Kufa, Najaf Governorate

LABOUR MARKET OPPORTUNITIES AND CHALLENGES

IOM Iraq – May 2020

This programme is supported by: List of Acronyms

BEP Business Expansion Package BSP Business Support Package CIP Community Implementation Plan CoC Chamber of Commerce CoI Chamber of Industries CRC Community Resource Centre ESP Employment Support Package FGD Focus Group Discussion FT Farming Training IDP Internally Displaced Person ISIL Islamic State in Iraq and the Levant IOM International Organization for Migration JP Job Placement LMA Labour Market Assessment NFI Non-Food Items MoLSA Ministry of Labour and Social Affairs OJT On-the-Job Training SME Small and Medium Enterprise VT Vocational Training

IOM Disclaimer

The opinions expressed in the report are those of the authors and do not necessarily reflect the views of the International Organization for Migration (IOM). The designations employed and the presentation of material throughout the report do not imply the expression of any opinion whatsoever on the part of IOM concerning the legal status of any country, territory, city or area, or of its authorities, or concerning its frontiers or boundaries.

IOM is committed to the principle that humane and orderly migration benefits migrants and society. As an intergovernmental organization, IOM acts with its partners in the international community to: assist in meeting the operational challenges of migration; advance understanding of migration issues; encourage social and economic development through migration; and uphold the human dignity and well-being of migrants.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the publisher. TABLE OF CONTENTS

List of Acronyms 2

IOM Disclaimer 2

Table of Contents 3

Executive Summary 4

Study Introduction 6

Labour Market Assessment Overview

District Overview

Assessment and Methodology Overview

Findings 8

Attitudes Towards Entrepreneurship and Cash

Types of Jobs Available

Skills Gaps

Recruitment Mechanisms

Supply-side Bottlenecks

Demand-side Bottlenecks

Conclusions 12 Labour Market Opportunities and Challenges

EXECUTIVE SUMMARY

IOM conducts livelihood programming in 15 out of 18 • Employers reported that working hours averaged 8.4 governorates in Iraq. As part of the Returns and Recovery hours per day (less than one third reported 9 hours and/ Unit programming, the International Organization for or above per day). No business owner mentioned having Migration (IOM) undertook a labour market assessment a written contract with workers. (LMA) in Kufa district in Najaf in December 2019 and • The average salary for skilled workers is 404 United States January–February of 2020. dollars (USD) and USD 227 for unskilled workers. LMAs have been conducted in over 30 locations across Iraq • Women-owned businesses generally include accounting, and give insights on the state of the local market in a given tailoring, beauty salons, food processing, trade (including area, the hiring preferences of employers and the available abayas), and photography services. Almost all respondents skills and aspirations of jobseekers, among others. thought these businesses were profitable.

STUDY COMPONENTS • Multistakeholder workshops did not point to a lack of skills in Barakiya, but identified a lack of laundry services, LMAs consist of both qualitative and quantitative exercises: carpentry, photography services (for both men and Key Informant Interviews (KIIs), multisectoral community women), printing and typing services, and tailoring for workshops and surveys with jobseekers, employers and women. consumers. • While jobseekers mostly did not know about a job centre, This LMA focused specifically on Kufa district, Najaf they suggested that job centre services could be offered Governorate. in the centre of the community. A summary of key findings is included below, followed by • Most employers reported personal connections and word recommendations for future interventions. of mouth as their main hiring mechanisms.

KEY FINDINGS • The most common challenge facing employers is • Fifty-eight per cent of jobseekers noted a preference for competition, followed by low demand and economic owning their business, suggesting a slight preference for stagnation in general. Some also mentioned traffic entrepreneurship in Kufa. congestion.

• Key informants did not feel that cash support would cause • The highest salaries of skilled workers are mostly found inter-household and community conflict. However, 77 per among butchers, in addition to less mentioned businesses cent of the jobseekers surveyed reported that people are such as honey production, baked goods, pickles, a not comfortable paying for goods and services in cash cafeteria, a smithery, a gift shop, a clothing retailer, and and 64 per cent of jobseekers reported preferring in-kind motorcycle tools. Overall, the food sector dominates the assistance over cash assistance. above-average salaries.

• Jobseekers reported that the main economic sectors • Businesses with high demand paying higher salaries in Kufa include the private sector, without additional include two butchers, a bakery, and a cafeteria. Employers specifications. A small number mentioned the Popular reporting average demand but still paying higher salaries Mobilization Forces, daily paid jobs in various sectors, include many businesses in the food sector (a bakery, a stores, construction, and private education as employing butcher, honey, and pickles production) in addition to a most of the workforce. All jobs were considered desirable. blacksmith, an aluminum workshop, a clothing shop, a gift shop, a barber, a shopping mall and a stationery shop. • Key informants mentioned that the sectors currently employing most people in Kufa include trade, especially markets and malls, followed by the industrial sector, clothes retailers, restaurants, and others.

