2016 Yearbook

Croatian Employment Service

Zagreb, May2017 ISSN 2584-3729 Yearbook 2016

Croatian Employment Service Croatian Employment Service

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Publisher: Croatian Employment Service, , Radnička cesta 1 Phone: 00385 1 61 26 000 Fax: 00385 1 61 26 038 E-mail – Editorial Office: [email protected] Website: http://www.hzz.hr

On Behalf of Publisher: Ante Lončar, Acting Director General of the Croatian Employment Service

Editor: Marica Barić

English Translation: Abis d.o.o., Zagreb

Graphic Design: Intergrafika TTŽ d.o.o., Zagreb

2 2016 Yearbook

Contents

Summary 7

Economy and Labour Force 10

Unemployment 15

Labour Force Demand and Employment 21

Job Placement and Preparation for Employment 31

Active Labour Market Policy 39

Unemployment Insurance 43

International Community Supported Projects 48

Organizational Structure, Governance and Human Resources 53

Publicity of Operations and International Cooperation 55

Sources of Funding and Structure of Expenses 58

Internal Control System 64

3 Croatian Employment Service

Geographic Distribution of Regional and Local Offices of the CES by

COUNTY REGIONAL OFFICE LOCAL OFFICE

Dugo Selo Ivanić-Grad Zagreb Zaprešić I Zagreb City of Zagreb Zagreb Jug Sesvete Zagreb Zapad II -Zagorje Krapina Zlatar Pregrada Dvor Glina Sunja III Sisak- Popovača IV Karlovac Vojnić V Varaždin Varaždin VI -Križevci Križevci Đurđevac Koprivnica Čazma Garešnica VII - Bjelovar Grubišno Polje -Lošinj VIII Primorje-Gorski Kotar Čabar Otočac IX - Gospić Senj Slatina X -Podravina Virovitica Pitomača XI Požega- Požega XII - Slavonski Brod Nova Gradiška Okučani Obrovac XIII Zadar Biograd Gračac Našice XIV -Baranja Osijek Đakovo Drniš Vodice XV Šibenik- Šibenik Knin XVI Vukovar-Srijem Otok Županja Kaštela XVII Split- Split Omiš Poreč XVIII Korčula- Ploče XIX -Neretva Dubrovnik Metković XX Međimurje Čakovec Mursko Središće Prelog

4 2016 Yearbook

Map of Regional and Local Offices of the CES by County

Central Office Regional Office Local Office

5 Croatian Employment Service

6 2016 Yearbook

Summary

Economic Environment and Labour Market Trends: 2016 was marked by positive economic trends. Compared to a moderate growth of 1.6% recorded in 2015, a dynamic growth of 2.9% was achieved in 2016. All basic economic indicators, from industrial production through construction, tourism and trade to labour market, demonstrated positive trends. According to both the administrative sources and the Labour Force Survey, the changes in the labour market mainly refer to a decrease in the number of unemployed persons and the rate of unemployment, stagnation, i.e. a slight increase in the number of employed persons, and the consequent decrease in active population. The average annual number of registered employed persons was 1,390,419, with a zero growth rate, while the average annual number of registered unemployed persons decreased by 15.4%, down to 241,860 persons. The strong decrease in the number of unemployed persons and the stagnating number of employed persons led to a decrease in the average annual registered unemployment rate of 2.2 percentage points, i.e. from 17.0% recorded in 2015 to 14.8% in 2016. According to the Labour Force Survey (LFS), there were on average 1,590,000 employed and 240,000 unemployed persons in 2016. Compared to 2015, the number of employed persons increased by 0.3%, while the number of unemployed persons decreased by as many as 21.6%. Consequently, the rate of employment (15 – 64) increased to 56.9% (by 0.9 percentage points). The average LFS-based unemployment rate amounted to 13.1% in 2016, dropping by 3.1 pp compared to 2015.

Registered Unemployment: The decreasing trend in registered unemployment continued for the third consecutive year. The average number of unemployed persons decreased from 285,906 recorded in 2015 to 241,860 in 2016, dropping by 15.4%. Unemployment decreased in terms of both unemployed men (17.4%) and unemployed women (13.7%). The largest percentage decrease in the average number of unemployed persons was recorded in younger age groups (persons aged 15 to 19: 20.0% and 20 to 24: 19.8%), while the oldest age group (60+) was the only group that recorded a slight increase in unemployment (0.8%). Furthermore, the average number of unemployed persons decreased in all groups distinguished by the level of education, primarily in the case of persons who completed secondary education (three-year program: 18.4% and four-year program: 16.3%). In 2016, the number of unemployed persons declined in all areas of activity and across all the . At the end of the year, the structure of unemployed persons included 54.4% short-term (less than 1 year) and 45.6% long-term (more than 1 year) unemployed persons. Since duration of unemployment depends greatly on the achieved level of education and decreases proportionally with the increase in the same, persons with the lowest level of education accounted for the largest share of long-term unemployed persons (71.4%), while the smallest share of long-term unemployed persons was recorded in the group of unemployed persons with undergraduate university and post-secondary non-university education and those with graduate and post-graduate university or academy education (30.0% and 29.7% respectively).

Labour Force Demand and Employment: In 2016, the employers reported 232,254 vacancies to the CES, which represents a 14.7% increase compared to the year before and continued growth in labour force demand. The increase in the number of reported vacancies was recorded in most areas of activity and across all counties. However, after several years of oscillating growth, the trend in registered employment shifted in 2016. The number of persons from the CES unemployment register who found employment decreased by 5.9% compared to 2015. More precisely, 218,834 persons from the CES unemployment register were employed during the year, of which 197,047 (90.0%) on a work 7 Croatian Employment Service

contract basis and 21,787 (10.0%) on the basis of other business activities (workplace training without a work contract, starting a company, craft or trade business, temporary service contract, etc.). Compared to 2015, employment regulated on a work contract basis decreased by 4.6%, while the number of persons employed on the basis of other business activities decreased by 15.9%. Seasonal employment accounts for a large share of total employment. To be more precise, 40,682 persons found seasonal employment in 2016, which accounts for 20.6% of the total number of persons from the CES unemployment register employed on a work contract basis. Compared to 2015, the total number of seasonal workers slightly decreased by 785 or 1.9%. Seasonal employment was most significant in accommodation and food service activities (55.1% of the total number) and trade (12.4%). Most seasonal workers employed in 2016 came from the Coastal (a total of 61.3%) and Slavonian (22.0%) counties, while persons from North-western and Central account for a relatively small share of seasonal employment (14.9%).

Active Labour Market Policy: In 2016, a total of 70,728 persons participated in the measures envisaged under the Active Labour Market Policy from the scope of responsibility of the Croatian Employment Service, i.e. 9.2% participants more than in 2015. The total number of participants included 33,021 active participants from the previous year and 37,707 new entrants in the course of 2016. Most new entrants joined workplace training without a work contract (15,059 persons or 39.9%) and public works (8,773 persons or 23.3%) or took advantage of employment incentives (5,716 persons or 15.1%). A relatively small number of new participants took advantage of the following measures: institutional training for the unemployed (10.1%), self-employment (start- up) incentives (6.2%), job retention subsidies (5.1%) and subsidies for institutional training (advancement incentives) for the employed (0.3%). The share of new entrants from a particular group in the respective average number of unemployed persons was most significant in the group of persons with graduate and post- graduate university or academy education (40.3%), followed by young persons up to 29 years of age (32.5%) and short-term unemployed persons, including those unemployed for up to 6 months (19.7%) and from 6 to 12 months (21.9%). In terms of gender, women accounted for a slightly larger share of new entrants (16.8%) compared to men (14.1%). The total number of new entrants who joined in 2016 included 915 persons with disabilities (12.9% of the average number of unemployed persons with disabilities), 1,615 Croatian war veterans (6.9% of the average number of unemployed war veterans) and 569 members of the Romani national minority.

Unemployment Insurance: In 2016, there were on average 39,907 unemployment benefit recipients per month, i.e. 16.5% of the total number of unemployed persons. Besides the unemployment benefit, unemployed persons claimed other types of financial insurance as well. In 2016, the CES thus approved 3,229 requests for financial assistance during education and training, 14,912 requests for financial assistance during workplace training without a work contract, 1,869 requests for financial assistance to persons insured under an extended pension insurance scheme on the basis of temporary work contracts for regular seasonal jobs, 9,336 requests for reimbursement of travel and relocation expenses, as well as 107 requests for one- off financial assistance and 193 requests for pension insurance. In the course of 2016, applying the provisions of EU directives on coordination of social security systems (Directive (EC) No. 883/2004 and Directive (EC) No. 987/2009), the CES issued 47 PD U2 forms for export of unemployment benefit, 84 SED U009 forms confirming that the unemployed person who was granted right to unemployment benefit in another member state has registered with the CES and 1,399 forms confirming the period of insurance (PD U1), reason for termination of employment (SED U002) and the salary earned in the Republic of Croatia for the purpose of claiming unemployment insurance in another member state (SED U004). In the same period, the CES approved 829 requests for unemployment benefit with an element of coordination (the so-called ‘cross-border workers’ and aggregation of periods of insurance). 8 2016 Yearbook

Job Placement and Preparation for Employment: Job placement activities are aimed at improving employability and labour market orientation skills of the unemployed, as well as for the purpose of preventing their social exclusion. In efforts to achieve this goal, individual counselling and consultations intended for unemployed persons and assistance provided to them in defining a professional job search/employment plan play the primary role. In 2016, CES employment counsellors thus held 410,621 individual counselling meetings and 3,263,082 individual consultations, and assisted in defining 236,605 professional job search/employment plans for the unemployed. Furthermore, 11,736 unemployed persons participated in 390 organised informative group meetings/forums and 21,555 unemployed persons participated in 3,883 various strengthening workshops. Special attention was dedicated to persons characterized by low employability in the labour market, such as the youth, long-term unemployed persons, persons of the Romani national minority, persons with disabilities, and to activities aimed at encouraging and assisting the unemployed in their efforts to start their own business, i.e. ensure self-employment. Depending on the results of the needs analysis, a number of unemployed persons are advised to participate in vocational guidance activities, i.e. various types of vocational informing and counselling meetings intended for groups or individuals. In 2016, 24,728 persons participated in the workshops and informative group meetings organised in and regional offices of the CES, while 18,410 persons participated in individual counselling/informative meetings. Furthermore, the eleven Career Informing and Counselling Centres (CISOK) operating within the CES have been established precisely for the purpose of making vocational guidance services available to the widest group of users. Career informing and counselling services provided by CISOK centres were used on 53,185 occasions in 2016, while the associated web portal recorded 74,729 visits, including multiple viewings and use of the available e-tools. In addition to the system for working with unemployed persons, the CES also has a system in place for working with employers. The said system presupposes clearly defined activities and responsible persons, goals and measurable implementation indicators. During the year, CES employment counsellors paid 20,435 visits to employers and the employers filed 122,299 labour force demand notices with the CES, offering employment to 232,254 workers. The counsellors referred 1,109,647 unemployed persons to the reported vacancies. A total of 218,834 persons from the CES unemployment register were thus employed.

International Community Supported Projects: In 2016, the CES continued implementing projects within the framework of the following EU programmes: Intelligent Energy , Erasmus+ and The Seventh Framework Programme (FP7). Furthermore, it also started preparing for participation in the Connecting Europe Facility (CEF) programme. The CES completed the last projects implemented under Component IV of the IPA Programme and continued implementing the operations planned for the second half of 2013 under the European Social Fund programme, i.e. the Operational Programme - Human Resources Development 2007 – 2013. In 2016, the CES also implemented and prepared for participation in projects envisaged under the Operational Programme – Efficient Human Resources 2014 – 2020, and continued executing the projects co-financed by the World Bank.

9 Croatian Employment Service

Economy and Labour Force

Basic Economic Trends 2016 was marked by positive economic trends. Compared to a moderate growth of 1.6% recorded in 2015, a dynamic Gross Domestic Product growth of 2.9% was achieved in 2016. The said GDP growth was greatly contributed by domestic demand, i.e. personal consumption, which started rapidly increasing, and continued positive trends in foreign demand, i.e. export of goods and services. The dynamics of GDP growth over the year indicates an upward trend of relatively high rates, i.e. without the usual oscillations in different calculation periods. More precisely, the growth rates ranged from 2.7% in the first quarter, through 2.8% in the second and 2.9% in the third quarter, to 3.4% in the fourth quarter.

Basic Economic Indicators in 2015 and 2016, Growth Rates (in percentages) 2015 2016 Gross Domestic Product 1.6 2.9 Physical Volume of Industrial Production 2.7 5.3 Physical Volume of Construction Works -0.7 2.7 Tourist Overnights 7.7 9.0 Nominal Retail Trade Turnover 1.4 2.4 Real Retail Trade Turnover 2.4 4.0 Exports – Total (HRK)* 11.0 5.7 Imports – Total (HRK)* 7.7 5.4 Average Monthly Net Salaries 3.2 1.6 Real Net Salaries 3.7 2.7 Consumer Price Index -0.5 -1.1 Total Number of Employed Persons 1.1 0.0 Total Number of Unemployed Persons -12.9 -15.4 Registered Unemployment Rate 17.0 14.8 LFS-based Unemployment Rate 16.2 13.1 Source: Croatian Bureau of Statistics All basic economic indicators, from industrial production through construction, tourism and trade to labour market, demonstrated positive trends. Industrial production continued growing for the third consecutive year, with a more dynamic rate of increase. In 2016, the volume of industrial production increased by 5.3% compared to 2015. The increase in industrial production was caused by the increase in production in the field of manufacturing (5.6%) and electricity, gas, steam and air-conditioning supply (7.0%), and the decrease in production in the mining and quarrying industry (1.8%). After decreasing for several years, the volume of construction works increased by 2.7% compared to 2015. More precisely, the physical volume of construction works on buildings increased significantly in 2016 (by 8.7%), while the volume of construction works on other infrastructural facilities continued decreasing (by 2.5%). In the tourism industry, physical indicators continued recording positive trends. To be more precise, tourist arrivals increased by 8.7% and tourist overnights by 9.0% compared to 2015. Domestic arrivals and overnights increased by 7.6% and 2.0%, while foreign arrivals and overnights increased by 8.9% and 9.6% respectively. Foreign tourists accounted for 88.6% of total arrivals and 92.5% of total overnights, while domestic tourists accounted for 11.4% of total arrivals and 7.5% of total overnights. Nominal retail trade turnover increased by 2.4% in 2016, while the annual real retail trade turnover increased by 4.0%, thus confirming the continued real turnover growth for the third consecutive year. 10 2016 Yearbook

In 2016, foreign trade once again recorded positive trends. The value of exports from Croatia, measured in HRK, increased by 5.7% at the annual level, while the value of imports to Croatia increased by 5.4%. The Export Import Coverage Ratio thus increased from 62.4% recorded in 2015 to 62.6% in 2016. The Consumer Price Index (CPI) recorded a negative rate of -1.1% in 2016, thus confirming the continuation of deflationary trends recorded in the previous two years (-0.2% in 2014 and -0.5% in 2015). In 2016, the average monthly net salary per person employed in a legal person amounted to HRK 5,685. Compared to 2015, this represents an annual increase of 1.6% in nominal terms. Due to deflationary trends, however, the average real salary growth was significantly greater than the nominal one and amounted to 2.8%.

Labour Force in Croatia In 2016, positive changes were recorded in the labour market as well. The changes primarily refer to a decrease in the number of unemployed persons and the rate of unemployment, stagnation of employment and the consequent decrease in active population.

Registered Employment and Unemployment According to the data from the Croatian Bureau of Statistics based on administrative sources, average employment in the Republic of Croatia remained at last year’s level, whereas unemployment decreased by 15.4%, leading to a decrease of 2.7% in total active population.

Active Population Based on Administrative Sources, Annual Average in 2015 and 2016

2016/2015 2015 2016 Index Active Population 1,676,908 1,632,279 97.3 Employed 1,391,002 1,390,419 100.0 - employed in legal entities 1,175,656 1,177,004 100.1 - employed in crafts, trades and free professions 194,142 193,524 99.7 - insured individual farmers 21,204 19,891 93.8 Unemployed 285,906 241,860 84.6 Registered Unemployment Rate 17.0 14.8 - Source: Croatian Bureau of Statistics; results of the analysis of the JOPPD income tax form

In 2016, the average annual number of registered employed persons was 1,390,419, with a zero annual rate of increase. In the sector of legal entities, which account for 84.7% of total registered employment, the number of persons employed increased by 0.1%, while the number of persons employed in the sector of crafts, trades and free professions and the sector of individual farmers decreased by 0.3% and 6.2% respectively. According to the National Classification of Activities (Schedule 1, Page 14), the largest number of employed persons was recorded in manufacturing (236,722 or 17.0%), wholesale and retail trade, repair of motor vehicles and motorcycles (215,736 or 15.5%), public administration, defence and compulsory social security (114,962 or 8.3%), education (108,523 or 7.8%) and human health and social work (98,690 or 7.1%). Compared to 2015, employment increased in eleven areas of activity. A significant percentage increase was recorded in administrative and support service activities (4.0%), other service activities and water supply, sewerage, waste management and remediation (2.0% each), education (1.6%) and accommodation and food service activities (1.5%). At the same time, employment decreased in ten areas of activity, primarily in mining and quarrying (13.8%), activities of households as employers (9.2%), financial and insurance activities and real estate activities (3.5%), electricity, gas, steam and air-conditioning supply (2.1%) and agriculture (agriculture, forestry and fishing 1.2% and individual farming 6.2%). 11 Croatian Employment Service

As far as economic sectors are concerned (agricultural, non-agricultural and service sector), the structure of persons employed in 2016 shows that 69.7% persons found employment in service, 26.7% in non-agricultural and 3.6% in agricultural activities. Compared to 2015, the share of service activities in total employment increased (by 0.3 percentage points), while the shares of non-agricultural and agricultural activities decreased (by 0.2 and 0.1 percentage points respectively). Registered unemployment continued decreasing for the third consecutive year. Compared to 2015, the average number of unemployed persons decreased in 2016 by 44,046 persons or 15.4%, i.e. from 285,906 persons registered in 2015 to 241,860 in 2016. The decrease in registered unemployment was contributed by a significant decrease in the number of persons who joined the CES unemployed register in 2016 (by 10.7%).

Unemployment Rate Based on Administrative Sources The significant decrease in the number of unemployed persons and the stagnating number of employed persons recorded in 2016 led to a decrease of 2.2 percentage points in the average annual registered unemployment rate, i.e. from 17.0% recorded in 2015 to 14.8% in 2016 at the national level (data obtained from the Croatian Bureau of Statistics). Unemployment Rate by County - In order to present unemployment rates at the level of counties, the data on insured employed persons registered with the Croatian Pension Insurance Institute and the data on unemployed persons registered with the Croatian Employment Service

Unemployment Rate by County, Annual Average in 2016 and 2015

40

35

2016 2015 29 .6

29 .8

30 .0 26 .6 25 .1 2 4

22 .8

25 %

.0 19 .6 19 .2

18 .9

1 8

17 .8

20

.0

14 .6 14 .3 13 .5 1 3 15 12 .6

12 .1 Percentage 5 10 .5

10 .4 8 . .0

10 .0 7 6

9 4 6 3 0 5 9 7 4 7 5 3 7 0 8 9 4 3 3 5

5 4 5 . . 10 . 12 . 12 . 14 . 16 . 16 . 15 . 16 . 18 . 19 . 19 . 22 . 22 . 22 . 26 . 27 . 28 . 30 . 32 . 32 . 8 7 0 r c b b i n je a a e e r d r r d v ž Knin g g Senj a Istria l o a a a Z r r im u Srijem ik - - Z a a đ ka - Baranja Zagorje Križevci Neretva r i Bilogora - - Slavonia e K Dalmatia V - a L - k r a Moslavina t v Podravina M be n - ca - a i l i i nik - o i n ga - k v p Š v k n Gorski Kotar p si j e e a l o o u i ca - S a ž City of Z s i v r O r i Slavonski Brod i t r e je - V o j b r v K S p P B u o o o r i D Republic of Croatia K i m V r P

are used. The so-obtained average national unemployment rate amounted to 14.3%. In nine counties it was lower and in twelve higher than the national average. *HZZ calculations

Unemployment rate differed significantly among the counties. The lowest unemployment rates were recorded in the County of Istria (6.0%) and the City of Zagreb (7.0%). Rates below the national average were also recorded in the Counties of Varaždin (8.5%), Primorje-Gorski Kotar 12 2016 Yearbook

(10.4%), Međimurje (10.5%), Zadar (12.1%), Krapina-Zagorje (12.6%), Koprivnica-Križevci (13.0%) and Dubrovnik-Neretva (13.5%). The highest unemployment rates were, on the other hand, recorded in the Counties of Sisak-Moslavina and Virovitica-Podravina (29.8% and 29.6%), followed by Vukovar-Srijem (26.6%), Osijek-Baranja (25.1%), Bjelovar-Bilogora (24.0%) and Slavonski Brod-Posavina (22.8%). Compared to the year before, unemployment rate decreased in all counties. The largest decrease was recorded in the Counties of Slavonski Brod-Posavina and Bjelovar-Bilogora (by 3.9 pp), Zagreb (by 3.8 pp), Vukovar-Srijem (by 3.7 pp) and Koprivnica-Križevci, Požega-Slavonia and Karlovac (by 3.5 pp). The smallest decrease was recorded in the City of Zagreb (by 1.4 pp) and the Counties of Istria and Šibenik-Knin (by 1.5 pp).

