After years of recession and decline, employment trends finally became positive in 1999. An average increase of 1.8% in the number of actively employed was recorded as the result of job placements for unemployed people with the help of active employment policy programmes, changes in the method of determining which people are included in public works as well as an increase in overall economic activity. According to the latest calculations by the Slovenian Statistical Office, in 1999 the national GDP which is the main indicator of the success of an economy as a whole, and which has been increasing in Slovenia since 1993, increased in comparison with 1998 by as much as 4.9%.

According to the Statistical Office there were, on average, 758,473 people actively working, which is 1.8% more than the 1998 average. According to the end-of-year figures there were 766,173 actively working people, which is 3.3% more than at the end of 1998. In 1999 the number of employed as well as of self-employed people increased; the increase was the most obvious in the number of people employed by self-employed entrepreneurs and in agriculture.

At the end of the year, companies, enterprises and organisations employed 610,075 people which with regard to the end of 1998 is 2.9% more. On average, companies, societies and organisations employed 606,927 people in 1999 which is 2.6% more than the 1998 average. The number of employed people grew in all months of 1999 apart from August when the employment in companies, societies and organisations fell slightly.

At the end of 1999 self-employed entrepreneurs employed 65,405 people which in comparison with the end of 1998 is a 6.4% increase; on average they employed 64,043 persons which is 5.3% more than the 1998 average. A comparison of monthly data shows that apart from January and December, when it fell, the number of people employed by the self-employed people grew in 1999.

On average 87,502 people were self-employed in 1999 which is 5.6% fewer than in 1998; at the end of the year there were 90,693 self-employed people which is 3.6% more than at the end of 1998. Until 1998 the number of self-employed people grew slowly, but in that year it fell. A similar trend continued in 1999. Only in July (up by 6.5%) and October (up by 1.2%) did the number of self-employed people grow, while in all other months it either stayed the same or fell. The reason for the increase in the number of self-employed people in July and October lies in the increase in the number of farmers. (Statistical Office obtains data on farmers with the Labour Force Survey which is carried out quarterly).

Apart from November (when it grew by 0.1%) the number of self-employed entrepreneurs remained constant or fell. At the end of the year there were 44,865 self-employed people which is 1.2% less than at the end of 1998. On average, there were 45,093 self-employed entrepreneurs people in 1999; this is a fall of 1.7% in comparison with the 1998 average.

A similar trend to that of self-employed entrepreneurs applied for persons providing independent professional services. Apart from February, July, October and December when their numbers increased on the preceding month, their numbers fell in 1999. At the end of the year there were 5,766 people providing independent professional services; in comparison with December 1998 their number increased by 0.6%. However, on average in 1999 there were 5,723 people providing independent professional services; in comparison with 1998 their number fell by 1.5%.

At the end of 1999 there were 40,062 farmers in Slovenia, which in comparison is a 10% increase with December 1998; the annual average for 1999 is 36,685 farmers which is 10.6% less than the 1998 average.

Table III: Overall employment (actively working population) - annual average from 1987 to 1999

Table IV: Active population by sector as at 31 December 1999

Figure 7: Structure of active population (1999 average)

The demand for labour and employment followed the moderate and relatively stable pattern of economic growth in Slovenia. In comparison with the previous year the demand for workers and trainees which employers must register with the ESS increased; and job placement increased slightly as well. No essential changes took place in the structure of the demand; employers still mainly advertise vacancies for temporary employment and seek highly skilled or unskilled workforce. There are still imbalances between the educational, territorial and other structures of the demand and supply, especially among the unemployed registered with the ESS.

Employers notified the ESS of a need for 148,494 workers and trainees. This was the highest number of registered needs for workers and trainees since 1997, since when it no longer includes the need for foreign workers, except in cases followed by new employment. In comparison with 1998 the number of registered vacancies increased by 4.1%. Across the whole year, demand retained its seasonal character: the traditional decline in the demand towards the end of 1998 continued into the first months of 1999. The start of spring seasonal work in the agriculture and construction industry in March led to an increase in demand which as the result of summer seasonal work in restaurants and in tourism continued until July. In August the demand fell due to the holiday period, increasing again in September and October only to fall once more towards the end of the year.

Figure 8 shows the monthly demand for workers and trainees by month.

