budget.

2,295,086 kuna (93.68 per cent of the planned amount) were spent for mediation in employment (vocational

guidance and rehabilitation, medical examinations and informing of unemployed persons for the purpose

of finding employment), which is 0.22 per cent of the total expenses. The funds for these expenses were

secured from the State Budget.

1,872,991 kuna (93.65 per cent of the planned amount) were spent for education for the purpose of

employment that includes vocational training, retraining and upgrading, as well as acquisition and

improvement of knowledge and skills of unemployed persons for the purpose of finding employment and

employed persons for the purpose of keeping employment, which is 0.18 per cent of the total expenses.

These funds have been secured from own income.

Expenses related to the employees of the CES amounted to 111,046,201 kuna (95.53 per cent of the planned

amount), accounting for 10.27 per cent of the total expenses. The employee salaries and wages are paid in

accordance with the CES Regulations on Employee Salaries, Basic Collective Agreement for Employees and

Officials Working in Public Services and other legal regulations regulating the payment of salaries in public

services. The funds for the salaries were party secured from the State Budget (in the amount of 96,326,078

kuna) and partly from own income (in the amount of 14,720,123 kuna).

Financial expenses incurred by the CES in 2006 amounted to 42,082,627 kuna (92.84 per cent of the

planned amount). This number represents 3.89 per cent of the total expenses. The funds for these expenses

were secured from own income.

The realized cost of joint investment in employment of young persons at the local level was 1,304,736

kuna, i.e. 22.87 per cent of the planned amount, covered under the CARDS 2002 Programme. The expense

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related to the payment of financial contribution to the General Budget of the European Union for the participation of the Republic of Croatia in Community Employment Incentive Measures amounted to a total of 223,194 kuna, of which 37.455 kuna were secured from the State Budget of the Republic of Croatia, and the difference of 185,739 kuna was secured from the funds of the PHARE pre-accession programme.A total of 6,340,000 kuna from own income was allocated for the procurement of non-financial assets (capital investments), of which 5,179,724 kuna were actually spent (81.7 per cent of the planned amount), which represents 0.48 per cent of the total expenses. The following items are included in the cost of procurement of non-financial assets: cost of equipment in the amount of 1,372 kuna received from capital donations from entities outside the general state, and cost of procurement of non-financial assets in the amount of 181,880 kuna secured under the CARDS Programme called Vocational Education and Training – Modernization and Strengthening of Institutions – Delivery of Equipment. The expense for the procurement of non-financial assets in the amount of 2,403,924 kuna, entered at the same time as the income or receivable from the collection on prior employment incentive loans, refers to the procurement of assets assigned to the CES as lien creditor in seizure procedures instigated against the beneficiaries of employment incentive loans.In 2006, the deficit in the total realized income and receivables compared to the realized expenses in the amount of 21,031,168 kuna was covered using the surplus income from the previous years that amounted to 21,985,396 kuna. The difference of unspent 954,228 kuna was transferred into 2007.

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IT Support to the Functioning of the CES

During 2006, the CES worked on the development, maintenance and upgrading of software, technological

and communication equipment to support the functioning of the CES information system.

System Platform

Up-to-date versions of Patches received from the manufacturer of Microsoft System Software for the ICT

System and the analysis of the CES software domain (Active Directory Health Check) were carried out in

cooperation with the Microsoft Global Technical Support Center. The improvements based on the analysis

results were also made.

Security, Monitoring and Control Software

Adjustments and improvements related to the use of Network Node Manager 7.5 for monitoring and control

of the server platform were made.

Technological Platform

During 2006, the following IT equipment was set up:

• Server for the purpose of supporting the CES website and Microsoft ‘CES Domain’,

• Work stations and printers to meet the needs of the users in Regional Offices (delivery through e-

Croatia), as well as adjustments of the IT equipment records at the level of the CES (including all

Regional Offices).

CES Website – the communication connection for accessing the website was replaced by the optical

connection.

Communication Platform – preparations for joining the HITRONeT network of the Croatian Government

were carried out.

Cooperation with the Central State Office for E-Croatia – the implementation of the project called ‘Operational

Programme for the Implementation of the 2007 E-Croatia Programme for 2006’.

ICT Development – the documentation concerning the project called ‘An Improved IT System to Support the

CES Services, Analyses and Management of Business Activities’ was prepared for the EU Phare 2006 Pre-

accession Fund.

Furthermore, software application for the monitoring of activities from the National Employment Action Plan

for 2006 was also created. It includes:

• An application for entering and updating of data, monitoring of contractual obligations, creation of

necessary reports concerning incentive measures the CES is the holder of;

• A module for monitoring the fulfillment of activities of all stakeholders in the framework of the National

Employment Action Plan for 2006;

• Connecting of accounting databases and modules of the National Employment Action Plan for 2006;

• Creation of data warehouse for active labour market policy measures for purposes of analytical and

statistical monitoring.

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The procedure for the exchange of data with the Croatian Institute for Pension Insurance was also improved:

• Employers – checking of the active status of employer (company or craft business);

• Checking of the contractual obligations from contracts related to the measures under the Employment

Incentive Programme of the Government of the Republic of Croatia;

• Checking of the contractual obligations from contracts related to the measures under the National

Employment Action Plan;

• Deleting of persons from the unemployed persons register based on finding employment;

• Reaching a resolution on the termination of unemployment benefit in the case of persons who found

employment or retired.