Employment and Unemployment Based on the Labour Force Survey The Labour Force Survey is conducted by the Croatian Bureau of Statistics in accordance with the methodological rules prescribed by the Statistical Office of the European Communities (Eurostat), which makes LFS an internationally comparable source of data. According to the Labour Force Survey, the average active population in the Republic of Croatia was 1,830,000 persons in 2016 (61,000 persons or 3.2% less than in 2015), including 1,590,000 employed and 240,000 unemployed persons. Compared to 2015, the number of employed persons increased by 5,000 persons or 0.3%, while the number of unemployed persons decreased by 66,000 persons or 21.6%. Consequently, the rate of employment (in the group of persons aged 15-64) increased from 56.0% recorded in 2015 to 56.9% in 2016.

Unemployment Rate Based on the Labour Force Survey The average LFS-based unemployment rate recorded in 2016 was 13.1%, i.e. it decreased by 3.1 pp compared to 2015 as a result of the significant decrease in the number of unemployed and a slight increase in the number of employed persons.

LFS-based Active Population, Annual Average in 2015 and 2016

2016/2015 2015 2016 Index

Active Population 1,891,000 1,830,000 96.8 Employed 1,585,000 1,590,000 100.3 Employment Rate (15-64) 56.0 56.9 - Unemployed 306,000 240,000 78.4 LFS-based Unemployment Rate 16.2 13.1 -

Source: Croatian Bureau of Statistics

Depending on the method applied to measure employment and unemployment, i.e. taking into account the results of the Labour Force Survey or data obtained from administrative sources, the absolute number of employed persons significantly differs. More precisely, the absolute number of employed persons calculated on the basis of the results of the Labour Force Survey was by 14.4% or almost 200,000 persons greater compared to the number calculated on the basis of the data from administrative sources, while the average number of unemployed persons is relatively the same regardless of the source of data used. As far as the differences in trends are concerned, the LFS-based figures indicate a slight deviation from the trend of growth in employment (0.3% compared to 0.0%) and a somewhat more significant deviation from the trend of decrease in unemployment (21.6% compared to 15.4%) compared to the figures obtained on the basis of the data from administrative sources. 13 Croatian Employment Service

Schedule 1

Employed Persons by Activity Based on the National Classification of Activities (NCA), Annual Average in 2016 Crafts, Trades TOTAL Legal Entities and Free Area of Activity Professions (NCA) 2016/ 2016/ 2016/ Number % 2015 Number 2015 Number 2015 Index Index Index Agriculture, forestry and fishing 30,391 2.2 98.8 21,701 98.5 8,690 99.4 Individual farming 19,891 1.4 93.8 - - - - Agricultural Activities 50,281 3.6 96.8 21,701 98.5 8,690 99.4 Mining and quarrying 4,554 0.3 86.2 4,369 85.8 185 96.9 Manufacturing 236,722 17.0 99.1 208,375 99.2 28,347 98.7 Electricity, gas, steam and air- 13,763 1.0 97.9 13,763 97.9 0 - conditioning supply Water supply, sewerage, waste 24,586 1.8 102.0 24,410 102.0 176 94.4 management and remediation Construction 91,056 6.5 99.1 70,893 98.8 20,163 100.3 Non-agricultural activities 370,680 26.7 99.1 321,810 99.0 48,870 99.4 Wholesale and retail trade, repair of 215,736 15.5 100.3 190,631 100.8 25,104 96.4 motor vehicles and motorcycles Transportation and storage 75,301 5.4 100.3 61,683 99.9 13,618 101.9 Accommodation and food service 94,738 6.8 101.5 62,666 103.0 32,072 98.9 activities Information and communication 34,580 2.5 99.1 33,111 99.0 1,469 102.4 Financial and insurance activities 40,175 2.9 96.5 39,138 96.1 1,037 113.3 Real estate activities 9,088 0.7 100.9 8,469 100.1 619 113.8 Professional, scientific and technical 69,657 5.0 100.9 54,110 101.0 15,546 100.4 activities Administrative and support service 47,993 3.5 104.0 43,475 103.9 4,517 104.9 activities Public administration and defence, 114,962 8.3 99.0 106,507 98.9 8,455 100.5 compulsory social security Education 108,523 7.8 101.6 107,888 101.6 635 114.9 Human health and social work 98,690 7.1 100.6 86,610 100.5 12,081 101.2 activities Arts, entertainment and recreation 25,653 1.8 100.3 22,998 100.5 2,655 98.4 Other service activities 31,275 2.2 102.0 16,206 101.0 15,069 103.1 Activities of households as employers, undifferentiated goods- 2,644 0.2 90.8 0 - 2,644 90.8 and services-producing activities of households for own use Service Activities 969,013 69.7 100.5 833,493 100.6 135,520 99.9 TOTAL 1,390,419 100.0 100.0 1,177,004 100.1 193,524 99.7 Source: Croatian Bureau of Statistics, http://www.dzs.hr; Statistics in Line

14 2016 Yearbook

Unemployment

Total Unemployment Trends In December 2016, the unemployment register of the Croatian Employment Service included 236,617 persons, i.e. 17.1% less than in the same month the year before. The total number of new entrants (277,496) amounted to less than the sum of the total number of persons from the unemployment register employed in 2016 and the persons removed from the register for other reasons (326,347), which resulted in a decrease in unemployment. In each month of 2016, the number of unemployed persons was significantly lower compared to the corresponding month of 2015. This difference, if measured in percentages, was greater in the second than in the first half of the year.

Number of Unemployed Persons by Months in 2015 and 2016 340 320 2015 300 2016 280 260 240 220 Number of Unemployed (000) 200 I II III IV V VI VII VIII IX X XI XII Months

Just as every year, seasonal factors influenced the movements in the number of unemployed persons registered with the CES in 2016 as well. At the beginning of the year, the number of unemployed persons was high. It significantly decreased during spring and summer months, only to start growing again in October and continue growing until the end of the year. Therefore, the largest number of unemployed persons was recorded in January (293,236) and the smallest in September (211,827).

Unemployment Structure and Trends by Gender, Age and Level of Education The average number of unemployed persons decreased from 285,906 recorded in 2015 to 241,860 in 2016, which represents a decrease of 15.4%. Average unemployment decreased both in the case of men and women, although the decrease in the number of unemployed men (-17.4%) was slightly greater than the decrease in the number of unemployed women (-13.7%). Consequently, the share of unemployed men in the total number of unemployed persons decreased, while the share of unemployed women in the total number of unemployed persons increased (by 1.1 pp).

Average Number of Unemployed Persons by Gender in 2015 and 2016

2015 2016 2016/2015 Spol Number % Number % Index Men 130,698 45.7 107,947 44.6 82.6 Women 155,208 54.3 133,913 55.4 86.3 TOTAL 285,906 100.0 241,860 100.0 84.6 15 Croatian Employment Service

As far as unemployment trends by age are concerned, the average number of unemployed persons decreased in almost all age groups. The largest percentage decrease in the average number of unemployed persons was recorded in the youngest age groups. More precisely, the average number of unemployed persons aged 15 – 19 decreased by 20.0% and the average number of unemployed persons aged 20 - 24 decreased by 19.8%. The decrease in the number of unemployed persons of middle working age was smaller, but also significant. For example, the number of unemployed persons aged 45 – 49 decreased by 16.9%. On the other hand, the oldest age group recorded a negligible increase in unemployment (by 0.8%). Consequently, the largest increase in the share in the total number of unemployed persons was recorded by the oldest group.

Average Number of Unemployed Persons by Age in 2015 and 2016

2015 2016 2016/2015 Dob Number % Number % Index From 15 to 19 14,814 5.2 11,849 4.9 80.0 From 20 to 24 34,910 12.2 28,009 11.6 80.2 From 25 to 29 35,001 12.2 28,683 11.9 81.9 From 30 to 34 30,615 10.7 24,757 10.2 80.9 From 35 to 39 28,940 10.1 24,071 10.0 83.2 From 40 to 44 27,409 9.6 23,351 9.7 85.2 From 45 to 49 29,664 10.4 24,642 10.2 83.1 From 50 to 54 32,541 11.4 28,514 11.8 87.6 From 55 to 59 36,334 12.7 32,184 13.3 88.6 60 + 15,678 5.5 15,800 6.5 100.8 TOTAL 285,906 100.0 241,860 100.0 84.6

In 2016, the average number of unemployed persons decreased in all groups distinguished by the level of education. More precisely, the average number of unemployed persons without elementary education decreased by 9.6%, while the average number of unemployed persons with completed elementary school decreased by 15.5%. The average number of unemployed persons with completed three-year secondary school decreased by 18.4% and of those with four-year secondary or grammar school by 16.3%. The decrease in the average number of unemployed persons with higher levels of education was somewhat less significant. To be more precise, the average number of unemployed persons who completed an undergraduate university or post-secondary non-university programme decreased by 8.9%, and the average number of unemployed persons who completed a graduate/post-graduate or academy programme decreased by 8.0%.

Average Number of Unemployed Persons by Level of Education in 2015 and 2016

2015 2016 2016/2015 Level of Education Number % Number % Index No education and uncompleted elementary 15,664 5.5 14,155 5.9 90.4 school Elementary school 59,222 20.7 50,070 20.7 84.5 1 to 3-year vocational secondary school and 91,985 32.2 75,092 31.0 81.6 school for skilled and highly skilled workers 4 (or more)-year vocational secondary school 82,464 28.8 69,055 28.6 83.7 and grammar school Undergraduate university and post-secondary 15,930 5.6 14,508 6.0 91.1 non-university education Graduate and post-graduate university or 20,641 7.2 18,980 7.8 92.0 academy education TOTAL 285,906 100.0 241,860 100.0 84.6 16 2016 Yearbook

Croatian War Veterans Unemployment Structure and Trends In 2016, the average monthly number of unemployed war veterans registered with the CES was 22,433, i.e. 14.0% less than the year before. War veterans with completed or uncompleted elementary school accounted for 38.4% and those with completed three-year vocational secondary school or training for skilled workers accounted for 35.7% of the said number. In terms of age, 67.0% of unemployed Croatian war veterans were aged 50 to 65.

Unemployment Structure and Trends by Previous Employment Activity The structure of unemployed persons who had previously been employed, i.e. who have work experience, can be analysed in terms of previous employment activity. The average number of persons with previous work experience recorded in 2016 was 198,927, i.e. 14.9% less than in 2015 and in proportion with the decrease in the total average number of unemployed persons. Compared to 2015, the number of unemployed persons decreased in almost all areas of activity in 2016. In some areas of activity, the recorded decrease was quite significant, particularly in the private sector. Thus, for example, the number of unemployed persons with previous work experience in construction decreased by as many as 23.3%, while the number of unemployed persons with previous work experience in manufacturing decreased by 18.2%. Furthermore, the number of unemployed persons with previous work experience in trade decreased by 18.5%, while the average number of unemployed persons with previous work experience in accommodation and food service activities decreased by 12.0%. On the other hand, the number of unemployed persons with previous work experience in public administration, defence and compulsory social security increased by 4.6%.

Average Number of Unemployed Persons with Work Experience by Previous Employment Activity in 2015 and 2016 2015 2016 2016/2015 Activity (2007 NCA) Number % Number % Index A Agriculture, forestry and fishing 10,378 4.4 8,680 4.4 83.6 B Mining and quarrying 614 0.3 526 0.3 85.7 C Manufacturing 44,355 19.0 36,277 18.2 81.8 D Electricity, gas, steam and air-conditioning supply 309 0.1 318 0.2 102.9 Water supply, sewerage, waste management E 3,685 1.6 3,000 1.5 81.4 and remediation F Construction 22,549 9.7 17,300 8.7 76.7 Wholesale and retail trade, repair of motor G 40,481 17.3 32,981 16.6 81.5 vehicles and motorcycles H Transportation and storage 7,652 3.3 5,974 3.0 78.1 I Accommodation and food service activities 29,553 12.6 26,008 13.1 88.0 J Information and communication 3,432 1.5 2,948 1.5 85.9 K Financial and insurance activities 2,774 1.2 2,361 1.2 85.1 L Real estate activities 1,387 0.6 1,152 0.6 83.1 M Professional, scientific and technical activities 8,143 3.5 6,884 3.5 84.5 N Administrative and support service activities 11,983 5.1 10,614 5.3 88.6 O Public administration and defence, compulsory social security 14,873 6.4 15,553 7.8 104.6 P Education 6,669 2.9 6,336 3.2 95.0 Q Human health and social work 7,313 3.1 6,743 3.4 92.2 R Arts, entertainment and recreation 3,172 1.4 2,807 1.4 88.5 S Other service activities 10,377 4.4 9,139 4.6 88.1 Activities of households as employers, T undifferentiated goods- and services-producing 3,904 1.7 3,282 1.6 84.1 activities of households for own use U Activities of extraterritorial organizations and bodies 49 0.0 44 0.0 89.8 TOTAL 233,652 100.0 198,927 100.0 85.1 17 Croatian Employment Service

Unemployment Structure and Trends by County, Gender, Age and Level of Education Compared to the year before, the average number of unemployed persons decreased in all counties in 2016. The largest percentage decrease in the average number of unemployed persons was recorded in the Counties of Koprivnica-Križevci (23.5%), Varaždin (22.4%), Krapina- Zagorje (22.3%) and Zagreb (20.9%), while the smallest was, on the other hand, recorded in the Counties of Lika-Senj (9.0%) and Šibenik-Knin (7.7%).

Average Number of Unemployed Persons by County in 2015 and 2016

2015 2016 2016/2015 County Number % Number % Index Zagreb 15,803 5.5 12,495 5.2 79.1 Krapina-Zagorje 6,648 2.3 5,168 2.1 77.7 Sisak-Moslavina 18,261 6.4 16,051 6.6 87.9 Karlovac 9,592 3.4 7,872 3.3 82.1 Varaždin 7,441 2.6 5,771 2.4 77.6 Koprivnica-Križevci 6,462 2.3 4,944 2.0 76.5 Bjelovar-Bilogora 11,559 4.0 9,448 3.9 81.7 Primorje-Gorski Kotar 15,518 5.4 12,888 5.3 83.1 Lika-Senj 3,461 1.2 3,148 1.3 91.0 Virovitica-Podravina 9,179 3.2 8,146 3.4 88.7 Požega-Slavonia 5,287 1.8 4,411 1.8 83.4 Slavonski Brod-Posavina 12,700 4.4 10,591 4.4 83.4 Zadar 8,107 2.8 6,965 2.9 85.9 Osijek-Baranja 32,467 11.4 28,062 11.6 86.4 Šibenik-Knin 7,122 2.5 6,571 2.7 92.3 Vukovar-Srijem 17,047 6.0 14,351 5.9 84.2 Split-Dalmatia 40,044 14.0 35,383 14.6 88.4 Istria 6,664 2.3 5,404 2.2 81.1 Dubrovnik-Neretva 7,762 2.7 6,717 2.8 86.5 Međimurje 5,576 2.0 4,665 1.9 83.7 City of Zagreb 39,206 13.7 32,809 13.6 83.7 TOTAL 285,906 100.0 241,860 100.0 84.6

As far as the structure of unemployed persons by gender and county is concerned, the largest share of women in the total average number of unemployed persons in 2016 was recorded in the Counties of Karlovac, Vukovar-Srijem, Split-Dalmatia, Osijek-Baranja, Primorje-Gorski Kotar and Slavonski Brod-Posavina (ranging from 56.5% to 58.2%). The Counties of Šibenik-Knin, Bjelovar- Bilogora and Varaždin recorded the smallest shares of women in the total number of unemployed persons (from 50.0% to 50.2%). In terms of age, the largest share of young persons aged up to 24 in the total number of unemployed persons was recorded in the Counties of Požega-Slavonia (23.4%), Međimurje (22.3%) and Koprivnica-Križevci (21.6%), and the smallest in the City of Zagreb (11.7%) and the Counties of Istria (13.1%) and Primorje-Gorski Kotar (13.1%). Finally, from the aspect of educational qualifications, the largest share of qualified persons, i.e. persons with completed secondary or post-secondary university or non-university education, was recorded in the Counties of Split-Dalmatia (84.0%) and Dubrovnik-Neretva (82.8%), and the smallest in the Counties of Međimurje (58.6%), Sisak-Moslavina (62.6%) and Bjelovar-Bilogora (63.1%). 18 2016 Yearbook

Structure of Unemployed Persons by County (2016 average) Persons aged Qualified Men Women County TOTAL up to 24 Persons Number Share Number Share Number Share Number Share Zagreb 12,495 5,680 45.5 6,815 54.5 2,303 18.4 9,257 74.1 Krapina-Zagorje 5,168 2,407 46.6 2,761 53.4 1,019 19.7 3,667 71.0 Sisak-Moslavina 16,051 7,128 44.4 8,923 55.6 2,602 16.2 10,045 62.6 Karlovac 7,872 3,425 43.5 4,447 56.5 1,126 14.3 5,214 66.2 Varaždin 5,771 2,873 49.8 2,898 50.2 919 15.9 4,030 69.8 Koprivnica-Križevci 4,944 2,366 47.9 2,578 52.1 1,069 21.6 3,179 64.3 Bjelovar-Bilogora 9,448 4,711 49.9 4,737 50.1 1,826 19.3 5,962 63.1 Primorje-Gorski Kotar 12,888 5,435 42.2 7,453 57.8 1,684 13.1 10,171 78.9 Lika-Senj 3,148 1,535 48.8 1,613 51.2 624 19.8 2,175 69.1 Virovitica-Podravina 8,146 3,697 45.4 4,449 54.6 1,510 18.5 5,276 64.8 Požega-Slavonia 4,411 1,980 44.9 2,431 55.1 1,030 23.4 3,188 72.3 Slavonski Brod-Posavina 10,591 4,431 41.8 6,160 58.2 2,152 20.3 7,122 67.2 Zadar 6,965 3,105 44.6 3,860 55.4 1,147 16.5 5,358 76.9 Osijek-Baranja 28,062 11,867 42.3 16,195 57.7 5,037 17.9 19,380 69.1 Šibenik-Knin 6,571 3,285 50.0 3,286 50.0 1,104 16.8 5,057 77.0 Vukovar-Srijem 14,351 6,237 43.5 8,114 56.5 2,817 19.6 10,183 71.0 Split-Dalmatia 35,383 15,166 42.9 20,217 57.1 5,300 15.0 29,724 84.0 Istria 5,404 2,421 44.8 2,983 55.2 707 13.1 4,102 75.9 Dubrovnik-Neretva 6,717 3,000 44.7 3,717 55.3 995 14.8 5,561 82.8 Međimurje 4,665 2,123 45.5 2,542 54.5 1,040 22.3 2,733 58.6 City of Zagreb 32,809 15,075 45.9 17,734 54.1 3,847 11.7 26,251 80.0 TOTAL 241,860 107,947 44.6 133,913 55.4 39,858 16.5 177,635 73.4

Unemployment Structure and Trends by Duration, Gender and Level of Education The structure of unemployed persons can also be broken down by unemployment duration. At the end of 2016, 44.0% of the total number of unemployed persons were unemployed for up to 6 months and 45.6% for more than one year. Compared to the end of 2015, the number of unemployed persons decreased in all groups distinguished by duration of unemployment. The largest decrease in the number of unemployed persons was recorded in the group of persons unemployed for 6 to 9 months and 2 to 3 years (each group by 29.8%), while the smallest decrease was recorded in the group of persons unemployed for up to 3 months (by 7.3%) and over 3 years (by 9.9%).

