TIRANA, Jan. 20 – With youth unemployment at around 33 percent, the booming call center business and the traditional garment and footwear manufacturing are emerging as two of the key employers for Albanian young men and women aged from 15 to 29.
While the call center business dominated by Italian companies mainly attracts university students and newly graduates who are unable to find a job in the occupation they have graduated in, the façon industry, a traditional employer producing garment and footwear mainly for export, is attracting a considerable number of youngsters who have finished only the compulsory education or secondary education but failed to attend university.
With their number counted on the fingers of one hand until 2005, more than 100 call center companies employing around 20,000 youngsters operate in Albania currently.
This service mainly engaged in marketing campaigns and customer service for big operators in Italy has seen a boom in the past eight years in Albania mainly due to its low operational costs and the fluent Italian Albanian youngsters speak.
The market has rapidly grown in the past few years at a time when more Italian companies have transferred their companies to Albania, Romania Tunisia and Argentina, managers say.
Albania has been one of the most attractive destinations due to low average wages and the vicinity to Italy. Operating costs are estimated three times lower compared to Italy where average wages for a call center job range from Euro 900 to 1,000 compared to Euro 280 to 350 in Albania.
Living with a fiscal burden of 15 percent is just a one-hour flight from Italy. That’s how a headline published in Italy’s daily Il Giornale recently described Albania comparing it to Italy which applies a 31.4 percent corporate income rate. The Italian daily described Albania as an attractive destination where some 20,000 Italians have already invested. A considerably number of them are involved in the call center business.
Intercom Data Service, is one of the few big Albanian-run companied which has seen its number of employees rise from a mere twenty in 2005 when it launched its activity to 3,000 currently.
“We plan to further extend our in other cities apart from Tirana, Vlora and Elbasan. The company’s performance has been satisfactory and we have ambitious plans,” says the company’s director Agron Shehaj.
The call center jobs are also attractive to students attending university because of the flexibility they offer, by allowing employees to choose their working hours.
“I have been working at call centers since I was 17 and studying at high school. Now I am 24 and I study economy at the University of Tirana. I work six hours a day and earn 350 euros a month, which is a good salary and better than a waiter or a salesperson and the flexible working hours allow me to attend my studies,” says Jetmira Ramolli, as quoted by local media.
Meanwhile, more and more youngsters have been employed at garment and footwear factories after the government announced a support package to this sector, offering to pay social security contribution to new employees. The industry employs around 100,000 people a considerable part of whom are youngsters aged up to 29.
In mid-2014, government finalized a package of facilitating measures on garment and footwear producers in an effort to give a boost to this sector which has been the traditional top Albanian exporter and one of the key employers in the past two decades despite negative impacts from the Eurozone crisis in the past few years. The move came after the corporate income tax was raised to 15 percent starting January 2014, sparking strong opposition by this business community, worried over losing competitiveness to regional peers applying 10 percent flat tax regimes.
The new package includes a series of measures which offer garment and footwear producers, locally known as façon, state facilities for a symbolic rent of only one Euro, accelerate VAT refunds to 30 days, and lift of a series of customs barriers. Government says the extra 5 percent from corporate income tax will go back to garment and footwear producers in support policies to promoting employment in these enterprises by paying social security and health insurance contributions for new employees for a certain period.
Youth unemployment
Youth unemployment climbed to a historic high of 33.5 percent in the second quarter of 2014, meaning one out of three people aged between 15 to 29 find themselves jobless, according to a labour force survey published by the country’s state statistical institute, INSTAT. The unemployment rate for this category has increased by around 10 percent in the past couple of years rising from 23.6 percent in the first quarter of 2012 to 30.2 percent in early 2014 and 33.5 percent in the second quarter of 2014. Youth aged 15 to 29 years old who said they were students or attending training accounted for 62.7 percent of young men and women economically not active.
With Albania’s average population age at 31, one of the youngest in Europe along with Kosovo, youth unemployment has become a top concern although most young men and women nowadays manage to get a university degree, unveiling the inefficiency of the education system but also crisis impacts as the private sector has almost frozen new hirings. Around 12.6 percent of youth aged between 15 to 29 are classified as discouraged workers.
“Young people face a number of challenges when it comes to seeking gainful employment, such as a lack of skills and education to respond to the market needs. These challenges are compounded for youth with disabilities, who have even more limited access to higher education,” says the UNDP which is assisting the Albanian government improve youth employment opportunities in the northern Lezha, Kukes, and Shkodra regions, where the rates are currently highest.
With university degrees not matching market needs, the Albanian government is promoting vocational education training whose students stand better chances to find a job.
