Economic trends in Slovenia in 1998 were favourable for the sixth year running. As expected, economic growth was reflected in increased productivity rather in an increased employment rate. The employment rate grew by 0.7% but, as the number of self-employed people fell by 5.7%, the number of actively working people at the end of December had fallen by 0.1% in comparison to 1997.

Demand for workers was up by 6.6% on the 1997 level, which can be attributed mainly to the greater needs for seasonal labour on the part of the construction industry, agriculture, catering and tourism. Over 72% of the total was demand for temporary labour; among workers with low qualifications, this figure stood at 84%; and permanent employment was offered in half the cases to the highly-qualified labour force. Despite comparatively high demand on the one hand and large numbers of unemployed people on the other, around one-fifth of the demand could not be met, largely due to vocational, age and regional discrepancies between supply and demand.

In 1998 the number of work permits issued at the employer's request fell by 17.1%, falling below the 35,000 mark for the first time since 1993. The reduction in the number of permits issued was the result of carefully planned work by the ESS on seeking suitable Slovene workers and of tougher controls implemented in the process of issuing work permits. The majority of foreign workers employed in Slovenia are originally from ex-Yugoslav republics. In the years since Slovenia's independence, the branches employing most foreign workers have remained the same: construction and agriculture.

At the end of 1998 a total of 126,625 unemployed people were registered with the ESS, which is a 1.5% fall on the year before. A total of 77,021 people registered for the first time - a fall of 1.8%. The key difference in comparison with earlier years was in the structure of the influx, with steady growth recorded in the influx of people whose temporary employment had been terminated, and a reduction in the influx of people made permanently redundant or who had lost their jobs due to company bankruptcy or liquidation. A total of 55,448 jobless people found employment, although eight out of ten did so for a temporary period only. In recent years the unemployment structure has become increasingly less favourable, chiefly because employers tend to lay off older and less qualified staff and look for a younger, and usually better qualified, workforce. In particular, employers have come to expect specific knowledge and skills from candidates. The discrepancy between supply and demand and the comparatively high costs of laying people off are forcing employers to resort to contractual and overtime work. In 1998, 7.8 million hours of contractual work and 13.3 million hours of overtime were done. Branches which led in terms of volume of contractual work were: processing and education, followed by healthcare, social security and construction.

In terms of the comparability of the unemployment rate with other countries, the survey-based unemployment rate should be mentioned. At 7.7% it was lower than the average EU rate of 10.2%. The only EU countries whose unemployment rates were below Slovenia's were Austria, Great Britain, Denmark, the Netherlands and Portugal.

In order to combat discrepancies on the labour market, various forms of active employment policy, designed to reduce the gap between supply and demand, have been in place in Slovenia since the early 1990s. In terms of activating and motivating unemployed people, 1998 was the most successful year since Slovenia first had to deal with the issue of high unemployment. Due to the large number of long-term unemployed people and of young people without qualifications, the ESS increased the number of public works programmes in 1998, integrating 6,000 young people in training programmes for the jobless devised by the Ministry of Labour, Family and Social Affairs and the Ministry of Education and Sport.

There are two basic objectives to such training for unemployed people: one is to narrow the gap between supply and demand by training people for those professions in which there is a pronounced labour shortage; the other is to increase the education levels among unemployed people by including unemployed people who have no professional qualifications in education programmes. In view of the changes in demand, of the importance of knowledge for future development and of the necessity of raising the age limit for retirement, education programmes for unemployed people became even more important in terms of actively engaging unemployed people, reducing the discrepancies in available and required professions, raising education levels and increasing the competitive standing of the unemployed on the labour market. In addition to education programmes for unemployed people, the ESS provided more than 6,300 unemployed people with employment opportunities through on-the-job training, while 14,000 unemployed people were included in various condensed forms of training which helped to enhance their employment or self-employment opportunities.

The second most extensive programme in 1998 involved public works. Public works programmes, which are about active engagement and the preservation or acquisition of work habits, skills and new knowledge, are suitable for difficult-to-employ categories of people (e.g. the long-term unemployed, those with no skills, older people). Public works programmes are created in cooperation between local communities, providers and the ESS, and are an example of a partner-based approach to the resolution of the unemployment issue. In 1998 these programmes involved 10,641 unemployed people - nearly twice as many as the year before. Very good results in comparison with previous years were also recorded in direct transition into employment from public works programmes, with as many as 17% of participants finding regular employment while engaging in programmes (12% of participants found employment in 1997).

Apart from these two most extensive programmes, the ESS also encouraged employment by refunding contributions to those employers who took on long-term unemployed people, first-time job-seekers, or recipients of unemployment benefit or assistance. Given that employment opportunities for the disabled are not good, the ESS dedicated particular attention to finding training and employment opportunities for the disabled and to preserving jobs for disabled people in sheltered companies through subsidies. In spite of a well-organised programme of assistance to people with business ideas who wish to realise them through self-employment, the level of interest in this programme among unemployed people was lower than two years ago.

Cooperation continued with those companies which are included in the government's restructuring and revitalisation projects and which are engaging in the restructuring of staff. By establishing professional foundations and securing funding, labour funds, whose members are workers who have been made permanently redundant during the lay-off period and in some cases the long-term unemployed as well, were able to start operation. First results indicate that this type of work is suitable for both surplus and difficult-to-employ categories of people.

The number of people who joined active employment policy programmes, which are coordinated by the ESS, increased by 50% compared to 1997. As a result, 64,693 unemployed, redundant and disabled people took part in various programmes aimed at enhancing their employability and at preserving their jobs. The number of participants joining active employment policy programmes will have to increase still further in the future, since, given the unemployment structure, a variety of active employment policy measures will be the only method of finding employment for these people.

The ESS ensured that the rights to unemployment benefit or assistance arising from unemployment insurance were recognised and paid out in time. At the end of 1998, 36,082 unemployed people were entitled to unemployment benefit and 2,818 to unemployment assistance. In comparison with December 1997, the number of recipients fell by 4.9%, which can be attributed, among other things, to very active engagement on the provision of placements and to active employment policy programmes. The only suitable programmes for the majority of entitlement-holders were public works programmes, since as many as 54.5% of them were over 50 years old.

In the field of vocational guidance, a marked increase in the volume of vocational information and guidance for schoolchildren and adults took place (16,170 adults and 12,838 schoolchildren). A trial Centre for Vocational Information and Guidance was set up in Ljubljana. Scholarships were provided in line with the Rules on Scholarships. In the 1998/99 academic year, 43,136 secondary-school and university students were receiving national scholarships (more than 2,600 fewer than in the preceding academic year) and 10,259 were receiving scholarships for the gifted.

In addition to an increase in the volume of tasks on active employment policy programmes, an increase in vocational guidance for adults, and the formulation of employment plans for most registered unemployed people, the ESS was also actively involved in preparations of the new Employment and Unemployment Insurance Act, and carried out the most urgent preparations for the entry into force of the modifications to the rights arising from unemployment insurance, for the new rules applying to public works, and for refunding contributions to employers. All this required a great deal of involvement in the preparation of procedures, applications, and staff and partner training for public works programmes.