LABOUR MARKET OPPORTUNITIES AND CHALLENGES Khanaqin District, Diyala Governorate 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). 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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 11 Labour Market Opportunities and Challenges EXECUTIVE SUMMARY IOM conducts livelihood programming in 15 out of 18 • Jobseekers reported that the main economic sectors governorates in Iraq. As part of the Returns and Recovery currently hiring were in trade, construction and food Unit programming, the International Organization for and that these jobs were generally desirable. Jobseekers Migration (IOM) undertook a labour market assessment are also interested in performing all the jobs currently (LMA) in the town of Jalawla located in Khanaqin, a district available. of Diyala Governorate, from January to March 2020. • Key informants also mentioned that trade, food processing/ LMAs have been conducted in over 30 locations across Iraq preparation, services and manufacturing sectors currently and give insights on the state of the local market in a given employ most people in the city. area, the hiring preferences of employers and the available • Employers reported that working hours averaged 7.6 skills and aspirations of jobseekers, among others. per day. No business owner mentioned 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 in Jalawla and surrounding Key Informant Interviews (KIIs), multisectoral community communities ranged from 120 to 600 United States workshops and surveys with jobseekers, employers and dollars (USD) for skilled workers to USD 100 to 300 for consumers. unskilled workers. This labour market assessment focused on Jalawla, in addition • Women-owned businesses, as reported by key informants, to other surrounding communities in Khanaqin District. generally include tailoring, beauty/hairdressing salons, and This assessment consisted of 101 individual interviews and food preparation. Jobseekers added trade to the list. These a community workshop, conducted from January to March businesses were noted to be mostly profitable. 2020. • Graduates suggested support to start businesses in livestock, engineering, medical services and education. A summary of key findings is included below, followed by Agricultural businesses require support at all levels, recommendations for future interventions. especially in irrigation of agricultural lands. KEY FINDINGS • For women, home businesses were suggested. • Jobseekers overall prefer to own their business (87%) • Jobseekers did not report any sector as facing difficulties pSeventy-seven per cent of jobseekers noted a preference in finding adequately trained employees. Employers, also for owning their business, suggesting a preference for asked about skills that are missing, mentioned only tailoring. entrepreneurship in the community. • Most employers reported word of mouth and/or • Eighty-seven per cent of jobseekers reported that people personal connections as their hiring mechanisms. Only are not comfortable paying for goods and services in a small number of employers, who reported personal cash in the area. Yet only 33 per cent of jobseekers connections as their primary method of hiring, were open reported preferring in-kind over cash assistance. However, to recruiting through more formal channels, while others informants did not feel that cash support would cause were less clear about it. inter-household and community conflicts in Jalawla. • Seventy-three per cent of business owners reported • Workshop participants noted that Jalawla sub-district having multiple potential suppliers for their raw materials has a large market and could absorb additional jobs and all reported being able to respond to an increase in and businesses. Currently, many people earn an income demand. from small businesses such as barber shops, taxi driving, • Businesses self-reporting average demand, and paying tailoring, and beauty/hairdressing salons; others earn daily higher salaries include a construction materials retailer, a wages. barber shop, a butcher shop, a cattle breeder, a clothing • Agriculture businesses such as crops and cattle breeding retailer, a grocery store, a PVC workshop, a restaurant, are considered the main source of income in the villages a confectionery seller, and a tailor. Because they pay surrounding Jalawla and Sa’dia. above-average salaries and experience average demand, these businesses could be therefore considered as having potential for creating sustainable jobs. 4 IOM IRAQ Labour Market Opportunities and Challenges Recommendations Agriculture and less mentioned sectors such as manufacturing, services and trade in SECTORS TO TARGET general were mentioned by key informants as having potential for growth. In addition, health and education were suggested by workshop participants Key informants mentioned trade with food, especially groceries, as being oversaturated SECTORS TO AVOID and facing significant competition. These businesses might be therefore less suitable for support • Vocational training: barbering, hairdressing/beauty services, computer skills and baking were suggested. However, the list is not exhaustive as these were mentioned as examples • Business support packages and business expansion packages (BSP/ESP) is suggested for women, as workshop participants mentioned that women need support for ‘home businesses’, which could include food preparation, hairdressing and tailoring, ACTIVITIES TO TARGET to list just a few. Since many ‘crafts’ were reported in the market as requiring support, these should be also supported by BSP/ESP. However, these ‘crafts’ were not specified. Looking into businesses with average demand and paying higher salaries, the following might be therefore appropriate: barbering, butcher, cattle breeding, clothing retail, restaurants, and confectionery/sweets • On-the-Job training and Farmer training were not suggested ACTIVITIES TO AVOID N/A Consumers reported not having any savings and more than half reported having CASH FOR WORK (CFW) incurred in debts. CFW is therefore recommended and could include waste removal, housing rehabilitation and school renovation and rehabilitation Cash support is recommended as many jobseekers prefer cash and key informants UNRESTRICTED CASH thought that cash support would not cause community conflicts. Youth, female-headed households, graduates, persons with disabilities, older people, PROFILES TO TARGET unskilled workers, returnees, and internally displaced persons NOTES N/A Table 1. Recommendations IOM IRAQ 5 Labour Market Opportunities and Challenges STUDY INTRODUCTION IOM recognizes that the private sector is an engine for growth; DISTRICT OVERVIEW therefore, it strives to create inclusive markets at the individual, Al-Khalis is a town located in Diyala Governorate, community and institutional levels. At the individual level, IOM approximately 15Khanaqin district is in Diyala Governorate. has prioritized support to micro enterprises, including providing Diyala has a diverse ethno-religious population of Arabs, business development services (for example business advisory Kurds and Turkmen. Religious communities in the governorate services) and Business Support Packages (BSPs), including include Sunni and Shia Muslims, Christians, Yezidis and Ahl in-kind and cash support, all of which aim to increase income Al-Haqq