Sofia Investment Agency just published the Labor Market in Sofia 2017 Report, prepared by SeeNews for Investment Analysis Department at the Agency. Find out below a summary of the report or download the full PDF version of the document.
Sofia labor force in figures
General characteristics of the labor market in Bulgaria
In Q2 of 2017, the number of employed people in Sofia is 701,300. A total of 50.3%, or 352,800, are men and 49.7%, or 348,600, are women. The highest is the number of people with higher education – 360 300. There is a trend towards increasing the relative share of the people with tertiary education driven by the overall improvement of the educational structure of the population in Sofia.
For the period 2012 – 2016, the number of the employed who had a tertiary education went up by 29%, while the employed with completed secondary education decreased by 10%, and those with primary or lower level of education – by over 30%. The key factors for this include the easier access to higher education in Sofia, the restructuring of the economy, and the fact that the major job creating sectors in Sofia require secondary or higher education – ICT, Business Service Outsourcing and the high-value added manufacturing activities typical for the region of Sofia.
Almost 99% of the labor force in Sofia aged between 19 and 34 speaks at least one foreign language, and 85% of them have an average or good level of Command /Blue Point data/. The most common language is English, spoken by 98.5%. This means that in Sofia the number of young people with advanced knowledge of English exceeds 109,000. The second place is taken by Russian, spoken by 44.5%, German is spoken by 37.7%, and the fourth most common foreign language in the capital is Spanish with a share of 17.7%, as some 5,300 young people.
The most common combination between two spoken languages is English and Russian – 129,000 people, followed by English and German – 116,800, English and Spanish – 53,600 and English and French – 43,660 people.
Employment rate by education level and by sector of economic activity
The highest employment rate in 2016 is registered among university graduates in Sofia – 73.4%, followed by people with secondary education and acquired professional qualification – 67.5%, other secondary education – 55.5% and primary and lower level of education – 14.0%. In the period 2011 – 2016, the number of university graduates in the region rose by 81,000 and their share grew from 40% to 60%.
During the reported period, the highest number of people were employed in the sector of Trade and Retail – 146,522 people, followed by Creation and Distribution of Information and Creative Products and Telecommunications – 64,779 people and Manufacturing – 60,072 employed. ICT was the fastest growing sector by number of employees in the five-year reported period with a growth of 21.8%. Other sectors with an increase over 10% were Administrative and Support Service Activities and Production and Distribution of Electricity, Heat and Gaseous Fuels.
The private sector dominates the structure of the economy in the capital, accounting for 79.5% of all employed and its share continues to grow. The highest share of private sector employees is reported in the Trade and retail sector – 99.7%.
The average gross monthly salary in Sofia before tax and social security amounts to BGN 1 413 or EUR 722 (March 2017). The average annual gross salary of employees under a labor contract in Sofia amounts to BGN 14 531. The ICT sector offers the highest gross salary –
BGN 26 773. Second come the Financial and Insurance Activities sector with BGN 21 879 and Professional Activities and Scientific Research with BGN 18 781. In terms of annual growth, the leader is the sector of Agriculture, Forestry and Fishing with 16.4%, followed by Administrative and Support Service Activities with 13.3%.
The highest average salary is received by employees aged 30 -39 years. In 2004 it was 8.0% higher than the national average. Second came employees ages 40 – 49 with 4.0% above the national average. There is a constant trend for young people to receive higher remuneration, whereas those aged over 50 see a steady decline in payment.
Bulgarian students abroad
In 2017 Germany and the Netherlands were the most desired destinations among the Bulgarian secondary school graduates, followed by Austria, UK, France, Spain and Denmark. There is no official information about those Bulgarian citizens who have graduated abroad and have returned to Bulgaria, but in recent years there has been a positive trend and the number of graduates returning to the country.
Sofia has a number of advantages compared to other major cities in the region – Belgrade, Bucharest, Skopje and Thessaloniki. The leading advantage of the Bulgarian capital is the
10% direct tax (corporate and personal income tax) which are the lowest in the region, together with Macedonia. The total insurance burden in Bulgaria was 31.4% of the gross salary as of March 2016, while in Greece, Serbia and Romania it was significantly higher.
In March 2017, the average gross monthly salary in Sofia before tax and social security amounted to BGN 1 413 or EUR 722. By contrast, in Belgrade it was EUR 678 and in Plovdiv, Bulgaria’s second biggest city, it was EUR 468. In 2016, the average gross monthly salary in Sofia was EUR 663 which was more than two times lower than in Thessaloniki (EUR 1 455), but higher than Belgrade (EUR 647), Bucharest (EUR 627) and Skopje (EUR 526).
The highly skilled labor force will continue to quickly attract investments in the growing ICT sector, the outsourcing of business services and some industrial activities with relatively high added value. A major constraint to further expansion of the IT industry and the digital economy is the shortage of suitable technical and engineering specialists, which forces companies to make significant investments in training or recruiting staff from competing companies.
Considering the increased economic activity in the capital and the growing share of the private sector, it is expected the share of Sofia in Bulgaria’s total labor force to continue its growth the next three years and to exceed the current share of 21.6% of the total labor force in the country.
In the full document Labor Market in Sofia 2017 you will find a detailed overview of the main indicators of the labor force in the capital and a comparison of employment growth with selected competitive markets. You can download the full document here.
If you have further questions regarding the report or other data on the investment climate in Sofia, do not hesitate to contact our team at firstname.lastname@example.org.