Figure 8: Monthly registered demand for labour

Offers of temporary employment fell in 1999 in comparison with 1998 by 1.3 percentage points to 70.9% of all registered vacancies. Despite the fall the share of temporary work offers increased by 9.6 percentage points in comparison with early 1990s. In the months when demand for labour is up the demand for temporary workers also increases. In those months the demand for seasonal workers increases, thus the increase in temporary positions during that period is understandable. The largest need for temporary workers was registered in agriculture (81.7% of the total demand in agriculture), followed by non-agricultural activities (78.2% of the total demand in non-agriculture); the demand for temporary workers was the lowest in the services sector (65% of the total demand in this sector).

Temporary employment provides no job security to a worker as he or she might find himself/herself unemployed again once it ends. Job placement was dominated by temporary employment - as much as 73.4% of all people to find employment in 1999 were employed temporarily. Among the groups of people that are usually employed temporarily, three groups stand out in particular: the unemployed, first-time job seekers and unskilled workers. In 1999, 70.6% of all unemployed, 83.8% of all unskilled workers and 93.1% of first-time job seekers were taken on temporarily.

In 1999 employers reported 9,806 vacancies for trainees which is 11.4% less that the year before.

The actual demand for labour has not changed significantly according to employment sector in comparison with previous years. The highest demand was reported by employers in service activities (55.7% of the total demand), which is 9.1% more than in 1998, followed by the non-agricultural sector, which registered 43.2% of the demand, which is only slightly less than in 1998. Demand from employers was most modest in the agricultural sector (1%), which is still 12.3% more than the year before.

The educational structure of registered vacancies for workers and trainees in 1999 was as follows: for workers who have attained first and second levels of education, 31.6%; third and fourth levels, 34.6%; fifth level, 17.9%; sixth and 15.8% the seventh. In comparison with 1998, the share of the need for those with the first, second, third and fourth levels was slightly lower while for those with the fifth, sixth and seventh it was slightly higher.

The educational structure of demand and of registered unemployment is shown in Figure 9.

In 1999, together with notifications of job vacancies, the ESS began to collect information on the occupation as a group of related works and assignments which the future employee is expected to perform. This will help to provide more in-depth information on the vacancy, which is essential for efficient job placement. By adding the information on the occupation to the vacancies record the problem of no distinction between the education required for the job and the occupation as a specific type of work was removed. The ESS will continue to gather information on required level of education and encode it with the help of the code book for vocational and occupational qualifications. Information on an occupation is obtained from an employer's brief description of the job and assignments. The ESS then, on the basis of the employer's brief description of the job and assignments, identifies the occupation and encodes it according to the standard occupation classification.

The standard classification of occupations divides occupations by related type, level of knowledge and skill required for the specific work area. By level of knowledge and skill required the SOC divides occupations to four levels. The SOC has a hierarchical structure with occupations divided into ten main groups of occupations, which are then further divided into subgroups. With classification of an occupation to one of the ten main groups of occupations the level of knowledge or skill necessary to perform this occupation is defined; classification within the main group depends on the type of knowledge or skill required.

Information on the occupational structure of the demand for labour acquired from the record of vacancies for workers in 1999 was the first of its kind to be collected in Slovenia.

Figure 10 shows the occupational structure of the demand for labour.

A detailed examination of the main groups of occupations reveals that demand was the highest in some work-specific occupations. In the area of commercial sales staff the demand for the following groups of occupations was highest: for marketing and sales managers, technical and sales representatives, commercial and financial agents and representatives, sales staff for shops and fairs, demonstrators. In the construction area the demand was highest for the following occupations: construction and surveying technicians, builders, drivers of excavation machines and unskilled construction workers. In the finance and economy areas the demand was the highest for the following occupations (by group): financial experts, auditors, accountants, bookkeepers, accounting and bookkeeping staff.

Fulfilling labour demand

Based on data on the number of people registering for a pension and disability insurance and health insurance it can be concluded that 114,387 people found employment in 1999; of that total, 6,747 were trainees. In comparison with the year before employment did not increase significantly - only 0.4% more people found employment. The previous trend of a falling number of trainees finding employment continued (down by 19%); on the other hand, 1.9% more workers were employed. Temporary employment amounted to 73.4% of all workers to find employment in 1999.