Unemployed Persons by Unemployment Duration (31 December 2015 and 2016) Duration of 2015 2016 2016/2015 Unemployment Number % Number % Index Up to 3 months 82,657 29.0 76,649 32.4 92.7 From 3 to 6 months 39,240 13.7 27,543 11.6 70.2 From 6 to 9 months 16,221 5.7 13,188 5.6 81.3 From 9 to 12 months 15,813 5.5 11,302 4.8 71.5 From 1 to 2 years 38,688 13.6 29,246 12.4 75.6 From 2 to 3 years 25,078 8.8 17,611 7.4 70.2 More than 3 years 67,771 23.7 61,078 25.8 90.1 TOTAL 285,468 100.0 236,617 100.0 82.9 19 Croatian Employment Service

As far as unemployment duration by gender is concerned, the share of long-term unemployed persons (unemployed for more than one year) in the total number of unemployed men was 45.9% and in the total number of unemployed women 45.4%. It is therefore evident that long- term unemployment is as frequent in men as it is in women. The share of persons unemployed for 2 to 3 years is greater in the case of men than in the case of women, while women account for the greater share of persons unemployed for more than 3 years.

Unemployed Persons by Unemployment Duration and Gender (31 December 2016) Duration of Unemployment Total Men % Women % Up to 3 months 76,649 33,587 32.4 43,062 32.4 From 3 to 6 months 27,543 11,926 11.5 15,617 11.8 From 6 to 9 months 13,188 5,593 5.4 7,595 5.7 From 9 to 12 months 11,302 5,064 4.9 6,238 4.7 From 1 to 2 years 29,246 13,025 12.6 16,221 12.2 From 2 to 3 years 17,611 8,349 8.0 9,262 7.0 More than 3 years 61,078 26,221 25.3 34,857 26.2 TOTAL 236,617 103,765 100.0 132,852 100.0

Finally, if unemployment duration is analysed in terms of the level of education, it is evident that persons with lower levels of education account for a significantly larger share of long-term unemployed persons. In 2016, long-term unemployed persons (more than 1 year) accounted for 71.4% of the total number of unemployed persons with no education or uncompleted elementary school, while those with completed elementary education accounted for 59.4%. The share of long-term unemployed persons was significantly smaller in the groups of persons with three- or four-year secondary education (45.0% and 39.3% respectively). The smallest share of long- term unemployed persons was recorded in the groups of unemployed persons with higher levels of education, i.e. those who completed an undergraduate university or post-secondary non-university programme and those who completed a graduate/post-graduate university or academy programme (30.0% and 29.7% respectively). It can therefore be concluded that the level of education has a huge effect on unemployment duration.

Structure of Unemployed Persons by Unemployment Duration and Level of Education (31 December 2016) 4 (or 1 to 3-year Graduate No education more)-year Undergraduate vocational and post- and vocational university and Duration of Elementary secondary school graduate Total uncompleted secondary post-secondary Unemployment school and school for skilled university elementary school and non-university and highly skilled or academy school grammar education workers education school Up to 3 months 32.4 15.2 24.2 33.0 35.9 42.2 42.7 From 3 to 6 months 11.6 5.4 7.6 11.8 14.1 14.7 14.5 From 6 to 9 months 5.6 3.9 4.2 5.5 6.0 7.2 7.6 From 9 to 12 months 4.8 4.1 4.6 4.7 4.7 5.7 5.5 From 1 to 2 years 12.4 14.6 13.5 11.7 12.1 12.0 11.9 From 2 to 3 years 7.4 10.4 9.4 7.3 6.6 5.4 5.7 More than 3 years 25.8 46.3 36.5 26.0 20.6 12.7 12.1 TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Short-term Unemployment 54.4 28.6 40.6 55.0 60.7 70.0 70.3 Long-term 45.6 71.4 59.4 45.0 39.3 30.0 29.7 Unemployment 20 2016 Yearbook

Labour Force Demand and Employment

Reported Job Vacancies The number of reported job vacancies has been continuously increasing since 2010. The highest rates of increase in labour force demand were recorded in 2011 (19.9%), 2015 (32.4%) and 2016 (14.7%), while the rates recorded in the remaining four years ranged from 2.3% and 8.7%. In 2016, employers reported a total of 232,254 vacancies to the CES, i.e. 29,786 or 14.7% more than in 2015. If analysed on the basis of the National Classification of Activities, the number of reported job vacancies (Schedule 2, Page 28) increased in sixteen areas of activity. The most significant increase in labour force demand was recorded in accommodation and food service activities (38.0%), administrative and support service activities (33.1%), manufacturing (31.5%), real estate activities (28.0%) and wholesale and retail trade (27.8%). The smallest increase in (reported) labour force demand was, on the other hand, recorded in other service activities (1.8%), professional, scientific and technical activities (2.3%) and financial and insurance activities (3.5%). At the same time, labour force demand decreased in public sector activities, including public administration, defence and social security (9.5%), human health and social work (5.4%) and education (0.8%). In terms of Regional Organization, the number of reported job vacancies (Schedule 3, Page 29) increased in almost all counties. The largest increase in reported vacancies was recorded in the Counties of Primorje-Gorski Kotar (28.7%), Slavonski Brod-Posavina (25.6%), Dubrovnik- Neretva (24.9%), Zadar (24.4%) and Istria (20.7%). At the same time, the smallest increase in labour force demand was recorded in the Counties of Osijek-Baranja (2.7%) and Koprivnica- Križevci (4.6%), while the Counties of Vukovar-Srijem and Virovitica-Podravina recorded a decrease in labour force demand (by 5.6% and 8.4% respectively). In 2016, employers largely looked for science and engineering professionals (50,562 or 21.8%) and service and sales workers (52,832 or 22.7%). Compared to 2015, the demand for service and sales workers increased (by 28.0%), whereas the demand for science and engineering professionals decreased (by 8.1%). Different groups of workers in elementary occupations accounted fora significant share of total labour force demand, including cleaners, deliverers, workers without qualifications and similar (43,455 or 18.7%) and those working in crafts and related trades and individual production (38,325 or 16.5%). Compared to 2015, labour force demand increased in the two mentioned groups by 32.4% and 23.2% respectively. Labour force demand also increased in the group of plant and machine operators and assemblers (by 34.7%) and clerical support workers (by 11.8%), while the demand for technicians and associated professionals decreased (by 2.5%). Other occupations accounted for as little as 0.7% in total labour force demand reported to the CES.

Reported Job Vacancies by Group of Occupations in 2015 and 2016 Group of Occupations 2015 2016 2016/2015 (National Classification of Occupations 2010) Number % Number % Index Armed forces occupations 0 0.0 550 0.2 - Managers (legislators, senior officials and chief 195 0.1 206 0.1 105.6 executives) Professionals (science, engineering and 55,048 27.2 50,562 21.8 91.9 associated professionals) Technicians and associated professionals 19,679 9.7 19,184 8.3 97.5 Clerical support workers 13,545 6.7 15,139 6.5 111.8 Service and sales workers 41,262 20.4 52,832 22.7 128.0 Skilled agricultural, forestry and fishery workers 511 0.3 812 0.3 158.9 Craft and related trades workers 31,106 15.4 38,325 16.5 123.2 Plant and machine operators and assemblers 8,305 4.1 11,189 4.8 134.7 Elementary occupations 32,817 16.2 43,455 18.7 132.4 TOTAL 202,468 100.0 232,254 100.0 114.7 21 Croatian Employment Service

Employment of Persons from the CES Unemployment Register After it had been continuously increasing for several years (with oscillating rates of increase, from high 26.3% in 2011 to as low as 0.5% in 2012), the trend shifted in 2016. More precisely, the number of persons from the CES unemployment register who found employment during the year decreased by 5.9% compared to 2015. To be more precise, a total of 218,834 persons from the CES unemployment register were employed during the year (13,665 persons less than in 2015), of which 197,047 (90.0%) on a work contract basis and 21,787 (10.0%) on the basis of other business activities (workplace training without a work contract, starting a company, craft or trade business, temporary service contracts, etc.). Compared to 2015, employment regulated on a work contract basis decreased by 4.6%, while the number of persons employed on the basis of other business activities decreased by 15.9%, which resulted in the total annual decrease in registered employment of 5.9%. From the total number of employed persons, 106,282 were women (accounting for a share of 53.9% in the total number) and 90,765 were men (accounting for a share of 46.1%). Compared to 2015, the number of employed women decreased by 0.8% and the number of unemployed men by 8.7%. The largest number of persons from the CES unemployment register who found employment in 2016 were employed on a work contract basis (197,047 persons or 90.0%). The structure of persons employed on a work contract basis according to different features: Employment Activity – The persons from the CES unemployment register who were employed on a work contract basis in 2016 (Schedule 2, Page 28) mainly found employment in the following areas of activity: accommodation and food service activities (38,758 persons or 19.7%), manufacturing (30,627 persons or 15.5%) and wholesale and retail trade (29,606 persons or 15.0%). Significant shares of registered employment were also recorded in the following areas: administrative and support service activities (16,142 persons or 8.2%), education (14,788 persons or 7.5%) and construction (14,647 persons or 7.4%). Almost three quarters (73.4%) of the total number of persons from the CES unemployment register who found employment in 2016 were employed in the mentioned five areas of activity. Compared to 2015, registered employment increased in administrative and support service activities (by 7.8%), electricity, gas, steam and air-conditioning supply (by 5.4%), real estate activities (by 4.4%), human health and social work (by 4.3%) and arts, entertainment and recreation (by 1.0%), while the number of newly employed persons in other areas of activity decreased. The largest percentage decrease in registered employment was recorded in construction (by 16.4%) financial and insurance activities (by 15.7%) and agriculture, forestry and fishing (by 11.4%). Regional Employment Structure – The structure of registered employment by county (Schedule 3, Page 29) shows that most persons who were employed on the basis of a work contract were, just as in previous years, recorded in the County of Split-Dalmatia (27,491 persons or 14.0%), the City of Zagreb (22,621 persons o 11.5%) and the County of Osijek-Baranja (19,509 persons or 9.9%), while the smallest number of such persons were employed in the Counties of Lika- Senj (2,640 persons or 1.3%) and Požega-Slavonia (4,007 persons or 2.0%). Compared to 2015, registered employment increased in the Counties of Šibenik-Knin (by 5.4%), Lika-Senj (by 1.9%) and Split-Dalmatia (by 0.8%). At the same time, the most significant percentage decrease in registered employment regulated on a work contract basis was recorded in the Counties of Varaždin (by 15.1%), Krapina-Zagorje (by 12.2%), Međimurje (by 12.0%), Istria (by 9.1%) and Zagreb (by 8.0%). Work Experience – From the total number of persons from the CES unemployment register employed on a work contract basis 171,109 persons (86.8%) had prior work experience and 25,938 persons (13.2%) were employed for the first time. In both groups, employment grew at the same rate (4.6%) compared to 2015. Duration of Employment – 16,403 persons (8.3%) were employed on a permanent basis and 180,644 (91.7%) on a temporary basis. Compared to the previous years mainly marked by a decrease in permanent employment, a positive change was recorded in 2016. More precisely, 22 2016 Yearbook permanent employment increased by 6.6%, while temporary employment decreased by 5.5%. Level of Education and Group of Occupations – Persons with secondary education accounted for the largest share of the total number of persons from the CES unemployment register employed on a work contract basis, including those who completed a three-year vocational school or school for skilled and highly skilled workers (34.4%) and persons who completed a four-year vocational school or grammar school (32.7%), followed by those with higher levels of education, i.e. persons with graduate and post-graduate university or academy education (10.8%) and persons with undergraduate university and post-secondary non-university education (7.2%), and those with lower levels of education, i.e. persons with completed elementary school (13.2%) and persons with no education (1.6%). Compared to 2015, a decrease in registered employment was recorded in the group of persons with completed elementary education (by 7.0%), followed by persons who completed a three-year vocational school or school for skilled and highly skilled workers (by 7.7%) and persons who completed a four-year vocational school or grammar school (by 3.8%). At the same time, other groups distinguished by level of education recorded a slight increase in employment, primarily the group of persons with undergraduate university or post- secondary non-university education (by 2.5%).

Persons from the CES Unemployment Register Employed on a Work Contract Basis by Level of Education in 2015 and 2016

2015 2016 2016/2015 Level of Education Number % Number % Index No education and uncompleted 3,187 1.5 3,206 1.6 100.6 elementary school Elementary school 27,909 13.5 25,964 13.2 93.0 1 to 3-year vocational secondary school and 73,495 35.6 67,863 34.4 92.3 school for skilled and highly skilled workers 4 (or more)-year vocational secondary 66,992 32.4 64,464 32.7 96.2 school and grammar school Undergraduate university and post- 13,863 6.7 14,210 7.2 102.5 secondary non-university education Graduate and post-graduate university or 21,144 10.2 21,340 10.8 100.9 academy education TOTAL 206,590 100.0 197,047 100.0 95.4

Different groups of occupations (defined in accordance with the National Classification of Occupations) accounted for the following shares in total registered employment in 2016: the largest share of persons employed belonged to the group of service and sales workers (46,095 or 23.4%), while significant shares of persons employed were also recorded in the group of technicians and associated professionals (30,601 or 15.5%), elementary occupations (30,396 or 15.4%), science, engineering and associated professionals (29,438 or 14.9%), as well as craft and related trades workers, including production workers, (26,915 or 13.7% and clerical support workers (22,420 or 11.4%). Compared to 2015, employment increased in the group of science, engineering and other related professionals (by 1.5%), workers in elementary occupations (by 1.0%) and workers belonging to the group of occupations in agriculture, forestry, fishing and hunting (by 14.2%), although their share in total employment was relatively small (only 0.7%). At the same time, a decrease in employment was recorded other groups of occupations (from -1.7% to -14.9%), while the number of persons belonging to the group of armed forces occupations or legislators, senior officials and executive managers is rather negligible (18 and 25 persons respectively). 23 Croatian Employment Service

Persons from the CES Unemployment Register Employed on a Work Contract Basis by Group of Occupations in 2015 and 2016

2015 2016 2016/2015 Group of Occupations (NCA 10) Number % Number % Index Armed forces occupations 15 0.0 18 0.0 120.0 Managers (legislators, senior officials and 22 0.0 25 0.0 113.6 chief executives) Professionals (science and engineering 29,010 14.0 29,438 14.9 101.5 professionals) Technicians and associated professionals 31,142 15.1 30,601 15.5 98.3 Clerical support workers 22,869 11.1 22,420 11.4 98.0 Service and sales workers 49,469 23.9 46,095 23.4 93.2 Skilled agricultural, forestry and fishery 1,164 0.6 1,329 0.7 114.2 workers Craft and related trades workers 31,615 15.3 26,915 13.7 85.1 Plant and machine operators and assemblers 11,189 5.4 9,810 5.0 87.7 Elementary occupations 30,095 14.6 30,396 15.4 101.0 TOTAL 206,590 100.0 197,047 100.0 95.4

Volume of Employment by Level of Education and Occupation The ratio between the number of persons employed during a year on a work contract basis and the average end-of-month number of unemployed persons may serve as an indicator of the relative volume of employment. In 2016, the relative employment volume indicator differed significantly among the groups of unemployed persons distinguished by level of education. More precisely, the relative employment volume indicator recorded in the group of persons with no education or uncompleted elementary school was 22.6%. In the group of those who completed elementary school, it was 51.9%, whereas in the group of those who completed vocational secondary school in the duration of up to three years or school for skilled and highly skilled workers, it was 90.4%. In the group of persons who completed a vocational secondary school in the duration of four or more years or grammar school, the relative employment volume indicator was 93.4%. Furthermore, the relative employment volume indicator of 97.9% was recorded in the group of persons who completed an undergraduate university or post- secondary non-university programme, while in the group of persons with graduate/post- graduate university or academy education, the relative employment indicator was 112.4%. It can therefore be concluded that the difference in the relative volume of employment between the persons with elementary and those with secondary education is quite significant, as is the difference in the relative volume of employment between the persons with undergraduate university or post-secondary non-university and those with graduate/post-graduate university or academy education, who recorded the highest relative employment volume indicator. In short, the higher the level of education, the higher the relative volume of employment.

24 2016 Yearbook

Education Level Codes: Volume of Employment by Level of Education in 2016 (%) A – no education and uncompleted elementary 120 112.4 school

B – elementary school 97.9 100 93.4 C – 1- to 3-year vocational 90.4 secondary school and school for skilled and 80 highly skilled workers D – 4(or more)-year 60 vocational secondary 51.9 school and grammar school 40 E – undergraduate university and post-secondary 22.6 non-university education 20 F – graduate and post- Relative Volume of Employment (%) graduate university or 0 academy education A B C D E F Level of Education As usual, the relative volume of employment differed significantly among the groups of persons with the same level of education distinguished by occupation. The following table shows twenty occupations with the highest and twenty with the lowest relative employment volume indicators within the most frequent groups at secondary level of education.

Volume of Employment at Secondary Level of Education

Occupation % Occupation % Tourism and Hospitality Commercialist 174.3 Clothing Expert 72.2 Computer Technician in Mechanical 165.5 Technical Drawer 72.1 Engineering Mechatronics Technician 165.3 Seller 71.1 Medical Nurse / General Care 159.0 Tailor 68.6 Technician Forest Technician 150.9 Tool Keeper 66.9 Gas Fitter 150.8 Clerk 66.7 Computer Technician 146.6 Economic Expert 66.1 Automated Construction Machine 145.0 Administrative Secretary 65.7 Operator Cook 143.6 Farmer 64.6 Heating and AC Installer 133.1 Fur and Leather Tailor 62.6 Tourism and Hospitality Technician 131.5 Chemical Lab Worker 62.5 Mechanical Electrician 129.4 Accessories Maker 60.7 Commercialist 129.3 Machinist 58.2 Waiter 127.3 Expert Chemical Technology Worker 55.2 Electronics Technician 125.2 Associate in Educational Process 54.9 Rail Transport Technician 124.9 Garmenter 54.1 Architectural Technician 123.7 Metal Turner 49.0 Environmental Technician 118.7 Economist in Accounting and Finance 47.9 Road Transport Technician 118.4 Weaver 44.5 Electrical Installation Fitter 118.2 Assistant Tailor 33.5 Note: the selection includes the groups in which there were on average 200 or more unemployed persons. 25 Croatian Employment Service

The following table shows ten occupations with the highest and ten with the lowest relative employment volume indicator at undergraduate university and post-secondary non-university and graduate and post-graduate university or academy level.

Volume of Employment by Occupation/Major at Undergraduate University and Post-secondary Non-university and Graduate and Post-graduate University Occupation/Major % Occupation/Major % Teacher Education 309.2 Marketing 69.2 General Medicine 282.2 Finance 64.5 Preschool Education 191.7 Administrative Law 63.4 and Literature 169.7 Journalism 63.1 Nursing 132.9 Law 62.6 History 132.3 Agronomy 60.5 Kinesiology 128.1 Road Transport Engineering 54.5 Hotel Management 119.8 Architecture 50.3 Physical Education 114.8 Political Sciences 46.7 Physical Therapy 100.3 Management 43.3 Note: the selection includes the groups in which there were on average 100 or more unemployed persons.

