Zoran Đorđević, Minister Of Labour, Employment, Veteran And Social Affairs:

Winning Combination For Employees And Employers

The economy and education have finally come together and now education profiles in schools are created systematically so that they suit the needs of the labour market and the country’s economy

In this interview with Serbian Labour, Employment, Veteran and Social Affairs Minister Zoran Đorđević we discussed his ministry’s contribution to strengthening the attractiveness of the Serbian economy, as well as cooperation between the government of Serbia and the ministry with German institutions.

What kinds of qualities have German companies brought to Serbia when it comes to employee-employer relations?

– Germany is one of the biggest investors in Serbia and is becoming our biggest foreign trade partner. In the period ahead, we expect even more companies from this country to seek to invest in Serbia. German investors are also known for adhering to the law and having a responsible attitude towards employees and their obligations towards the state.

Serbia has a very high-quality workforce, but also domestic companies that are good, high-quality and available suppliers, and which – together with German companies – can conquer new markets and have secure sales.

We also can’t fail to mention that German companies have contributed to the development of the labour market in Serbia, as well as assessments that it has had a positive impact on the productivity and motivation of employees, raising the level of qualifications and academic education.

Which benefits does the Ministry offer new investors, and how does it ensure compliance with contractual obligations?

– Through teamwork within the government that was led by Aleksandar Vučić and the current government that is led by Ana Brnabić, Serbia has become one of the most attractive investment destinations in the Western Balkans. This will inevitably imply increased demand for a high-quality and educated workforce.

Serbia supports investors in creating new jobs. The overall regulatory framework for business is stimulating for investments in the economy. The most stimulating measures are for investors intending to launch or expand their operations in underdeveloped parts of Serbia.

The National Employment Service, which comes under the jurisdiction of our ministry, conducts an entire array of different measures and programmes on an annual level for the active employment policy intended for employers, and therefore new investors, primarily those belonging to the private sector. Contracts are concluded with all employers interested in participating in support programmes for investors who satisfy the conditions, with implementation regularly monitored. If problems or unforeseen situations arise in the implementation of the contract, NES representatives, together with employers, identify more adequate solutions.

What does the government and your ministry intend to do when it comes to combatting the brain drain?

– The Serbian government is already taking measures, which include adapting education programmes and curricula to the needs of the labour market, particularly through the introduction of education profiles in the field of information and communication technologies, and education profiles for expert workers that are needed and in demand on in the labour market.

On the other hand, activities are continuing and intensifying on the creation of a stable and predictable business environment, as the foundation for economic and investment activity growth, which represent a prerequisite for creating new, high-quality jobs, especially for young people with higher levels of education, starting from the fact that quality human capital represents the capital for the future of every society.

The last good example from practise – to answer your question more specifically – is the enrolling of the first group of final-year basic postgraduate students who are studying law and political sciences at the University of Belgrade into the programme of three-month volunteering within our ministry, in positions and sectors that they are actually studying for. We have also invited other universities to join this protocol agreement.

German companies have contributed to the development of the labour market in Serbia and had a positive impact on the productivity and motivation of employees

What is brought to the work of your ministry, and particularly the work of the National Employment Service, by digitisation?

– The digitisation of society in all segments represents the basis for providing equal opportunities for all citizens, and thus eliminating the reasons for young people to relocate abroad. Reducing labour costs, resolving citizens’ problems faster and more efficiently, reducing conditions for the grey economy to function, clearly recognising social needs, eliminating waiting at counters … these are only a few of the advantages of digitisation, which will benefit our citizens the most, because we will service the needs of citizens faster and more efficiently, offering them the service they have paid for through taxes.

In our sector it will mean the creation of new jobs, raising people’s capacities and their competitiveness on the labour market, easing the availability of services, increasing the efficiency of the administration and lastly, not least importantly, providing a clearer overview and more efficient functioning of the entire system. Digitisation will also bring new values in the work of the National Employment Service, as well as in all segments of society.