4 IOM IRAQ Labour Market Opportunities and Challenges

Recommendations

Agriculture, industrial sector, food processing, and services (taxi, online retail, photography, tailoring, advertising, marketing, printing, religious tourism). Manufacturing SECTORS TO TARGET (a blacksmith, an aluminum workshop) and trade (clothing, gifts, stationery) reported high demand and paying high salaries, so they should be also targeted

SECTORS TO AVOID No sector in particular

• Business support packages in laundry services, carpentry, photography services (for men and women), printing and typing, and tailoring (for women), mechanics, plumbing, electrical skills, welding

ACTIVITIES TO TARGET • Vocational training was not mentioned • On-the-Job training was requested and the presence of graduates was reported but details not given

• Farming training (details were not given)

ACTIVITIES TO AVOID No activity in particular

Consumers do not have any savings and a small number also have debts. CFW is there- CASH FOR WORK (CFW) fore recommended. In Barakiya, waste removal and installing pipes to connect some areas to the water network were proposed by the workshop’s participants

In-kind support is recommended as 77% of the jobseekers surveyed reported that UNRESTRICTED CASH people are not comfortable paying for goods and services in cash and all employers have multiple suppliers

Youth (also mentioned by workshop participants), female-headed households, graduates, PROFILES TO TARGET persons with disabilities, unskilled workers, older people and internally displaced persons

NOTES Many consumers reported travelling to other areas to buy clothes

Table 1. Recommendations

IOM IRAQ 5 Labour Market Opportunities and Challenges

STUDY INTRODUCTION

IOM recognizes that the private sector is an engine for growth; While people have access to tap water, quantity is reportedly therefore, it strives to create inclusive markets at the individual, insufficient, especially in summer. Issues with water quality community and institutional levels. At the individual level, IOM were also reported, as well as poor water network coverage, has prioritized support to micro enterprises, including providing which forces some households to connect illegally to the business development services (for example business advisory existing water network. Problems with wires and transformers services) and Business Support Packages (BSPs), including were reported as the power network is overburdened in-kind and cash support, all of which aim to increase income because of the high number of users. Only one health centre generation at the household level. was reported as being accessible, and it lacks medicines and equipment, among other limitations. In schools, the pupil- For those individuals who need capacity development support teacher ratio is high. Some schools do not have access to or who have specific backgrounds such as agriculture, IOM running water and others do not have windows. The market provides specialized skills development and training through in Al-Shuhada is almost entirely destroyed and purchasing Vocational Training (VT), Farming Training (FT) or On-the-Job power among people is low. Workshop participants said Training (OJT), accompanied by employability assistance that no one is interested in repairing the market. The major – inclusive of in-kind items tailored to enhance individual employers before the crisis included the industrial sector in employability. For beneficiaries who already have relevant general (carpentry, PVC, aluminum), cement/marble factories, education or training and need to gain hands-on work trade, food processing and agriculture. Informants had mixed experience, IOM’s job placement and job matching initiatives views on whether these businesses had recovered or not; at link participants with businesses in growth sectors, and pays most, a 50 per cent recovery was estimated. their salaries partially or fully for three to six months.

At the community level, through the Enterprise Development CONSUMER SPENDING SNAPSHOT Fund (EDF), IOM provides support to slightly larger businesses • Key weekly expenses: The typical consumer in Al-Shuhada – small and medium enterprises (SMEs) – to support long- reported spending an average of USD 107 per week term job creation and the expansion of local production on food for their household (for a household of seven capacities. IOM also targets the infrastructure needed to members, on average). support markets. For example, in agricultural communities IOM may support irrigation projects. At the institutional level, • Key monthly expenses: 33 per cent of consumers reported IOM provides capacity building to national and local authorities, having a monthly rent expense, averaging USD 188 per including market assessments that seek to promote institutional month; and almost all reported monthly expenses on change in support of local livelihoods. temptation goods, such as sweets and tobacco, averaging USD 50 per month. LABOUR MARKET ASSESSMENT OVERVIEW ASSESSMENT AND METHODOLOGY OVERVIEW IOM’s LMAs are intended to provide actionable recommendations for the individual livelihood assistance The LMA process began in December of 2019, after a that IOM provides in multiple districts throughout Iraq. This two-day training on labour market assessment objectives and LMA focuses on the community of Al-Shuhada and includes on data collection tools. Following the training, community- interviews and a community workshop. level workshops with youth, women and local residents were organized in January 2020, followed by KII, jobseeker, employer, DISTRICT OVERVIEW and consumer surveys in February and March of 2020.

