About the ILO in Slovenia

Labour shortage may interfere with strong growth

After independence in 1991, Slovenia, unlike other countries of the region, embarked on a more gradual transition of the economic system. The main reasons for following such a strategy were the early introduction of some economic reforms in the end of the 1980s, when Slovenia was still part of Yugoslavia, the country’s relatively high level of development, and the rather easy separation from Yugoslavia when compared to other successor states. This relatively smooth transition enabled Slovenia to avoid major shocks and to benefit from steady growth.

Slovenia became the first former Yugoslav republic to obtain EU membership in 2004 and was the first new EU member state to join the Eurozone in 2007. While in the early 1990s, per capita income was 50 per cent of the EU average, it now reaches 91 per cent, the highest in Central and Eastern Europe.

During 2020-2022, Slovenia’s economy grew faster than the EU average. The 2020 decline caused by the pandemic was offset by strong growth in 2021-2022. In 2022, the economy grew by 5.4 per cent despite the difficult external environment. Growth was driven by increases in consumer spending as well as investment. The economy proved resilient despite the effects of Russia’s war against Ukraine.

The Slovenian labour market continued to improve in 2022 with rising employment and historically low unemployment rates. The employment rate stood at 78.2 per cent in Q4- 2022, well above the EU average of 74.9 per cent. The unemployment rate is well below the EU average, but the activity rates (the share of the population offering their services on the labour market) of both younger (15 – 24 year- old) and older (60 – 64 year-old) workers in Slovenia were below the EU average. Supply of labour is becoming more and more challenging in certain sectors, although currently Slovenia is still able to attract labour from Western Balkans. The unfavourable demographic outlook is further aggravating the situation. While an increase is expected in the number of older people and young people working or looking for a job as well as in the number of foreign workers, supply of labour will not keep up with demand.
Labour shortages, coupled with skills mismatches, have become acute especially in healthcare and long-term care, information and communications technology (ICT), construction, transport, accommodation and hospitality services and in education. Upskilling and reskilling have increased in energy-intensive industries for a green transition. Meeting the need for a digitally skilled workforce remains a challenge and digital skills are particularly low among older and low-skilled workers.

The country performs well in sharing the gains. Income inequality, the risk of poverty, and the gender pay gap are all relatively low.

Slovenia and the ILO

Slovenia is a member state of the ILO since 1992.

The ILO has assisted Slovenia in its economic and labour market transformation and in its accession to the EU in 2004. Main areas of work included support to independent workers’ and employers’ organizations, social dialogue, new active labour market policies, labour law reform, regular labour force surveys, and pension reforms.

After 2004, the ILO support covered youth employment and an impact assessment of the Great Recession on social dialogue, industrial relations, and the pension system.
Text last edited on 07/23