77% of labour demand was fulfilled, in 1999, which is 3% less than the previous year. The reason not all registered vacancies for workers and trainees were filled is in the discord between demand and supply. The employment possibilities of people with fewer qualifications are low and their numbers among the ranks of the unemployed grow faster than employer needs. The territorial distribution of demand is still different to the distribution of towns where unemployed people live, who usually are not prepared to move because of a job. The number of unemployed people over 40 is growing, while employers often consider such people unfit for employment. Employers often demand, in addition to suitable qualification, various other skills, work experience, and personal characteristics as a condition for employment thus making it more difficult to find employment for those who do not meet such requirements. An analysis of these additional requirements in advertised job vacancies, carried out in the first half of 1999, showed that work experience was a requirement in 42.4% of cases, computer literacy in 11% and foreign language in 12.7% of vacancies. Part of the reason for the gap between the demand and supply is administrative, mainly because temporary employment makes it possible to advertise the same job vacancy several times in a year.

The bulk of the activities in this area concerned employment of foreigners in Slovenia while employment of Slovene workers abroad took place in a very limited extent only.

Most of the activities of the ESS in this area centred on reducing foreign employment in Slovenia and replacing foreign workers with Slovene unemployed people and on cooperating in the preparations for legislative changes on foreign employment.

3.3.1. Employment of foreign workers in Slovenia

The employment of foreigners in Slovenia in 1999 was marked by a few characteristics which influenced the dynamic of issuing of work permits and of foreign employment. These primarily include the increase in the needs for labour in construction industry and agriculture, the application of the Instruction on the Implementation of the Aliens Act (Ur.l. RS, No. 54/97) and the introduction of work permits for foreigners who previously regulated their status with the help of business visas.

Following the fall in the number of work permits issued in 1997 and 1998, in 1999 such employment grew by 1.1%. This however is not more than the increases in foreign employment in 1995 and 1996, when it was at its highest. The relatively high number of work permits to have been issued in recent years is understandable, as it involved more cases of renewals of old work permits by foreign workers who were in the country when Slovenia gained independence than new job placements of foreigners. New job placements by foreigners were in a minority; most of them were seasonal jobs.

The precondition for a foreigner finding employment in Slovenia is a work permit, which is issued by the ESS on condition that there are no suitable Slovene workers available who are willing to accept the job. Work permits are usually issued pursuant to an application by the would-be employer and for one year only. This means that one has to re-establish every year whether any Slovene candidates are available for the job performed by the foreign worker. The further employment of the foreign worker in question depends on this, as the revocation of the work permit also means the termination of his/her employment. It should be pointed out here that even though the number of issued permits is high, most of them are permits to foreign workers who have been employed for years and there are not many new job placements as such.

Table V: Number of work permits issued, 1992 - 1999

This is confirmed by the data on the total number of valid work permits where a growth has been recorded but considerably smaller than the number of issued permits. At the end of 1999 there were 37,791 valid work permits, while 22,965 permits were granted on the request of the employer.

In connection with the new Aliens Act (Ur.l. RS, No. 61/99) attention must be drawn to the changes in the way the residence and work of foreigners, managers and detached workers are now regulated, which previously were regulated with business visas. These were issued by Slovenia's consular offices abroad or by administrative units in Slovenia. Because the new Act no longer prescribes business visas the Instructions Amending the Instructions on the Implementation of the Aliens Act (Ur.l. RS, No. 80/99) introduces special work permits which are issued by the head office of the Institute for Foreign Managerial and Other Staff in Foreign-Owned Companies providing cross-border services in Slovenia. Within two months of its enactment, 629 personal and work permits have been issued on its basis.

The main reasons for employing foreign workers remain the following:

• structural discrepancies on the labour market (e.g. in construction and agriculture);
• willingness by foreign workers to accept work under more demanding working conditions;
• the professional qualification levels of foreign workers;
• the unwillingness of Slovene job seekers to accept certain forms of employment, in most cases due to unsuitable working conditions;
• the unwillingness of Slovene workers to accept work in certain sectors;
• other reasons (ties with parts of the former Yugoslavia, reuniting of families, etc.).

