The level of unemployment in Bulgaria in August is 4.3%, a record value since the existence of the statistics of the Employment Agency. At first glance, this is great news for the state: people rely on earned income, not social payments, and the coffers are filled with taxes and insurance. However, the news is not that good for investors: the supply of staff is extremely limited in terms of both quantity and quality.
You know what a pain it is to find a sales consultant in a grocery store, exclaims a site owner in Plovdiv. The saga of him is in several acts, but to no avail. Dozens come for an interview, but right from the door they signal that they don’t want to work, he says. Even wage bargaining doesn’t work, because either the working hours are inconvenient for them, or the breaks are short, or the shift mode doesn’t suit them, or they necessarily keep weekends free. On the other hand, I hardly want anything special – no higher education, no specific skills, languages or anything else, says the shop owner. The salaries he gives are around BGN 1200 net.
In production, the problems are the same and, according to experts, they are once again due to less staff training. The workers do not want to understand that the low-skilled labor is paid low and the highly skilled – with a solid salary, sums up the situation, analyst Svetozar Gledachev. That’s why the company was forced to pursue a lean policy to both attract and retain talent. However, we are talking about truly trained personnel, with good skills in their professional field and personal characteristics such as loyalty, responsibility, teamwork, etc.
And wages are rising
Over the past seven years, the cost of employers’ labor in Plovdiv has been growing every year at a good and sustainable pace, points out Georgi Stoev of Trakia teh. It is most pronounced in the mechatronics and automotive industries (8.7%), in food and beverage manufacturing (7.9%), in process industries (chemical and metal manufacturing – 9.4%), etc. Furthermore, the data indicated are for the period 2014-2021. This year, due to inflation, the wage increase is expected to be greater. However, it is unlikely to cover inflation, the analyst is quick to point out. The “Mechatronics and Automotive” sector is very important to the Plovdiv economy as other activities are emerging alongside them and create competitive pressure for staff and remuneration. More than 20,700 are employed.
Bulgarian companies against foreign ones
The industrial heart of Bulgaria, as the economic zones near Plovdiv are called, provides bread to some 71,000 people, Georgi Stoev points out. Contrary to expectations, however, only 27,000 jobs were created by foreign companies. Most of it is the work of local entrepreneurs. Only in the “Mechatronics and Automotive” sector do foreign owners logically dominate, as the factories here supply the automotive parent companies directly.
The annoying “average salary”
The average salary for the month of June for the Plovdiv region is 1,480 BGN gross, or in other words, we are in sixth place compared to other administrative regions. This means that the average Plovdiv employee receives BGN 1,148, the rest goes to taxes and insurance. The statistics keep this indicator due to the big picture and it is calculated automatically – Ivan has a minimum wage of BGN 710 and his neighbor Dimitar – out of BGN 2250. When an investor with an interest in business comes to Plovdiv, he does not ask what the average salary is for the country, but “what is the average salary for position X in sector Y exactly in the Plovdiv region,” explains Georgi Stoev. When we show him the graph of wage growth in the specific sector, he is aware that this means an annual update of the remuneration, at least with the average growth over the years, says the analyst. Also, it takes a year or two from the investor’s interest to opening the business, and the manager is aware that the salary data he sees now will be updated in two years, and this must be included in their financial plans. According to the analyst, even in 2022 there is clear investor interest in the Plovdiv region, despite the geopolitical and economic challenges.
Everyone is unhappy
On average, wages in Bulgaria grew by 13.6% in one year (June 2021-June 2022), as inflation at that date was 16.9%. This is why workers and employees en masse are clamoring for more money to guarantee them the same standard of living as before, and unions are returning to practice with demands for a higher minimum wage, etc.
The job market in Bulgaria has been distorted for years, says analyst Svetozar Gledachev. The big problem is that the Bulgarian worker is inefficient. The percentage of wages compared to the country’s GDP is 0.64% – the highest among the rest of the EU – 27. That is, something is produced for 1 lev, but 64 cents go to wages. At the other pole is Ireland, with 0.32%. To have investments and modernizations in the economy, to produce more and give better returns, we must follow the model of Ireland, Gledachev is convinced.
For years, wealthy companies have been doing everything they can to automate and robotize their production. In other words – fewer people – fewer problems. Because robots don’t get sick, they don’t go on vacation, they don’t ask for increases, they don’t have trade unions and they can work both day and night.
