Erbil District, Erbil Governorate

LABOUR MARKET OPPORTUNITIES AND CHALLENGES

IOM Iraq – May 2020

This programme is supported by: List of Acronyms

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

IOM Disclaimer

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

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

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

List of Acronyms 2

IOM Disclaimer 2

Table of Contents 3

Executive Summary 4

Study Introduction 6

Labour Market Assessment Overview

District Overview

Assessment and Methodology Overview

Findings 8

Attitudes Towards Entrepreneurship and Cash

Types of Jobs Available

Skills Gaps

Recruitment Mechanisms

Supply-side Bottlenecks

Demand-side Bottlenecks

Conclusions 12 Labour Market Opportunities and Challenges

EXECUTIVE SUMMARY

IOM conducts livelihood programming in 15 out of 18 grocery stores, markets/supermarkets, sweets shops, governorates in Iraq. As part of the Returns and Recovery bakeries, restaurants, PVC workshops, metal workshops, Unit programming, the International Organization for a clothing retailer, a barber, tailors and beauty salons/ Migration (IOM) undertook a labour market assessment hairdressers. (LMA) in Erbil District in January and February 2020. • Key informants also mentioned that small businesses, especially in the food sector, as well as factories, currently LMAs have been conducted in over 30 locations across Iraq employ most people in the city. and give insights on the state of the local market in a given area, the hiring preferences of employers and the available • Employers reported that working hours averaged 10.23 per day. Only 3 per cent of business owners mentioned skills and aspirations of jobseekers, among others. having written contracts with workers. STUDY COMPONENTS • Average wages for skilled and unskilled workers among LMAs consist of both qualitative and quantitative exercises: the businesses surveyed ranged from 100 to 600 United Key Informant Interviews (KIIs), multisectoral community States dollars (USD) for unskilled workers and up to USD 2000 for skilled workers. workshops and surveys with jobseekers, employers and consumers. • Women-owned businesses generally include tailoring and beauty/hairdressing salons, in addition to government and This LMA focused specifically on Bahirka and Mamzawa in Erbil private-sector jobs. District, Erbil Governorate, and consisted of 202 individual • As a brainstorming activity, focus group discussions interviews and two community workshops, conducted from (FGD) participants built a list of potential industries and January to February 2020. Sixty employers, 20 informants, 61 professional activities that nongovernmental organizations consumers and 61 jobseekers were surveyed. A summary of might find relevant to engage with. These included English key findings is included below, followed by recommendations language, electrical installation, plumbing, computer skills, for future interventions. mobile phones and electrical devices maintenance, and KEY FINDINGS food processing courses for men. Hairdressing, sewing/ knitting, and pastry courses were suggested for women. • Eighty-five per cent of jobseekers noted a preference for owning their business, suggesting a preference for • Focus group discussion participants mentioned that many entrepreneurship in the communities. refugee youth have skills in construction, food processing, carpentry and metal businesses. • Thirty-three per cent of jobseekers reported that people are not comfortable paying for goods and services in cash • Jobseekers, on the other hand, mentioned trade, the in the area. Only 25 per cent of jobseekers reported industrial sector in general and education (computer skills, preferring in-kind over cash assistance. languages), and photography as sectors that experience difficulties in finding adequately trained employees. • Meanwhile, 4 0ut of 16 (25%) of informants felt that cash However, most reported that no sector experienced any support would cause inter-household and community difficulties. conflicts in Bahirka and Mamzawa. • Employers, when asked about skills, mentioned • While construction projects were noted as hiring many management, ice-cream making, baking, and tailoring youth as daily paid workers in Bahirka and Mamzawa, skills as hard to find. Only two, a tailor (for men) and many internally displaced young men were reported to a household items retailer are interested in having be working in an iron factory in Mamzawa. Syrian refugees apprentices. tend to work in construction as daily paid workers. Nonetheless, there are many jobless young people in both • Fifty-five per cent of employers who reported personal communities. connections as their primary method of hiring, were open to recruiting through more formal channels. • Many private-sector factories and investors tend to hire foreign workers. • Sixty-three per cent of business owners reported having multiple potential suppliers for their raw materials, • Jobseekers reported that the main economic sectors whereas 95 per cent reported being able to respond to currently hiring were in food, construction, and various an increase in demand. industries and that these jobs were generally desirable. • Those who reported not being able to respond to an • Jobseekers also said the most successful businesses include: increase in demand included businesses in stationery, a