The exchange of data is done three times a month.

The daily exchange of data about employers with the State Bureau of Statistics was continued.

In the beginning of 2006, the CES website was redesigned and restored and new public services intended for

both employers and unemployed persons were introduced such as: online creation of CVs (for jobseekers)

and the possibility of entering the demand for workers on the website (for employers).

During 2006, a greater number of additional operational reports were made for purposes of counsellors,

mediation managers, analysts and information technology experts (monitoring of the work of counsellors,

making sure that all required characteristics of unemployed persons are entered in the databases, monitoring

and maintaining the data from the catalogues etc.). Also, the data from databases of unemployed persons

were delivered to almost all Regional Offices for the purpose of enabling analysis of the work of counsellors

and redistribution of record files.

Continuous support in using applications in business processes of the CES was enabled, together with the

necessary correction of data or applications (mediation, National Employment Action Plan, register). The

implementation of the application support enabled uninterrupted and constant management of terms to

both counsellors and unemployed persons, as well as the right to access application modules etc.

The use of data warehouse (OLAP Cube) for analytical and statistical purposes was enabled in three Regional

Offices (Vukovar, Kutina and Osijek).

In cooperation with the Employment Mediation and Preparation Sector and instructors, at the end of 2006 the

application support for business processes related to the categorization and preparation of the so-called ‘Employment

Plan’ were changed. New working instructions with a list of application modules were also created.

Application support for entering job vacancies using the Internet was enabled for the benefit of employers.

The CES website is regularly maintained and refreshed.

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International Relations

In the framework of international relations, the Croatian Employment Service performed the following activities in 2006:

Promotion of Cooperation with International Institutions and Individuals – the CES continued international relations with its bilateral and multilateral partners.

Bilateral International Cooperation was carried out through projects and individual meetings.

Multilateral International Cooperation

• Membership in the WAPES Managing Board (World Association of Public Employment Services - WAPES).

The CES is one of the 16 members of the WAPES Managing Board and until May 15, 2006 it had also been the treasury of the same association. The CES actively participated in the implementation of the annual action plan and financial analyses. In cooperation with the WAPES Secretariat and Management, the CES prepared extensive financial reports concerning the final account for 2005 and the budget for 2006 that were on repeated occasions submitted to the President of the Association, the Executive Secretariat and the Managing Board of the Association, as well as the WAPES General Assembly, to which the CES submitted the following reports:

• Report of the treasury concerning the financial performance of the Association in 2005 (including the membership fees for 2005);

• Report of the treasury concerning the financial results of the Association in the period from 2003 to 2006 with an account of financial performance in the period from 2001 to 2003;

• An overview of the situation related to the payment of membership fees in the period from 2003 to 2006 with an account of the financial performance in the period from 2001 to 2003;

• List of members in the case of which exclusion from the membership in the Association should be considered (created on the basis of (non)payment of fees in the period from 2003 to 2006).

The CES came up with a solution to the question of irregular payment of fees, and in 2006 the WAPES Managing Board started applying all items contained in the recommendation. The CES prepared and delivered invoices for the payment of membership fees for 2006, and took care of sending urgency notes.

• Participation of the CES employees in professional gatherings and seminars in the country and abroad.The employees of CES Central and Regional Offices participated in professional gatherings, meetings and seminars upon invitation by international bodies, organizations and associations (certain governments of EU member states, European Council, ETF, ILO, UNECE, UNDP, CEI, WAPES, and similar) through the Ministry of the Economy, Labour and Entrepreneurship, Ministry of Foreign Affairs and European Integration, or responding to direct invitation. According to the records of the Department for International Relations and Informing, the employees of the CES participated in the said activities with a total of 135 days.

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Organization of International and Local Conferences, Workshops and Seminars

The CES carries out activities related to official visits and travels of participants to the mentioned events, creates and collects data, prepares calendars of visits and travels, suggests the funds and cost of traveling abroad and visits from abroad, takes care of the transportation of foreign delegations, prepares gifts for foreign officials, keeps records of the cost of all travels, and handles other activities related to the visits and travels.

• Bilateral project with France directed towards raising the level of vocational education in Croatia.During 2006, activities related to the implementation of the bilateral project of the Ministry of the Economy, Labour and Entrepreneurship of the Republic of Croatia and the Ministry of Employment, Labour and Social Cohesion of France were continued. This project encompasses the following sub-projects referring to activities from the scope of the CES: ‘Promotion of Employment of Persons with Disabilities’, ‘Verification of Competencies: Methodological Development of Competency Assessment and Verification of Acquired Experience’ and ‘Labour Market Oriented Vocational Education’. In June 2006, in the framework of this bilateral project, the CES prepared meetings the purpose of which was to determine the further steps of future cooperation.

• In May 2006, the Service organized a seminar in cooperation with the Swedish National Employment Service on the topic of the European Social Fund for the participants coming from CES Central and Regional Offices and the Ministry of the Economy, Labour and Entrepreneurship.

Cooperation with Members of Negotiation Teams during Preparations for Negotiations with the EU

The CES supports the negotiations with the European Union. The employees of the CES participated in task forces for the preparation of negotiations, taking part in the analytical review and assessment of the level of harmonisation of Croatian legislature with the laws of the European Union, which included the coordination of translation activities, proofreading and editing all relevant texts.

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Notes

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Notes