Sulaymaniyah District, Sulaymaniyah Governorate

LABOUR MARKET OPPORTUNITIES AND CHALLENGES

IOM Iraq – May 2020

This programme is supported by: List of Acronyms

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

IOM Disclaimer

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

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

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

List of Acronyms 2

IOM Disclaimer 2

Table of Contents 3

Executive Summary 4

Study Introduction 5

Labour Market Assessment Overview

District Overview

Assessment and Methodology Overview

Findings 7

Attitudes Towards Entrepreneurship and Cash

Types of Jobs Available

Skills Gaps

Recruitment Mechanisms

Supply-side Bottlenecks

Demand-side Bottlenecks

Conclusions 10 Labour Market Opportunities and Challenges

EXECUTIVE SUMMARY

IOM conducts livelihood programming in 15 out of 18 in December 2019, employer surveys and key informant governorates in Iraq. As part of the Returns and Recovery interviews were conducted in December 2019 and January Unit programming, the International Organization for 2020. Migration (IOM) undertook a labour market assessment (LMA) in Sulaymaniyah District in December 2019 and KEY FINDINGS January 2020. • Trade, food and manufacturing jobs were noted as the LMAs have been conducted in over 30 locations across Iraq most desirable. and give insights on the state of the local market in a given • Participants noted a preference for owning their business. area, the hiring preferences of employers and the available • All surveyed employers defined demand for their products skills and aspirations of jobseekers, among others. and services as good or average.

STUDY COMPONENTS • Hairdressing skills, English language, and computer training were suggested for young women, while barbering, mobile LMAs consist of both qualitative and quantitative exercises: phone repair, English language, computer, and electrical Key Informant Interviews (KIIs), multisectoral community appliance repair training were suggested for young men. workshops and surveys with jobseekers, employers and consumers. • Sewing courses were noted to be already available, or oversaturated. This LMA focused on Khabat, the main community and surrounding communities (Kaniba, Chiya 306, Wluba, • Big industries such as oil, cement, and iron factories, and Qaratoghan) in a Sulaymaniyah District, Sulaymaniyah education, and sweets factories were mentioned as Governorate. sectors that had difficulties in finding adequately trained employees. This LMA consisted of 104 individual interviews and a • Employers mentioned painting, ironing, and baking skills community workshop, conducted from December 2019 as hard to find. to January 2020. Consumers and jobseekers were surveyed

Recommendations

SECTORS TO TARGET General trade, food processing, hospitality, services, construction and education SECTORS TO AVOID N/A Business expansion support packages (BEPs) for supermarkets, On-the-Job training for busi- ACTIVITIES TO TARGET nesses selling women’s items (such as accessories and clothing). Enterprise Development Fund (EDF) grants to sweets factories

ACTIVITIES TO AVOID Business support packages for construction tool sellers Yes, and could be around education or electricity projects (installation and repairs) if CASH FOR WORK (CFW) possible Direct cash is recommended here (only 3% of jobseekers reported that people are not DIRECT CASH comfortable paying for goods and services in cash)

PROFILES TO TARGET Youth, female-headed households, graduates, internally displaced persons and older people

• Electricity is the main area with needs

• The EDF might perform well here as reportedly there are some factories and industries NOTES such as oil and cement, indicating the presence, albeit underdeveloped, of an industrial sector. However, no employers mentioned hiring new workers when asked about what they would do with a grant to expand their business