Legal provisions enabling the new employment of foreign workers, the absence of a comprehensive policy of employing foreign workers, and the narrow interest in cheap labour by employers are all reflected in the low level of professional qualifications among foreign workers who have acquired work permits in the past. The structure remains the same. Most work permits were issued to unskilled and semi-skilled workers: 66% to workers with first and second levels, 24% to those with the fourth, 6% with the fifth level and 4.6% to those with the sixth level and Master's degrees.

According to work sector, most permits were issued for work in construction (50.5% of the total or 19,583 permits) followed by retail (4,184), business services (3,334), agriculture and forestry (2,753), restaurants (1,933) and metal industry (1,410).

The current situation is a reflection of the actual demand for unskilled labour now and in the past. With regard to their nationality the structure of foreign workers has been more or less the same since 1992, which is understandable considering that a large number of workers are from the former Yugoslavia who lived in Slovenia when it gained independence. These now extend their permits every year. They amount to 96% of the total.

Table VI: Breakdown of valid permits by qualification and nationality as at 31 December 1999

Considering the existing structural discrepancies on the labour market, the employment of foreign workers, i.e. the substituting of Slovene workers with foreign workers, remains an issue. Despite the positive trends in the past and the work carried out by the ESS on giving priority to Slovene workers in job placement it is expected that due to these discrepancies foreign workers will continue to be required in the future, especially during seasonal works in construction and agriculture.

Until the end of 1980s unemployment was not really a big issue in Slovenia; at the end of that period the deepening economic crisis and the transition to a new economic system meant changes on the labour market. Structural changes in the economy caused bankruptcies and large lay-offs of redundant workers. The number of registered unemployed people grew rapidly from 15,184 in 1987 to 129,087 in 1993 when it peaked (in October 1993 there were over 137,000 unemployed people). The unemployment rate followed a similar pattern; from 1.5% in 1987 to 14.4% in 1993. Because of the different structure of the influx in the body of unemployment (domination of older jobless people and of people with lower qualifications) over the next few years unemployment did not fall despite the economic growth, but has acquired a seasonal character.

Figure 11: Registered unemployment trends, 1987 - 1999

The 1999 unemployment trend was favourable in comparison with previous years. While there were 126,625 registered unemployed people in Slovenia at the end of 1998, at the end of 1999 there were 114,348 which is 9.7% less. The change occurred with the introduction of the new EUIA at the end of 1998, which defined the status of unemployed people in more detail. This was reflected in the unemployment figures. Those who have joined public works were given the status of an employed person. The obligations of unemployed people to seek and accept suitable employment and to join employment programmes were increased. Furthermore, the supervision was introduced to determine whether unemployed people met their obligations. The fall in unemployment was also caused by economic growth. Since 1993, when Slovenia's economy came out of recession, the rate of employment stayed the same, but in 1999 a growth occurred in the area of employment as well.

Table VII: Registered unemployment trends, 1987 - 1999

A total of 80,778 people entered registered unemployment in 1999, which was 3,757 more people than in 1998 (an increase of 4.9%). The highest increase was recorded in the category of people registered for other reasons (increase of 39.8%) because people who became unemployed at the end or termination of public works re-registered with the ESS under this category. In 1999 around 4,000 people re-registered at the end of public works. There was an increase among first-time job seekers (up by 5.5%) and people unemployed as a result of termination of temporary employment (up by 4.6%). The increase was expected as their numbers have been slowly but surely growing over the last few years. In comparison with 1998 the number of people unemployed as a result of bankruptcies and of permanently redundant workers fell (by 7.2% and 34.6% respectively). Their numbers have been falling since the critical year of 1993; in 1999 the influx of permanently redundant workers fell in particular, which indicated that personnel restructuring of companies is over in most companies and organisations.

Figure 12: Newly-registered unemployed by reason for registration in 1998 and 1999

A total of 93,055 people left registered unemployment in 1999 or 17.8% more than in 1998, of whom 30,705 (up by 30.5%) were removed from the unemployment record and 55,448 (12.4%) found employment, of this around 10,000 in public works. There was an increase among those finding first employment; 6.5% more than in 1998 were taken of the record for that reason. As result of the fall in the number of people unemployed after a bankruptcy or of redundant workers, their numbers leaving registered unemployment also fell (by 3.5%).