Seasonal Employment Seasonal employment accounts for a significant share of total employment of persons from the CES unemployment register, particularly in tourism. Besides in accommodation and food service activities, seasonal employment is recorded in other related activities as well (trade, transport, administrative and other service activities). Furthermore, seasonal employment is also typical in other areas of activity, primarily agriculture, forestry and fishing, some parts of manufacturing and construction. Job placement services provided for the purpose of meeting seasonal labour force demand in tourism is one of important activities performed by the Croatian Employment Service. As a regular practice, at the beginning of each year the CES organises regional meetings with the representatives of large hotel and tourism companies for the purpose of reaching concrete agreements about the estimated demand for seasonal workers (planning) and the manner in which it can be met (selection). The meetings are held in the coastal (Istria, Primorje- Gorski Kotar, Zadar, Šibenik-Knin, Split-Dalmatia and Dubrovnik-Neretva) that are preparing for the upcoming tourist season. After demand planning and selecting suitable unemployed persons from the domicile population, the representatives of the mentioned companies also conduct, in cooperation with regional/district CES offices from continental Croatia, informative interviews with the interested candidates from their registers, after which they select the most suitable workers and refer them to the agreed job positions. In 2016, a total of 40,682 workers were seasonally employed, which represents 20.6% of the total number of persons from the CES unemployment register employed on a work contract basis. Compared to 2015, total seasonal employment slightly decreased (by 785 or 1.9%). Seasonal employment was most significant in accommodation and food service activities (22,404 workers or 55.1%), followed by trade (5,040 workers or 12.4%), administrative and support service activities (3,376 workers or 8.3%), manufacturing (2,044 workers or 5.0%), agriculture, forestry and fishing (1,325 workers or 3.3%) and transportation and storage (1,209 workers or 3.0%). In 2016, most seasonal workers came from coastal (a total of 61.3%) and Slavonian (22.0%) counties (Schedule 4, Page 30), i.e. areas where tourism represents the number one economic

26 2016 Yearbook activity and (continental) areas providing a significant number of workers for employment in coastal areas, but also in the field of agriculture and manufacturing as activities of seasonal character. North-western and Central Croatia account for a relatively small share in seasonal employment (14.9%). As far as occupation is concerned, most seasonal workers belonged to the following groups: salespersons (3,791 or 9.3% of the total number of employed persons), waiters (3,637 or 8.9%), cooks (3,358 or 8.3%), cleaning ladies (1,787 or 4.4%), chambermaids (1,776 or 4.4%) and assistant cooks (1,750 or 4.3%).

Interregional Employment Interregional/interdistrict job placement services are provided with the aim of meeting the employers’ demand for workers, especially in areas with insufficient labour force in certain groups of occupations, encouraging migration of workers and ensuring their employment, particularly in areas recording high unemployment rates. If a certain regional/district office is not able to fill a vacancy by selecting an unemployed person registered in its county, it forwards the request to other regional/district offices that have registered labour force meeting the requirements of the job. Interregional/interdistrict placement is particularly important in the efforts to meet the demand for seasonal workers during the tourist season and the demand for workers trained in shortage occupations. In 2016, 36,967 workers from the CES unemployment register were employed in the place outside of the territorial scope of the regional/district office to which the request had originally been submitted, which is 0.8% less than in 2015. If the structure of such workers is analysed by county (Schedule 4, Page 30), it is evident that most of them came from the Counties of Osijek-Baranja (4,883 or 13.2%), Vukovar-Srijem (3,773 or 10.2%), Sisak-Moslavina (3,652 or 9.9%) and Slavonski Brod-Posavina (2,879 or 7.8%). Furthermore, the most significant relative increase in the number of workers who were employed in the place outside the territorial scope of the regional/district office to which the request had originally been submitted was recorded in the County of Lika-Senj (23.2%) and the County of Istria (20.2%), followed by the Counties of Šibenik-Knin (10.9%), Dubrovnik-Neretva (10.7%), Split-Dalmatia (9.4%), Primorje-Gorski Kotar (8.1%) and Zadar (8.0%). In terms of employment activity, one third (33.1%) of workers employed outside the territorial scope of the regional/district office to which the request had originally been submitted found employment in accommodation and food service activities, 14.7% in wholesale and retail trade, 12.1% in manufacturing, 10.7% in administrative and support service activities and 9.1% in construction. Compared to the year before, the largest increase in labour force mobility was recorded in administrative and support services activities (17.2%), real estate activities (14.1%), information and communication (8.9%) and wholesale and retail trade (6.9%).

27 Croatian Employment Service

Schedule 2

Reported Job Vacancies and Employment of Persons from the CES Unemployment Register on a Work Contract Basis by Areas of Activity Based on the National Classification of Activities (2007) in 2015 and 2016

Number of persons from the CES Reported job vacancies unemployment register employed on a work contract basis Area of Activity (NCA 2007) 2016/ 2016/ 2016 2016 2015 2016 2015 2015 2016 2015 % % Index Index Agriculture, forestry and A 4,069 4,433 1.9 108.9 7,512 6,653 3.4 88.6 fishing B Mining and quarrying 82 124 0.1 151.2 196 184 0.1 93.9 C Manufacturing 24,459 32,173 13.9 131.5 32,833 30,627 15.5 93.3 Electricity, gas, steam and D 602 446 0.2 74.1 313 330 0.2 105.4 air-conditioning supply Water supply, sewerage, E waste management and 1,469 1,584 0.7 107.8 2,012 1,819 0.9 90.4 remediation F Construction 17,229 21,025 9.1 122.0 17,515 14,647 7.4 83.6 Wholesale and retail trade, G repair of motor vehicles and 21,531 27,517 11.8 127.8 30,698 29,606 15.0 96.4 motorcycles H Transportation and storage 5,911 7,167 3.1 121.2 6,866 6,580 3.3 95.8 Accommodation and food I 23,131 31,921 13.7 138.0 40,923 38,758 19.7 94.7 service activities Information and J 2,707 2,881 1.2 106.4 2,314 2,247 1.1 97.1 communication Financial and insurance K 1,810 1,873 0.8 103.5 1,764 1,487 0.8 84.3 activities L Real estate activities 1,024 1,311 0.6 128.0 1,093 1,141 0.6 104.4 Professional, scientific and M 8,507 8,703 3.7 102.3 6,491 6,408 3.3 98.7 technical activities Administrative and support N 11,604 15,441 6.6 133.1 14,968 16,142 8.2 107.8 service activities Public administration and O defence, compulsory social 20,771 18,788 8.1 90.5 8,426 7,934 4.0 94.2 security P Education 25,508 25,315 10.9 99.2 14,181 14,788 7.5 104.3 Human health and social Q 22,378 21,164 9.1 94.6 9,493 8,852 4.5 93.2 work activities Arts, entertainment and R 3,238 3,839 1.7 118.6 2,956 2,985 1.5 101.0 recreation S Other service activities 6,371 6,483 2.8 101.8 5,410 5,292 2.7 97.8 Activities of households as employers, undifferentiated T goods- and services- 56 61 0.0 108.9 603 536 0.3 88.9 producing activities of households for own use Activities of extraterritorial U 11 5 0.0 45.5 23 31 0.0 134.8 organisations and bodies TOTAL 202,468 232,254 100,0 114.7 206,590 197,047 100.0 95.4 28 2016 Yearbook

Schedule 3

Reported Job Vacancies and Employment of Persons from the CES Unemployment Register on a Work Contract Basis by County in 2015 and 2016 Number of persons from the CES Reported job vacancies unemployment register employed on a work contract basis County 2016/ 2016/ 2016 2016 2015 2016 2015 2015 2016 2015 % % Index Index Zagreb 8,515 10,084 4.3 118.4 11,077 10,195 5.2 92.0 Krapina-Zagorje 5,562 6,579 2.8 118.3 5,505 4,834 2.5 87.8 Sisak-Moslavina 5,273 5,803 2.5 110.1 9,725 9,666 4.9 99.4 Karlovac 4,080 4,496 1.9 110.2 5,740 5,561 2.8 96.9 Varaždin 9,893 11,412 4.9 115.4 7,551 6,410 3.3 84.9 Koprivnica-Križevci 5,080 5,313 2.3 104.6 5,189 5,162 2.6 99.5 Bjelovar-Bilogora 4,531 5,135 2.2 113.3 8,089 7,669 3.9 94.8 Primorje-Gorski Kotar 16,774 21,596 9.3 128.7 13,430 12,482 6.3 92.9 Lika-Senj 2,542 2,786 1.2 109.6 2,591 2,640 1.3 101.9 Virovitica-Podravina 3,353 3,072 1.3 91.6 5,946 5,607 2.8 94.3 Požega-Slavonia 2,746 3,172 1.4 115.5 4,026 4,007 2.0 99.5 Slavonski Brod-Posavina 5,716 7,179 3.1 125.6 8,482 8,286 4.2 97.7 Zadar 8,079 10,052 4.3 124.4 7,315 6,891 3.5 94.2 Osijek-Baranja 16,173 16,604 7.1 102.7 20,039 19,509 9.9 97.4 Šibenik-Knin 6,071 7,221 3.1 118.9 6,322 6,664 3.4 105.4 Vukovar-Srijem 7,303 6,893 3.0 94.4 11,955 11,112 5.6 92.9 Split-Dalmatia 21,996 24,763 10.7 112.6 27,285 27,491 14.0 100.8 Istria 14,947 18,034 7.8 120.7 9,414 8,558 4.3 90.9 Dubrovnik-Neretva 6,638 8,292 3.6 124.9 7,549 7,132 3.6 94.5 Međimurje 6,161 7,000 3.0 113.6 5,169 4,550 2.3 88.0 City of Zagreb 41,035 46,768 20.1 114.0 24,191 22,621 11.5 93.5 TOTAL 202,468 232,254 100.0 114.7 206,590 197,047 100.0 95.4

29 Croatian Employment Service

Schedule 4

Seasonal and Interregional Employment of Persons from the CES Unemployment Register on a Work Contract Basis by County in 2015 and 2016 Seasonal employment Interregional employment

County 2016/ 2016/ 2015 2016 2016 % 2015 2015 2016 2016 % 2015 Index Index Zagreb 412 411 1.0 99.8 1,040 955 2.6 91.8 Krapina-Zagorje 310 337 0.8 108.7 1,679 1,525 4.1 90.8 Sisak-Moslavina 1,392 1,456 3.6 104.6 3,519 3,652 9.9 103.8 Karlovac 638 784 1.9 122.9 1,568 1,579 4.3 100.7 Varaždin 601 365 0.9 60.7 1,185 1,051 2.8 88.7 Koprivnica-Križevci 429 447 1.1 104.2 1,517 1,370 3.7 90.3 Bjelovar-Bilogora 1,375 1,164 2.9 84.7 2,578 2,415 6.5 93.7 Primorje-Gorski Kotar 2,415 2,598 6.4 107.6 1,031 1,115 3.0 108.1 Lika-Senj 583 740 1.8 126.9 388 478 1.3 123.2 Virovitica-Podravina 1,013 993 2.4 98.0 1,609 1,677 4.5 104.2 Požega-Slavonia 809 771 1.9 95.3 1,320 1,356 3.7 102.7 Slavonski Brod-Posavina 1,980 1,631 4.0 82.4 2,814 2,879 7.8 102.3 Zadar 2,378 2,090 5.1 87.9 641 692 1.9 108.0 Osijek-Baranja 3,094 2,772 6.8 89.6 4,968 4,883 13.2 98.3 Šibenik-Knin 2,999 2,879 7.1 96.0 897 995 2.7 110.9 Vukovar-Srijem 2,761 2,781 6.8 100.7 3,923 3,773 10.2 96.2 Split-Dalmatia 8,627 9,741 23.9 112.9 2,106 2,304 6.2 109.4 Istria 3,903 3,534 8.7 90.5 470 565 1.5 120.2 Dubrovnik-Neretva 4,629 4,092 10.1 88.4 785 869 2.4 110.7 Međimurje 250 213 0.5 85.2 762 633 1.7 83.1 City of Zagreb 869 883 2.2 101.6 2,458 2,201 6.0 89.5 TOTAL 41,467 40,682 100.0 98.1 37,258 36,967 100.0 99.2

30 2016 Yearbook

Job Placement and Preparation for Employment

Working with Unemployed Persons Provision of job placement services represents the main function of the CES that focuses on developing new services on the basis of the identified user needs. Job placement activities are carried out with the aim of improving employability and labour market orientation skills of the unemployed, as well as for the purpose of preventing their social exclusion. In efforts to achieve this goal, individual counselling and consultations intended for the unemployed and assistance provided to them in defining a professional job search/employment plan play the primary role. Individual counselling is a method used by employment counsellors to assist the unemployed in identifying their transferable and other skills acquired through employment or education and defining their work potential, which is expected to help them find employment in the open labour market in the shortest possible period. Counselling is mandatory for all persons entered in the unemployment register, and it is particularly important for persons who had been employed for a long time or young persons coming directly out of school. In 2016, employment counsellors held 410,621 individual counselling meetings with registered unemployed persons, which is on average 802 individual counselling meetings per counsellor. Individual consultations refer to mutual contacts between the employment counsellor and the unemployed person made for the purpose of providing/obtaining information and advice about reported vacancies, job application process results and activities carried out for the purpose of preparing for employment and improving employability. 3,263,082 individual consultations were performed in 2016. More precisely, each employment counsellor performed on average 531 per month and 6,373 per year. With the aim of improving employability of the unemployed and facilitating their adjustment to the open labour market, employment counsellors also assist unemployed persons in defining a professional job search/employment plan. Such a professional plan must include the list of jobs and occupations that the unemployed person for whom the plan is drafted is capable of performing considering his/her professional, work-related and personal abilities and labour market needs, the list of activities he/she plans to carry out for the purpose of finding employment, the list of activities he/she plans to carry out for the purpose of preparing for employment and deadlines for completion of the mentioned activities, along with the times set for contacts between the relevant unemployed person and the employment counsellor for individual consultation purposes. A total of 236,605 professional job search/employment plans were defined in 2016, i.e. on average 462 plans per counsellor. Furthermore, the CES also organises informative group meetings with the aim of informing the unemployed about the topics associated with preparation for employment and active job search, ALMP measures, novelties related to unemployment insurance, various services provided by the CES or other institutions and associations relevant in terms of job search and employment. In 2016, 390 various group informative meetings or forums were held, involving 11,736 unemployed persons. In order to help the unemployed prepare for the labour market to the best of their abilities as well as to assist them in developing career management skills, the CES organised 3,883 strengthening workshops, involving 21,555 unemployed persons. The CES dedicates special attention to employment of young persons and implementation of EU Recommendation – The Youth Guarantee, the purpose of which is to turn all young persons under the age of 25 (under 30 in the Republic of Croatia) into active labour market participants as soon as possible. Quick activation means receiving a quality employment offer within 4 months from the moment of leaving or completing school, or becoming unemployed. In 2016, 102,861 young persons from the CES unemployment register found employment, of which 56,806 within 4 months after entering the register, which represents 55.2% of the total number of employed young persons. 31 Croatian Employment Service

During the year, 169,213 individual counselling meetings and 912,909 individual consultations with young people were held. Furthermore, 10,642 young persons up to 29 years of age participated in active job search workshops. These workshops are particularly important for young unemployed persons who often enter the CES unemployment register immediately after finishing regular schooling, i.e. young persons without work experience, job search experience or experience in meeting with potential employers. Participation in these workshops allows the youth to learn through interactive exercises, which help them acquire the skills necessary to present themselves to employers, successfully participate in job interviews, complete job application forms and prepare their CVs, as well as raise their awareness of and self-assess the skills they possess which are considered relevant in job search and efforts to successfully present oneself to employers. The CES also provides its services to young persons living in special institutions for children and youth without adequate parental care and in foster homes. In 2016, the CES thus contacted 20 homes for children and youth without adequate parental care and held 30 meetings with the employees of these institutions for the purpose of establishing cooperation and presenting its vocational guidance services intended for pupils and its professional worker selection services, as well as with the aim of providing information about the activities which are performed under the preparation for employment programme and ALMP measures intended for institutions of this kind. In 2016, 60 pupils of final grades of elementary and secondary schools participated in the vocational guidance activities provided by the CES, whereas 21 persons participated in group informative meetings on the topic of preparation for entry into the unemployment register. 61 pupils (of which 56 elementary school pupils and 5 pupils attending final grades of secondary school) participated in the counselling meetings organised with the aim to provide the youth with information about the possibilities for continuing education. 70 pupils attending final grades of elementary and secondary schools participated in career selection counselling meetings. The CES issued 81 recommendations to continue education. In 2016, 182 young persons from homes for children and youth without adequate parental care and foster homes entered the CES unemployment register. The CES organised 220 individual counselling meetings and signed and approved 195 professional job search/employment plans. At the same time, 108 young persons (raised in alternative care) from the CES unemployment register were employed in 2016, of which 10 by joining the measures implemented under the Active Labour Market Policy. In order to intensify the activities intended for long-term unemployed persons, the CES created several new services: motivational counselling for long-term unemployed, workshops aimed at activation of long-term unemployed persons, a new categorization system aimed at improving the targeting of activities intended for unemployed persons, which would help them overcome or mitigate the problems associated with their access into the labour market, labour market inclusion agreement (a document regulating the activities performed by long-term unemployed persons for the purpose of entering the labour market). At the end of 2016, one part of the counsellor training in the provision of the new services intended for long-term unemployed persons was completed. The programme involved 94 counsellors and will continue in 2017. With the aim of creating the preconditions for an increase in the rate of employment of persons of the Romani national minority, all registered unemployed Roma (at the end of December 2016, the CES unemployment register included 4,777 persons of the Romani national minority, which represents 2.0% of the total number of unemployed persons) were involved in regular activities performed by the CES and in the activities intended specifically for this target group. In 2016, a total of 4,516 persons of the Romani national minority participated in individual counselling meetings, and 358 Roma participated in informative group meetings. Furthermore, the CES also organised informative meetings on the topic of self-employment for persons of the Romani national minority who expressed interest in starting their own business, i.e. registering a company or craft/trade, while 8 persons participated in individual counselling meetings on the topic of self-employment. In 2016, a total of 566 persons of the Romani national minority from the CES unemployment register found employment, of which 180 women (31.8%). The CES is particularly committed to encouraging and assisting the unemployed start their own business. With the aim of ensuring support to persons interested in self-employment, the CES 32 2016 Yearbook introduced the function of the self-employment counsellor who helps the unemployed who wish to start their own business define a business plan, understand the procedure for applying for self-employment subsidies (start-up incentives) and provides support to the same during their first year of operation. Self-employment counsellors make special efforts to strengthen the local self-employment partnership gathering all stakeholders (e.g. local and district/regional self- government units, Croatian Chamber of Economy, Croatian Chamber of Crafts and Trades, Croatian Employers’ Association, unions, development agencies) that can somehow contribute to the strengthening of new entrepreneurs and help them overcome the challenges during the first year of operation. In 2016, self-employment counsellors held 7,380 individual counselling meetings with persons interested in self-employment. Depending on the assessed needs of the unemployed, their characteristics and employability, as well as the estimated level of CES assistance they need to find employment, a number of users are advised to participate in vocational guidance activities, which include various types of vocational informing and counselling meetings intended for groups or individuals, and self-help services (in the form of brochures and other informative material, web tools maintained by the CES and other tools for self-assessment of competencies – knowledge and skills). A special emphasis in working with the unemployed is placed on informing the users about the services provided by the CES, labour market conditions, in-demand qualifications and the possibilities for education and employment at regional and local levels, as well as the services provided by other institutions that might help them in their job search and career development efforts. In 2016, the largest number of unemployed persons participated in group activities (24,728), including workshops and informative group meetings. Unemployed persons requiring more intensive professional assistance in career planning and development are advised to participate in individual counselling and informing activities. Individual vocational counselling is a complex procedure performed by a multidisciplinary team of professionals and includes an assessment of knowledge, skills and potentials of unemployed persons and provision of advice and support to the same in their job search and career development efforts. Where needed, such counselling may include an examination by an occupational medicine specialist and a psycho-diagnostic assessment, which requires significant capacities and resources, including multiple activities provided to a single user. In 2016, the CES provided individual counselling/informing services to 18,410 unemployed persons. Furthermore, the eleven Career Informing and Counselling Centres (CISOK) operating within the CES have been established for the purpose of making vocational guidance services available to the widest group of users. Career informing and counselling services provided by CISOK centres were used on 53,185 occasions in 2016, while the associated web portal recorded 74,729 visits, including multiple viewings and use of the available e-tools. Young persons under 15 and aged 15 – 19 accounted for the majority of users of CISOK services in 2016 (14,895 and 11,836 persons respectively). As many as 60.7% of all services provided by CISOK centres in 2016 were used by persons up to 29 years of age, which indicates that CISOK centres are considered important support facilities by the youth and for purposes of implementation of the Youth Guarantee initiative. The results of the user satisfaction survey carried out at CISOK centres (covering a total of 19,754 users) indicate a large number of satisfied users, i.e. 97.1% users rated the services provided by the centres satisfactory or very satisfactory, while 94.7% of the users rated the services useful or very useful. The CISOK centre model has been recognized as an example of good practice in vocational guidance. As such, it has been described in the manuals prepared on the topic of employment policies and career development and presented at several professional gatherings organised at the initiative of the European Commission, European Network of Public Employment Services (EU PES Network), Organisation for Economic Cooperation and Development (OECD), International Centre for Career Development and Public Policy (ICCDPP) and European Centre for the Development of Vocational Training (CEDEFOP). In 2016, the CES actively participated, in cooperation with other partners, in establishing a system for identification and activation of persons from 15 up to 30 years of age who are not employed or involved in any kind of educational programme or training, i.e. the so-called NEET 33 Croatian Employment Service