4 IOM IRAQ Labour Market Opportunities and Challenges

PVC and aluminum workshop and a kitchen units factory. • Businesses that have average demand and pay higher Meat, kitchen 8food ingredients) supplies and olives were salaries include a barber, a car wash, a meat shop, a noted to be more expensive in the local community than construction shop, two fasts foods, a furniture factory, a in other areas of Iraq. kitchen factory, two oven factories, a PVC and aluminum • Workers in the food processing and hospitality sector are workshop, a blacksmith and two restaurants, in addition paid good salaries, including in a bakery and sweets factory, to some markets, grocery shops and sweets shops. and a butcher. In addition, a blacksmith, an oven factory, These businesses might point to jobs that could be both a car wash and two businesses in trade are found among sustainable be decently remunerated. the above-average salaries.

Recommendations

SECTORS TO Food processing, especially meat processing, hospitality (including equipment), construction, educa- TARGET tion, health and industry in general were mentioned by key informants as having potential for growth SECTORS TO Factories unwilling to hire refugees, electricity companies AVOID • In respect to vocational training (VT) in Bahirka and Mamzawa, the following were explicitly requested by workshop participants: mobile repair, electricity skills, plumbing, computer skills, languages, air conditioning units repair, food processing (baked goods, fast food). For women: sewing, knitting, hairdressing, and pastry making. Among these businesses, food processing and preparation businesses appear to have average demand and pay above-average salaries, and therefore point to priority trades for VT, for both men and women. The remaining skills mentioned for women appear to correspond to at least one business surveyed that self-reported as having average demand, or to jobseekers mentioning it as being among the most

ACTIVITIES TO successful businesses TARGET • Business support packages (BSP) and business expansion packages for food processing. Both workshops in Bahirka and Mamzawa reported that refugees had many skills in different voca- tions. Except for ceiling decoration, these skills were not specified, although respondents mentioned that ‘refugees can work as blacksmiths, carpenters, butchers, representative of some of the available skills. All these businesses might be worth considering for BSP, assuming that refugees are allowed to work in these sectors. This type of businesses is also found among those with average demand and paying higher salaries, and were reported by jobseekers as being among the most successful • Joint businesses Tailors mentioned that it was hard to find skilled workers for men’s tailoring, but they also paid poorly and had low demand. Therefore, it might be worth avoiding male tailoring businesses ACTIVITIES TO AVOID Note: While participants mentioned that tailoring, hairdressing, barbering and photography courses were already provided by other nongovernmental organization, they also mentioned that some of these skills were still needed CASH FOR WORK While consumers do not have savings and many have debts, CFW was not recommended (CFW) Cash support is recommended, as slightly more than half of jobseekers prefer cash and key inform- DIRECT CASH ants thought cash support would not cause community conflicts • Refugees, including all profiles of refugees and host community members (to avoid tensions in PROFILES TO the community) TARGET • Jobseekers also mentioned: female-headed households, youth, older people, graduates, internally displaced persons, people with disabilities There may be scope to look at meat processing value chains if refugees are allowed to work in this NOTES sector. Consumers noted high expenses on food and the price of meat is reportedly higher in Erbil than in other locations.