The official registered unemployment rate is published by the Statistical Office of Slovenia. In December 1999 it was 13%; 11.8% for men and 14.4% for women. In comparison with December 1998 the registered unemployment rate fell by 1.6 percentage point; for men by 1.7 percentage point and for women by 1.5 percentage point. In 1999 on average 13.6% of the active population was jobless. In comparison with 1998 the rate fell by 0.9%. Around 12.4% of active men and 15% of active women were registered as unemployed.

Table VIII: Influx and outflow from the body of unemployment

Figure 13: Monthly trends in certain categories of registered unemployed in 1999

Table IX: Typical groups of registered unemployed, 1987 -1999

*Shares by individual category of average unemployment, except for the share of those unemployed for over one year and aged over 40, which was calculated using the figures for the end of the year

On average 118,951 people were unemployed in 1999; of this 60,202 were women (their share amounted to 50.6%). In comparison with 1998, the share of women among the unemployed increased by 0.7 percentage point. Figure 13 shows trends in some typical categories of unemployment. The share of older unemployed people continued to grow in 1999. The reasons for continued growth were the new influx of older unemployed people as well as the fact that most people in this age category are less interesting for employers. Older unemployed people find it more difficult to find employment also because often they are not skilled or do not have the right skills, nor they are motivated enough to obtain further training and work. The average registered unemployed person is growing older each year. At the end of 1999 as many as 29,597 or 25.9% of all unemployed people were over 50 years old; 24.6% or 28,114 people were in the 40 to 50 age group. On the other hand, there were 25,476 (22.3%) unemployed people under 25. Of the total registered with the ESS in 1999, 47.5% had attained first or second levels of education, 27.2% the third and fourth, 20.6% the fifth, 2.5% the sixth and 1.8% the seventh. In comparison with the educational structure of registered unemployment in 1998, the share of those unemployed who had attained first and second levels of education increased by 0.6%, the share of the unemployed with third and fourth levels was unchanged, while the shares of persons who had attained the fifth level fell by 0.3%, the sixth by 0.2% and the seventh by 0.1%.

Table X: Registered unemployment by education level in 1999

The growing share of hard-to-employ people among the unemployed is affecting the average duration of unemployment, which is growing longer every year.

People who have been unemployed for over a year are considered to be long-term unemployed. At the end of 1999 there were 42,418 people among the registered unemployed who were out of work for less than a year and 71,930 long-term unemployed. In comparison with the end of 1998 the number of long-term unemployed people fell by 7,128, but the share of long-term unemployed among the entire body of unemployed increased by 0.5%.

Figure 14: Duration of unemployment of registered unemployed in 1998 and 1999

In comparison with 1998 the influx of first-time job seekers increased by 5.5%, of people whose temporary employment was terminated by 4.6%, for other reasons by 39.8%; the influx of people whose employment was terminated due to bankruptcy fell by 7.2% and of redundant workers by 34.6%. The increase of those who were made unemployed for other reasons was notable. This is the consequence of assigning people whose unemployment on public works ended or was terminated to this group.

Basic concepts and definitions of terms used in the Labour Force Survey

The Labour Force Survey (LFS) has been carried out in line with ILO methodology and the EU Statistical Office's standards (EUROSTAT) for the sixth successive year. The aim of the LFS is the statistical monitoring of the level of active economic engagement of the population, as it provides data on the size and structural characteristics of the active and non-active populations. LFS data complements classical statistical sources and guarantees the international comparability of data.

The LFS classifies the population into categories by applying the active population key, which is slightly different from the approach applied by classical statistical sources. Individuals are first classified as under 15 or 15 and over. The latter group is then divided by activity or contribution (or willingness to contribute) to the production of goods and services incorporated in the concept of the productivity of the System of National Accounts (SNA). The basic population categories are divided according to the strict principle of "at least one hour of work against payment in a week". While many question this criterion (because this number of working hours would not be sufficient to provide for a person's basic living requirements), it nevertheless allows for an unequivocal distinction between work and non-work.

