Bulgaria saw a booming labor market last year marked by a workforce shortage, two-digit wage hikes and falling unemployment rates.
Nearly 3.3 million people were employed in the economy at the end of the 2022, up 40,000 year on year. The employment rate of 57% was one of the highest for the past ten years. Unemployment dropped to 4.3%, close to its pre-pandemic level in 2019.
As a result, wages increased at a two-digit rate each quarter, year on year, speeding up to 16.6% in the last quarter, so that the gross monthly remuneration reached 1,879 levs (961.38 euro) at the end of 2022. That nearly compensated for the rising inflation, which hit some 17-18% in annual terms in the months of October to December.
Despite expectations for a gradual cool-down in 2023, the average remuneration accelerated its growth to 17.3% in the first quarter, reaching 1,953 levs in March. In the second quarter wages went up 13%, outstripping the inflation rate of about 10%.
The projections for the second half of 2023 are more moderate due to the expected slow-down in the Bulgarian and the European economy as a result of rising interest rates and the soft recession in the eurozone.
In a longer-term plan, the labor market is set to undergo a structural change under the pressure of two factors: the advance of artificial intelligence and automation in certain industries, and the worsening demography in Bulgaria and Europe.
The big 100
The number of employees in the 100 largest companies in terms of staff increased by 0.11% in 2022, year on year, reaching a total of 230,000 - a tenth of all employees working under a labor contract in Bulgaria.
There were no substantial lay-offs in any of the top 100 companies. Instead, some increased their staff by 20- 30%. Many of them were export-oriented companies. Last year Bulgaria's exports reached 93.5 billion levs, up 36% year on year, and well ahead of the average 12% growth in global exports.
As in previous years, retail chains registered the biggest rise in the number of employees in 2022. The total staff of such companies listed among top 100 reached 28,600 people, up 5% year on year. The increase is traditionally the result of the opening of new stores. The strongest growth in employees in 2022 was reported by drugstores dm Bulgaria: more than 11%. The largest employer in the sector was Kaufland Bulgaria with a staff of nearly 7,000.
The IT sector is also a big hirer. The three IT companies in top 100 increased their staff by nearly 6% to more than 4,500 people. The BPO sector on the other hand had a more varied performance. Some companies (mainly call centers) reduced their staff, while others (providing IT services) hired more people. The total number of the employed in the BPO industry remained unchanged from 2021 at close to 20,000 people.
Employment data show that arms manufacturers had a strong year in 2022. The three companies in top 100 - Arsenal, VMZ and Arcus - increased their staff by more than 1,000 to 12,500 people.
The biggest rise in workforce was registered by transport and logistic services provider Discordia: by 30% to more than 2,100 people. The company is growing and planning to have a fleet of 1,800 trucks by the end of 2023. That will expand the staff by a further 780 people. Automation technology supplier Festo Production also saw a two-digit increase in employees: by 19% to 1,246 people.
Staff reduction
The transport sector is traditionally a big employer. Most of the companies however are state - or municipal-owned (except for Discordia and PIMK) and they cut staff slightly every year. Thus the 11 transport companies in top 100 had a staff of 25,400 people in 2022, down by 0.7% year on year.
The company that saw the biggest decrease in 2022 was Foundever Bulgaria (formerly Sitel): down by 19% to 1,628 people. The company provides consultancy and telephone marketing services.
The second biggest drop was registered by SOF Connect, the Sofia Airport concessionaire, which reported an 18% decrease in personnel. The main reason for that however was that many of the employees were transferred to the cleaning and retail companies at the airport.
Among the state-owned companies, Bulgarian Post was the leader in redundancies. The staff of the loss-making behemoth shrank by nearly 14% to 8,519 people.
Bulgaria saw a booming labor market last year marked by a workforce shortage, two-digit wage hikes and falling unemployment rates.
Nearly 3.3 million people were employed in the economy at the end of the 2022, up 40,000 year on year. The employment rate of 57% was one of the highest for the past ten years. Unemployment dropped to 4.3%, close to its pre-pandemic level in 2019.