Table 1. Recommendations IOM IRAQ 5 Labour Market Opportunities and Challenges

STUDY INTRODUCTION

IOM recognizes that the private sector is an engine for growth; one third of the community of Bahirka consists of refugees, therefore, it strives to create inclusive markets at the individual, many of whom are estimated to be living below the poverty community and institutional levels. At the individual level, IOM line. Incomes tend to come from daily wages. Tensions with has prioritized support to micro enterprises, including providing host communities were not reported. business development services (for example business advisory services) and Business Support Packages (BSPs), including CONSUMER SPENDING SNAPSHOT in-kind and cash support, all of which aim to increase income • Key weekly expenses: The typical consumer in Erbil generation at the household level. reported spending an average of USD 155 per week on For those individuals who need capacity development support food for their household. or who have specific backgrounds such as agriculture, IOM • Key monthly expenses: 64 per cent of survey respondents provides specialized skills development and training through reported having a monthly rent expense, averaging USD Vocational Training (VT), Farming Training (FT) or On-the-Job 175 per month, and 89 per cent reported monthly Training (OJT), accompanied by employability assistance expenses on temptation goods, such as sweets and – inclusive of in-kind items tailored to enhance individual tobacco, averaging USD 17 per month. employability. For beneficiaries who already have relevant education or training and need to gain hands-on work ASSESSMENT AND METHODOLOGY OVERVIEW experience, IOM’s job placement and job matching initiatives link participants with businesses in growth sectors, and pays The LMA process began in January 2020, after a two-day their salaries partially or fully for three to six months. training on labour market assessment objectives and the tools for data collection. F0llowing the training, community-level At the community level, through the Enterprise Development workshops with youth, women, and local residents were Fund (EDF), IOM provides support to slightly larger businesses organized on 20 and 23 January 2020, followed by interviews – small and medium enterprises (SMEs) – to support long- with key informants and jobseeker, employer, and consumer term job creation and the expansion of local production surveys. capacities. IOM also targets the infrastructure needed to support markets. For example, in agricultural communities Multisectoral Community Workshops IOM may support irrigation projects. At the institutional level, Two workshops were held, one in the Bahirka Youth IOM provides capacity building to national and local authorities, Centre Hall and one in the Shamamk Sports Centre Hall. including market assessments that seek to promote institutional These workshops included both Syrian refugees and host change in support of local livelihoods. community members, men and women. The workshops gave the opportunity to introduce IOM’s livelihood activities and LABOUR MARKET ASSESSMENT OVERVIEW ask questions related to livelihoods skills, and employment IOM’s LMAs are intended to provide actionable opportunities for refugees in the area. recommendations for the individual livelihood assistance that IOM provides in multiple districts throughout Iraq. This LMA Key Informant Interviews focuses on the communities of Bahirka and Mamzawa in Erbil Twenty KIIs were conducted with representatives of the District, Erbil Governorate, and includes interviews and a business community in Erbil. KIIs seek to establish trends community workshop conducted in both communities. and observations about the business community, industries currently hiring, ongoing public and private investment, and key DISTRICT OVERVIEW emerging sectors capable of generating employment. Erbil District, Erbil Governorate, consists of Ankawa, Bahirka and Shamamek sub-districts. Its population is mostly Kurdish, Jobseeker Surveys with several other minorities. According to the United Nations Jobseeker surveys are designed to identify preferences High Commissioner for Refugees, 124,182 Syrian refugees live of unemployed and underemployed workers. In Erbil, 61 in Erbil as of December 2019. About 1000 refugee families jobseekers were identified and surveyed. The survey’s purpose reside in the community of Mamzawa, a higher number than was outlined for each jobseeker survey, and informed consent that of host community members in this community. About was obtained from those surveyed.

6 IOM IRAQ Labour Market Opportunities and Challenges

Employer Surveys TOTAL NO. MALE FEMALE TOOLS OF SURVEYS RESPONDENTS RESPONDENTS Sixty employer surveys were also conducted in Erbil District CONDUCTED to provide a sample as representative as possible of the local Multisectoral 2 work- market. Employers were initially provided an advance copy of Community 33 13 shops, 46 the handout materials and then later contacted for follow-up Workshops participants interviews. Key Informant 20 0 20 Consumer Surveys Interviews Jobseeker The consumer survey was designed to triangulate data 42 19 61 related to demand, income and vulnerability. In commercial Surveys or industrial districts in Erbil district, members of the public Private Sector were approached and 61 were identified as respondents. 60 0 60 There were no restrictions on the demographic profiles of Employer Surveys participants, but IOM sought diversity to the extent possible. Consumer 52 9 61 The table below outlines the types and number of surveys Surveys conducted for Erbil district. Table 2. Surveys Conducted in Erbil district for Labour Market Analysis