The above LFS concept leads to the formulation of the following categories:

• actively employed; those aged 15 or over who, during the week surveyed, performed any work against payment (monetary or other) or for profit, and those who are employed or self-employed but were temporarily absent from work during that week;
• unemployed; those aged 15 or over who, during the week surveyed:
1. did not work (were not employed or self-employed, or did not perform any work against payment);
2. were actively seeking employment (in the previous four weeks or were registered with the ESS, applied for vacancies, etc.);
3. were willing to accept work within two weeks;
4. had already found work and were going to start after the week surveyed;
• active population; those aged 15 or over who make up people in employment and the unemployed;
• inactive population; those aged 15 or over who are not ranked among those in employment or the unemployed.

Active population trends and unemployment structure

In 1999*, the long-lasting trend of growing active population and declining inactive population in Slovenia slowed down and reversed. The total of the active population fell from 983,000 in 1998 to 963,000. The fall was caused by a fall in both subgroups of the active population; the group of people in employment fell from 907,000 in 1998 to 892,000 in 1999, the number of survey-based unemployed fell from 75,000 to 71,000. At the same time the number of inactive people in Slovenia increased from 656,000 to 690,000.

The restructuring of Slovenia's economy is reflected in the distribution of people according to employment sector. The trend of a falling share of people employed in agriculture continued; in comparison with 1998 it fell by 1.2 percentage points to 10.8% and the share of people employed in non-agricultural activities fell from 39.4% to 37.8%. In contrast, the share of people employed in services increased from 48.2% to 51.1%. For the first time more than half of people in employment in Slovenia work in services. The number of people in employment increased in all branches of the services sector apart from restaurants and retail.

Figure 15: Breakdown of survey-based unemployment by sex, 1994 - 1999

During this period the number of survey-based unemployed fell to 71,000. Of these 37,000 were men and 34,000 women. The survey-based unemployment rate fell from 7.7% in 1998 to 7.4% in 1999. The standardised method of calculating the survey-based unemployment rate makes it internationally comparable. In the second quarter of 1999 the average survey-based unemployment rate in the EU was 9.4%, i.e. higher than the Slovene average. The survey-based unemployment rates were higher in the following countries: Belgium (9%), Finland (10.3%), France (11.2%), Germany (9.1%) and Spain (16.3%).

The survey-based unemployment rate for the older unemployed (aged between 50 and 64) increased from 4.2% in 1998 to 5.1% in 1999, and the survey-based rate of young unemployed people (aged between 15 and 24) remained at the 1998 level (18.2%). The unemployment rates for young people differ by gender and follow different trends; in comparison with 1998 the unemployment rate for men fell by 1.1 percentage point to 16.6% while for women it grew by 1 percentage point to 19.8%. In comparison with 1998, the survey-based unemployment rate increased in 1999 for the group of people who had attained primary education (by 10.2%), one or two-year secondary school (by 13.3%) and two-year university education (by 4.8%), while for everyone else it fell. The share of long-term unemployed increased slightly to 56.8% of the total survey-based unemployment, the share of long-term unemployed men grew to 59.3%, while the share of long-term unemployed women fell to 54.2%.

The data on transitions from one status to another in between two surveys (the first and second quarter of 1999) shows that over 90% of people in employment and inactive people kept their status; 1.9% of people in employment became survey-unemployed and so did 2.8% of the inactive population. On the other hand 13.6% of the survey-based unemployed joined the ranks of the employed, 25.3% became ranked in the inactive population and 61% remained survey-unemployed.

Comparison of survey-based and registered unemployment

In the second quarter of 1999 there were 120,000 people registered as unemployed with the ESS, while the number of people classified as unemployed on the basis of the survey was 75,000. The registered unemployment rate was 13.7%, and the survey-based unemployment rate 7.4%.

A comparison between the number of people classified as unemployed on the basis of the survey and the number of registered unemployed people reveals the following:

• there were 14,000 people classified as unemployed on the basis of the survey who were not registered with the ESS because they were seeking employment through other channels;
• there were 62,000 people classified as unemployed on the basis of the survey who were registered with the ESS;
• there were 63,000 registered unemployed people who did not meet the survey criteria.

Among the 63.000 people registered with the ESS who did not meet the survey criteria on unemployment, 69.6% did not actively seek employment in the last four years, 24.1% worked at least an hour in the week before the survey for payment or family benefit and 6.3% of them would be unable to accept work within two weeks of the survey.

A comparison between the survey-based and registered unemployment enables the identification of labour market flows. However, in order to obtain an interpretation of both unemployment data their methodological and topical characteristics must be taken into account.