Ljubljana related

05 Feb 2019, 17:49 PM

STA, 4 February 2019 - Calls for structural reforms, in particular lower taxes and a more flexible market, were in the centre of a Slovenian Business Club (SBC)-sponsored meeting in Postojna, which featured some of Slovenia's top business and state officials. Prime Minister Marjan Šarec promised changes, while also noting the importance of preserving the welfare state.

Šarec told the meeting, which brought together around 300 successful entrepreneurs and several cabinet members, that the government would draft a package of measures before the end of the year, "measures that you've perhaps been wishing to see for a while".

He expects the measures will again cause a storm in the public, but "there is no action without a reaction".

Šarec, however, went on to stress that the welfare state was also needed, "since things that it provides for everybody - such as education, healthcare and other services - are not unimportant".

Šarec, who acknowledged the economy was slowing down but argued it was too early to speak of a crisis, rejected comparisons with Switzerland, which is being looked to at the meeting for inspiration on how to increase added value.

"If we continue to wonder how to become another Switzerland or somebody else, we'll probably fail to meet the desired goals and results. No system has only pluses and no system has only minuses," the prime minister said.

Marjan Batagelj, the chairman and majority owner of Postojnska Jama, the operator of Postojna Cave, said it was time for concrete measures, calling for lower taxation of wages and greater labour flexibility.

"We must not become a tax island. All countries around us are reducing taxes and we need to make sure our business environment is competitive," said Batagelj, while at the same time calling for a more effective education system.

He pointed to Switzerland as an example of a country where politics is constantly coordinating its actions with business.

This was echoed by Heinz Karrrer, the president of the biggest economic organisation in Switzerland, Economiesuisse, who said politics should listen very carefully to the needs of business when it comes to creating jobs.

The afternoon part of the meeting, which also featured Economy Minister Zdravko Počivalšek, Finance Minister Andrej Bertoncelj and Labour, Family, Social Affairs and Equal Opportunities Minister Ksenija Klampfer, looked in more detail at the forthcoming measures in Slovenia.

Bertoncej said the government would present measures coming as part of "comprehensive tax optimisation" to social partners within a month.

He called for an all-encompassing review, noting that while labour was taxed heavily in Slovenia, the tax burdens on capital were lighter than in other countries.

Promising that the business environment would remain predictable, Bertoncej also announced a gradual introduction of measures, with the biggest batch expected in 2019, to be followed by individual measures in 2020 and 2021.

Among concrete measures being mulled by the government, he mentioned easing taxation on the holiday allowance, changes to income tax brackets, to general income tax allowance, as well as to the corporate tax rate.

Bertoncelj, who also sees reserves as regards the effectiveness of the public sector, added that macroeconomic stability would be the priority focus of the ministry.

Economy Minister Počivalšek highlighted labour force shortages as a key factor undermining growth, suggesting that focusing on raising the average wage would have been better than the recent focus on the minimum wage.

He added that "a step forward" could also be possible when it comes to expanding possibilities to lay off unmotivated staff.

Labour Minister Klampfer also called for reducing the tax burden on labour "across the entire vertical", while stressing the need for social dialogue.

04 Feb 2019, 10:20 AM

STA, 3 February 2019 - Out of more than 142,000 companies active in Slovenia in 2017, almost 95% were micro companies, and they employed more than a third of the total of 627,000 all employees in companies. Most of the revenue, over two-thirds, was generated by large companies, Statistics Office data shows.

Large companies employed 27.3%, medium-sized companies 19.1% and small companies 18.6% of all workers.

The exact number of companies active in 2017 was 142,574, of which 94.7% were micro companies, classified as entities with up to nine employees.

Small companies (with up to 49 employees) represented 4.3%, medium-sized companies (up to 249 employees) 0.8% and large companies (250 of more employees) 0.2% of all companies.

All Slovenian companies generated a total of EUR 96bn in revenue in 2017, of which 34.3% was generated by large companies, which were followed by medium-sized companies (23.2%), micro companies (21.8%) and small companies (20.7%).

