STA, 6 March 2019 - The Chamber of Commerce and Industry (Gospodarska zbornica Slovenije - GZS) has proposed a reform of the pay system in the corporate sector for 2019-2025 centred around tying wage growth to productivity gains, echoing its long-standing position that pay should be more performance-based.
Under the proposal unveiled on Wednesday, average gross wages would increase by nearly a quarter by 2025, provided that annual productivity gains almost doubled compared to 2014-2018, from 2.7% to 4.8%.
The goal of the proposal is to increase value added per employee to EUR 60,000 and exports to EUR 50bn. In that case, the average gross wage would be EUR 2,000, GZS director general Sonja Šmuc said.
Slovenia's exports amounted to EUR 31bn last year, the average private sector gross wage was at EUR 1,647 in December, whereas value added per employee was EUR 43,000 in 2017, the latest year for which data are available.
"Assuming appropriate productivity gains, the average gross wage could rise by EUR 370," GZS chief economist Bojan Ivanc said.
To achieve the required productivity gains, Slovenia has to step up investments in research and development and improve vocational education, according to Šmuc.
At the same time, wages in the public sector must grow at a slower pace than private sector pay, and the retirement age must gradually converge towards the EU average.
"It is time to talk about this now, not when we already have major problems funding pension," Ivanc pointed out.
The GZS has sent its proposal to all social partners and will now try to reach a consensus. Negotiations are expected to start next week.
Meanwhile, employers and trade unions have voiced reservations about the proposal. An exception is the ZSSS, Slovenia's biggest trade union confederation, which believes the goals could be reached.
Marjan Trobiš, the head of the Employers' Association, expressed surprise that the proposal was presented as having the backing of the entire business sector.
He said that his association had only gotten the text yesterday and had not yet had the chance to become fully acquainted with the document. He is also surprised that negotiations are to start as early as next week.
Igor Antauer, the secretary general of the Trade Crafts and Small Business Employers' Association, said that the proposal had not yet been coordinated among employers.
"It's a shame that somebody was in a hurry ... and that they did not check what would happen to all segments of the private sector not just the industries represented by the GZS."
Pergam trade union head Jakob Počivalšek said that the document was not aiming to raise salaries but to limit them and enable higher pay for managers.
Počivalšek said he was not against investing in R&D and training, but that the proposal provided no guarantees that this would actually be the case and the funds would not be spent on higher pay for top managers.
Lidija Jerkič, the head of the ZSSS, is not as critical. "These goals are nothing new. They can be reached but will require a restructuring of the industrial sector." She added that it was high time to reach an agreement on private sector pay.
STA, 5 March 2019 - Slovenian chief financial officers (CFOs) expect a somewhat less positive outlook of the state of the economy this year, and point to operational cost management and lack of trained workers as the main risks to business, according to the 2019 survey by consultancy services provider Deloitte Slovenija.
"The main findings of the survey, which has been carried out for the 10th time in Central Europe and for the 8th time in Slovenia, are that CFOs expect growth to slow down.
"In Slovenia, they stressed that an unstable fiscal or legislative environment in general makes their business highly uncertain," Deloitte Slovenija director Barbara Žibret Kralj said as she presented the survey in Ljubljana on Tuesday.
With the minimum wage to rise in Slovenia, Slovenian CFOs expect labour costs to rise the most among all costs. And just like in 2018, they point to hiring adequately trained staff as one of the biggest problems.
The CFOs also expect the unemployment rate to rise, and see banks as the most popular lenders, with internal sources of funding also playing an important role.
Mojca Osolnik Videmšek from the Gorenjska Banka bank said the economy was deeply in an investment cycle, so the need for banks as sources of funds, also because of low interest rates, was there to stay.
This year's survey also focused on artificial intelligence.
More than three-quarters of CFOs in Central Europe and around 40% in Slovenia say their companies lack the support of artificial intelligence in decision-making processes.
In Slovenia, two-thirds of companies say artificial intelligence is important for the development of financial services, but are poorly prepared for implementation.
Slovenian CFOs also believe artificial intelligence will create many jobs in the medium term, but a quarter maintain it will make many jobs obsolete in the long run.
While firms compete globally to attract IT experts, Juri Sidorovič from Deloitte said directors not giving clear instructions and not setting goals was sometimes a problem.
"The problem is what a goal is, what we want, what can be modernised, what can be robotised," he stressed.
Deloitte Slovenija also commented on the tax reform presented last week, with Andreja Škofič Klanjšček saying it was more of a "correction since it brings no major changes".
She welcomed the planned changes to personal income tax to finally take the pressure off of those in the middle of the income scale, and exempting holiday allowance from all taxes.
However, Škofič Klanjšček is worried about the planned rise in corporate income tax from 19% to 22% and about the minimum taxation of 5% of all legal entities.
The participants of the news conference said raising the corporate income tax "is a bad signal to attract investors".
They also complained about the lack of a strategy in which the government would set goals to be achieved with tax changes.
Sidorovič said the state could for instance decided to promote IT and then take measures to implement such a strategy.
STA, 28 February 2019 - Slovenia's survey unemployment rate stood at 4.4% in the last quarter of 2018, which is the lowest rate since the last quarter of 2008, when it stood at 4.3%, the Statistics Office reported on Thursday.
Among the people aged between 15 and 29, the survey unemployment rate in the last quarter of 2018 was at 7.6%, or two percentage points lower year-on-year. The rate was the lowest in the 55-64 age group, at 3.8%.
The long-term unemployment rate dropped to 1.8% year-on-year, as the number of long-term unemployed persons was down by 35.6%, from 29,000 to 19,000.
In the last quarter of 2018, 45,000 persons were unemployed by ILO standards, which is 14,000 (24.3%) fewer year-on-year. The active population in Slovenia was up by 12,000 (1.2%) to 984,000.
The number of inactive persons was up by 4,000 or 0.6% to 729,000. More than half of them (394,000) were older than 65, while 7% or 47,000 of them were aged between 25 and 49.
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.
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
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.
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.
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
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.
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.
"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.
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.
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.
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
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.
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
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.
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
All out stories on the Slovenian economy can be found here
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.