Fallujah is a district in Anbar Governorate whose capital, Multisectoral Community Workshops Fallujah city, is located roughly 65 km west of Baghdad. Most of its residents are Sunni. The population of Fallujah Two multisectoral workshops were conducted in Baiji, one was estimated at about 275,000 in 2009/10. Almost 22,000 in Al-Asry Al-Shimaly (20 Returnees) and one in Al-Siniya individuals were reported as displaced in Fallujah district alone (23 Returnees). After introducing IOM and its programming, as of December 2019.1 staff explained IOM’s plan to work closely with community members in implementing future programmes..

1 IOM, Displacement Tracking Matrix, 31 December 2019

6 IOM IRAQ Labour Market Opportunities and Challenges

Key Informant Interviews TOTAL NO. MALE FEMALE TOOLS OF SURVEYS RESPONDENTS RESPONDENTS Nine KIIs were conducted with representatives of the business CONDUCTED community from Markaz Fallujah. KIIs seek to establish trends Multi- and observations about the business community, sectors sectoral 27 13 30 and businesses currently hiring, ongoing public and private Community investment, and key emerging sectors capable of generating Workshops employment. Key Informant 8 1 9 Jobseeker Surveys Interviews Jobseeker Jobseeker surveys are designed to identify preferences of 30 0 30 unemployed and underemployed workers. In Al-Shuhada, 30 Surveys jobseekers were identified and surveyed. The survey’s purpose Private Sector was outlined for each jobseeker survey, and informed consent 30 0 30 Employer was obtained from those surveyed. Surveys Consumer Employer Surveys 22 8 30 Surveys Thirty employer surveys were conducted in Al-Shuhada. Seven were conducted in Nazal, two in Al-Resala, and one Table 2. Surveys Conducted in Al-Shuhada for Labour Market Analysis in Al-Moalimeen 2 to provide a sample as representative as possible of the local market. Employers were initially provided an advance copy of the handout materials and then later contacted for follow-up interviews.

Consumer Surveys

The consumer survey was designed to triangulate data related to demand, income and vulnerability. In commercial or industrial districts in Al-Shuhada, members of the public were approached and 30 of them identified as respondents. There were no restrictions on the demographic profiles of participants, but IOM sought diversity to the extent possible.

The table below outlines the types and number of surveys conducted for Al-Shuhada, Fallujah.

IOM IRAQ 7 Labour Market Opportunities and Challenges

FINDINGS

ATTITUDES TOWARDS ENTREPRENEURSHIP SKILLS GAPS AND CASH Workshop participants noted that tailoring and food Most jobseekers noted a preference for owning their business preparation skills are required for women. Languages, (67%) suggesting a preference for entrepreneurship in the computer proficiency, literacy, business skills, and ‘crafts’ (likely community. The remaining prefer employment. referring to welders, plumbers, mechanics) were reported as needed. No such courses were noted to be available in the Key informants did not feel that cash support would cause community. inter-household and community conflict. While all jobseekers reported that people are not comfortable paying for goods Jobseekers (2), on the other hand, mentioned that the and services in cash, all jobseekers also reported preferring manufacturing sector had difficulties in finding adequately cash assistance over in-kind assistance. These findings suggest trained employees. Employers, also asked about skills, that cash support can be safely introduced to Al-Shuhada by mentioned that technical skills were difficult to find in general an international organization. (mentioned by one employer). In addition, one mechanic and one car painting business said they had difficulties in finding TYPES OF JOBS AVAILABLE adequately trained employees.

Multisectoral workshop participants reported that a high More than half of employers have experience in providing number of youth in the community were unemployed, in apprenticeships, including businesses in mechanics services, addition to widows and divorced/separated women. Jobseekers car painting, car wash, car tuning, electronic devices repair, reported that the main economic sectors in Al-Shuhada construction tools and materials sale, a blacksmith, marketing, include construction (blocks), manufacturing (smithery, carpentry, detergent production, and a restaurant. carpentry), trade (in general, supermarkets, and grocery shops) and services (car wash, barbering, tailoring, beauty salons), Tools and assets most commonly requested by businesses and bakeries. Almost all jobseekers thought these jobs were included a variety of equipment/machinery to operate their desirable and that no specific group dominated these jobs. business. Some also mentioned generators. Business owners were asked what they would do were they to receive a cash Key informants also mentioned similar sectors as employing grant: nobody mentioned hiring new employees (in addition most people, in addition to mosaic tiles factories, restaurants, to a few who mentioned expanding their business in general), cafes and private education. However, some of these businesses with the most common response being buying new machinery/ refer to other neighborhoods and not Al-Shuhada exclusively. equipment. Employers reported that working hours averaged 8.4 hours RECRUITMENT MECHANISMS per day. Business owners said they did not have written contracts with workers. Average wages for skilled and unskilled While jobseekers mostly did not know of a job centre, they workers in the businesses surveyed ranged from USD 200 to suggested that job services could be offered in the city centre, 800 and from USD 150 to 500, respectively. while a smaller number mentioned it could be anywhere close to their respective communities. Most employers reported AVERAGE SALARY FOR AVERAGE SALARY FOR SKILLED WORKERS UNSKILLED WORKERS personal connections and word of mouth as their main hiring mechanism. Employers were not open to hiring through more USD 360 USD 288 formal channels and mentioned that formal channels were Consumers noted average monthly incomes of USD 335 per not efficient. Employers reported hiring mostly relatives. The month. area is prone to labour migration, with almost all respondents mentioning that people tend to migrate for economic reasons Employers reported no preference as to which gender should outside of the community, including to Fallujah city centre and fill in positions, except for one respondent, who mentioned Baghdad. sales. However, women-owned businesses, as reported by KIIs, generally include beauty salons, fast food preparation, tailoring, livestock and agriculture and gyms; these businesses were considered mostly profitable. Almost all consumers also reported that women do not contribute to household income.