system (Not in Education, Employment or Training). The CISOK centres have been recognized as the main places through which the NEET group can be reached and activated, and entities responsible for defining the type of cooperation to be established with particular partners, including the associated responsibilities, as well as for developing preventive measures. In such places where CISOK centres have not been established yet, their role in working with the NEET group will be played by the Youth Centres operating within the regional and district CES offices. The purpose of identification and activation of inactive NEET persons is to encourage their social inclusion, primarily through educational/employment-related activities and career informing and counselling activities, which is expected to help improve their employability, facilitate their access into the labour market and prevent (long-term) unemployment in this target group. In 2016, 2,719 persons from the NEET group of users used the professional career informing and counselling services provided by CISOK centres. During the year, CISOK centres also concluded a number of cooperation agreements with local partners related to the process of identifying and activating users from the NEET group. In addition to the existing e-tools available to users for independent search of information and assistance related to career development (BurzaRada – Job Exchange, LMI system, CISOK web portal, and other), CES created a portal called e-Guidance (e-Usmjeravanje). The purpose of the portal is to gather all relevant information about job search, career development and the possibilities for education in the world of labour in the broadest context. The portal is supported by the so-called Career Compass (Kompas karijere), a tool allowing the user to search information by target groups (pupils, students, unemployed and employed persons). Part of the portal is reserved for self-assessment questionnaires, which help the users assess their own interests and competencies in order to be able to make the right career choice and determine whether they possess the abilities that are desirable in the labour market, such as communication skills, teamwork and similar. In 2016, the portal was visited by 166,437 users, and it was viewed 649,256 times. In 2016, the CES continuously worked on strengthening the persons with disabilities in order to prepare them for employment and thus ensure them as successful integration into the labour market as possible. In addition to regular consultations and counselling services provided by employment counsellors, 762 persons with disabilities were additionally individually informed and 1,150 persons with disabilities were provided additional vocational informing and counselling services by counsellors specialized in vocational rehabilitation and career development. For the purpose of assessing their work abilities, 173 persons with disabilities were referred to medical and psychological examination, while 748 persons with disabilities attended the workshops for improving job search competencies. Furthermore, 176 persons with disabilities participated in 38 workshops adjusted to the needs of persons with various types of disabilities. With the aim of improving employability, employment and self-employment chances, 1,480 persons with disabilities joined the ALMP measures in 2016. At the same time, 2,853 persons with disabilities were employed during the year, which represents an increase of 9.2% compared to 2015. Although employment of persons with disabilities has been constantly increasing for the past ten years, the largest increase was recorded after the enforcement of the new Act on Professional Rehabilitation and Employment of Persons with Disabilities (OG 157/13, 152/14). In 2016, 127 treated drug addicts participated in the vocational informing and counselling activities organised by the CES for purposes of employment and career development in the framework of activities envisaged under the Social Reintegration of Drug Addicts project. Furthermore, 35 treated addicts were subject to an assessment of work-related and other abilities. In 2016, a total of 92 treated addicts participated in the ALMP measures. 20 treated drug addicts participated in educational programmes envisaged in the framework of the Local Partnerships for Employment measure. In the period from 1 January to 31 December 2016, a total of 54 treated addicts covered by the Social Reintegration of Drug Addicts project were employed. Furthermore, 44 treated addicts participated in the active job search and career development workshops. The workshops were mainly organised in CES offices, but vocational guidance and rehabilitation counsellors also conducted a number of workshops in cooperation with local partners in various associations and organizations that provide therapy services. As a result, 28 treated addicts 34 2016 Yearbook participated in the vocational guidance activities organised by the representatives of the Krapina and Šibenik district offices in therapeutic communities. In the spring of 2016, the CES organised Job Fairs in 11 cities, including Mursko Središće, Dubrovnik, Krapina, Osijek, Rijeka, Slavonski Brod, Split, Šibenik, Varaždin, Vinkovci and Virovitica. The fairs gathered a total of 604 exhibitors, of which 409 employers. According to CES regional/district office estimates, CES job fairs were visited by about 20,850 people. In November 2016, the CES organised another Job Fair, this time in Zagreb.

Working with Employers In order to ensure maximum efficiency of the services provided to employers, the CEShas established a system for working with employers which presupposes clearly defined activities and responsible persons, goals and measurable implementation indicators. The goal of the activities performed by the counsellors responsible for working with employers is to increase the number of employers using CES services. The best way to establish business cooperation is to visit the employers and perform all the activities agreed at the agreed time. In 2016, CES employment counsellors thus paid 20,435 visits to employers and the employers filed 122,299 labour force demand notices in return, offering employment to 232,254 workers. 1,109,647 unemployed persons were referred to the reported vacancies. As a result, a total of 218,834 persons from the CES unemployment register were employed. In 2016, special attention was devoted to key employers and introduction of the function of a key employer counsellor through a pilot project called Connection - Your Employment Partner. The purpose of introducing the key employer counsellor position is to ensure that each key employer has a particular contact person, i.e. connection, within the CES who will assist the relevant key employer in defining labour force demand and ensure that it is met in the shortest period possible. During the implementation of the pilot project, key employer counsellors paid 2,185 visits to key employers. After their visits, 4,701 vacancies were reported. The counsellors referred 25,610 unemployed persons to the new job openings and 2,994 persons from the CES unemployment register were thus employed. After the pilot project had been completed, CES key employer counsellors continued visiting and developing cooperation with the key employers. So, by the end of the year, they visited 1,165 employers from the accommodation and food service industry and 1,683 employers from the transport, metal production and construction industries.

Collective Redundancy According to the Labour Act1, any employer that in the period of 90 days might have at least 20 redundancies, of which at least 5 work contracts would be terminated due to business reasons, is required to begin consultations with the workers’ council with a view to reaching an agreement aimed at avoiding redundancies or reducing the number of workers affected, as well as notify the competent public authority, i.e. employment service, of the consultations conducted. Redundancies refer to workers whose work contract is to be terminated due to business reasons and by means of an agreement between the employer and the worker, as proposed by the employer. Pursuant to Article 128 of the Labour Act, work contracts of identified redundancies may not be terminated earlier than 30 days after the date of delivery of the notification about the consultations conducted to the competent public employment service. The competent public employment service may, no later than on the last day of the time limit referred to in Article 128, paragraph 1 of the Labour Act, request the employer to postpone either collective or individual redundancies for a maximum of 30 days, provided the employer is in the position to ensure the continuation of employment for the relevant workers during such extended period. The CES tries to help redundant workers and workers facing layoff by offering its job placement services already during the agreed notice periods with the aim of finding another job for the

1 Labour Act (Official Gazette No. 93/14) 35 Croatian Employment Service

same. In efforts to achieve this goal, the CES refers the redundant workers and those facing layoff to retraining or further training, either for the purpose of performing another job within the same company or as preparation for employment outside their current company, etc. In the implementation of these activities, the CES faces a series of objective problems, primarily the lack of new vacancies in the same or some other company, followed by the psychophysical condition of workers affected by collective redundancy. In 2016, the CES received 37 notifications of collective redundancy from employers, involving 2,534 workers, i.e. 1,545 women (61.0%) and 989 men (39.0%). Workers who completed a vocational secondary school in the duration of 4 (or more) years or grammar school accounted for the largest number of workers affected by collective redundancy (47.4%), followed by those with completed graduate/post-graduate university or academy education (20.6%) and those who completed a vocational secondary school in the duration of up to 3 years or school for skilled and highly skilled workers (12.3%). In terms of age, the affected workers primarily belonged to older age groups. More precisely, persons aged 50 – 59 accounted for 32.4%, those aged 40 – 49 for 28.4%, those aged 30 – 39 for 24.7%, and those aged under 30 for 14.5% of the total number of workers affected by collective redundancy. Furthermore, the persons affected by collective redundancy were mainly employed in financial and insurance activities (33.4%), manufacturing (21.3%) and transportation and storage (11.6%). Compared to 2016, when the CES received 74 notification of collective redundancy from employers, involving 9,014 workers, the number of notifications received in 2016 decreased by 50.0%, while the number of workers affected decreased several times (by 6,480 persons or 3.5 times). In 2016, the number of persons registered with the CES directly following termination of their work contract due to business reasons was 25,848. The figure shows that only a small number of such persons (9.8%) were covered by collective redundancy programmes, which represents a significant decrease in coverage compared to the year before.

Number of Notifications of Collective Redundancy Received and Number of Workers Affected, Number of Newly Registered Unemployed Persons Following Work Contract Termination due to Business Reasons, 2012 - 2016 Number of newly Share of workers Number of Collective Number of workers registered persons covered by Collective Redundancy Year affected by collective whose work contract Redundancy Programmes/ redundancy was terminated due Programmes Notifications received to economic reasons (3:4) 1 2 3 4 5 2012 91 5,697 52,471 10.9 2013 107 12,843 49,708 25.9 2014 68 6,639 40,919 16.2 2015 74 9,014 32,583 27.7 2016 37 2,534 25,848 9.8

Early Interventions and Preventive Activities in Working with Pupils and Students Vocational guidance intended for elementary and secondary school pupils is an important employment policy tool and represents early interventions aimed at preventing (long-term) unemployment. Pursuant to the Regulation on Elements and Criteria for Enrolment of Pupils in the First Grade of Secondary School passed by the Ministry of Science, Education and Sports (OG 49/2015), the CES performs vocational guidance activities intended for final-grade pupils of elementary and secondary schools, particularly those with developmental or more serious 36 2016 Yearbook health problems, which narrow down their opportunities in selecting educational programmes, i.e. make their future access to the labour market more difficult. During the 2015/2016 academic year, CES regional and district offices issued a total of 4,958 expert opinions for pupils with developmental problems or more serious health issues, i.e. for 10.54% of the total eight grade population. In 2016, 11,151 pupils were involved in various types of individual activities (informing and counselling) and 6,212 pupils of elementary and secondary schools participated in group informing and counselling activities. It should further be mentioned that, during the year, CISOK centres provided 31,084 career informing and counselling services to pupils of elementary and secondary schools. It is also important to mention the newly introduced possibility to receive vocational informing and counselling services via a web portal called e-Guidance (www.e-usmjeravanje.hr). The portal is mainly used by the youth. Furthermore, with a view to promote occupations in demand, CES regional and district offices performed, in cooperation with regional/district chambers of crafts and trades and other partners, various activities aimed at promoting shortage craft or trade- based occupations and financing of medical examinations for the purpose of enrolling pupils in the related educational programmes. In 2016, 416 medical examinations for the purpose of enrolment of pupils in educational programmes in shortage occupations were financed. For the purpose of informing the pupils about secondary school programmes available on the territory of the Republic of Croatia, the CES updates and publishes its brochures called Where to after Elementary School? each year. The brochures are issued for five Croatian regions, and each contains descriptions of occupations, enrolment requirements, scholarships, schools and educational programmes, boarding homes, occupations in demand and vocational guidance services provided by the CES. With the aim of ensuring successful integration of children of asylum seekers in the educational system, the Croatian Employment Service started defining, in cooperation with the Croatian Ministry of Science and Education and the Office for Education, Culture and Sports of the City of Zagreb, a cooperation protocol and preparation activities as part of efforts aimed at ensuring inclusion of children/international protection (asylum) seekers in secondary school programs. Through vocational counselling activities, the CES Vocational Guidance Department will provide professional support to children/international protection (asylum) seekers in selecting appropriate secondary school programmes. The procedure for defining the methodology to be applied in working with the target group concerned was initiated in 2016. The methodology will be defined respecting the existing characteristics of the said group (knowledge of language, previously acquired education etc.).

International Job Placement Services Pursuant to the principle of free labour force mobility, as of the date the Republic of Croatia joined the EU, Croatian citizens have been free to search for employment and get employed in EU member states without any special approvals or work permits. Absolute freedom of movement of workers is, however, not ensured in the case of EU member states that have decided to introduce a temporary transition period of up to seven years for Croatian citizens. Pursuant to the principle of reciprocity, the Government of the Republic of Croatia passed the Regulation on Temporary Application of Rules Relating to Employment of Nationals of EU Member States and their Family Members in Croatia effective as of 1 July 2013. After the initial two-year period that lasted until 30 June 2015, the following countries extended the application of free labour force mobility restrictions for another three years: Austria, Malta, the Netherlands, Slovenia and the United Kingdom. In 2016, the CES continued performing its activities within EURES, the network of European employment services, formed for the purpose of facilitating free labour force mobility through provision of information, advice and assistance in matters associated with employment at the European level. EURES counsellors provide information, advice and job placement services 37 Croatian Employment Service

to both job seekers and persons who wish to change their job, as well as employers and other persons interested in labour force mobility issues. More than 1,000 EURES counsellors are ready to provide information to employers and offer support in matters pertaining to the labour market of the European Economic Area (EEA). On the territory of the Republic of Croatia, EURES activities are currently carried out by 11 certified EURES counsellors working in regional offices in Osijek, Rijeka, Split, Varaždin and Zagreb, and district offices in Čakovec, Sisak, Vukovar and Zadar. After Croatia’s accession to the EU, numerous other requirements concerning the treatment of job seekers from the EU, arising in connection with the process of coordination of social security systems and unemployment benefits, were introduced. In addition, international placement activities are also supported by EURES assistants, whose responsibilities include provision of basic information about the possibilities of employment in other EU member states to persons seeking employment in the EU and provision of information about the rights arising in connection with the process of coordination of social security systems to employers. EURES assistants have therefore been appointed in all CES regional and district offices. In 2016, 4,887 persons were removed from the CES unemployment register on the grounds of finding employment in one of the EU member states, of which most came from the Counties of Osijek- Baranja, Vukovar-Srijem and Split-Dalmatia. The major destination countries were Germany, Austria and Italy. In 2016, EURES counsellors made over 14,000 individual contacts with potential users of CES services, of which 90% inquiries came from job seekers and mostly referred to requests for information about the EURES network and its role in the work of the Croatian Employment Service as well as about the employment and job search possibilities in EU member states. In 2016, the mandatory horizontal activities performed by the CES and EURES Croatia included the organisation of two Safe Mobility Days, one in Zagreb and one in Osijek, in cooperation with the Representative Office of the European Commission. In doing so, the interested Croatian citizens were able to receive relevant information about various aspects associated with safe mobility in one place. The institutions and networks, i.e. the partners in the implementation of this project, provided information and advice about the formal and practical preconditions for ensuring labour force mobility at the European level, and the rights arising from the EU citizen status. 1,300 people participated at Safe Mobility Day events. Selection procedures and employment projects implemented by EURES Croatia in cooperation with EURES offices from other EU member states were performed in 2016 as well. More precisely, selection procedures and employment project activities were performed in cooperation with representatives of EURES Germany and EURES Austria. The activities performed in cooperation with EURES Germany referred to employment of young persons participating in dual education/ practice programmes (MobiPro-EU), workers in the field of hospitality and system gastronomy and students, while the activities performed in cooperation with EURES Austria referred to employment of seasonal hotel and hospitality workers in Austrian winter holiday resorts in the Counties of Styrol, Tyrol and Vorarlberg. Furthermore, the Croatian Employment Service participates in the implementation of the Your First EURES Job 4.0 2015 – 2017 initiated by the Ministry of Labour of the Republic of Italy (EURES Italy National Coordination Office) as a partner institution. The project consortium consists of 11 partner institutions and 19 project associates. In the framework of this project, the CES provided support to young job seekers and companies interested in employment of EU workers outside their domicile countries through informing, selection, placement and financing activities.

38 2016 Yearbook

Active Labour Market Policy

In 2016, the measures defined under the Active Labour Market Policy (ALMP) were carried out in accordance with the Guidelines for the Development and Implementation of Active Labour Market Policy in the Republic of Croatia for the period 2015 - 2017 adopted by the Croatian Government in December 2014. The said Guidelines were prepared in accordance with ALMP priorities and goals defined on the basis of the results of the labour market analysis and strategic employment-related documents of the Republic of Croatia and the . Taking into account the defined goals, the following measures were implemented under the ALMP: employment and self-employment (start-up) incentives for unemployed persons, advancement training incentives for new hires and redundancies (job retention), financing of labour market- oriented education for unemployed persons, financing of workplace training without a work contract, co-financing/financing of direct job creation, including public work programmes and job retention programmes. In 2016, the affirmed ALMP measures were divided into packages intended for specific target groups of unemployed persons and employed persons facing job loss, including: • young persons up to 29 years of age, • long-term unemployed persons, • persons aged 50+, • persons with disabilities, • special groups of unemployed persons such as: single parents, young persons leaving children’s homes, family abuse victims, Croatian war veterans, parents of four or more underage children, parents of children with special needs, asylum seekers, treated addicts, and other groups of unemployed persons facing the threat of social exclusion and long-term unemployment, • members of the Romani national minority, and • employers facing difficulties in efforts to save jobs. In 2016, the target groups defined for individual measures were revised with the aim of ensuring better targeting of interventions. Furthermore, the workplace training without a work contract measure was revised in order to allow persons trained in shortage occupations and persons with specific competencies join workplace training with the aim of improving their employability and providing them with an official document confirming their competence.

Active Labour Market Policy Measure Participants in 2015 and 2016

80,000

70,000 2015 2016 60,000

50,000

40,000

30,000 70,728 64,773

20,000 41,595 37,707

10,000 33,021 23,178

0 Active participants at the New entrants Total participants beggining of the year during the year in the year 39 Croatian Employment Service

In 2016, a total of 70,728 persons participated in the measures defined under the Active Labour Market Policy falling within the scope of responsibility of the Croatian Employment Service, which represents an increase of 9.2% compared to the number of participants recorded in 2015. The total number of participants in ALMP measures included 33,021 active participants from the previous year and 37,707 new entrants in the course of 2016. Total Participants in the Year by Type of Intervention/Measure – In 2016, most participants joined workplace training without a work contract (33,366 persons or 47.2%). Other participants took advantage of the following measures: employment incentives (12,056 persons or 17.0%), public work programmes (11,990 persons or 17.0%), self-employment (start-up) incentives (4,980 persons or 7.0%), institutional training incentives for unemployed persons (4,904 persons or 6.9%), job retention subsidies (2,928 persons or 4.1%) and institutional (advancement) training incentives for employed persons (504 persons or 0.7%).

New Entrants and Total Participants in ALMP Measures by Type of Intervention in 2016

40,000

35,000 33,366 New entrants during the year

30,000 Total participants in the year

25,000

20,000 15,059 15,000 11,990 12,056 10,000 8,773 5,716 4,904 4,980 5,000 3,809 2,928 2,333 1,920 504 97 0 Training for Training for Workplace Employment Public Start-up Out-of-work the unemployed the employed training without incentives works incentives income a work contract maintenance and support Type of intervention

New Entrants (participants who joined during the year) by Type of Intervention/Measure – In 2016, 37,707 persons joined the programmes implemented under the Active Labour Market Policy. Most new entrants joined workplace training without a work contract (15,059 persons or 39.9%) or took advantage of the available public work programmes (8,773 or 23.3%) and employment incentives (5,716 persons or 15.1%). Furthermore, a relatively small share of new entrants took advantage of the following measures: institutional training for the unemployed (3,809 persons or 10.1%), self-employment (start-up) incentives (2,333 persons or 6.2%), job retention subsidies (1,920 persons or 5.1%) and institutional (advancement) training for the employed (97 persons or 0.3%). In the structure of new entrants who joined the measures in 2016, the share of women (59.6%) was significantly larger than the share of men (40.4%). In terms of age, young persons up to 29 years of age once again accounted for more than half of new entrants (59.1%), followed by persons aged 30–49 (middle working age) who accounted for a bit over one quarter of new entrants (27.8%), and persons aged 50+ who accounted for a bit more than one tenth of new entrants (13.1%). In terms of the level of education, the persons with completed secondary school accounted for the largest share of new entrants (49.8%), followed by persons with completed graduate/post- graduate university or academy education (35.8%), while those with lower levels of education accounted for a significantly smaller share (14.1%). Short-term unemployed persons (up to one year) accounted for the largest share of new entrants who joined in 2016 (65.8%). The share of particular groups of new entrants in the average number of unemployed persons from the same group was most significant in the case of unemployed persons with graduate/ 40 2016 Yearbook post-graduate university or academy education (40.3%), young persons up to 29 years of age (32.5%) and short-term unemployed persons, i.e. persons unemployed for a period of up to 6 months (19.7%) and from 6 to 12 months (21.9%). As far as gender is concerned, women accounted for a slightly larger share of new entrants (16.8%) compared to men (14.1%). The total number of new entrants who joined in 2016 also included 915 persons with disabilities (12.9% of the average number of unemployed persons with disabilities), 1,615 Croatian war veterans (6.9% of the average number of unemployed war veterans) and 569 members of the Romani national minority.