Out of the total added value of EUR 23bn, 35.8% was generated by large companies, 23.5% by micro companies, 21.2% by medium-sized companies and 19.5% by small companies.

The largest share of sales revenues was generated by industrial companies (40%), which were also at the top in terms of the generated added value (43%).

The least sales revenues and added value sector-wise was generated by construction companies, 5% and 6%, respectively.

Industrial companies, which include mining and quarrying, manufacturing, electricity, gas, steam and water supply, and waste water and waste management companies, increased sales revenues by 11% compared to 2016.

There were almost 20,000 companies in manufacturing in Slovenia in 2017, with sales revenues increasing the most in the motor vehicle segment (by 29%), and decreasing the most in the production of clothing (by 14%).

The data can be explored in more detail here

01 Feb 2019, 16:20 PM

STA, 1 February 2019 - Gorenje, the Velenje-based household appliances group which was taken over by China's Hisense last year, is cutting 325 temporary-basis jobs, according to information from the in-house trade union.

Gorenje confirmed that fixed-term contracts of 190 workers had elapsed, but the head of the in-house trade union Žan Zeba insisted that 325 jobs were being slashed, including agency workers.

Speaking with the STA, the head of the in-house trade union Žan Zeba said the news came as a negative surprise after the company's plans about expansion of production and extra hiring.

Zeba said the Gorenje management had promised the workers who are now being laid off full time jobs. He also said that it would be hard to meet the output goals given the current labour dynamics.

"After the very good test results of our new generation appliances we definitely expect production to increase and the capacities to be filled; we will welcome all new investments once they happen."

Zeba also hopes that the employees' wishes be taken into consideration in the company's reorganisation.

He said the management was planning to launch a new dishwasher production line in mid-year, but the trade union did not have any information about it.

Production of build-in freezers and fridges is to be moved to the subsidiary in Valjevo in Serbia in the coming months.

Denis Oštir, director of corporate communication at Gorenje, told the STA that the mentioned workers were on temporary job contracts. "These contracts have now run out."

"Gorenje denies in the strongest terms the information that we will lay off 325 workers. We will not give notice to a single worker employed on fixed or non-fixed terms," Oštir said.

After receiving official information from the staffing department, Oštir also denied that employment contracts of 325 workers had run out, saying the correct figure was 190 workers.

He added though that it "is true that the fixed-term contracts of a number of workers have elapsed at this time. This is a matter of seasonal change, which is common in a company's operations".

Oštir said the company was adapting to the clients' demands and seasonal trends in demand. At the end of 2018, demand for labour force in production was bigger because the company created stocks because of the move to Valjevo.

Asked about the plans for a new TV plant announced by the Chinese owners, Oštir said the project was in the phase of acquiring the necessary documents.

The plant is to be built by the existing warehouse in Velenje and is to create 300 to 400 jobs.

Gorenje is currently being transformed from a joint stock company into a limited responsibility company. The company delisted from the Ljubljana Stock Exchange last year.

01 Feb 2019, 12:50 PM

STA, 31 January 2019 - About 40% of employers in Slovenia have a problem finding qualified work force, according to a survey conducted by temping group ManpowerGroup. The figure is, however, 5% lower than the average of the survey conducted in 43 countries.

 

Compared to a similar survey conducted in 2017, the share of companies that have a tough job finding skilled work force has increased by 40%.

The needs of employers are changing and they are often looking for work force with very specific know-how, skills and experience, Nebojša Biškup, the head of ManpowerGroup Slovenia and Croatia said on Thursday.

Related: Foreigners now hold 10% of jobs in Slovenia

 Modern jobs do not always demand a university degree, but they do depend on continuous development of skills because even the most traditional work places will require modern technology skills, Biškup added.

The survey included more than 39,000 employers from six industries, finding that more than half of them have started investing in educational platforms and the development of tools to train the right work force. A survey in 2014 showed that only 20% of employers made such investments.

