Bulgaria Faces Deepening Labor Shortages Across Key Sectors

The latest market survey from the Employment Agency indicates a persistent high demand for labor in Bulgaria, both in the short and long term. However, the need for workers varies significantly across different sectors and professions. Construction workers have surged to the forefront, replacing machine operators, while the tourism sector shows a decline in demand. Additionally, there is a notable increase in the need for teachers in higher education, contrasting with a reduced demand for healthcare workers. The ongoing shortage of staff underlines the pressing need for reforms in education and labor market policies to tackle these structural challenges.

According to the survey responses from employers, the challenges associated with hiring new employees are intensifying. In 2024, 66.7% of employers reported difficulties in recruitment, a slight increase from 64% in the previous year. The primary reason for these challenges remains the inadequate qualifications, education, and skills among available candidates, as noted by 43% of employers. Furthermore, the shortage of individuals of working age is becoming increasingly critical; 16% of employers reported having no available candidates, and an additional 12% cited a lack of applicants for specific open positions. It's important to highlight that these issues pertain only to the 14% of companies actively seeking new hires, while the remainder do not view expanding their workforce as feasible or necessary.

The immediate demand for labor in various sectors is also undergoing considerable transformation. While industry accounts for 36% of the total demand of 212,000 workers, the construction sector now ranks second at 21%, overtaking trade, transport, and tourism, which collectively account for 20%. These shifts reflect both the normalization of the labor market following the COVID-19 pandemic and the recovery of tourism to pre-crisis levels, alongside the continued growth in the construction sector. Public administration, education, and healthcare also feature prominently, primarily due to the needs of schools and hospitals.

Analyzing the demand for professionals reveals significant shifts in specific roles. The anticipated shortage of construction workers in 2024 is projected to be nearly 23,000, a substantial rise from 8,300 a year earlier. There is also a marked increase in the demand for construction technicians, which has surged from 1,200 to 5,100 positions. Conversely, the shortage of cooks, waiters, and bartenders is gradually declining, likely attributed to a rapid increase in employment within the hospitality sector, bolstered by the influx of foreign workers.

In the industrial sector, trends are mixed; the shortage of machine operators has decreased by almost 5,000, bringing the total to 9,600. However, demand for locksmiths (3,900) and welders (3,400) continues to grow. Overall, the labor demand can be divided into two categories: roles with a shortage of qualified specialists and those where compensation is uncompetitive compared to both national and EU labor markets. This discrepancy is particularly evident in professions related to the sewing industry, as well as in tourism and construction.

Furthermore, there is a significant shift in the demand for higher-educated personnel over the next 12 months. Teachers are now at the top of the list, with a shortage of 6,500 positions, representing an increase of more than 2,000 from the previous year. This trend raises concerns about the effectiveness of recent teacher pay reforms and suggests that additional measures are needed. In healthcare, a contraction is anticipated with a drop in demand for nurses (3,600) and doctors (2,000). The discrepancies between educational majors and labor market needs, coupled with poor working conditions and salaries in some professions, particularly nursing, contribute to this situation.

Regionally, labor demand is recovering from previous anomalies and generally aligns with the structure of the labor market. The capital city leads with a demand for 47,000 workers, followed by Varna (29,000), Plovdiv (23,000), and Burgas (22,000). The demand profile varies significantly across regions, with tourism, trade, and transport being dominant in many areas, while construction is prominent in Burgas and Sofia. The need for personnel in education and healthcare is relatively evenly distributed.

Notably, despite uncertainties surrounding the energy transition, Stara Zagora continues to show significant demand. Regions with lower economic development, such as Smolyan, Blagoevgrad, and Kardzhali, are also gaining attention due to the growing importance of the processing industry. In contrast, Vidin, Gabrovo, and Razgrad are experiencing low demand, which limits their potential for job growth in the near future. Some areas have witnessed a rapid decline in unmet demand, including Smolyan (over 8,000), Targovishte (almost 7,000), and Gabrovo (6,000), reflecting employers’ expectations regarding future growth potential and access to qualified labor.

While short-term labor demand has decreased compared to the previous year, employers remain optimistic about long-term prospects, with a projected deficit of 483,000 workers over the next 3-5 years. This highlights the expectation of economic growth and business expansion amid the existing tight labor supply, which presents significant challenges to fill these positions.

The medium-term labor shortage is expected to be most pronounced among specialists with secondary education, particularly in wholesale and retail trade (39,000). Construction continues to lead with a demand for 18,000 workers, followed by marketing and advertising (18,000) and accounting (14,000). However, there are notable shifts in medium-term demand for graduates, with teachers (13,200) surpassing economists (11,500) in expected deficits. The demand for social work professionals is projected to double, while there is a slight decrease in nursing and medical roles. When combined, healthcare specialties represent the largest anticipated shortage over the next five years.

Currently, labor demand is relatively balanced across major regional markets, but medium-term projections indicate a high concentration in the capital, where employers estimate a need for 241,000 workers—nearly 30,000 more than projected in 2023—primarily among graduates. Varna follows with an anticipated demand for 31,000 additional workers, alongside similar projections for Plovdiv and Burgas. In most regions outside Sofia with large labor markets, there is a predominance of expected demand for individuals with secondary education.

At this stage, the slowdown in economic growth does not appear to negatively impact labor demand significantly. On the contrary, shortages of personnel in key areas—whether due to a lack of specialists or subpar working conditions and compensation—are increasingly hindering the growth potential for numerous businesses, thus affecting medium-term economic growth. The substantial medium-term demand underscores the urgent need for reforms aimed at improving education and labor market policies, focusing on enhancing the quality of school and vocational education, promoting lifelong learning, and engaging inactive workers while attracting talent from abroad.