When it comes to the work of the National Employment Service, its operations have not been possible for many years without IT support. For example, the NES’s Unique Information System is very complex and process orientated, with hundreds of applications and thousands of programmes, with IT support for around 80 per cent of business processes at over 190 locations across the entire territory of the Republic of Serbia, and is developing continuously and intensively.

In addition to a web service that enables connection with the Interior Ministry, Tax Administration and Central Registry, in accordance with the Decree on the Acquisition and Transfer of Data on Facts for Which Official Records are Kept, data has been made available electronically and via the eGovernment portal.

How do you view dual education from the aspect of improving the readiness of the workforce?

– There are exiting government working groups that develop strategies and projects which are important for the state, and one of these groups, Group 3, of which I am a member, is working precisely on harmonising education with the market.

As is known in the contemporary context of life, needs for services and products change rapidly, which demands a different approach to education. Competencies must be developed constantly, with knowledge acquired in school having to be used in an unpredictable and complex environment, and this has become an imperative for contemporary teaching. This concept of lifelong learning is applied in all developed countries worldwide, and entrepreneurship represents the basis for the realisation of this concept. As such, the combining of theory and practical experience is an indispensable factor of dual education, which will significantly improve the readiness of the workforce.

There turned out to be huge interest among young people who want to be educated in this way and then work, while on the other hand the economy has a need for such a trained and specially educated workforce.

Through teamwork within the government of Aleksandar Vučić and the current government led by Ana Brnabić, Serbia has become one of the most attractive investment destinations in the Western Balkans

How do you see the current sharp debate about targeting the educating of children specifically for the economy? What are the advantages and possible pitfalls?

– The economy and education have finally come together and now education profiles in schools are created systematically so that they suit the needs of the labour market and the country’s economy. The advantages are numerous. This method should solve the problem of unemployment that is faced by a large number of young people, due, among other things, to them being insufficiently familiar with work in their field of professional education after completing their studies. And a challenge is for such an organisation and this cooperation to be embedded even more systemically within the legal framework.

Dual education will improve future personnel who will complete their education in the coming period, and I’m sure these young people will be much better trained and able to do their jobs.

To what extent is the functioning of the pension fund sustainable today, and how sustainable is it in the long term, considering demographic circumstances and the small percentage of the population that’s actively working?

– Most European pension systems, including our own, are facing similar demographic challenges. Responses to these challenges include measures aimed at increasing employment, extending the age of retirement or securing a state guarantee, which covers shortfalls in funds for pension payments from the budget, and in individual cases reserve funds are created for the same purpose. Our country is taking measures in several phases to reform the pension system, in order to gradually create conditions for its longterm economic sustainability, which would ensure that the pension system is continuously adjusted to changes in society, the economy and demography. Changes in the pension system must be implemented carefully. This process will also continue in the future.

There is significant room for employment growth, which would also mean improving the observed relations, and thereby improving pension system sustainability. By continuing the fight against the grey economy, even better results are expected, and therefore a reduced need for additional intervention from the budget.

How can the government encourage allocations for private pension funds?

– The state encourages employers to pay voluntary pension insurance for employees by freeing them of the obligation to pay a certain amount of taxes.

The system of voluntary pension funds and pension plans is significant from the aspect of the possibility of providing additional income in old age, which adheres to European trends to encouraging additional savings for old age at individual and collective levels.

Unlike the state fund (the first pillar of pension insurance), which functions on the principle of intergenerational solidarity, voluntary pension funds (the third pillar of insurance) function under the personal account system and represent a type of investment fund that collects voluntary pension contributions and invests them in order to provide additional, private pensions that will be supplemented by a state pension. That, in practise, is long-term saving for old age.

The state is not a guarantor for the payment of pensions from the third pillar, with the risk carried by members, but these funds operate under the strict control of the National Bank of Serbia, and the law has precisely defined the rules for investing funds – a conservative policy of investing in low-risk securities, real estate etc.