All our stories about employment in Slovenia are here

31 Jan 2019, 10:20 AM

STA, 30 January 2019 - The past year has been again excellent for business, so it's time for long-term measures to raise net wages, the Managers' Association of Slovenia (Združenja Manager) boss Aleksander Zalaznik said as he addressed the association's annual get-together in Ljubljana on Wednesday.

https://www.zdruzenje-manager.si/en/home/

Taking a look at 2018, Zalaznik said exports reached 86% of Slovenia's GDP, and praised the fact that 75% of jobs were created by new and fast-growing companies, which was above EU average, as especially encouraging.

Still, signs of a slowdown in Slovenia's main trade partners could be noticed in recent months, and Brexit is another unknown, he said, adding competitiveness and productivity remained Slovenia's challenges, while demographics should also not be neglected.

Nevertheless, an important next step is raising net wages to contain brain drain and facilitate further economic development. So the association proposes a five-year agreement to gradually raise gross wages and reduce taxation.

Related: Find Out the Average Pay for Various Jobs in Slovenia

"A social agreement that we all want a competitive business environment is crucial here," said Zalaznik, who is convinced Slovenia is able to make this leap. "The moment is right, let's take it."

His view about higher wages but also a higher added value was echoed by Zdravko Počivalšek, the minister of economic development and technology.

He said the Council for Competitive and Stable Business Environment, the ministry's advisory body, had proposed the government and businesses draft a long-term plan for wage growth.

"Higher wages and a higher added value must be the goal of all of us, and they are also our responsibility," the minister stressed.

The managers were also addressed by Prime Minister Marjan Šarec, who outlined via video conference government plans to improve the business environment in 2019.

Related: Outfit7 Founders Still the Richest Slovenians

He said the government would draft a proposal on tax restructuring and overhaul the regulatory framework.

The event was attended by President Borut Pahor, who thanked the association for its contribution to Slovenia becoming a better society since gaining independence.

The Managers' Association, which traditionally holds its get-together at the start of a new business year, also gave out its annual awards.

The lifetime achievement award for 2018 went to Bogomir Strašek, the founder, majority owner and director of automotive supplier KLS Ljubno.

Igor Verstovšek, the co-owner of hi-tech company Cosylab, became Young Manager of 2018.

The Artemide award for breaking the glass ceiling to assume top posts in companies was bestowed on GZS director general Sonja Šmuc and Agitavit Solutions director Anka Brus.

15 Jan 2019, 15:00 PM

STA, 12 January 2019 - The economic and financial crisis in Slovenia, which started in 2009, brought a significant growth of unemployment, with the number of the unemployed more than doubling to almost 130,000 at the beginning of 2014. The situation on the labour market has been improving lately, with shortage of certain staff actually becoming a problem.

The number of registered unemployed persons was up steeply in 2009 and peaked at the beginning of 2014 at almost 130,000, which was around double of that before the crisis.

It was in 2014 when the number finally started to decline, with the improvement on the labour market accelerating in 2016 and 2017 and continuing in 2018, with the number standing at 78,534 at the end of the year.

Projections for the coming years speak about an additional improvement, with the number of registered unemployed expected to drop to the pre-crisis level by 2021 barring major negative shocks.

Staff shortages are now a growing issue, along with unemployment among those aged 55+

There is a large number of structurally and long-term unemployed people in Slovenia and hard-to-employ people, whose activation requires additional active employment policy measures.

Given the circumstances, a large number of companies have already started reporting shortages of adequately trained staff, which is becoming a limiting factor in the implementation of their strategies.

The number of the active working population is also growing again, and the employment rate exceeded the pre-crisis level in 2017. The total number continued to increase in 2018 to reach 1.022 million in the third quarter, a 23-year record.

Although the total employment rate is somewhat higher than the EU average, Slovenia fares much worse when it comes to the employment rate in the 55-64 age category despite an improvement in recent years.

