Iceberg model and Employment Issues in Bosnia and Herzegovina /Thinking Out Loud/

I have firstly encountered Iceberg Model somewhere on the Internet during 2017, in one of Leyla Acaroglu’s articles/blogs. It immediately made sense to me and I copied it to my notepad. In short, it’s a tool used to gain a deeper understanding of things. It illustrates that things we see or read about in newspapers (events) are only a tip of iceberg. There’s much more of iceberg under the water, just as there are things that influence things we see or read about, but are not easily visible.

source:  Leyla Acaroglu 

A few days ago I tried to find Leyla’s post, but failed. Instead, I found Systems Thinking With The Iceberg: A Tool for Multi-stakeholder System Sight which explains it nicely.

In order to help myself understand (un)employment in Bosnia and Herzegovina better, I decided to give the iceberg model a try. Here are the first results:

right click -> open image in the new tab to see full size image

EVENTS:

  • Poor working conditions in industry: overtime work, irregular salaries, “bossing”, incomplete salaries at the end of the month, poor salaries…
  • Employers report that high school graduates don’t have appropriate knowledge
  • Employers often don’t register their employees (they usually do it later, when state offers incentives for employment)
  • Enterprises can’t find workers
  • Unemployed persons show poor interest for employment programs (note: high school graduates show best interest)
  • Enterprises mostly need low skilled workers

PATTERNS:

  • Workers are leaving B&H, especially younger people (large percentage of them is finding jobs abroad with help of Employment Offices)
  • High-income families are also leaving (some of the reasons I found in interviews online are general uncertainty and lack of possibilities for professional advancement)

STRUCTURES:

  • Enterprises must offer their products for low price to be competitive (since without Research&Development and final products, they don’t have many possibilities), so they are making saving by paying low salaries

MENTAL MODEL:

  • Ingenuity at the expense of the state
  • “If others are doing it so will I”
  • “It’s better to do nothing for nothing, then to work for nothing”
  • general belief that it’s a shame not to finish a college

I’m about to add more events in the next few days (or weeks), which I will use to see if there are any new patterns or structures appearing. I’m also sure some things are misplaced, but still I decided to post it. If someone who has used Iceberg model in practice and/or is interested in the same topic is reading, a comment would be great.

To be continued…

Enterprises in Banja Luka Region mostly need workers with low level of knowledge and skills

It is possible to find a news article with lists of unemployed persons sorted by professions. But I don’t remember I ever found similar list of workers required by enterprises, sorted by professions.

I got a chance to make such list for region of Banja Luka on Job Fair in June 2017. I’m aware that not all enterprises which are looking for workers were present on this Job Fair, but I believe that based on those that were present a rough image can be formed on what professions are needed by domestic enterprises.

Enterprises from Banja Luka and neighboring municipalities (Čelinac, Gradiška, Kotor Varoš and Prnjavor) were present and they were in search for almost 800 workers.

It is evident that nearly half of workers are required by textile and shoe wear industry, and that they need workers in production. Requirements for employment in these enterprises are low. Candidates are only required to have elementary school diploma, which means non-qualified workers can apply. Low level of needed skills and knowledge for work in these positions conditioned very low salaries (minimal salary, ~200 EUR). This shouldn’t surprise anyone, since textile and shoe wear industry products are made in the same way in Germany, Turkey, India and here, which means enterprises in this industry need to offer lower price to be competitive. That’s why they need to make savings in production, and the most effective way to make those savings are low salaries for workers. To conclude, enterprises in this industry offer plenty of jobs, but those jobs are, conditionally speaking, not quality ones.

For easier analysis, in further text I will ignore this industry and analyze rest of required workers.

When we ignore workers required by textile and footwear industry, most of required workers are non-qualified workers with only elementary school finished. They are mostly required by construction companies: construction carpenter, armature workers, masons, electrical installers. Then there are Mechanical engineers (first profession with Faculty education) – 19 of them. Out of mechanical professions, mechanical technicians, welders and locksmiths are also needed. Leather technicians, carpenters, sellers, whitesmiths, tip truck drivers are also needed, about 10 for each profession.

I was surprised to see small number of required CNC operators (7), since I often hear in enterprises they’re always in pursuit for them.

It’s interesting to highlight number of needed engineers, total 28. 19 mechanical engineers, 8 electrical engineers and one geoinformatics engineer. Number of needed architects is 5 and number of economists with Bachelor is only 1. In total, number of professions with Faculty diploma is 34.

Then I grouped professions required by domestic enterprises based on level of knowledge and skills they need to have. This is how I did it:

5 – engineer / Faculty diploma
4 – Technician / Highschool diploma
3 – craftsman
2 – trained worker
1 – non-qualified worker

This is the result:

Hence, enterprises in Banja Luka Region are mostly looking for trained workers (whereby terms for employment are usually minimal, so we can also call them non-qualified workers), 478 of them. With 37 non-qualified workers, we get information that 65% of required workers are those with minimal knowledge and skills. With raise of needed knowledge and skills, demand for these professions is decreasing. Thus, number of needed craftsmen is 199, number of needed technicians is 51 and number of needed professions with faculty education is 37.