IOM IRAQ 7 Labour Market Opportunities and Challenges

FINDINGS

ATTITUDES TOWARDS ENTREPRENEURSHIP Average wages for skilled and unskilled workers among the AND CASH businesses surveyed in Bahirka and Mamzawa communities Eighty-five per cent of jobseekers noted a preference for ranged from USD 100 to 600 for unskilled workers and up owning their business (rather than being employees), suggesting to USD 2000 for skilled workers. a preference for entrepreneurship in the community. AVERAGE SALARY FOR AVERAGE SALARY FOR SKILLED WORKERS UNSKILLED WORKERS Thirty-three per cent of jobseekers, meanwhile, reported that USD 476 USD 257 people are not comfortable paying for goods and services in cash. Only 25 per cent of jobseekers also reported preferring Consumers noted average monthly incomes of USD 468 per in-kind over cash assistance. Meanwhile, 4 0ut of 16 (25%) month. of key informants felt that cash support would cause inter- household and community conflicts in Bahirka and Mamzawa Most businesses, save for a few exceptions, reported not communities in Erbil. These findings suggest that cash could having any gender preference for filling certain positions. be safely introduced by an international organization in Erbil. Women-owned businesses, on the other hand, as reported by KIIs, generally included tailoring and beauty/hairdressing TYPES OF JOBS AVAILABLE salons, as well as government and private sector jobs. These businesses were noted to be mostly profitable. Women- In Khan Dari and Al-Nasar, the availability of small shops was owned businesses, as reported by jobseekers, earned on While construction projects were noted to hire many young average USD 290 per month, which is slightly higher than the people as daily paid workers in Bahirka and Mamzawa, many average salary for skilled workers reported earlier. However, internally displaced young men were noted to be working in an save for a few exceptions, consumers mostly reported that iron factory in Mamzawa. Nonetheless both communities have women did not contribute to household income. high numbers of unemployed youth. Construction projects, in particular, are considered the main sector employing Syrian SKILLS GAPS refugees. Many private-sector factories and investors were said to be hiring workers from their own countries (such as Turkey) FGD participants suggested a list of potential industries and or from other countries (such as India), because they are able professional sectors that nongovernmental organizations to pay lower salaries. There are no factories in Bahirka. Most might find relevant to engage with, as workshop participants of the host community young people are working in various consider working in this type of businesses as desirable. These government jobs, and some of them have their own businesses businesses / professions included: or are working as daily paid workers. • English language, electrical installation, plumbing, computer Jobseekers, meanwhile, reported that the main economic skills, mobile phones and electrical devices maintenance, sectors currently hiring were in food, construction, and and food processing courses for men. ‘big industries,’ and that these jobs were generally desirable. • Hairdressing, sewing/knitting, and pastry production Five jobseekers mentioned that they would not work as courses for women. daily laborers (3), in grocery stores (2) and as carpenters (1). Reasons were not provided. Jobseekers also reported FGD participants mentioned that many refugee youth have that the most successful businesses include: grocery stores, skills in construction, food processing, carpentry and metal markets/supermarkets, confectionery, bakeries, restaurants, businesses. Tailoring and hairdressing for women, as well as PVC workshops, metal workshops, clothing retailers, barbers, barbering and photography courses were noted to be already tailors, beauty salons/hairdressers. available in the community, although most of these courses were still requested. Key informants also mentioned that small businesses, especially in the food sector, as well as factories, currently employ most Jobseekers, on the other hand, mentioned trade, the industrial people in the city. Employers reported that working hours sector in general, education (computer skills, languages), and averaged 10.2 per day. Only 3 per cent of business owners photography services as sectors that experience difficulties mentioned having written contracts with workers. in finding adequately trained employees. However, the vast majority reported that no sector experienced difficulties.