In 2017, it stood at 43% or 14 percentage points below the EU average. Slovenia is meanwhile recording better progress in the under-25 category, but its rate is still at roughly half of the EU average.

         Employment  Registered        Survey

         rate (%)    unemployment (%)  unemployment (%)

2008        73.0         6.7               4.4

2009        71.9         9.1               5.9

2010        70.3        10.7               7.2

2011        68.4        11.8               8.2

2012        68.3        12.0               8.9

2013        67.2        13.1              10.1

2014        67.7        13.1               9.7

2015        69.1        12.3               9.0

2016        70.1        11.2               8.0

2017        73.4         9.5               6.6

* The figures are annual averages

Source: Statistics Office, Employment Service

Pay in Slovenia after the crisis

Growth of wages slowed down in the crisis years and came to a stop in 2012 and 2013. Wages started to grow again noticeably only in 2017 and 2018, when the growth of gross wages exceeded 3%, with the trend expected to continue and grow even stronger in the coming years. Domestic and foreign macroeconomic analysts are stressing that the growth of wages will not significantly exceed the growth of productivity and undermine the competitiveness of the economy.

Data for the period as of 2008 also show that the growth of wages was higher in the private than in the public sector. While in the public sector the crisis was fought with lay-offs, there were no dismissals in the public sector, with the number of employees even increasing in certain activities. Civil servants did contribute their share by accepting austerity measures, which are only now being gradually abolished.

Related: Economic crisis that produced a "lost decade" in Slovenia

In the years after 2013, contributing significantly to the real purchasing power was a low inflation, which was noticeable again only in 2017 and last year, when it reached 1.4% according to preliminary estimates.

What also marked the crisis years was a raise of the minimum wage of more than 20% in 2010, which enraged the employers, who blamed the rise in the unemployment rate in the coming years on this measure. Trade unions were meanwhile noting that the minimum wage was still below the minimum costs of living and that all bonuses were calculated into it.

In the recent years, the minimum wage has been increasing more gradually, standing at EUR 843 gross last year. This year it will increase to EUR 886 and in 2020 to EUR 940 gross under the latest legislative changes, which also regulate the elimination of bonuses from the minimum wage as of 1 January 2020.

      Inflation (%)  Average net wage*      Average gross wage*

                     in EUR   growth in %   in EUR  growth in %

2008     2.1         899.8       7.8        1,391.4       8.2

2009     1.8         930.0       3.3        1,439.0       3.4

2010     1.9         966.6       3.9        1,494.9       3.9

2011     2.0         987.4       2.1        1,524.6       2.0

2012     2.7         991.4       0.4        1,525.5       0.0

2013     0.7         997.0       0.6        1,523.2       0.0

2014     0.2       1,005.4       0.8        1,540.2       1.1

2015    -0.5       1,013.2       0.8        1,555.9       1.0

2016     0.5       1,030.2       1.7        1,584.7       1.8

2017     1.7       1,062.0       3.1        1,627.0       2.7

* Annual average

Source: Statistics Office

Added value and productivity

In addition to the demographic trends, one of the key challenges for long-term development and economic competitiveness of Slovenia are growth in productivity and added value in the economy, to which growth of wages and well-being are tied. In this segment, the economic crisis brought stagnation and even a slight decline, while in comparison with the EU average, productivity in the Slovenian economy in 2018 was still lower than in the pre-crisis 2008.

Gross added value per employee was up in the 2008-2017 period, but is still well below the EU and eurozone averages, at 63% of the EU average and 57% of the eurozone average.

Related: Banks were at the center of the financial crisis in Slovenia

Increasing productivity and added value is a challenge both for the economy and economic policy. Businesses have set an ambitious goal of reaching EUR 60,000 in added value per employee, EUR 50bn in exports and an EUR 2,300 average wage by 2025, which is why they except measures from the state ranging from the tax police to the immigration policy.

Among the necessary measures both in the economy and institutions, they have pointed to measures for growth of investments in new production capacities and new technologies and digitalisation, a growth in investments in research and development, which as a share of GDP dropped from 2.6% in 2013 to 1.93% in 2017.