New Entrants in ALMP Measures by Gender, Age, Level of Education and Unemployment Duration in 2015 and 2016

Share in the average number Number Structure of unemployed persons

Year 2015 2016 2015 2016 2015 2016

Total 41,595 37,707 100.0 100.0 14.5 15.6

Men 17,086 15,231 41.1 40.4 13.1 14.1

Gender Women 24,509 22,476 58.9 59.6 15.8 16.8

15 - 29 25,050 22,290 60.2 59.1 29.6 32.5 30 - 49 11,671 10,486 28.1 27.8 10.0 10.8 Age 50+ 4,874 4.931 11.7 13.1 5.8 6.4 No secondary education 5,201 5.333 12.5 14.1 6.9 8.3 Secondary education 19,805 18,767 47.6 49.8 11.4 13.0 Post-secondary education 16,463 13,508 39.6 35.8 45.0 40.3 Education Unknown 126 99 0.3 0.3 - - Up to 6 months 16,282 17,282 39.1 45.8 15.9 19.7 6 - 12 months 6,380 7,536 15.3 20.0 15.3 21.9 More than 12 months 18,317 12,669 44.0 33.6 12.9 10.6

Duration of Persons who were not unemployed Unemployment 616 220 1.5 0.6 - - before Persons with disabilities 1,094 915 2.6 2.4 15.8 12.9 Persons of the Romani national minority 480 569 1.2 1.5 - - Croatian war veterans 1,935 1,615 4.7 4.3 7.1 6.9

New entrants in ALMP measures accounted for a share of 15.6% of the average number of unemployed persons in 2016. The shares, however, ranged significantly at the county level, i.e. from 34.2% to 10.3% (Schedule 5, Page 42). The largest share of 34.2% (the absolute number of new participants, i.e. 1,850 persons) was recorded in the County of Istria. Above-average shares were also recorded in another eight counties, among which the Counties of Međimurje (26.2%), Varaždin (22.8%) and the City of Zagreb (21.7%) accounted for the largest shares. The smallest shares of new participants were recorded in the Counties of Zagreb (10.3%), Split- Dalmatia (10.8%) and Sisak-Moslavina (11.0%). 41 Croatian Employment Service

Schedule 5 - 1 0 0 5 7 0 0 0 0 0 1 0 2 29 74 63 63 211 573 358 1,541 2,928 ticipants Total par Total support 1 0 0 3 2 0 0 0 0 0 0 0 2 19 49 47 41 163 364 987 242 New 1,920 maintenance and entrants Out-of-work income - 96 89 95 72 55 112 333 135 194 200 349 102 106 661 171 136 378 233 302 156 1,005 4,980 ticipants Total par Total 55 91 57 76 46 62 53 31 26 44 61 58 99 76 167 156 287 103 215 144 426 New 2,333 Start-up incentives entrants - 63 274 352 364 355 519 547 412 153 270 244 197 278 995 406 435 603 1,080 1,371 19,37 1,135 11,990 ticipants Total par Total 94 21 Public works 190 236 724 298 288 437 367 254 146 241 175 835 251 855 796 250 302 347 New 1,666 8,773 entrants Direct job creation - - 70 633 495 425 277 583 263 352 895 199 252 341 263 168 360 385 246 754 1,033 1,107 2,855 ticipants 12,056 Total par Total incentives 25 78 Employment 114 314 239 226 141 279 102 174 361 196 131 153 134 465 145 542 166 367 New 1,364 5,716 entrants - 950 887 705 833 850 313 742 813 831 727 694 790 1,224 1,217 2,006 1,574 2,653 1,212 3,375 1,156 9,814 ticipants 33,366 Type of Intervention Type Total par Total contract 527 425 407 333 555 355 380 954 143 292 395 369 722 314 529 505 310 386 without a work New 1,310 1,498 4,350 Workplace training Workplace entrants 15,059 - 1 1 0 0 0 0 0 0 7 0 0 0 0 0 0 0 0 1 30 169 295 504 ticipants Total par Total 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Of which: employed 96 97 Training for the Training New entrants - 83 80 87 164 347 288 169 180 172 149 164 180 340 468 104 324 313 127 172 167 826 4,904 ticipants Total par Total 83 80 70 46 94 72 90 unemployed 113 109 313 194 127 141 162 159 202 468 230 313 152 591 Training for the Training New 3,809 entrants - 993 400 906 900 831 866 958 1,115 1,011 1,308 1,234 1,386 1,013 1,022 2,155 1,914 3,121 1,566 3,857 1,283 ticipants 10,935 38,774 Total par Total Education 610 535 720 527 668 482 521 213 454 441 528 924 408 759 577 462 476 New 1,034 1,778 1,907 4,941 entrants 18,965 - 20.4 40.6 18.3 22.0 43.9 38.1 21.3 31.2 24.0 19.0 32.9 26.8 36.7 24.1 23.0 21.3 19.9 64.9 32.4 49.4 47.1 29.2 ticipants Total par Total persons, % Share in the 11.0 11.9 11.3 10.3 20.6 13.0 22.8 21.6 15.3 14.5 17.5 14.7 18.1 15.0 13.5 12.7 10.8 34.2 18.0 26.2 21.7 15.6 of unemployed New average number entrants - TOTAL 754 2,549 2,097 2,933 1,735 2,531 1,884 2,016 4,022 1,547 1,451 2,835 2,554 6,753 1,551 3,057 7,050 3,505 2,178 2,305 Participants in Active Labour Market Policy Measures by County and Type of Intervention/Measure in 2016 Active Labour Market Policy Measures by County and Type Participants in ticipants 15,461 70,728 Total par Total year Number of 456 922 773 887 New 7,119 1,282 1,065 1,761 1,026 1,313 1,067 1,124 1,968 1,560 1,262 4,196 1,817 3,824 1,850 1,212 1,223 participants in the entrants 37,707 County Zagreb Krapina–Zagorje Sisak–Moslavina Karlovac Varaždin Koprivnica–Križevci Bjelovar–Bilogora Primorje–Gorski Kotar Lika–Senj Virovitica–Podravina Požega–Slavonia Slavonski Brod– Posavina Zadar Osijek–Baranja Šibenik–Knin Vukovar–Srijem Split–Dalmatia Istria Dubrovnik–Neretva Međimurje City of Zagreb TOTAL 42 2016 Yearbook

Unemployment Insurance

Pursuant to the provisions of the Job Placement and Unemployment Insurance Act2, unemployment insurance includes: • unemployment benefit, • pension insurance, • financial assistance and reimbursement of expenses incurred in the course of education and training and workplace training without a work contract, • financial assistance for persons insured under an extended insurance scheme on the basis of a temporary work contract for regular seasonal jobs, • one-time financial assistance and reimbursement of travel and relocation expenses. The unemployment insurance claiming procedure is initiated at the request of the unemployed person, and the requests are handled pursuant to the provisions of the General Administrative Procedure Act. The first-instance procedure is performed by CES regional/district offices, while first-instance decisions concerning unemployment entitlements based on EU regulations on the coordination of social security systems are made by the Central Office. Appeals over first- instance decisions are resolved by the Ministry of Labour and Pension System.

Unemployment Benefit Unemployed persons acquire the right to unemployment benefit provided they had worked 9 out of 24 months prior to termination of employment and that such termination was not caused through their own fault or will. Furthermore, unemployed persons who cease operating their sole business are also eligible for unemployment benefit, provided they had worked 9 out of 24 months prior to such cessation of operation and provided that such cessation is deemed justifiable pursuant to the Job Placement and Unemployment Insurance Act. In order to claim unemployment benefit, an unemployed person must report to the CES and apply for unemployment benefit within 30 days from the date of termination of employment, cessation of operation of a sole business or end of sick, maternity or parental leave. If an unemployed person fails to report to the CES within the specified deadline of 30 days due to justifiable reasons, he/she may report to the competent employment service and submit an application for unemployment benefit within 8 days from the date of termination of the reason that caused the failure to meet the deadline, however no later than 60 days from the missed deadline. Depending on the total years of service, an unemployed person may claim unemployment benefit for a period of 90 to 450 days. Unemployed persons entitled to unemployment benefit may request to receive the approved amount in the form of a one-time payment. The conditions and method of payment are defined in the Decision on the Conditions and Method for Making One-time Unemployment Benefit Payments3. One-time unemployment benefit payments are granted for starting a craft (trade) or sole business, getting employed in a company in which the unemployed person participates with a share that does not exceed 25%, as well as for starting a company and getting employed in the same. The basis for determining the unemployment benefit amount for a person whose work relationship has been terminated is the average salary earned in the three-month period preceding the termination of employment reduced by mandatory insurance contributions. As regards persons who cease to operate a sole business, the average base amount, determined under special regulations, on which mandatory insurance contributions were paid in the period preceding the cessation of operation is used. If the basis cannot be determined in the above-described manner, the same will equal the minimum salary reduced by mandatory insurance contributions, depending on the years of service.

2 Official Gazette No. 80/08, 94&09, 121/10, 25/12, 118/12, 12/13 – purified text version; 153/13 3 Official Gazette No. 123/12 43 Croatian Employment Service

During the first 90 days, unemployment benefit amounts to 70% of the base amount. However, in the remaining period during which unemployment benefit is received, the recipients get 35% of the base amount. During the first 90 days, unemployment benefit may not exceed 70% of the base amount, while in the remaining period, it may not exceed 35% of the average salary paid in the economy of the Republic of Croatia in the previous year determined in accordance with the latest officially published data. The highest unemployment benefit in 2016 amounted to HRK 3,997.70, whereas the average unemployment benefit amount was HRK 1,917.10. 104,008 applications for unemployment benefit were submitted in 2016 (first-time applications and renewals), of which 100,917 were approved. Furthermore, 1,413 requests for one-time payment of the unemployment benefit were received and 1,247 approved. In 2016, there were on average 39,907 unemployment benefit recipients per month, which represents a decrease of 17.6% compared to 2015. The following groups accounted for the largest shares in the average number of unemployment benefit recipients: women (with a share of 54.9%), persons aged 25–54, i.e. persons of middle working age (62.3%), persons with secondary education (65.9%) and short-term unemployed persons (80.5%). On average, 16.5% of the total number of unemployed persons received unemployment benefit in 2016 (which represents a decrease of 0.4 pp compared to 2015 when the share of unemployment benefit recipients in the total number of unemployed persons was 16.9%). The share of men (16.7%) and the share of women (16.4%) were approximately the same, while persons above 55 years of age accounted for a significantly larger share (25.7%) compared to all other age groups. Compared to persons with higher levels of education (16.6%), persons with secondary education accounted for a negligibly larger share of unemployment benefit recipients (18.2%). Compared to persons with lower levels of education (12.5%), their share was relatively larger. Finally, the share of short-term unemployed persons in the total number of unemployment benefit recipients (26.3%) was several times greater than the share of long-term unemployed persons (6.5%).

Unemployment Benefit Recipients by Gender, Age, Level of Education and Unemployment Duration in 2015 and 2016 Share in the Average Number Structure Average Number of 2016/ Unemployed Persons 2015 Index 2015 2016 2015 2016 2015 2016 Total 48,442 39,907 100.0 100.0 16.9 16.5 82.4 Gender: Men 22,800 17,991 47.1 45.1 17.4 16.7 78.9 Women 25,642 21,916 52.9 54.9 16.5 16.4 85.5 Age: 15 - 24 2,914 2,725 6.0 6.8 5.9 6.8 93.5 25 - 54 29,870 24,859 61.7 62.3 16.2 16.1 83.2 50+ 15,658 12,323 32.3 30.9 30.1 25.7 78.7 Education: No secondary 10,604 8,058 21.9 20.2 14.2 12.5 76.0 education Secondary 31,978 26,295 66.0 65.9 18.3 18.2 82.2 education Post-secondary 5,860 5,554 12.1 13.9 16.0 16.6 94.8 education Duration of Unemployment: Short-term 37,922 32,131 78.3 80.5 26.3 26.3 84.7 (0-12 months) Long-term (12+) 10,520 7,777 21.7 19.5 7.4 6.5 73.9 44 2016 Yearbook

Claiming Unemployment Insurance According to the Regulation on Coordination of Social Security Systems In determining eligibility for unemployment insurance, the CES also applies the social security agreements concluded between the Croatian Government and the governments of other countries. Social security agreements containing provisions on unemployment concluded with and Herzegovina, Macedonia, Yugoslavia (Serbia), Montenegro and Turkey are currently in force. Under the said social security agreements, only the aggregate periods of insurance are taken into account when applying for unemployment benefit, provided however that the unemployed person’s work contract had been terminated in Croatia and that he/ she had been, prior to submitting the application, employed in the Republic of Croatia for a certain period of time or insured for the event of unemployment. The data concerning the period of unemployment insurance were exchanged with the aforementioned countries in 670 cases. Furthermore, in addition to the conditions set forth in these agreements, the applicant must also meet the requirements prescribed under the Job Placement and Unemployment Insurance Act. After Croatia joined the European Union, former social security agreements signed with EU member states ceased to be applied and were replaced by EU regulations on the coordination of social security systems (EC Regulation No. 883/2004 and EC Regulation No. 987/2009). The Act on the Implementation of EU Directives on the Coordination of Social Security Systems4 came into force on the date of Croatia’s accession to the EU. The said act defines the competent authorities, institutions and liaison bodies and their responsibilities in the implementation of EU regulations pertaining to the coordination of social security systems. Under the act, the CES has been appointed as the competent authority responsible for the provision of unemployment insurance in Croatia. The EU regulations provide guidelines for coordination of social security systems of EU member states and define the core principles and conditions related to unemployment insurance, particularly with respect to: • export of unemployment benefit, • import of unemployment benefit, • aggregation of periods of insurance realised in different member states, and • unemployment benefit claims of cross-border and non-cross-border workers. Pursuant to the regulations on the coordination of social security systems, the CES issued in 2016 47 PD U2 forms authorising export of unemployment benefit to unemployed persons who were granted right to unemployment benefit in the Republic of Croatia but moved to another member state in search of employment retaining the acquired right to unemployment benefit; 84 forms confirming that an unemployed person who was granted right to unemployment benefit in another member state but came to the Republic of Croatia in search of employment has registered with the CES (SED U009); and 1,399 forms confirming periods of insurance, reasons for termination and last received salary in the Republic of Croatia for the purpose of applying for unemployment insurance in another member state (PD U1, SED U002, SED U004). In the same period, the CES also approved 829 unemployment benefit applications with an element of coordination (pertaining to cross-border workers and aggregation of periods of insurance). In addition, the CES continued applying for half-yearly refunds of unemployment benefits paid to cross-border workers by the Republic of Croatia. It thus submitted refund requests for the period from 1 July to 31 December 2015 to the Federal Republic of Germany (for 69 persons), Austria (for 65 persons), Italy (for 6 persons), Slovenia (for 5 persons), Sweden, Hungary, Cyprus, Ireland and (for 1 person each) in the total amount of HRK 1,348,081.53. Refund requests were also submitted for the period from 1 January until 30 June 2016 to the following countries: Federal Republic of Germany (for 233 persons), Austria (for 61 persons), Italy (for

4 Official Gazette No. 54/13 45 Croatian Employment Service

20 persons), Ireland (for 6 persons), Slovenia (for 4 persons), Cyprus (for 2 persons), Sweden, Norway, Romania, Portugal and Czech Republic (for 1 person each) in the total amount of HRK 3,171,851.59. In 2016, a total refund of HRK 3,092,355.65 was received for claims submitted for periods until 31 December 2015. It must be noted that, pursuant to the provisions of EU directives on coordination of social security systems, the general rule for claiming unemployment benefit is that applications must be submitted in the country of employment (according to the lex loci laboris principle) and that national regulations of that country are applied in determining a person’s right to receive the same (the laws of the country in which the person had worked on the basis of employment or self-employment). Cross-border workers (persons employed or self-employed in one member state, while being residents of another member state to which they return daily or at least once a week) represent exceptions to this rule, i.e. they are entitled to claim unemployment benefit in the country of residence. In such cases, the member state in which the worker had been last employed is required to refund the country of residence which approved the application for unemployment benefits paid out for the first three or five months (if the person had worked 12 out of the last 24 months). Refund requests are submitted within the period of six months following the end of the calendar half-year period in which the last unemployment benefit payment, for which refund is requested, was paid.

Pension Insurance Unemployed persons who have been granted right to unemployment benefit and meet the age requirements for age-based retirement but miss up to 5 years of pensionable service in order be eligible for such retirement may apply for pension insurance. In 2016, 213 applications for pension insurance were submitted and 193 were approved.

Financial Assistance and Reimbursement of Expenses Incurred in the Course of Education and Training and Workplace Training without a Work Contract Unemployed persons referred by the CES to education or training are eligible to receive financial assistance during such education or training equal to the lowest unemployment benefit amount and reimbursement of expenses incurred in the course of such education or training, including real public transportation expenses, real cost of the required textbooks, food, prescribed protective clothes, shoes and other aids. Unemployed persons referred by the CES to workplace training without a work contract are entitled to financial assistance during such training in the amount determined under the decision of the Government of the Republic of Croatia (in 2016, the amount of financial assistance paid to unemployed persons referred by the CES to workplace training without a work contract amounted to HRK 2,400.00 per month). In 2016, 3,229 requests for financial assistance during education and training and 14,912 requests for financial assistance during workplace training without a work contract were approved.

Financial Assistance for Persons Insured Under an Extended Pension Scheme On the Basis of a Temporary Work Contract for Regular Seasonal Jobs A person insured under an extended insurance scheme on the basis of a temporary work contract for regular seasonal jobs is entitled to financial assistance for a maximum of six months of such extended insurance period. The manner in which the amount of financial assistance to be paid is determined is defined in a decision issued to that effect by the Government of the Republic of Croatia. 1,869 requests for financial assistance submitted by persons insured under an extended insurance scheme on the basis of a temporary work contract for regular seasonal jobs were approved in 2016.

46 2016 Yearbook

One-time Financial Assistance and Reimbursement of Travel and Relocation Expenses In the event the CES is unable to find employment for an unemployed person in his/her place of residence and that unemployed person finds employment somewhere else, through own efforts or through interregional/interdistrict job placement services provided by the CES, such person will be entitled to one-time financial assistance and reimbursement of travel and relocation expenses for themselves and their spouses and children from the place of residence to the place of employment. The eligibility requirements for receiving this type of unemployment insurance have been determined on the basis of the Decision on One-time Financial Assistance and Reimbursement of Travel and Relocation Expenses5. In 2016, 9,336 requests for reimbursement of travel and relocation expenses and 107 requests for one-time financial assistance were approved.