Table 1. Recommendations

4 IOM IRAQ Labour Market Opportunities and Challenges

STUDY INTRODUCTION

IOM recognizes that the private sector is an engine for growth; encourages internally displaced persons (IDPs) to move to the therefore, it strives to create inclusive markets at the individual, area. Buildings tend to be quite old and while there are mini community and institutional levels. At the individual level, IOM markets, there are no malls in the community or surrounding has prioritized support to micro enterprises, including providing communities. With 3–4 medium-sized sweets factories in business development services (for example business advisory the community, most employees who work in the factories services) and Business Support Packages (BSPs), including are from outside of the community, except for IDPs. Khabat’s in-kind and cash support, all of which aim to increase income community members said they wished more factories could generation at the household level. be established to create opportunities for youth and women to work, and mentioned education, health, and electricity as For those individuals who need capacity development support their main needs. or who have specific backgrounds such as agriculture, IOM provides specialized skills development and training through CONSUMER SPENDING SNAPSHOT Vocational Training (VT), Farming Training (FT) or On-the-Job • Key weekly expenses: The typical consumer in Training (OJT), accompanied by employability assistance Sulaymaniyah District reported spending an average of – inclusive of in-kind items tailored to enhance individual 97 United States dollars (USD)per week on food for their employability. For beneficiaries who already have relevant household. education or training and need to gain hands-on work experience, IOM’s job placement and job matching initiatives • Key monthly expenses: 78 per cent of survey respondents link participants with businesses in growth sectors, and pays reported having a monthly rent expense, averaging their salaries partially or fully for three to six months. USD 195 per month, and all (100%) reported monthly expenses on temptation goods, such as alcohol and At the community level, through the Enterprise Development tobacco, averaging USD 57 per month. Fund (EDF), IOM provides support to slightly larger businesses – small and medium enterprises (SMEs) – to support long- ASSESSMENT AND METHODOLOGY OVERVIEW term job creation and the expansion of local production capacities. IOM also targets the infrastructure needed to The LMA process began in December 2019, after a two-day support markets. For example, in agricultural communities training on labour market assessment objectives and the tools IOM may support irrigation projects. At the institutional level, for data collection. Following the training, community-level IOM provides capacity building to national and local authorities, workshops with youth, women and local residents were including market assessments that seek to promote institutional organized on 5 December 2019, followed by KIIs, jobseeker, change in support of local livelihoods. employer, and consumer surveys.

LABOUR MARKET ASSESSMENT OVERVIEW Multisectoral Community Workshops

IOM’s LMAs are intended to provide actionable In Sulaymaniyah-Khabat, IOM conducted a workshop, held recommendations for the individual livelihood assistance on 5 December 2019 in Shahed Hama-amen Pola Primary that IOM provides in multiple districts throughout Iraq. This School in Khabat, with 25 participants (12 host community LMA focuses on the communities of Khabat, Kaniba, Chiya members and 13 IDPs, of whom 12 were women and 13 men) 306, Wluba, and Qara Toghan, in Sulaymaniyah District, After introducing IOM and its programming staff explained Sulaymaniyah Governorate, and includes interviews and a IOM’s plan to work closely with community members in community workshop in Khabat community. implementing future programmes.

DISTRICT OVERVIEW Key Informant Interviews

About 350 IDP families and 2700 host community individuals Ten KIIs were conducted with representatives of the business (around 4900 families) live in Khabat, many of whom are community in Sulaymaniyah city. KIIs seek to establish trends estimated to be living below the poverty line; around 70 Syrian and observations about the business community, industries refugee families live in this community. Khabat community is currently hiring, ongoing public and private investment, and key one of the poorest areas in Sulaymaniyah Governorate. Rent is emerging sectors capable of generating employment. lower than in other parts of the governorate, which reportedly

IOM IRAQ 5 Labour Market Opportunities and Challenges

Jobseeker Surveys TOTAL NO. MALE FEMALE TOOLS OF SURVEYS RESPONDENTS RESPONDENTS Jobseeker surveys are designed to identify preferences of CONDUCTED unemployed and underemployed workers. In Sulaymaniyah Multisectoral city, 31 jobseekers were identified and surveyed. The survey’s Community 13 12 1 purpose was outlined for each jobseeker survey, and informed Workshops consent was obtained from those surveyed. Key Informant 8 2 10 Employer Surveys Interviews Jobseeker Thirty-one employer surveys were conducted in Sulaymaniyah 23 8 31 District to provide a sample as representative as possible of Surveys the local market. Employers were initially provided an advance Private Sector copy of the handout materials and then later contacted for 30 1 31 Employer follow-up interviews. Surveys Consumer Consumer Surveys 22 10 32 Surveys The consumer survey was designed to triangulate data related Table 2. surveys conducted in khabat district for labour market to demand, income and vulnerability. In commercial or industrial analysis districts in Sulaymaniyah District, members of the public were approached and 32 of them were identified as respondents. There were no restrictions on the demographic profiles of participants, but IOM sought diversity to the extent possible.