Labour productivity, % of EU average

       Per employee   Per hour worked

2008       83.5           83.8

2009       79.9           79.0

2010       79.4           78.2

2011       80.6           80.3

2012       80.0           79.8

2013       80.3           78.9

2014       81.2           78.9

2015       80.5           77.9

2016       80.5           79.7

2017       81.0           81.5

Source: Statistics Office

Gross value added, in EUR

      Per employee  EU average    Eurozone average

2008     34,759        55,079          61,492

2009     33,694        52,917          60,581

2010     34,107        55,506          62,638

2011     35,594        56,951          64,164

2012     34,854        58,247          64,834

2013     35,643        58,850          65,863

2014     36,893        60,247          66,991

2015     37,758        62,818          68,678

2016     39,091        62,418          69,398

2017     40,136        63,276          70,861

Source: Eurostat

All out stories on the Slovenian economy can be found here

11 Jan 2019, 10:20 AM

STA, 10 January 2019 - More than 90% of Austrian companies doing business in Slovenia believe the country will continue to be an investment-friendly environment this year, follows from an annual survey conducted by the representation of the Austrian economy in Slovenia, Advantage Austria Ljubljana. The skills gap remains an issue.

Around 60% of surveyed Austrian business executives said that the economic situation in Slovenia had improved last year and would advance further this year. Accordingly, more than half of the respondents said that revenue and orders would go up this year.

"Austrian companies and investors are aware that they have an incredibly interesting, dynamic, stable, competitive and reliable market with plenty of opportunities right next to them," Peter Hasslacher, the head of Advantage Austria Ljubljana, said at the presentation of the survey.

Companies doing business in Slovenia are satisfied with the accessibility of public tenders and their transparency, and with the quality, education and the motivation of the workforce in Slovenia.

However, they find it increasingly hard to find suitable workers. Among those, 73% would require more workers with secondary education and almost 27% more workers with higher education.

According to Hubert Culik, the head of coatings maker Helios, which had been owned by Austria's Ring International before being sold to Japanese Kansai Paint, there is a lack of practical training of young people in Slovenia.

"Many of our new employees require lengthy practical training despite just having finished their studies," he said.

Other measures that would further improve the business environment in Slovenia include reducing taxes and red tape, improving the flexibility of labour market, and stabilising the political situation, according to the respondents.

20 Dec 2018, 14:20 PM

STA, 19 December 2018 - Slovenia's tourism industry has had another record year, with tourist nights expected to top 15.2 million by the end of 2018, up from last year's 12.6 million. Still, some challenges remain to be addressed, including the shortage of staff and low pay as well as the consolidation of state-owned tourism companies.

 

Slovenia now a trendy destination

Slovenia has regularly made it to various lists of destinations worth exploring which are compiled by specialist media abroad, and the country's promotional campaigns have regularly won awards at major international tourism events.

"Slovenia is not only a recognisable destination, it is now a trendy destination," is how Slovenian Tourist Board (STO) director Maja Pak has recently summed the country's position in global tourism.

Tourism revenue, a key indicator of tourism performance, is growing, rising by 11.6% to EUR 2.12m in the first nine months of the year.

While the 2017 tourist nights figures were exceeded already in October, Slovenia expects to record over 5.6 million tourist arrivals in 2018, up from 4.95 million last year.

The number of foreign guests is to reach 4.2 million by the end of the year, and they are expected to generate almost 11 million tourist nights, STO data shows.

The growth is thus considerably more robust that in the EU or in the world.

Hotels in the black, differences in ownership

Following the crisis, hotels are back in the black, yet Economy Minister Zdravko Počivalšek, whose ministry is in charge of tourism, is not entirely happy yet.

He believes the relatively low value added should be blamed on the fact that as many as 40% of hotels are in state ownership.

He thus insists on their restructuring as envisaged in the 2017-2021 strategy on sustainable development of Slovenian tourism.