Number of Unemployment Insurance Requests Approved in 2015 and 2016 2016/2015 Type of Financial Insurance 2015 2016 Index Unemployment benefit 106,976 100,917 94.3 One-time unemployment benefit 1,411 1,247 88.4 Pension insurance 59 193 327.1 Financial assistance during education 1,422 3,229 227.1 Financial assistance during workplace training without a work 18,579 14,912 80.3 contract Financial assistance paid to persons insured under an extended insurance scheme on the basis of a temporary work 1,267 1,869 147.5 contract for regular seasonal jobs Reimbursement of travel and relocation expenses 9,680 9,336 96.4 One-time financial assistance 21 107 509.5

5 Official Gazette No. 23/14, 50/14 47 Croatian Employment Service

International Community Supported Projects

In 2016, the CES continued implementing projects within the framework of the following EU programmes: Intelligent Energy Europe, Erasmus+ and The Seventh Framework Programme (FP7). Furthermore, it also started preparing for participation in the Connecting Europe Facility (CEF) programme. The CES completed the last projects implemented under Component IV of the IPA Programme and continued implementing the operations planned for the second half of 2013 under the European Social Fund (ESF) programme, i.e. Operational Programme - Human Resources Development 2007 – 2013. In 2016, the CES also implemented and prepared for participation in projects envisaged under the Operational Programme – Efficient Human Resources 2014 – 2020, and continued executing the projects co-financed by the World Bank. Within the framework of the Instrument for Pre-accession Assistance (IPA) programme for the period 2012 – 2013, the CES completed the projects agreed under the Improving Labour Market Access of Persons with Disabilities and Local Initiatives for Employment – Phase 2 grant schemes. A project called Training for Employment of Redundant and Long-term Unemployed Persons was implemented under IPA Component 4. Under the project, measures aimed at helping redundant and long-term unemployed persons improve their competitiveness and employability were co- financed. In 2016, the CES implemented the mentioned measures and conducted round tables on the topic of local labour market development. The project was completed in December 2016. In 2016, the CES continued implementing the projects under the Operational Programme – Human Resources Development 2007 – 2013, including: Implementation of Active Labour Market Policy Measures - The project included co-financing of workplace training without a work contract, employment incentives for young persons, i.e. employment after workplace training, and self-employment (start-up) incentives. The operation finished in June 2016 and, besides achieving the target number of participants, the outcomes also included preparation of the final project report detailing the activities conducted, the methodology applied and the data processing system and containing the results obtained and the experiences of participants, mentors and employers involved in workplace training; Implementation of the Public Works Programme to Activate Women in the Local Community – The project was completed in 2016. Its purpose was to promote employment of women who are unfavourably positioned in the labour market within a limited period of time. The jobs to which such women were referred to in the framework of the project included care for the elderly and the disabled in handicapped households; External Evaluation of Active Labour Market Policy Measures – The project ended in February 2016. The implementation of project activities produced the expected outcomes: analysis and interpretation of survey-based and qualitative data and preparation of a summary evaluation report. In the framework of the project, measure performance, the effect of the measures on end users and the complementarity of the same with actual labour market needs were evaluated; Strengthening the Croatian Employment Service Labour Market Training Centre (LMTC) – The project was completed in March 2016. The project produced the following outcomes: activation of the LMTC e-Learning portal; analysis of trainer education needs and organisation of a training and certification programme for 20 LMTC trainers on the topic of e-learning and blended learning programmes; and analysis of CES employee education needs at both the national and regional levels and organisation of pilot training for CES employees. The LMTC e-Learning portal has been accepted as a virtual environment that provides regular education to CES employees and stores all the relevant documents associated with education and development of CES human resources; Further Development of Occupational Standards – The implementation of the project ended in June 2016. Within the framework of the project, four employees were trained in the skills necessary to perform the project activities. Other project activities completed in 2016 include performance of surveys for 50 occupations, which will serve as the analytical basis for the 48 2016 Yearbook development of occupational standards, and workshops explaining the method for performing surveys intended for institutions/stakeholders that plan to develop occupational standards and gather information independently. The project outcomes include the definition of capacities, methodology and occupational standards survey implementation practices, which contributes to establishing a connection between the labour market and the educational system. Definition of occupational standards is the precondition for the preparation of qualifications standards, i.e. preparation or adjustment of educational programmes in accordance with labour market needs. In 2016, the CES performed the following operations under the Operational Programme – Efficient Human Resources 2014 – 2020: Application of Occupational Standards in CES Business Processes and Implementation of the Occupational Standards Survey – The operation started in August 2016. It represents a sort of continuation of the Further Development of Occupational Standards project. The main goal of the operation is to improve CES business processes and contribute to further development of occupational standards. Specific project objectives include: improving job placement and vocational guidance business processes performed by the CES through the application of occupational standards and contributing to the development of the Croatian Qualifications Framework through the implementation and development of the Occupational Standards Survey; The implementation of ESF co-funded Active Labour Market Policy measures was continued through 7 projects: Implementation of ALMP Measures for the Youth (Youth Employment Initiative); Implementation of ALMP Measures for Long-term Unemployed Youth; Implementation of Public Work Programmes for Groups with Lower Employability; Education, Training and Retraining of Unemployed Persons; Self-employment Support; Subsidies for Employment of Groups with Lower Employability; and Job Retention Programmes; The CES worked hard on drafting project documentation for a number of different projects. As a result, project briefs for the following operations: Strengthening the Capacities of the Labour Market Training Centre and Human Resources Management of the Croatian Employment Service, Further Development and Establishment of New Career Informing and Counselling Centres (CISOK) and Local Initiatives for Employment – Phase 3 were prepared and submitted to the Ministry of Labour and Pension System. In November 2016, the CES delivered a revised project brief for the Inclusion of Marginalized Groups into the Labour Market project to the Ministry of Demography, Family, Youth and Social Policy. The brief was amended according to Instructions for Applicants. In the framework of the ERASMUS+ Programme, the Alpe Adria Working Mobility – Intercultural Competencies in Career Guidance project, under which the CES performed a number of activities in cooperation with partners from Austria, Italy and Slovenia, was completed in 2016. The purpose of the project was to improve the competencies of vocational guidance/ career development counsellors in working with the unemployed who wish to find employment abroad (Austria, Italy, Slovenia, Croatia). A special emphasis was placed on the acquisition of intercultural competencies. The expected direct project outcomes were realised, including the analysis of labour markets in the Alpe Adria region and the existing vocational guidance practices and methods, with an emphasis on cultural and linguistic competencies of counsellors, preparation of a curriculum for professional training programmes in international career guidance for counsellors (trainers), pilot implementation of professional training programmes for career counsellors through mobility within the countries involved in the project, development of web tools and materials for trainers and unemployed persons who wish to find employment abroad. An international project conference was also held in the framework of the project. The activities performed in the framework of the World Bank funded Modernisation of the Social Protection System in the Republic of Croatia project include execution of agreements for the provision of statistical profiling effects evaluation services and statistical profiling software upgrade/design services. Agreements were also signed with the selected consortium comprising Selectio, Techted and the Institute for Labour Market Development. As a result, activities envisaged to be performed in the framework of the agreed service, i.e. development, implementation, communication and preparation for a scale-up of statistically assisted profiling, 49 Croatian Employment Service

commenced. The CES further signed an agreement with external Associate Expert Frederik Jansson Dahlén in order to ensure commencement of activities envisaged to be performed in the framework of the agreed service, i.e. expert validation and support of statistical predictive model for profiling. Pilot implementation is currently in process and it is expected that it will last until mid-2018. As part of the Intelligent Energy – Europe programme, the CES participates as a partner institution in the implementation of the Croskills Pillar II project. It is expected that project activities will be completed in September 2017. The project outcomes achieved in 2016 include: preparation of trainer manuals on continuous employee education in energy efficiency, preparation of a template for agreements to be signed between the training centre and the Croskills consortium and announcement of a public invitation for expression of interest to conduct an employee training programme in energy efficient construction in accordance with the Croskills programme. 20 potential training centres and 110 educational trainers expressed responded. As part of the Employ ID project, implemented under the FP7 Programme, an online course in peer coaching intended for CES employees was conducted and pilot implementation of the communication platform of the Community of Practice commenced. Following the approval of the financial report, the CES received funds in the amount of EUR 15,506.00. Furthermore, the Croatian Employment Service applied for partnership in the project called Co- financing of the Cost of Implementation of the EESSI System Based on the Business Initiative for the Exchange of Data in the Field of Social Security Systems, which is to be implemented in the framework of the Connecting Europe Facility (CEF) programme. In 2016, regional and district offices of the CES applied for participation in 35 projects, mainly as project partners. Only two district offices applied for participation in projects in the role of project owners, i.e. the Šibenik District Office for the project called Professional Assessment of Work- related Abilities of Persons Unfavourably Positioned in the Labour Market and the Sisak District Office for the project called What Seems to be the Problem?

Financial Management of EU Projects Pursuant to the Act on the Establishment of an Institutional Framework for the Use of EU Structural Instruments in the Republic of Croatia (OG 78/12, 143/13, 157/13) and the Decree on the Bodies within the Management and Control System for the Use of EU Structural Instruments in the Republic of Croatia (OG 97/12, 18/16, 3/17), the Department for Financing and Contracting of EU Funded Projects of the Croatian Employment Service plays, within the Operating Structure for the Implementation of the ESF Funding, the role of Intermediate Body Level 2 (IB2) responsible for the implementation of measures from the scope of Priority 1, measures 2.1 and 2.3 from the scope of Priority 2, measures from the scope of Priority 4 and measure 5.1 from the scope of Priority 5 of the Operational Programme - Human Resources Development, i.e. the use of the associated allocations. The responsibilities of the said body for the financial period 2014 – 2020 are defined under the Act on the Establishment of an Institutional Framework for the Implementation of EU Structural and Investment Funds in the Republic of Croatia in the Financial Period 2014 – 2020 (OG 92/14) and the Decree on the Bodies within the Management and Control Systems for the Use of the European Social Fund (ESF), European Regional Development Fund (ERDF) and Cohesion Fund (CF) Funding in Connection with the Investing in Jobs and Growth Objective (OG 107/14, 23/15, 129/15, 15/17). As Intermediate Body Level 2, the CES Department for Financing and Contracting of EU Funded Projects thus participates in the implementation of the Operational Programme - Efficient Human Resources, i.e. measures from the scope of Priority 1: High Labour Force Employability and Mobility, Priority 2: Social Inclusion, Priority 4: Good Governance and Priority 5: Technical Assistance. The Department participated in the assessment of compliance of the Management and Control System established for the Operational Programme – Efficient Human Resources for the period 2014 – 2020 with the relevant rules of the European Union. The compliance assessment process ended in May 2016. The outcome was an unqualified opinion issued by the audit body. 50 2016 Yearbook

From the total funds allocated for the implementation of the Operational Programme - Human Resources Development for the period 2007 – 2013 in the amount of EUR 179,309,591.00, the CES implementation body is responsible for operations in the value of EUR 101,811,987. In 2016, the Department for Financing and Contracting of EU Funded Projects participated in the preparation of tender documents for 1 operation included in the mentioned allocation. In 2016, the CES continued with the implementation and financing of 3 service agreements, 3 direct grant award agreements, 258 non-repayable grant award agreements, of which 69 non- repayable grant award agreements executed in accordance with the rules defined in the Practical Guide to Contract Procedures for EC External Actions within the scope of tenders announced prior to Croatia’s accession to the EU, and 189 non-repayable grant award agreements based on Shared National Rules. Furthermore, 4 non-repayable grant award agreements were signed on the basis of the Guidelines issued for purposes of the Operational Programme – Efficient Human Resources 2014 - 2020. From the total available funds allocated to the IB2 of the Croatian Employment Service for the period 2007 – 2013, contracts for operations in the value of EUR 101,050,637.73 or 99.25% were signed in 2016. Total funds allocated for the Operational Programme - Efficient Human Resources for the period 2014 – 2020 amount to EUR 1.85 billion. At the moment, 33 agreements in the value of HRK 1,832,066,362.86, in respect of which the Croatian Employment Service plays the role of Intermediate Body Level 2, are being executed.

51 Croatian Employment Service

52 2016 Yearbook

Organisational Structure, Governance and Human Resources

The Croatian Employment Service (CES) is a public institution established pursuant to the Job Placement and Unemployment Insurance Act (Official Gazette No. 80/08, 121/10, 25/12, 118/12, 12/13 – purified text version, 153/13). The CES is a legal person with rights, obligations and responsibilities defined under the Act, the relevant legal documents, as well as under the Bylaws passed by its Managing Council. The operations performed by the Croatian Employment Service are public and the CES is further required to reports on its performance and activities to the Government of the Republic of Croatia and the competent ministry at least once a year. The legitimacy of activities and general documents of the CES are monitored by the Ministry of Labour and Pension System. The CES performs its operations through its: • Central Office, • 5 regional offices, • 17 district offices, and • 99 branch offices, thus making its services available on the entire territory of the Republic of Croatia. The CES includes the following organisational units: 1. Director General’s Office, 2. Labour Market and Employment Policy Sector, 3. Financial Management Sector, 4. Legal Affairs Sector, 5. Analytics and IT Sector, and 6. independent departments. The CES is governed by the Managing Council composed of seven members appointed by the Government of the Republic of Croatia. Two Managing Council members are proposed by the Labour Minister, three by the Economic and Social Council depending on the structure of government representatives and representatives of social partners within the same (a higher-ranking representative of associations of employers and a higher-ranking representative of associations of unions), one member elected as the representative of CES employees and one member proposed by associations of unemployed persons. The CES is headed by a Director General, who represents the organization and is responsible for ensuring the legality of its operations. CES Director General is also appointed by the Government of the Republic of Croatia and has a deputy and assistants. The scope, authorities and responsibilities of the Managing Council, Director General, Deputy Director General and Assistants are defined under the Bylaws of the Croatian Employment Service. On 31 December 2016, the CES employed 1,535 workers, of which 1,226 women (79.9%) and 309 men (20.1%).

CES Employee Structure by Gender, 31 December 2016

79.9% Women Men

20.1%

53 Croatian Employment Service

The structure of CES employees by the level of education was as follows: 13 (0.8%) academic professionals or doctors of science, 1,072 (69.8%) employees with graduate/post-graduate university or academy education, 149 (9.7%) with undergraduate university or post-secondary non-university education, 261 (17.0%) employees who completed a 4-year vocational secondary school or grammar school, 14 (0.9%) employees who completed a vocational secondary school in the duration of up to 3 years or school for skilled or highly skilled workers and 26 (1.7%) employees without education, with uncompleted or completed elementary education. Employees with graduate/post-graduate or academy education account for the absolute majority of CES employees (80.4%).

CES Employee Structure by Level of Education, 31 December 2016

0.9% Graduate and post 1.7% graduate university or 17.0% academy education Undergraduate university and post- secondary non- university education 4 or more years 9.7% vocational secondary school and grammar school Up to 3 years vocational secondary school and 70.7% school for skilled and highly skilled workers Elementary school

From the total number of employees, 1,311 persons or 85.4% were employed in regional, district and branch offices, and 224 or 14.6% in the Central Office. Most employees, i.e. 37.1%of the total number, are employed in the Zagreb (225), Split (152), Osijek (114) and Rijeka (79) Regional Offices.

54 2016 Yearbook

Publicity of Operations and International Cooperation

Publicity of Operations Just as in previous years, the CES continued working on improving its visibility and the visibility of its services not only to the unemployed, but also to the employers and the general public. The transparency of the activities and operations performed by the CES is ensured through everyday communication with the media, guest appearances in radio and television shows, publishing of media releases, organisation of press conferences, printing of leaflets, brochures and other promotional material, organisation of round tables, public events and visits, provision of complete information to all institutions that require the same to perform their operations and analyses, and provision of information about CES activities via its website and social networks. In this manner, the CES ensures that the public is timely informed about the novelties in the labour market and the activities performed by the CES. During the year, the CES provided answers to 672 inquiries from journalists, including 336 radio/TV statements and 367 written texts. In addition, 39 requests for information submitted pursuant to the Access to Information Act were processed and an annual report on the implementation of the said Act was prepared. Compared to 2015, the number of requests decreased by 32%, which confirms that the CES publishes information successfully, proactively and openly, thus eliminating the need for the submission of individual information access requests. In 2016, the CES published 1,631 new texts on its website (www.hzz.hr), which represents an increase of 35% compared to 2015. In the said period, the CES also issued 12 CES News, i.e. newsletters intended for partners, associates and employers, with the aim of inform the same about the most important developments within the CES. Furthermore, an internal newsletter for CES employees was created and started to be published in 2016. As a result, 10 editions of the internal newsletter were issued in the period from February to December 2016. Joining the social networks, such as Facebook, Twitter and Linkedin, proved a good solution for establishing communication with the users of CES services. At the end of 2016, the CES recorded over 35,000 followers/users on Facebook, the most frequented social network, over 940 followers/users on Twitter and over 1,600 followers/users on LinkedIn. The CES does not only use the social networks to answer inquiries, which are received daily, but also to inform the users about its activities.

International Cooperation The CES regularly cooperates with its bilateral and multilateral partners. In 2016, international cooperation included projects, seminars, workshops, conferences, professional meetings and study visits to public employment services at the cross-border, regional, European and global level. In 2016, the CES received four delegations of representatives of institutions responsible for employment and labour market issues, including delegations from Turkmenistan, , Montenegro and Kosovo. So far, cooperation agreements have been signed with public employment services of Bosnia and Herzegovina, Montenegro, Hungary and Germany. In 2016, the CES continued intensively cooperating with public employment services of EU member states in the efforts aimed at defining a specific legal framework and initiatives for the European labour market, placing a special emphasis on working with the youth and long- term unemployed persons. Among other activities performed, the CES also participated in the consultations organised in connection with the launching of two new EU initiatives, namely European Solidarity Corps and European Pillar of Social Rights. 55 Croatian Employment Service

In July 2016, the Croatian Employment Service organised a vocational practical training for students of the faculty of the University of Applied Labour Sciences of the Federal Employment Agency. The students had the opportunity to get familiar with the organisation of work established within the CES, while particular emphasis was placed on local partnerships for employment and Career Informing and Counselling Centres (CISOK centres). After the programme had finished, the German partner expressed its wish to continue cooperation in the future as well. European Affairs – The CES was actively and systematically involved in the activities of the bodies, committees and working parties responsible for matters related to the European labour market and employment by participating at the meetings of the Employment Committee and the working parties formed within the same, i.e. the EMCO Indicators Working Party and the EMCO PAG Working Party. The representatives from the Croatian Ministry of Labour and Pension System and CES representatives together represented the Republic of Croatia in the mentioned committee and its working parties. Furthermore, the CES also participated in the preparation for the meetings of the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) and bilateral meetings with the European Commission. In 2016, the CES participated at two meetings of the PES Network Managing Board, one in June and one in December. The main topics discussed at the meetings were as follows: the situation in the EU labour market, integration of refugees, youth employment, long-term unemployed persons, establishment of the European Pillar of Social Rights, implementation of the European Solidarity Corps initiative, adoption of a new, comprehensive Skills Programme for Europe, organisation of the Day of Employers, cooperation among the public and private employment services, future of the benchlearning process, adoption of the new EURES regulation, elaboration of the European Skills/Competence Classification, Qualifications and Occupations (ESCO) system. The CES also continued participating in the activities of the EURES Network whose purpose is to facilitate free labour force mobility and provide information, advice and assistance with regards to employment at the European level. In 2016, CES representatives participated at the meetings of the European Coordination Office (ECO, former EURES Working Party), the EURES Working Party for Information and Communication Activities, the EURES Indicators Working Party and the Working Party for the Preparation of EURES Regulation Implementation Activities. The representatives of the CES also actively participated in the activities of the European Lifelong Guidance Policy Network (ELPGN). The CES joined the ELPGN Network in 2011 and performed the role of the national representative and operational coordinator for the Republic of Croatia. The project was completed at the end of January 2016. As part of the activities envisaged under the Mutual Learning Programme, i.e. the open EU employment policy coordination model tool, the CES responded to the invitations to participate at two professional meetings, one on the topic of predicting the skills needed in the labour market (Ireland) and one on the topic of integration of asylum seekers and refugees (Kingdom of Belgium). The CES hosted a presentation of the thematic review on the topic of Modernising PES through Supportive Data and IT Strategies organised on 6 and 7 July 2016 within the framework of the Mutual Learning Programme of the European Network of Public Employment Services. The associated results and learning activities were presented at the meeting of Advisors for European PES Affairs (AFEPA) held in October 2016 and the meeting of the Network’s Management Board held in December 2016. As a participant in European committees, groups and parties responsible for employment and labour market affairs, the CES continued fulfilling its obligations arising from Croatia’s EU membership with regards to the process of harmonising the Croatian labour and employment laws and regulations with those of the European Union. The CES thus cooperated with associate institutions on passing EU laws and regulations. In 2015 and 2016, the CES intensively participated in the activities related to the adoption of Regulation (EU) 2016/589 of the European Parliament and Council of 13 April 2016 on the European Network of Employment Services (EURES), workers’ access to mobility services and 56 2016 Yearbook the further integration of labour markets, and amending Regulations (EU) No. 492/2011 and (EU) No. 1296/2013. Pursuant to the new Regulation, the Croatian Employment Service was appointed the National Coordination Office. Multilateral cooperation at the global level - Since it joined the World Association of Public Employment Services (WAPES), the CES has been actively involved in its activities. In 2016, it continued participating in the Association as a member of the WAPES Managing Board. During the year, the CES attended two regular annual meetings of WAPES Region Europe, one in June and one in September 2016, at which the novelties and challenges that European (both EU and non-EU) public employment services are facing were presented. In reference to the meeting of WAPES Region Europe, a conference on the topic of the integration of asylum seekers and refugees was held in Sweden in June 2016 as well, while a visit to the Resettlement Centre established within the Federal Office for Migrants and Refugees in Bonn, Germany, was organised in September. The CES participated at the meeting of the WAPES Management Board held in Japan by authorising the Hungarian Employment Service to represent it. In the framework of cooperation within WAPES, CES internal auditors once again participated, together with the representatives from Germany, Austria, Norway, Sweden, Belgium (VDAB) and the Netherlands, in the activities of the working group formed within the framework of the peer learning programme called Internal Auditing with the aim of ensuring continuation of activities performed for the purpose of identifying good practices in the field of internal auditing, exchanging experiences and knowledge, as well as establishing international cooperation between internal audit departments organised within public employment services.