8 IOM IRAQ Labour Market Opportunities and Challenges

SUPPLY-SIDE BOTTLENECKS DEMAND-SIDE BOTTLENECKS

The most common challenge facing employers was related Challenges in dealing with clients were related to a lack of to debts and lack of cash (reported by 77%), followed by low cash, requests for services/goods requiring specific machinery/ purchasing power among people, poor demand and poor equipment to be produced (that is, not owned by the service availability. employer), and requesting payments in instalments.

Sixty per cent of business owners reported having multiple Sixty-seven per cent of businesses reported having average potential suppliers for their raw materials, whereas almost all demand and these pay USD 305 both to skilled and unskilled reported being able to respond to an increase in demand. More workers. High demand was reported by 17 per cent of than half of employers surveyed mentioned not purchasing businesses and these were paying their workers USD 405 raw materials locally, mainly due to quality issues. Only one per month on average. Poor demand was also reported by (involved in PVC manufacturing) mentioned that local prices a similar percentage and these were paying USD 310, slightly are higher. higher than for those self-reporting average demand. The highest salaries are found among businesses with high demand.

Examining salaries of skilled workers in detail (Fig. 1), a variety of businesses pay above average salaries and it appears that construction businesses pay above average salaries and cleaning detergents businesses pay among the lowest (along a barber).

IOM IRAQ 9 Labour Market Opportunities and Challenges

Fig.1 Average salary – skilled workers

An attractiveness matrix can be applied to measure and into high demand with high salaries (or salaries above the contrast the varying measures of demand as reported by average of all salaries), the automotive sector scored high. local businesses – and to compare them to the salaries these Businesses self-reporting average demand and that pay higher businesses reported paying their skilled workers – to get a salaries include construction (4), a bakery, a blacksmith, car better understanding of what types of jobs could be both tuning, carpentry, and a restaurant.. Manufacturing is also sustainable and be decently remunerated (Table 3). Looking present among lower salaries.

10 IOM IRAQ Labour Market Opportunities and Challenges

Poor Demand Average Demand High Demand

Construction (4), tools and materials

Electronic devices Bakery maintenance Higher Blacksmith Mechanic (2) Marketing Salaries Car turning Car wash Public smith and transportation Carpentry Restaurant

Barber POTENTIAL FOR IMPACT POTENTIAL Car painting

Car dealership Mechanic Lower Detergent manufacturing Home items supplier Car painting Salaries Market

Detergent manufacturing

POTENTIAL FOR GROWTH

Table 3. Cross-tabulation demand and salaries paid to skilled workers

IOM IRAQ 11 Labour Market Opportunities and Challenges

CONCLUSIONS

In Al-Shuhada in Fallujah, the EDF has potential for expanding many small and medium sized businesses, which could also absorb more youth, IDPs and other priority groups into the workforce. Many sectors also appear to have potential for growth and experience good/average demand and pay fairly high salaries, which could also suggest potential entry points for sustainable job creation.

Most jobseekers mentioned a preference to own their business; therefore, BSP for those wishing to enter a variety of so-called crafts (which were not specified) is recommended. Considering the high number of female-headed households, the BSP is especially important, as it would allow women to support themselves and their families, possibly through home-based businesses, which are preferable in conservative environments such as Fallujah’s. OTJ is also recommended, including for women.

Because there are no written contracts between employers and employees, and workers do long hours, IOM has an opportunity to improve the formality of work through the EDF. Since people do not have savings, CFW targeting community priorities such as waste removal would be beneficial too.

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Labour Market Opportunities and Challenges

IOM IRAQ 13 V`

LABOUR MARKET OPPORTUNITIES AND CHALLENGES

IOM IRAQ

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