Once they are brought under one roof, preferably under Slovenian Sovereign Holding, they should be consolidated to secure a higher value added and then gradually sold.

He believes there is room for no more than two to three major groups in the sector, and is confident the incumbent government will complete the restructuring process.

However, Počivalšek has admitted on several occasions that this will not be easy since not all stakeholders have the same view on the issue.

That even state stakeholders have different interests in the sector has been recently proven by the fact that several different state companies and funds bid for six hotels on the coast which are being sold by Istrabenz Turizem.

To achieve a higher value added, Slovenian tourism also needs to develop new innovative products, which implies investment into infrastructure.

To encourage the investment cycle, the ministry and SID Bank have launched a EUR 160m loan scheme for new accommodation facilities. Počivalšek has said there is much interest.

Higher tourist tax, further legislative changes in the making

By passing changes to the law on encouraging tourism development, the government enabled municipalities to raise tourist fee and introduce a new tax to secure more funds for tourism promotion.

The tourist free was capped at EUR 2.5 per person a night, but is still set by individual municipalities.

The new tax meanwhile amounts to 25% of the tourist fee and will be charged as of 2019 as a a new source of STO funds, bringing it an estimated EUR 4.7m a year.

Many municipalities have opted to raise the tourist fee, with several popular destinations such as Ljubljana, Piran and Bled raising it to the maximum.

The ministry has assessed the measure will annually bring all Slovenian municipalities additional EUR 6.9m.

For 2019, the ministry is planning further legislative changes to relax the rules on the hospitality sector and mountain guides.

New rules will also be introduced governing tourist accommodation facilities which introduce internationally-comparable Hotelstars standards.

Owners of accommodation facilities have until 1 April to adjust to a unified set of criteria to classify accommodation facilities.

New collective bargaining agreement, pay still low

Staff is one of the most burning issues in hospitality and tourism, with employers having a hard time finding quality staff in Slovenia or in the broader region.

This is mainly due to difficult working conditions and low pay.

A new collective bargaining agreement was signed in August, bringing higher wages for workers receiving the lowest pay, a higher annual holiday allowance of EUR 1,000 and changes to overtime work.

Nevertheless, hospitality and tourism trade unions have already announced their plan to push for fresh pay talks.

Feel Slovenia your way

This year was one of the most intensive and successful years for Slovenia in terms of marketing as well. The STO continued with its digital campaign Slovenia - Make New Memories this time on 17 markets, including in the US and Canada for the first time.

Its main promotional slogan "Slovenia - Green. Active. Healthy." will be replaced with "I Feel Slovenia. My Way." in 2019.

However, just like in 2018, culture will remain in the focus of the STO's promotional campaigns, to be replaced by gastronomy in 2020 and 2021.

18 Dec 2018, 14:28 PM

STA, 18 December 2018 - The number of jobs created in Slovenia increased to 885,700 in October with one in ten of the jobs filled by foreigners, fresh data from the Statistics Office show.

The number of people in employment in the country increased by 0.9% from November and by 3.2% on the same period a year ago.

More than half of those in jobs were men, their number rising by 0.8% from September to 486,600. The number of employed women rose by 1% to 399,000.

Manufacturing created most new jobs, the number of those employed there rising by 4.1% to over 8,000.

Almost 10% of all people in employment in Slovenia were foreigners. Their number rose by 19.5% in a year to 87,700. This is up 2% from September.

Most foreigner workers were from Bosnia-Herzegovina (42,600), Serbia (10,800), Croatia (7,500), Kosovo (7,100) and Macedonia (6,000).

Most were employed in the construction industry (23,400), manufacturing (20,300) and in transport and storage (14,800).

Related: 1 in 8 residents in Slovenia is an immigrant

04 Oct 2018, 10:20 AM

STA, 3 October 2018 - The number of people registered with the Slovenian Employment Service as being out of a job dropped to 73,781 at the end of September, 2.8% fewer than the month before and 8.9% fewer than a year ago. 

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