The table below outlines the types and number of surveys conducted for Sulaymaniyah district.

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FINDINGS

ATTITUDES TOWARDS ENTREPRENEURSHIP SKILLS GAPS AND CASH FGD participants suggested a list of potential sectors with About 77 per cent of jobseekers noted a preference to own which nongovernmental organizations might find it relevant their business, suggesting a preference for entrepreneurship to engage. These included: in the community. Three per cent of jobseekers reported that • English language course people are not comfortable paying for goods and services in cash in the area, yet only 35 per cent of jobseekers reported • Barbering/hairdressing preferring in-kind over cash assistance. Meanwhile, 80 per cent • Computer skills of key informants felt that cash support would cause inter- household and community conflict in Khabat community in • Mobile phones and electrical appliance maintenance Sulaymaniyah. A mini market, a bread making factory and restaurants were suggested for support, to help both men and women obtain TYPES OF JOBS AVAILABLE jobs. Sewing courses were noted to be already available, or While three sweets factories were noted to hire many oversaturated, in the community. young people in Khabat community, many young men were Jobseekers, on the other hand, mentioned big industries such as noted to be working with government in the police force oil, cement, and iron factories, education, and sweets factories and in Peshmerga departments, as well as in private sector as sectors that had difficulties in finding adequately trained trade and services. Women were said to be working in the employees. Employers, also asked about skills, mentioned government sector and private businesses in breadmaking, painting, laundry/ironing, and baking skills as hard to find. hairdressing salons, and tailoring. Jobseekers reported that the Table 3 shows that most businesses in the trade sector have main economic sectors currently hiring were in trade, and that difficulties in finding skilled or experienced workers. these jobs were generally desirable. Jobseekers also mentioned that, while they could work as daily laborers, in security and HARD TO INTERESTED FIND SKILLED/ in jobs that not fit their professional qualifications or in some TYPE OF BUSINESS IN HAVING AP- EXPERIENCED jobs that are not considered acceptable in the community, they PRENTICES WORKERS generally preferred not to. Bakery Yes Yes Key informants also mentioned that the service and trade sector Restaurant Yes No currently employ most people in the city. Marketing, working Selling paintings Yes No with larger companies, tourism services, and supermarkets Restaurant Yes No were mentioned. Employers reported that working hours Laundry/Ironing Yes Yes averaged 9.7 per day; 3 per cent of business owners mentioned Construction items Yes Yes having written contracts with workers. seller

Average monthly wages for skilled and unskilled workers Construction seller Yes Yes among the businesses surveyed in Khabat and surrounding communities reached up to USD 900. Water system shop Yes Yes Selling sofa and Yes No AVERAGE SALARY FOR AVERAGE SALARY FOR tables SKILLED WORKERS UNSKILLED WORKERS Supermarket Yes Yes USD 429 USD 265 Supermarket Yes No Making sweets Yes Yes Consumers noted average monthly incomes of USD 362. Women-owned businesses, as reported by KIIs, generally Table 3. businesses reporting challenges in identifying skilled workers and their experience in training of apprentices included food businesses (restaurants, food production and cafes) and the service sector (sewing, beauty/hairdressing salons, Tools and assets most commonly requested by businesses accounting, private education institutes), and were noted to be included shelves, refrigerators and stoves/ovens. Business mostly profitable. Women-owned businesses, as reported by owners were also asked what they would do were they jobseekers, earned on average USD 296 per month. to receive a cash grant, with none mentioning hiring new