8 IOM IRAQ Labour Market Opportunities and Challenges

Employers, also asked about skills, mentioned management, SUPPLY-SIDE BOTTLENECKS ice-cream making, baking, and tailoring skills as hard to find. The most common challenge facing employers was low Below, a table of businesses that reported difficulty in finding demand, lack of capital and assets, followed by shortness of skilled or experienced workers (in addition to those specifically electricity and gas. Sixty-three per cent of business owners mentioning a type of missing skills) is reported. Only two, a reported having multiple potential suppliers for their raw tailor (for men) and a household items retailer are interested materials, whereas 95 per cent reported being able to respond in having apprentices. The majority of employers reported not to an increase in demand. Those who reported not being able experiencing any difficulties in finding skilled workers. to respond to an increase in demand included a stationery shop, a PVC and aluminum workshop and a kitchen factory. TYPE OF HARD TO INTERESTED BUSINESS FIND SKILLED/ IN HAVING Meat, kitchen supplies, and olives were noted to be more EXPERIENCED APPRENTICES expensive in the local community than in other areas of Iraq. WORKERS Those who did not purchase raw materials locally tended to Tailoring for men Yes Yes report that it was because of low quality, insufficient amounts, Household items Yes Yes high prices and limited access to transportation. retailer Bakery Yes No DEMAND-SIDE BOTTLENECKS Sweets Yes No Challenges in dealing with clients included purchasing on credit, Stationery Yes No delayed payments and issues with communication with clients. Barber Yes No Businesses reporting overall good demand for their products include automotive accessories and furniture trade, and pay Table 3. businesses reporting challenges in identifying skilled workers the lowest salaries, on average. The highest salaries are paid and their experience in training of apprentices by businesses self-reporting average demand, USD 379 per month. Tools and assets most commonly requested by businesses included air coolers, refrigerators, generators and tools. Some TYPE OF BUSINESS businesses also mentioned goods and raw materials. Business HIGH DEMAND POOR DEMAND owners were also asked what they would do were they to Automotive accessories PVC and aluminum receive a cash grant and 5 per cent mentioned hiring new Furniture store Tailoring employees, with the most common response being expanding Poultry the business in general, purchasing new or more assets, and Markets (2) purchasing more raw materials or goods. Barbers (2) Bakery RECRUITMENT MECHANISMS Electrical appliances While 79 per cent of jobseekers mostly did not know of a job Mechanic motorcycle and centre, they suggested that job centre services could be offered bikes in the centre or somewhere on the main road of Mamzawa Electronic machines community, in the public hall, Perzin quarter, or in the center technician of Bahirka community as these places are easily accessible Average salary Average salary for everyone. Employers reported different channels as their USD 225 USD 335 hiring mechanisms, especially informal channels; 92 per cent mentioned personal connections and 65 per cent word of Table 4. Average salaries among businesses with high and mouth. Formal mechanisms were mentioned by 28 per cent poor demand of employers. Fifty-five per cent of employers who reported personal connections as their primary method of hiring were Examining salaries by businesses in detail (Fig. 1), good salaries open to recruiting through more formal channels. The area is are paid to workers in the food processing and hospitality prone to labour migration with 85 per cent of respondents sector, including for bakery and sweets factory workers, and mentioning that people tend to migrate for economic reasons. a butcher. In addition, a blacksmith, an oven factory, a car wash and two businesses in trade are found among the above- average salaries.

IOM IRAQ 9 Labour Market Opportunities and Challenges

Fig.1 Average salary – skilled workers

An attractiveness matrix can be applied to measure and of all salaries), were found. Businesses with average demand contrast the varying measures of demand as reported and paying higher salaries include a barber shop, a car wash, a by local businesses – and to compare them to the salaries meat shop, a construction shop, two fast food restaurants, a these businesses reported paying their skilled workers – to furniture factory, a kitchen factory, two oven factories, a PVC get a better understanding of what types of jobs could be and aluminum workshop, a blacksmith and two restaurants, sustainable and decently remunerated. No business with high as well as some markets, grocery shops and sweets shops. demand and paying high salaries (or salaries above the average

10 IOM IRAQ Labour Market Opportunities and Challenges

Poor Demand Average Demand High Demand

Market

Café (3)

Bakery Snooker club Higher Butcher Construction material shop / Salaries Electrical and construction items

Electrical installation shop

Welding workshop

A chicken shop (2)

Barber

Car oil change and mechanic

Baber (2) Curtain shop

Electric shop Electronics

Electrical appliances Home supplies exhibition Home tools shop Electronic machine Key-maker technician Lower Pickles (2) Mechanic motorcycles and Automotive accessories Salaries bikes Market (3)

Market Supermarket

Male tailoring Trade with groceries

Poultry Mobile shop

PVC and aluminum Photography studio

Plumbing

Restaurant

Stationery

Sweets making POTENTIAL FOR IMPACT POTENTIAL

POTENTIAL FOR GROWTH

Table 5 Cross-tabulation demand and salaries paid to skilled workers

IOM IRAQ 11 Labour Market Opportunities and Challenges

CONCLUSIONS

While the average consumer in Erbil District has a high monthly income, refugees are eager and open to receive any sort of support. Some international nongovernmental organizations have offered skills training courses, but refugees noted that many of them have skills in construction. Needed skills were perceived to be in electricity, mobile phone repair, and air conditioning units services, but the highest salaries are found in the food processing sector. With high consumer expenditures on food, investing more in this area may be a way to ensure the sustainability of jobs, entry points for women, and a possibility to experiment with group businesses, an area of interest expressed by refugee community members.

12 IOM IRAQ V`

Labour Market Opportunities and Challenges

IOM IRAQ 13 V`

LABOUR MARKET OPPORTUNITIES AND CHALLENGES

IOM IRAQ

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