Multilateral cooperation at the regional level - Under the Stability Pact and the Regional Cooperation Process, the CES continued participating in the activities of the Centre of Public Employment Services of Southeast European Countries (CPESSEC) with the aim of encouraging the exchange of experiences and good practices for the purpose of improving the possibilities for employment in Southeast European countries. Besides Croatia, the CPESSEC member states also include Bosnia and Herzegovina, Bulgaria, Montenegro, Macedonia, Hungary, Slovenia, Romania, Serbia and Turkey. In 2016, the Centre was presided by the Turkish Employment Agency (ISKUR). The presiding employment agency organised the 15th managers’ conference called Organisation of Public Employment Services on 6 December and the 14th professional conference called Providing Services to Target Groups on 7 December 2016 in Istanbul, Turkey. Just as every year, the CES once again participated in the preparation of the Statistical Bulletin providing statistical data about working and finding employment in CPESSEC member states.

57 Croatian Employment Service

Sources of Funding and Structure of Expenses

Sources of Funding As an extra-budgetary user of the state budget, the Croatian Employment Service bases its financial and accounting operations on the provisions of the Budget Act and other budget accounting implementation acts with the aim of securing the funds it requires to perform the activities prescribed under the Job Placement and Unemployment Insurance Act, its Bylaws and other implementation acts defining the manner in which CES is to perform its operations. In 2016, the CES performed its financial operations in accordance with the Revenue and Expense Plan for 2016, as the basic document regulating such operations, and the provisions regulating the operations performed through the state treasury system, considering the fact that since 2007 the CES has been depositing all its revenues into the designated state budget account, and covers all its expenses using state budget funds. The total revenues planned for 2016 amounted to HRK 2,397,240,195, while total realised revenues amounted to HRK 2,270,415,642, which is at the level of 94.71% of the annual plan. The realised income from the state budget, including income for funding regular CES operations and allocations for co-financing of EU projects, amounted to HRK 1,937,120,494. The realised income from financial assistance provided by international organisations and EU institutions/bodies amounted to HRK 331,006,412. The largest part of these revenues refers to ESF funding for coverage of expenses of projects implemented by the CES. In 2016, the CES realised income from financial aid and donations in the total amount of HRK 131,280 and income from extra-budgetary users earmarked for financing the cost of workplace training without a work contract in the amount of HRK 2,001,846 (in which case the CES itself was the benefit user). Pursuant to the provisions of Article 50 of the Budget Act, these extra- budgetary revenues were used up to the paid-in amount. Income from the sale of non-financial assets in the amount of HRK 6,972 refers to long-term assets disposed of pursuant to the provisions of the Regulations on Budget Accounting and Chart of Accounts.

Structure of Expenses The funds allocated for CES operating expenses were paid out in accordance with the Croatian State Budget for 2016, the CES Revenue and Expense Plan for 2016, and the laws and legal provisions applicable to CES operations. In 2016, total planned expenses amounted to HRK 2,397,240,195, while total realised expenses amounted to HRK 2,270,027,353 or 5.3% less than planned. In the structure of realised expenses, unemployment insurance expenses, amounting to HRK 1,556,596,260, accounted for the largest share (68.57%). These expenses included regular unemployment benefit payments, one-time unemployment benefit payments (Articles 37– 49 of the Job Placement and Unemployment Insurance Act), one-time financial assistance, reimbursement of travel and relocation expenses (Article 55 of the Job Placement and Unemployment Insurance Act) and financial assistance and travel expenses incurred during education and workplace training without a work contract. The realised expenses that refer to regular unemployment benefit payments, one-time unemployment benefit payments, one-time financial assistance and reimbursement of travel expenses during education of unemployed persons amounted to HRK 932,056,135. The amount of HRK 624,540,126 was used for the payment of financial assistance and reimbursement of expenses during education and workplace training without a work contract (to which the workers were referred by the CES). The portion of the said amount, i.e. HRK 112,606,471, refers to the funds from ESF project allocations booked under ‘Special Activities’ 58 2016 Yearbook in the state budget of the Republic of Croatia. From the funds allocated for projects implemented under the Operational Programme – Human Resources Development, the amounts used were as follows: Training for Employment of Redundant and Long-term Unemployed Persons - HRK 1,821,987; and Implementation of Active Labour Market Policy Measures - HRK 2,828,178. From the total funds allocated for projects implemented under the Operational Programme – Efficient Human Resources, the amounts used were as follows: Implementation of Active Labour Market Policy Measures for the Youth - HRK 95,204,044; Implementation of Active Labour Market Policy Measures for Long-term Unemployed Youth – HRK 11,250,373; Job Retention Programmes – HRK 622,161; and Education, Training and Retraining of Unemployed Persons - HRK 879,728. Funds in the amount of HRK 490,772,794 were used for the implementation of ALMP measures, accounting for 21.62% of total expenses. Funds in the amount of HRK 236,271,412 were used for the implementation of regular ALMP programmes defined under the Active Labour Market Policy Implementation Guidelines for the Period 2015 – 2017, which are covered by the state budget, while funds in the amount of HRK 9,255,825 were used to finance the implementation of measures defined under the Action Plan for the Implementation of the National Roma Inclusion Strategy for the Period 2013 – 2020. From the funds allocated for the implementation of projects envisaged under the Operational Programmes - Human Resources Management and Efficient Human Resources, the amount of HRK 245,245,557 was used to fund the implementation of ALMP measures. From the total funds allocated for individual projects implemented under the Operational Programme - Human Resources Management, the amounts used were as follows: Implementation of Public Works Programmes for Women in the Local Community – HRK 72,803,264; Implementation of Active Labour Market Policy Measures – HRK 176,645; Training for Employment of Redundant and Long-term Unemployed Persons – HRK 3,375,725; and Workplace Training without a Work Contract – HRK 8,753. From the total funds allocated for individual projects implemented under the Operational Programme – Efficient Human Resources, the amounts used were as follows: Implementation of Active Labour Market Policy Measures for the Youth – HRK 72,149,188; Implementation of Active Labour Market Policy Measures for Long-term Unemployed Youth - HRK 13,562,133; Education, Training and Retraining of Unemployed Persons - HRK 4,297,936; Job Retention Programmes - HRK 318,206; Implementation of Public Works Programmes for Groups with Lower Employability - HRK 33,785,551; Self-employment Support - HRK 19,689,496; and Subsidies for Employment of Groups with Lower Employability - HRK 25,449,457. The amount of HRK 1,108,890, i.e. 0.05% of total expenses, was spent on vocational guidance activities. The realised employee expenses amounted to HRK 163,231,704, accounting for 7.19% of total expenses. Employee salaries and benefits are paid in accordance with the Master Collective Agreement for Public Service Employees and Officers, CES Collective Agreement, and other legislation regulating the payment of salaries in public services. Some of the employee-related expenses (in the amount of HRK 11,237,798) were funded from allocations received for projects implemented under Operational Programmes – Human Resources Development and Efficient Human Resources, and other projects involving CES as the project owner. The use of such funds is presented under ‘Special Activities’ in the state budget. In 2016, the material expenses of the Croatian Employment Service amounted to a total of HRK 49,358,843, which represents 2.17% of total expenses. The material expenses incurred by the CES were financed using HRK 40,994,472 from the total state budget allocation for financing regular CES operations. Furthermore, the CES used the amount of HRK 2,054,043 from the total income from financial assistance provided by international institutions, income from extra-budgetary users earmarked for financing the cost of workplace training for employment without a work contract (in which case CES itself is the benefit user) and income from assistance allocated from country, municipal and town budgets for financing job fairs. The CES also used a portion of its own funds, i.e. income from the sale of 59 Croatian Employment Service

goods and services in the amount of HRK 136,040, to cover its material expenses. Donations from companies and entities outside the general state earmarked for the financing of job fairs were used in the amount of HRK 15,366. From the total funds allocated under the Operational Programme - Human Resources Development, the CES used a total of HRK 4,610,626, including the funds allocated for the following projects: Supporting CES in the Implementation of the Operational Programme: Human Resources Development (used to cover a portion of expenses incurred by the Department for Financing and Contracting of EU Funded Projects); External Evaluation of Active Labour Market Policy Measures; Further Development of Occupational Standards; Strengthening the CES Labour Market Training Centre; and other projects implemented in the framework of this programme by the regional and district offices of the Croatian Employment Service. From the total funds allocated under the Operational Programme – Efficient Human Resources, the CES used a total of HRK 1,547,598, including funds allocated for the following projects: Technical Assistance under the Operational Programme - Efficient Human Resources 2014 – 2020 (used to finance the costs incurred by the Department for Financing and Contracting of EU Funded Projects); Application of Occupational Standards in CES Business Processes and Implementation of the Occupational Standards Survey; and allocations for other projects used to fund ALMP measures, i.e. to cover part of the cost of office supplies used for project purposes. The financial expenses of the Croatian Employment Service amounted to HRK 1,572,547, and were funded from the state budget allocation for financing regular CES operations. The CES spent HRK 7,263,503, i.e. 0.32% of total expenses, on the procurement of non- financial assets. The expenses related to the informatisation of the CES and other investments in equipment within the scope of regular operations amounted to a total of HRK 5,485,296. Furthermore, the CES used HRK 4,794,475 to supply IT and other non-financial assets required for regular operation; the amount of HRK 23,715 from assistance received from county, municipal and town budgets and donations received from companies outside the general state earmarked for organisation of job fairs; the amount of HRK 2,445,313 from the funds allocated under the Operational Programme – Human Resources Development for the implementation of the Local Employment Initiative – Phase 2 project, implemented by the CES regional and district offices, and the Supporting CES in the Implementation of the Operational Programme: Human Resources Development project, and the funds allocated under the Operational Programme – Efficient Human Resources 2014 – 2020 for the implementation of the Technical Assistance under the Operational Programme – Efficient Human Resources project. The difference between the revenues and expenses was recorded in the books as a surplus in the amount of HRK 388,289. Taking into account the surplus from previous years, the CES recorded a total revenue surplus of HRK 519,397 in 2016, which is available for use in 2017.

Public Procurement The Croatian Employment Service is required to apply the Public Procurement Act (OG No. 90/11, 83/13, 143/13, 13/14) and the related subordinate regulations. In 2016, the CES planned and executed its procurement operations related to the supply of goods, works and services pursuant to the said act and the public procurement principles, while also ensuring transparent participation and equal treatment of all economic entities and promoting market competition. After adopting the budget and subordinate regulations pursuant to the Public Procurement Act, the CES drafted its Procurement Plan for 2016 and five Amendments to the same. The CES Procurement Plan is a document providing public insight into the list of all the needs for the procurement of goods, works and services of the CES within a given period in a transparent manner. The CES published its Procurement Plan for 2016 and all Amendments to the same on its web pages. In accordance with its Procurement Plan, the CES executed in 2016 a total of 33 lesser-value procurement operations (estimated procurement value (goods and services supply): from HRK 20,000.00 to HRK 200,000.00; estimated procurement value (works): from HRK 20,000.00 to HRK 500,000.00). Procurement operations in the value under HRK 20,000.00 are carried out 60 2016 Yearbook without the public tendering procedure, using order forms pursuant to Internal Instructions. The CES also executed 18 low-value procurement operations (estimated procurement value: from HRK 200,000.00 to HRK 1,558,544.00) and 8 high-value procurement operations (estimated procurement value: more than HRK 1,558,544.00). Furthermore, on the basis of 8 previously signed master agreements, the CES signed 8 individual public procurement agreements in 2016. The aforementioned act stipulates that low- and high-value procurement operations and the related notices be published in the Electronic Public Procurement Bulletin, and provides for the possibility of publishing notices of lesser-value procurement operations as well. Thus, in the course of 2016 the CES published a total of 105 announcements, including notices of lesser- value procurement operations, invitations to tender, notices of signed agreements, etc. Pursuant to Article 44 of the Public Procurement Act, the CES published on its web pages 178 invitations to tender for the supply of services from Appendix II B with respect to five subject matters of procurement and 16 invitations for the submission of offers for lesser-value procurement operations. Furthermore, pursuant to Article 44, Section 5 of the Act, the CES also sent out 3 invitations to tender for the supply of legal services (services listed in Appendix II B). It was not required to publish these invitations on its web pages, but it did publish the associated agreements in the Electronic Public Procurement Bulletin. The CES keeps a register of public procurement agreements and master agreements, as well as makes regular register updates at least every six months. The aforementioned register is published on the CES website. The CES also keeps a record of public procurement procedures and signed public procurement agreements, which will be used to prepare a statistical report on public procurement agreements signed in the previous year. The said report will be submitted to the Public Procurement System Authority.

61 Croatian Employment Service

Schedule 6

Statement of Revenues and Expenses for the period 1 January - 31 December 2016 (HRK) Index No. Acc. Account Name Planned Realised (5:4) 1 2 3 4 5 6 REVENUES 1 671 Income from the state budget 2,021,113,002 1,937,120,494 95.8 2 632 Assistance from EU institutions and bodies 375,977,193 331,006,412 88.0 3 633 Assistance from other budgets 118,500 5 634 Assistance from extra-budgetary users 2,001,846 6 661 Income from the sale of products and services 150,000 148,638 99.1 7 663 Income from donations 12,780 8 7 Income from the sale of non-financial assets 6,972 Total Revenues 2,397,240,195 2,270,415,642 94.7 EXPENSES 1 3711 Unemployment insurance 1,599,713,480 1,556,596,260 97.3 Unemployment benefit 932,056,135 Expenses incurred during education and workplace training (financial assistance, travel 492,560,870 expenses etc.) Financial assistance for regular seasonal 1,476,507,100 97.8 17,370,005 workers Other expenses (reimbursement of travel and relocation expenses and one-time financial 2,002,780 assistance) Expenses incurred during education and workplace training (financial assistance, travel 123,206,380 112,606,471 91.4 expenses etc.) – EU funded 2 3 Active Labour Market Policy 559,231,895 490,772,794 87.8 Active Labour Market Policy Implementation 264,230,363 236,271,412 89.4 Guidelines Action Plan for the Implementation of the 12,338,000 9,255,825 75.0 National Roma Inclusion Strategy Active Labour Market Policy measured funded 282,663,532 245,245,557 86.8 under EU projects 3 3721 Vocational guidance 1,150,000 1,108,890 96.4 4 31 Labour cost 168,819,400 163,231,704 96.7 Employee expenses funded under the SB 153,144,600 151,993,906 99.2 Employee expenses funded under EU projects 15,674,800 11,237,798 71.7 5 32, 34 Material and financial expenses 58,274,420 50,931,391 87.4 Material and financial expenses funded under 46,856,000 42,567,019 90.8 the SB Material and financial expenses funded from 0 1,751,857 financial aid and donations Material and financial expenses funded from 0 136,040 own revenues 62 2016 Yearbook

Material and financial expenses funded under 11,418,420 6,476,475 56.7 EU projects Expenses associated with the procurement of 6 4 10,031,000 7,236,503 72.4 non-financial assets Procurement of non-financial assets funded 5,350,000 4,794,475 89.6 under the SB Procurement of long-term assets funded from 23,715 financial aid and donations Procurement of long-term assets funded under 4,681,000 2,445,313 52.2 EU projects 7 37 Other project expenses 20,000 115,839 8 38 Expenses associated with donations made 0 6,972 Total Expenses 2,397,240,195 2.270,027,353 94.7 Total Revenues 2,397,240,195 2.270,415,642 94.7 Total Expenses 2,397,240,195 2.270,027,353 94.7 Balance 388,289 9221 Revenue surplus from previous period 131,108 Revenue surplus 519,397

63 Croatian Employment Service

Internal Control System

Pursuant to the Public Internal Financial Control Act (OG 78/15), the Croatian Employment Service performs activities organised within the framework of the established internal control system for the purpose of improving the management process and achieving general goals. The internal control system serves to ensure that operations are performed in a proper, cost-efficient, ethical, efficient and effective manner and in compliance with the laws, policies and plans; to prevent loss of assets caused by poor management, unjustified spending or use, irregularities and frauds; to increase the level of responsibility of all employees for successful achievement of the set goals; and to ensure reliability and comprehensiveness of financial and other reports.

Financial Management and Controls Financial management is the act of managing and controlling the financial effects of operations with the aim of achieving business goals using the resources in a proper, ethical, cost-efficient, effective and efficient manner. The internal control system covers all business processes that lead to the achievement of business goals, and is established in all organisational units of the CES that are responsible, each within its scope of authorisations and responsibilities, for the achievement of those goals. The financial management and control activities performed within the CES are broken down into five components, i.e. control environment, risk management, control activities, information and communication, and internal control system monitoring and evaluation. Within the framework of the ‘risk management’ component, the CES updated its Risk Register in 2016 and published it on its intranet pages. The Risk Register covers 12 organisational units and the belonging business processes. In 2016, the Central Office conducted regular follow-up inspections in four district andtwo regional offices under the ‘control activities’ component, after which it also prepared the related condition reports and issued instructions and recommendations concerning future actions. Based on the success achieved in that regard in 2016 and with the aim of improving the process of preparing the annual list of assets and liabilities, memos with recommendations were drafted and distributed to all regional and district offices. Furthermore, an application that simplifies and speeds up the physical process of making the list of basic resources was implemented, and application support for the delivery of reports on open items under booked receivables was developed as part of the process of preparing the annual list of assets. The organisational units of the Central Office prepared a total of 18 Internal Instructions, which serve to standardise and improve the actions and operations performed by the CES. The said instructions were made available to all employees of the CES via its intranet. Furthermore, an educational module on the topic of risk management was set up on the e-Learning portal and is available to all employees. In 2016, the Central Office prepared and distributed the Internal Instruction on Disclosure, Handling and Reporting on Irregularities in the Croatian Employment Service.

Internal Audit Pursuant to the relevant legal regulations, the CES performs internal audit activities, which serve to improve its operations. The internal audit function provides support to the CES in the efforts to achieve its goals by performing individual internal audits in accordance with the adopted plans, by assessing the adequacy and efficiency of the existing internal control system, as well as by providing expert opinions and recommendations for improvement of operations, where appropriate.

64 2016 Yearbook

Pursuant to the Annual Internal Audit Plan for 2016, ten audits were conducted within the CES during the year, for which the related audit reports with action plans, including six accepted recommendations and required measures, were also drawn up. The implementation of the same is monitored in accordance with legal provisions. On the basis of the recommendations specified in audit reports, the existing system of internal controls integrated into the processes being audited, which was designed and established by the management, is improved. Furthermore, pursuant to legal regulations, activities associated with the requirement to report on audits and activities performed by the internal audit function in the previous year were carried out in 2016 as well. As a result, internal auditors issued opinions with respect to the system of internal controls integrated into the processed that were subject to audit for purposes of the Fiscal Responsibility Statement, and with respect to the effects of the recommendations of the internal audit function, and prepared the Internal Audit Strategic Plan for the next 3-year period and the Internal Audit Annual Plan for the next year, while ensuring the quality of activities carried out by the internal audit function. With the aim of improving their knowledge, skills and competencies, CES internal auditors participated in 2016 in additional educational programmes (workshops, conferences, seminars), on the basis of which Reports on Continuous Professional Advancement are prepared and delivered to the Central Harmonisation Unit of the Ministry of Finance. Cooperation with internal audit units established in other bodies and institutions was realised through meetings and events organised by the Central Harmonisation Unit of the Ministry of Finance and other institutions with the aim of exchanging information, experiences and good practices. Furthermore, as part of the peer learning programme called Internal Auditing, international cooperation in the field of internal audit between public employment services of Germany, Austria, Norway, Belgium (VDAB) and Croatia was also continued.

65 ISSN 2584-3729