IOM IRAQ 7 Labour Market Opportunities and Challenges

employees, and the most common response being to purchase DEMAND-SIDE BOTTLENECKS more raw materials and new tools. Challenges in dealing with clients included excessive bargaining, purchasing on credit, and exchanging purchased goods. RECRUITMENT MECHANISMS Businesses reporting good demand overall for their products While most jobseekers did not know of a job centre, they are a supermarket, a sweets-making factory and a laundry/dry suggested that job centre services could be offered in cleaning service. Khabat market or in the centre of Khabat community. Most employers (55%) reported personal connections as their hiring TYPE OF BUSINESS GOOD DEMAND POOR DEMAND mechanisms, and 71 per cent of employers who reported personal connections as their primary method of hiring were Supermarket NA open to recruiting through more formal channels. The area is Sweets making prone to labour migration, with 71 per cent of respondents Laundry/dry cleaning service mentioning that people tend to migrate for economic reasons. Average salary skilled/ Average salary: NA unskilled workers: USD 380

SUPPLY-SIDE BOTTLENECKS Table 5. Average salaries among businesses with high and poor demand The most common challenge facing employers was public services (namely electricity, reported by 32% of business Looking at salaries among skilled workers by business, good owners), followed by the economic situation (reported by 6% salaries are found in retail businesses (women and children of business owners). About 65 per cent of business owners items), as well as bakeries and services. reported having multiple potential suppliers for their raw materials, whereas 94 per cent reported being able to respond to an increase in demand. Only a barber shop reported not being able to respond to an increase in demand. Motorbike spare parts were noted to be more expensive in the local community than in other areas of Iraq, and those who did not purchase raw materials locally tended to report that it was because of low quality, insufficient quantity, and high prices. Below, insufficient quantities are noted to be reported by a water-network items shop (such as pipes). and a supermarket, indicating the possibility of low levels of local production for these businesses.

Only cancer treatment drugs were reported by consumers as hard to find locally, while all other consumers reported that all their needed goods and services were locally available.

TYPE OF BUSINESS REASON FOR NOT PURCHASING LOCALLY Dry cleaning /laundry Other Water-system shop The available amount is insufficient Couches and tables shop Quality is not good Supermarket The available amount is insufficient Fabric for women’s clothing Price is higher Women accessories and Quality is not good clothing

Table 4. Businesses not purchasing locally and reasons why

8 IOM IRAQ Labour Market Opportunities and Challenges

Fig. 2 AVERAGE SALARY – SKILLED WORKERS

An attractiveness matrix can be applied to measure and businesses reported paying their skilled workers – to get a contrast the varying measures of demand as reported by better understanding of what types of jobs could be sustainable local businesses – and to compare them to the salaries these and be decently remunerated.

Average Demand Good Demand

Textile (for women) retail Ironing service

Higher Salaries Decoration service Supermarket

Paint shop

Supermarkets Construction material shops Lower Salaries Sweets-making Barbers POTENTIAL FOR IMPACT POTENTIAL

POTENTIAL FOR GROWTH

Table 6. Cross-tabulation demand and salaries paid to skilled workers

IOM IRAQ 9 Labour Market Opportunities and Challenges

CONCLUSIONS

Khabat and surrounding areas may view themselves as less well off than other areas of Sulaymaniyah Governorate, with high perceptions of unemployment and people living below the poverty line, yet many indicators point to higher-than-average incomes and expenditures compared to other southern governorates in Iraq.

Employers tend to report good or average demand for their goods and services, particularly in businesses offering services, trade in finished goods and processed foods. Although women-owned businesses were found to be less profitable, businesses that cater to women such as selling textiles and women’s clothes paid average/good salaries, indicating a possibility of supporting these businesses. Larger industries including those producing construction material also were noted to be possible sources of work opportunities. OJT with construction companies, grants to sweets factories (conditional on hiring employees), and start-up grants for general trade businesses should all do fairly well in Khabat.

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Labour Market Opportunities and Challenges

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IOM IRAQ

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