Legislative updates, key labor market trends, and what does Croatia do better? (Webinar)

During the webinar Legislative Updates, Key Labor Market Trends, and What Does Croatia Do Better? we highlighted the key changes that will shape the labor market in 2025; you can read the findings below. 

Sharing their experiences with us were Nives Orešnik, Director of HR Services (Manpower Slovenia), Ksenja Osolnik, Head of Marketing (Manpower Slovenia, Croatia, Hungary) and guest speaker Marko Pekčec, Regional Manager for International Mobility (Manpower SEE). They presented the key labor market trends for 2025, the legislative updates that will affect employment, and compared the practices of hiring foreign workers in Slovenia and Croatia. They also discussed the impact of labor shortages on the market, legislative challenges, and opportunities for optimizing hiring processes. 

Labor Market Situation and Employment Forecasts  

According to the results of the Manpower survey on salary and employment trends (SATR H1 2025), the employment forecast for the first half of 2025 is stable, though slightly lower than in previous periods. The labor shortage remains a major challenge, especially in manufacturing, logistics, sales, and construction. Interestingly, 7% of companies in the first half of 2025 are expected to lay off more employees than they hire, particularly in telecommunications, mechanical engineering, manufacturing, and transport. 

Despite economic adjustments, Slovenia has still surpassed Germany in achieving the lowest unemployment rate in the EU. This demonstrates a dynamic labor market where workers who lose their jobs quickly receive offers from competing companies. 

Net employment forecast by half-year (*results of the SATR H1 2025 survey):

Employee Turnover and Retention Strategies 

High turnover increases the pressure on companies by bringing higher costs and longer recruitment processes. Among the main reasons for employee departures are better pay from competitors, unfavorable working conditions, layoffs, and retirements. 

While companies are raising wages due to competitiveness and inflation, they often do not reward individual performance.  

"Wages are a hygiene factor because they are tied to survival, and they also reflect how much the company values you. Of course, for long-term employee retention, other factors are also key, such as workplace well-being, a sense of inclusion, and opportunities for development and advancement," emphasizes Nives Orešnik. 

Legislative Changes in Employment for 2025  

These changes will significantly impact the labor market and employment practices, so it is crucial that employers prepare for them in a timely manner. 

Already implemented changes 

• Right to Disconnect: Employees have the right not to be reachable outside working hours. 

• Labor and Social Security Records Act: Simplified rules for recording working hours, including the option for monthly time tracking and eliminating the mandatory recording of lunch breaks. 

• Expiration of the Intervention Act on the Employment of Foreigners: As of January 2025, the law will not be renewed. A long-term strategy for attracting highly qualified personnel is in preparation. 

Changes in preparation

• Act on the Implementation of Partial Wage Reimbursement for Reduced Working Hours: State aid for employers during reduced working hours (3–6 months) with reimbursement of up to 60% of the wage replacement paid. 

• Increase in Retirement Age: A gradual increase to 62 years (for individuals with 40 years of work experience) and to 67 years (for others). 

• Tax Relief for Highly Qualified Personnel: Young people up to 40 years old or foreign experts will be able to benefit from a 7% reduced income tax rate for five years. 

• Seasonal Work in Tourism and Hospitality: It will become easier to employ foreigners in seasonal sectors on the basis of temporary permits.  

Primerjava zaposlovanja tujcev v Sloveniji in na Hrvaškem 

Slovenia and Croatia have different approaches to hiring foreign workers, with Croatia standing out for faster procedures and greater flexibility. 

• Obtaining Work Permits: In Slovenia, the procedures are lengthy and complicated. The first two work permits are tied to the employer, and only the third one allows for greater mobility. In Croatia, the procedures are quicker, and with the recent introduction of three-year permits, greater stability is ensured for both employers and workers. 

• Worker Mobility: The Slovenian system restricts changing employers during the first year of employment, creating administrative hurdles. In contrast, the Croatian system allows full mobility after a certain period, increasing its attractiveness to foreign workers. 

• Assistance with Accommodation: Croatian employers are required to cover the accommodation costs for foreign workers, ensuring standardized living conditions. In Slovenia, this is not mandatory, which can influence a foreigner’s decision to work in the country. 

• Employment Forecast for Foreign Personnel: According to the SATR H1 2025 survey, Croatian employers express an intention to hire foreign workers from third countries (21% of participating employers), while Slovenian employers plan to hire personnel predominantly from the Adriatic region (18.65%). 

• Collaboration in EU Migration Policy: Croatia has a more coordinated strategy for attracting foreign talent and already actively collaborates with countries such as Bosnia, Serbia, and the Philippines. Slovenia, on the other hand, often reacts too late and remains more selective, reducing its attractiveness to foreign job seekers. 

“Slovenia and Croatia have different approaches to hiring foreign workers, with Croatia being more flexible and faster in its procedures. While the processes in Slovenia are complicated and lengthy, Croatia enables quicker permit acquisition and offers more open worker mobility," summarizes Marko Pekčec.

What to Consider When Preparing a Strategy for Hiring Foreigners 

When developing a strategy for hiring foreigners, it is crucial for companies and governments to consider the following aspects: 

Ethics in Hiring 

Ensure that hiring processes are transparent and compliant with legislation to avoid risks such as human trafficking or a black market in labor. Promote sustainable practices that protect workers’ rights and ensure their well-being. 

Integration into Society 

Successful hiring of foreigners is not only about employment but also about their integration into the local community. This includes access to education, healthcare services, and social support. Consider language learning programs and promote intercultural cooperation. 

Flexibility of Procedures 

Simplify and accelerate administrative procedures for obtaining work permits to reduce barriers for incoming foreign workers. Allow greater mobility between employers, which will increase worker satisfaction and productivity. 

Understanding Labor Market Needs 

Recognize that hiring foreigners is not a simple substitute for a domestic labor shortage. Strategic planning is necessary based on the specific needs of various sectors and long-term labor market trends. 

Sustainable Solutions 

Consider hiring foreigners as a long-term solution to labor shortages, not merely a short-term fix. This includes investing in their training and development. 

With a thoughtful approach to hiring foreigners, companies can not only fill gaps in their workforce but also create a more diverse and innovative working environment, contributing to the sustainable development of the economy. 

Key Directions for the Future 

For Slovenian employers to become more competitive in attracting and retaining talent, they need to focus on adapting to the labor market and optimizing hiring procedures for foreigners. Employers should invest in long-term strategies for retaining talent that are not solely based on raising wages but also include programs for employee well-being, fostering a sense of belonging, and offering opportunities for advancement. It is also important not to overlook the potential of older workers, who bring stability and valuable experience. With a comprehensive approach, companies can fill labor market gaps and become attractive to both domestic and foreign talent. 

If you would like to learn more about labor market trends or need assistance in optimizing your hiring processes, please contact us via the form at the bottom of the page or at [email protected]. 

Our experts can help you tackle your HR challenges and develop an effective strategy for hiring and retaining talent.