Now let’s get back to the beginning and remind ourselves that now all enterprises in Banja Luka and Region were present at Job Fair Banja Luka 2017, so these data should be taken with reserve. But I think that at least they are useful to make these conclusions: Required professions in Banja Luka are mostly those with low level of knowledge and skills. That shows us that economy of Banja Luka Region is not complex enough and that products it makes are relatively simple, because demand for knowledge and skills is low.

From the perspective of enterprises, it means they can’t be competitive with quality, but with low price. From workers’ perspective it means that their knowledge and skills are not needed and that what lefts, and that is their physical work on relatively simple jobs, will be low paid.

PS

Banja Luka Region has 35 000 people on Employment Office’s list of unemployed persons. Yet, during my visit to Job Fair, only about 10 unemployed persons were inside the hall. More employers then unemployed persons. But that’s topic for another blog.

Expert’s phrase diary is blurring the image

After few years of participating in and organizing workshops, it seems to me there is a problem with expert’s phrase diary in communication. A number of phrases, words and formulations that are often used to describe something by experts and consultants. There are plenty of those in, for example, strategic plans. The fact that experts have their own vocabulary is fine while they are using it in expert-to-expert communication, the problem appears when non-expert participants in workshops start using it: entrepreneurs, directors, workers, engineers, employees in the local administration, etc. And it seems to me they are using it because they see experts using it and they think that’s how they need to speak and formulate things they are about to say.

I’ve seen many times employees in the local administration being agonized while trying to formulate one simple thought. For example, in one small municipality in Republic of Srpska, result of that process was a goal “Solving a problem of floods on territory of the Municipality”. Seems legit, right? After asking them what that was about, we realized one small river was flooding in a specific location. When I asked why they formulated it that way if only one river was flooding one specific location, they laughed and said it sounds more professional. We re-formulated the goal and asked them not to use professional phrases anymore and just to say what is the problem using their own vocabulary. They did that, and it was much easier and faster from that moment. Later, we carefully reformulated it, so we don’t change the meaning.

Seems to me that, when non-experts are using experts’ vocabulary in workshops or elsewhere, valuable information is lost. Phrases tend to ‘swallow’ details, blur the image and fit statements around universal issues. I don’t think such waste of specific details is good during first phases of doing anything, and I find experts’ vocabulary to be a culprit of many superficial and too-generalized documents we have today.

Fastest growing industries in Bosnia and Herzegovina are food related

I have recently read an interesting blog written by Cesar Hidalgo, Trump, forget about Coal and Nuclear, software exports is where the jobs are at. His point was, among others, that state should invest more in growing sectors to provide new jobs. That instantly made sense to me, so I started thinking about what sectors are fastest growing in Bosnia and Herzegovina.

Since data on export from B&H 2013-2016 were recently released, I figured out I could use that to show approximately which sectors are growing fast. Also, I used export data since export-oriented sectors (and enterprises) are also the most competitive and most advanced ones.

First, let’s see how does B&H export treemap looks like in 2016:

Here are a few of my random thoughts about this treemap. It’s interesting that Furniture is #1 export product of B&H (excluding Cork and Wood manufactures), and wood as raw material #4, especially when you know how hard it is for domestic enterprises to get raw wood for their production.
Footwear and wearing apparel enterprises are good for creating a lot of jobs, but these jobs are not well payed since wages are mostly minimal allowed (200€). Those firms are mostly working for partners in EU, without developing their own products.
Metal processing enterprises are usually making parts for their foreign partners and don’t usually have their own final product. Unlike wood processing sector.
Road vehicles are compiled in Sarajevo for Volkswagen.

Now, let’s see which of these are fastest growing in period 2013-2016:

None of these are in top 5, but most of them do have an export growth. Furniture has export growth of 4,5%, Footwear also 4,5%, Manufactures of metal 6,5%, Cork and Wood 4,97%, Road vehicles 5,4%, Iron and Steel -4,2%…

Top 5 – Export Growth

  1. Animal and vegetable oils and fats (29,50% growth)
  2. Chemical materials and products (28,33%)
  3. Travel goods (23,57%)
  4. Meat and meat preparations (22,39%)
  5. Cereals and cereal preparations (17,68%)

What attracted my attention is that 3 of 5 products from top 5 export growth list were food products. So, it seems to me that food industry is the fastest growing industry in Bosnia and Herzegovina, and industry where B&H could create significant number of jobs.

P.S. I am also wondering where is the position of the IT industry in B&H export and how high is it’s growth.